The under-appreciated research department in the over-appreciated investment house of Goldman Sachs list four themes or transitions during the next year. They are (1) globalization transitioning to populism, (2) monetary policy transitioning to fiscal policy, (3) regulation to deregulation, and (4) stagflation to inflation. These are not minor transitions and will take longer than any one year. We have reached a “tipping point.”

First, it pains me to see globalization get trashed, just because politicians wanted the immediate benefits of it but wouldn’t pay the long-term costs of globalization, which include retraining and relocation. The baby is definitely going out in the bathwater!

Second, I’m thrilled at the prospect of having a vibrant fiscal policy as an economic tool once again. We have relied too much for too long on monetary policy alone. This transition is a good thing.

Third, the debate over regulation is like watching a pendulum swing and forth and is equally as boring. Republicans invariably complain about any regulation, while Democrats have seen very few regulations that weren’t absolutely necessary. Both are right, and both are boring. Arguments about regulations must be specific to the particular regulation. Yawn . . .

Lastly, the expected transition from stagflation to inflation is more interesting. Consumers see a slow-growth economy with rampant inflation, even though that view of inflation is not justified by the economic data. Goldman Sachs obviously sees the growth rate improving and reinvigorating inflation. Along the continuum of deflation-stagflation-inflation, deflation is the most pernicious and inflation is better than stagflation. So, relatively speaking, this is also a good thing.

All-in-all, I hope they are right!