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Making bets

I rather like this habit of economists trying to put their own money on the line in making certain predictions. David Henderson has an item about it. It adds a certain frisson to the joustings between different camps. The most famous bet of all, of course, is the one between the late Julian L Simon and Paul Ehrlich. The latter lost his bet that the price of commodities would rise over a certain period (they did not) and he declined to accept another bet for another decade. Poor loser, I say.

I would have liked to have seen the odds back in 2008 that Obama would likely be only a one-term president, or that one, or possibly two, nations could be driven from the euro-zone by say, 2011/12.

15 comments to Making bets

  • I like betting against people when we disagree – it focuses the mind.

  • I would have laid money (should have done) on Obama being a one-termer. Christ himself couldn’t have lived up to the hype. The only thing against that (and why I didn’t bet) was that I can’t see a coherent Republican alternative. the Tea Party is not coherent (one of it’s better features IMO but not necessarily an electoral asset).

    The Eurozone having casualties was also an accident I think a lot of people saw coming. Right from the start when thy fiddled the convergence criteria for the likes of Greece…

    You’re right JP. In a sense betting is more natural and honest than voting. We do it all the time don’t we anyway one way or another.

  • The Pedant-General

    “Christ himself couldn’t have lived up to the hype.”

    If we’re being picky:
    1) Christ himself DIDN’T _live_ up to the hype: he got himself executed.
    2) Christ was also only a one-termer: his ministry only lasted two years.

    [/snark]

  • Funny, the next item in my reader is this:

    http://tynan.com/ibetyou

    About betting with people to make them really think through what they’re saying

  • Barry Sheridan

    Johnathan,
    I am sure the single minded political classes will do their utmost to prevent anyone escaping from the EURO. In fact I would be willing to have a small private wager that they will destroy the European economic system first rather than allow it. That way they can continue in power which is what the European project is all about anyway.

    Any takers?

  • AKM

    I won a quid off a Canadian friend when Obama won. He thought the Americans were far too racist to ever elect a black president. :D

  • PeterT

    There was a debate at the time before the Euro as to whether it would necessitate ‘fiscal union’. Whether or not EMU countries receive aid directly from their ‘partners’ or have their debt bought by central banks, we are now seeing a move towards fiscal union.

    Anyhow, this is not about economics, but about politics. There are strong political reasons for why a country might choose to leave the EMU. If its a choice between cutting all your countrymen’s salaries by 20% and firing half the public sector or leaving the EMU and getting a prompt salary cut through devaluation, then the temptations facing the politician are obvious. There is, however, no real reason why stronger countries should wish to kick the weaker ones out, except perhaps to stop them moaning.

  • jsallison

    “2) Christ was also only a one-termer: his ministry only lasted two years.”

    I do believe one could make the argument that his ministry is ongoing.

  • Laird

    And I suspect that O’bama’s “ministry” will be ongoing, too, long after he’s left office. The changes he has made to our government structure are profound, not widely appreciated, and won’t be fully apparent for a long time.

  • Jacob

    After reading this(Link) and this(Link), I’m willing to bet on the demise of the Euro. The problem is that to bet you have to state a time frame. Will the demise of the Euro come in two years, five or 8 ?
    I reckon it’s a 50-50 chance for 2 years, but more than 80% for 8 years.

  • hovis

    @jacob I’m not so sure that failure of the euro. By that I mean as in existence, ( it is already a failure for most members bar mercantilist Germany).

    Never getting a crisis go to waste there will be a huge push for fiscal union on the back of this. whether that leads to break up is anither question.

    I’d love to see it crash and burn (apart from the real harm it would do to many people powerless tp prevent it.)

  • Richard Thomas

    Jacob, I wonder if one might concoct a way to turn a guaranteed profit by betting both sides but with different currencies.

  • Jacob

    Looks to me that a sure bet is to short the Euro, if you can find any takers.

  • Bod

    Carrying a short position on the Euro for as much as 8 years would be expensive.

    Unless you could be sure someone was going to give it a nudge off the cliff.

  • Paul Marks

    AKM

    In a weird way your Canadian friend was not totally wrong.

    The Americans elected Barack Obama, in part, because he is black (which is racism – of a sort).

    They were so taken up with the media story of the “historic first black President” (the MSM had been beating that drum since Barack Obama was the keynote speaker at the Kerry Convention of 2004) that they did not ask themselves basic questions.

    “What is this man’s background – what has he done in his life, and who are his friends and associates”.

    And.

    “What does this candidate propose to do – what are his specific policies”.

    In short if the man had been a white guy (with the same political background and so on) he would not have stood a chance.

    That bodes ill for him in 2012 – the “historic first black President” thing has been done now.

    Nick M.

    The message of the Tea Party moverment is very clear – roll back government spending (there are some people now, for example in Tea Party Nation, who want to broaden the message – but I think they are wrong, keep focused on the key issue).

    The problem, sometimes, is the candidates sometimes have not been effective – they have NOT been stupid (that is a myth), but they have had no media training at all (fatal).

    Do not talk to the MSM if you can help it (stick to non hostile media) – and if is talking to them is unaviodable just keep banging away at the tax and spend points.

    And if they say “you are not replying to my questions” simply reply “no I am NOT – I am dealing with the things that matter to the VOTERS not to the media”.

    Basic stuff – but some of the candidates did not have a clue about it, and walked into traps.

    Although the vast wave of smear propaganda was the key factor in the defeat of some Tea Party people.

    Contrary to media reports the left outspent the right in 2010.

    That will not be so in 2012.