My Crystal Ball For Next Year, Care of Santa Claus

During most of my career as a financial market economist, I made it a holiday tradition to write a "review and outlook" for the economy in the style of Clement Moore's classic, "A Visit from St. Nicholas." I have continued this tradition since I retired more than three years ago. In this year's rendition - the 32nd - Santa brings me a new crystal ball. If we heed the message inside, perhaps a stronger economy might soon emerge.

'Twas the night before Christmas, the moon was near full,
Lifting the midnight high tide with its strong lunar pull.
As it cast a soft glow 'cross the low-country marsh,
The gentle salt-laden breeze felt soothing not harsh.

To my old Yankee eyes it seemed all so unreal,
But with a snow-free Christmas I'll happily deal.
And whether warm air or cold on this winter night,
I just knew Santa's red sleigh would soon be in sight.

And sure enough over the soft breeze could I hear,
Santa's loud voice commanding his team of reindeer.
In wonder and awe I just stood there and stared
As the old elf held out a gift that for me he'd prepared.

When I asked, "What have you there? Is it for me?"
The jolly old man chuckled and said "Open and see."
When I undid the bow on his neat little gift,
I found a large crystal ball that from its box did I lift.

Santa said then "Look deep in this magical ball,
And you'll see what lies ahead for you -- and for all. "
I did as he said and on this globe fix'd my gaze
And here's what I saw in that orb's milky white haze.

Instead of recession that's some six years gone past,
I see very slow growth that seems likely to last.
And though the jobless rate's now the lowest in years,
This new labor market is still fostering fears.

Because income from wages is still very weak,
Too many people see their own future as bleak.
And with an election year about to begin
This sad state of commerce is the focus of spin.

Jobs and unequal income do some try to conflate,
But the links are complex and don't simply equate.
And some demagogues blame world trade for our woes,
Seeing other nations not as partners but foes.

But their argument's wrong in both theory and fact.
Trade benefits all when in self-int'rest we act.
Still all can agree that we need not be content
With a growth rate that's stuck at a mere two percent.

So I'm glad that in all this crystal-ball-gazing,
I saw how to reach a path far more amazing.
Back to a far simpler world we must find a way
Where growth-sapping forces can be just kept at bay.

From banking to health care to all sorts of commerce,
An excess of rules often makes matters much worse.
Our tax code's too complex -- it is truly a mess.
It skews market signals and puts the system in stress.

If regulation and taxes we just could reform,
We might just get growth back to its historical norm.
Then what lies ahead for the high world of finance?
The answer begins with the Fed's policy stance.

To normalize rates, the Fed's made a policy shift,
They don't call it a "hike," it was merely a "lift."
How fast will it act and what actions come next?
The answers will be found in Fed statements and text.

So my crystal ball's message to me seems quite clear,
We must take hold of our fate and act without fear.

With this I now end my yearly outlook in rhyme,
And wish everyone joy at this holiday time.