As 2012 winds to a close, pundits, poets and politicians are rushing to sew the year up into a neat little bundle. While they weigh the winners and losers, the year's wonders and its miseries, we decided to look at 2012 from a slightly different angle. Here is our list of the year's worst bets -- six things that seemed like easy money in January, but went bust by the end of December.
In January, anyone betting against Karl Rove might have experienced a moment of vertigo. After all, the man famed as "Bush's Brain" had a reputation as one of the keenest political minds in the country, and his operation, American Crossroads, was poised to skew political contests from coast to coast. Over the course of the election season, the SuperPAC spent over $100 million on races across the country, much of which was raised from Wall Street and business leaders such as Las Vegas billionaire Sheldon Adelson.
Crossroads ultimately proved to be a losing bet of epic proportions: 98.71% of its money went to supporting candidates who lost or attacking candidates who won. As for the people who made the bet, some -- such as Adelson -- plan to double down. The billionaire, who spent over $100 million in this election cycle, has announced that he plans to double his political donations in the next cycle.
In American banking, it's hard to come up with a better bet than Jamie Dimon. Amid the Great Recession's banking debacle, the CEO of JPMorgan Chase emerged as one of Wall Street's (few) heroes.
This May, Dimon, one of the few bankers who continues to outspokenly support the "bigger is better" banking model, was forced to eat crow when his company lost an estimated $6.2 billion (and counting) because of Bruno Iksil, aka "the London Whale," a trader in JPMorgan's London office. Soon afterward, Dimon found himself justifying his bank in the media -- initially with humility and later with more than a hint of pique. By August, he was telling reporters, notably New York Magazine's Jessica Pressler, that part of the reason his company was able to survive its vertiginous loss was because it was so big. After initially dismissing Iksil's losing bets as a "tempest in a teapot," he later backtracked, but continued to point out that "We didn't even lose money this quarter. We earned $5 billion. The analysts estimate us having a record year."
Sure, we all complain about irresponsibility in DC, but there always remains a lingering hope that, in the direst hours, the government will be able to move past partisan bickering into more statesmanlike behavior. This year offered one such moment for greatness: facing a "fiscal cliff" of budget cuts and sharp tax increases that neither Congress nor the president nor the American people wanted, the stage seemed set for a "Grand Bargain," a compromise that would make everyone look good.
Washington couldn't seem to get its act in order. First there was the wait for the election, as both sides hoped to gain an edge in Congress and the White House. Then there was Grover Norquist and the tax pledge that most Republicans agreed to -- and some tried to weasel their way out of. And then there was the fact that President Obama and House Speaker Boehner couldn't seem to negotiate with each other -- and Boehner couldn't negotiate with his party. And so the cliff came, and any illusion of government responsibility blew away in the dying moments of 2012.
Sure, the Patient Protection and Affordable Care Act finally passed through Congress, but when a law is as sweeping, as game-changing as this one, there's a big line between getting ratified and getting enacted. With critics preparing to dismember, dismantle and otherwise disembowel Obamacare, odds looked slim that it would ever get fully enacted. When the Supreme Court agreed to hear a challenge to the law, things looked even more dire: after all, with a 5-4 split in favor of conservative justices, there was little doubt about how most of the justices would rule.
Chief Justice Roberts broke with the conservatives on his court, agreeing that the plan's "individual mandate" qualified as a tax, which meant that it was a permissible exercise of federal power. While some argued that this was clever legal wrangling, employed by Roberts as an attempt to preserve the public image of an unbiased court, the conclusion -- and Obamacare -- still stood.
After Wisconsin's 2011 Budget Repair Bill changed the face of collective bargaining for state employees, it seemed like organized labor was a loser's bet. And things looked even worse in 2012, when a union-led recall attempt on Wisconsin Governor Scott Walker failed spectacularly. Meanwhile, unions also took a hit in Michigan, a classic organized labor stronghold, where the passage of a new state law restricted the ways in which unions are funded.
Management was a risky bet, too. The much-ballyhooed 2011 Wisconsin law hit a speedbump in September 2012, when a judge declared portions of it null and void, determining that it restricted free association, as well as the rights of certain municipalities. And on other fronts, organized labor seemed to have a few promising hints of new growth: in November, employees at Target and Walmart, angered at being forced to work on Thanksgiving, organized protests. A few days later, New York's fast food workers held the biggest demonstration in the history of the industry. While these actions only hint at a resurgence of organized labor, one thing is clear: the much-anticipated death of organized labor isn't quite here yet.