I’ve always endeavored to look ahead at the coming year in my column at the end of December. Regular readers know I don’t make predictions but rather set markers that will be important in the coming 12 months.
This year’s markers were all built around the pandemic — its effects on the economy, downtown, the future of work — and secondarily, politics at the national and local level. Still, I felt a modest sense of optimism.
But the markers didn’t account for the arrival of the delta variant, throwing out hopes for a return to normal. Thus is the peril of forecasting.
Now we face yet another variant of the coronavirus — omicron — which risks a major outbreak in January. Much isn’t yet known about omicron but at the worst we could be thrown back into another shutdown.
The result: Indefinite return to the office, more turbulence for travel and tourism, supply-chain disruptions, even canceling the cruise season again.
All these would have costly consequences for Seattle, especially a downtown hammered by crime as well. For example, the downtown Target store has repeatedly been the victim of organized shoplifting, a problem that has helped shutter dozens of other retailers.
The central core accounts for the majority of workers and business taxes in the city.
In early December, only 29% of workers had returned to downtown offices compared with early 2020, according to a recovery snapshot maintained by the Downtown Seattle Association. On the other hand, 74% of domestic visitors and 80% of visitors to Pike Place Market had been reached versus early 2020 numbers. Hotel-room demand, in the single digits early in the pandemic, had recovered to 67% early this month.
Tom Norwalk, chief executive of the trade association Visit Seattle, said in an email this week: “Our long and difficult road to industry recovery continues to get longer. It is both sobering and surreal to see the impact of the accelerating omicron variant which brings the possibility of tighter restrictions.”
Yet King County’s requirements of proof of vaccine and masking rules, “have enabled many small businesses, restaurants, venues and theatres to remain open — safely.”
President Joe Biden assured the nation during the week, “This is not March of 2020. Two hundred million people are vaccinated. We’re prepared; we know more.”
One new measure: The administration will purchase 500 million coronavirus rapid tests for free shipment starting next month. People will use a new website to order their tests, which will then be sent at no charge by the Postal Service.
So once again, the pandemic, its effects and our response will be the biggest marker to watch for the 2022 economy.
Another is inflation and the actions of the Federal Reserve. The central bank has signaled it will raise interest rates three times next year. But, as I wrote this past week, this carries risks of causing a recession, especially if the economy contracts because of another pandemic shutdown.
National politics is yet another marker as we gear up for congressional elections. Biden’s Build Back Better agenda is only half done. A bipartisan infrastructure bill was signed into law. But measures to strengthen the social safety net and address climate change remain hostage to opposition by Sen. Joe Manchin with the Democrats’ thin majority in the Senate.
Locally, Mayor-elect Bruce Harrell will try to steer a more pragmatic path despite a far-left City Council majority. But how much can he do?
Seattle policies, especially jobs taxes, have put it at a competitive disadvantage against other cities in the region, especially Bellevue. Amazon continues to increase its high-end employment outside Seattle. All this means less tax revenue for the city.
Meanwhile, carbon emissions continue to rise around the world. The Glasgow summit fell short of realistic commitments to address global warming. As a result, the economic costs of inaction will continue to be felt in 2022, from drought and extreme weather events to the decline of important species (e.g., bees) and stress on fisheries, the latter an important part of Seattle’s maritime economy.
The international scene presents three important markers for next year.
First, U.S. intelligence agencies are concerned that Russia is preparing for a massive invasion of Ukraine next year. If that happened, it could push everything but the pandemic into the background, particularly if NATO and the United States decided to intervene on Ukraine’s behalf.
Second, China has ramped up political and military pressure on Taiwan, the democratically governed island that Beijing sees as a renegade province. The United States maintains “strategic ambiguity” as to whether it would come to Taiwan’s defense or not. But if it did, the result would be a Sino-American war.
This wouldn’t necessarily turn nuclear (with the military bases on Puget Sound as first-strike targets). China would hope to make a quick invasion a fait accompli. If Washington, D.C., intervened, Beijing would seek a conventional victory over American carrier strike groups and push America from the South China Sea. That’s easier said than done and U.S. submarines might establish a crushing blockade of China.
The economic marker: A breakdown between the world’s two largest economies and a depression.
Third, Iranian nuclear-weapons ambitions remain ongoing. The Biden administration’s special envoy told CNN that time is running out to revive the multinational deal that would restrain Iran, resulting in “an escalating crisis.”
While relatively less serious than war with Russia or China, this could spiral into war in the heart of the world’s oil supplies. Israel, a quietly nuclear state, will not allow Iran to deploy nukes.
I know, it’s a strong brew of downers. But these are among the things we must watch for 2022.
The opinions expressed in reader comments are those of the author only and do not reflect the opinions of The Seattle Times.