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A Year on the Brink

NEW YORK – The year 2012 turned out to be as bad as I thought. The recession in Europe was the predictable (and predicted) consequence of its austerity policies and a euro framework that was doomed to fail. America’s anemic recovery – with growth barely sufficient to create jobs for new entrants into the labor force – was the predictable (and predicted) consequence of political gridlock, which prevented the enactment of President Barack Obama’s jobs bill and sent the economy toward a “fiscal cliff.”

The two main surprises were the slowdown in emerging markets, which was slightly sharper and more widespread than anticipated, and Europe’s embrace of some truly remarkable reforms – though still far short of what is needed.