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Predictions, bubbles, and predicting bubbles

Thus spake the prophet Micklethwait on September 27, a week before the US presidential debate that has just taken place:

Romney is not nearly as big a jerk as a lot of disappointed Libbos and Conservatives seem to think, or as Dems hope. He keeps on winning. I think he will do much better in the debates than most others seem to, because he has a story to tell, to and about an opponent who does not. Romney is indeed not a genius debater, but he knows it, and knowing also that he is winning, he will prepare hard and go in with exactly the right amount of and kind of confidence, like a winning sportsman. He will surprise many by how well he does.

Meanwhile Obama, surrounded by yes men, and fatally arrogant, and tired, a fed-up and probably knowing he is going to lose, and having nothing to say, will not prepare well enough for the debates. He faces a near-impossible task, and will not be up to it.

Correct in every detail bar two. I do not think Mitt Romney knew he was going to win the debate and I do not think Barack Obama knew he was going to lose.

Romney was a Mormon missionary in France for two and a half years. Apparently he met with a slightly less overwhelming proportion of rejection than most, and was promoted. Whatever your opinion of Mormonism, no one can emerge after thirty months of knocking on doors and trying to proselytise the French, in French, and not have developed some debating skills and also seen the limit of what any such skills can do. No one can do this and not learn, ineradicably, that the world contains people who do not think like them at all. Romney lives among the heathen. Obama lives among those who defend him from the heathen.

Unlike some on this blog, Paul Marks, for instance, I do not see Obama as a hard core Marxist. Real Marxists live among the heathen, even on university campuses. I do not see Obama as having a hard core at all; he flows into the shape of whatever vessel he finds himself inside. His current vessel is fine and comfortable. I think he could not quite make himself believe that Romney would dare intrude.

Elections are mostly mere show, but what a splendid show a hard-fought one can be. I caught myself the other day being resentful because I could not turn to the back of the book or look up the episode guide on Wikipedia to see how it will all turn out. Aesop would have sold more fables if he had thought to have the moral (better yet, a hundred competing morals) in the middle but leave the tortoise and the hare still running right until the last page.

In 1992 I turned down a bet that would have obliged me to pay ten pounds for every parliamentary seat of Neil Kinnock’s majority, or gained me ten pounds for every seat short of it. I only turned down the bet because I’m a wimp who has never so much as been inside a bookmakers*; I knew that John Major was going to win because I eavesdropped on my fellow commuters on the Victoria Line. The UK media then were almost as domineering as the US media now; whenever obliged to interview someone willing to admit to the intention of voting Conservative the interviewer would visibly stand back to avoid contamination. I wanted Labour to win – I had stopped being a socialist but I was tired of the Tories – but I could tell, I could just tell that the media and the Cool People were talking each other up while the troglodytes on the Victoria Line were bullied into whispers but not into voting for the Cool Party just because the Cool People said that everyone who was anyone would.

Splendid as I am and nearly always right about everything, I have also been known to make wrong predictions. In the next UK election I thought the Shy Tory effect would still be present. If it was it was washed away in a flood of voters not shy in the least about finally having had enough of the Conservative party in power.

All this talk about bubbles has also reminded me of two occasions on which I specifically took note of obvious signs that the other sort of newsworthy bubble, a house price / stock market / tulip bubble, was expanding serenely away – noted these signs, cogitated upon their meaning, and ignominiously got it wrong. Or at best totally missed their major meaning because I was so keen to lecture the world about a minor sub-meaning. One such sign was seen in Ireland about six or seven years ago. My family is from Ireland and I always listen a little harder to news from there, so I was interested to learn from several different recent visitors to Ireland that everywhere you looked, on every little hillock and crammed into every little gap among the drystone walls, a new holiday cottage was going up, spoiling the austere beauty of the landscape somewhat but nice to see so many people doing well. I knew what that meant. It meant I could write a post for Samizdata about planning laws. Good thing I never got round to that one.

The other sign was from the United States. I, I will have you know, knew what “redlining” was, and knew of the laws and government pressure put upon banks to foribid this practice, and could speak knowledgeably of the Community Reinvestment Act long before the Crash of 2008. I knew what the CRA meant. It meant I could write a post for Samizdata about how the suppression of incentives for poor and marginalised people to act in ways that would help them get out of poverty (such as saving for a deposit on a house, or getting a steady job in order to qualify for a mortgage) would do them no good in the long run, not to mention encouraging them to take on debt they could not afford. There might still be a post in that, but the great floating balloon marked WORLDWIDE FINANCIAL CRISIS COMING TO YOUR TOWN SOON floated straight past me.

Blow me your bubbles, tell me about your predictions, especially the ones you got wrong.

*and also because the person offering it had endowed me with all his worldly goods anyway.

23 comments to Predictions, bubbles, and predicting bubbles

  • Tedd

    Eight years ago I was convinced that the Liberal Party of Canada had such entrenched supporters that the worst they had to fear in the foreseeable future would be to form a minority government. To the extent that their majority was threatened, it was as much from the left (NDP) as from the right. Only a year or two later, the Conservatives formed a (minority) government. And today, the Conservatives have a majority and the Liberals are relegated to third place.

    I’m sure few Canadians doubt that this is a temporary downturn for the Liberals. But still, I didn’t see it coming at all. It’s a case where I’m glad to be wrong, though, because my prediction was based on a growing pessimism about Canadian voters that may not have been warranted.

  • Sam Duncan

    In the next UK election I thought the Shy Tory effect would still be present. If it was it was washed away in a flood of voters not shy in the least about finally having had enough of the Conservative party in power.

    Depends what you mean. The Tories lost about a million votes between 1992 and ’97. Very, very few went to Labour. The famous “switchers” are largely mythical. I don’t have the figures to hand, but I think Blair would have lost the ’92 election on his ’97 poplular vote. It certainly wouldn’t have been the landslide that he enjoyed in reality five years later.

    None of which should be construed as excusing the Major government – those million Tories should have been motivated to vote, and they weren’t – but the accepted narrative of a grateful nation flocking to Labour under its messianic young leader simply isn’t true.

    I expect a similar effect in November. Romney might not attract many independents, but Obama has certainly lost a lot of his 2008 support. He did nothing to reverse that trend the other night. As expected.

  • mdc

    I thought that Obama and David Cameron would be elected but that they would both be one term leaders. Let’s see.

  • Laird

    Neils Bohr is famously credited (it probably wasn’t original with him) with saying that “prediction is very difficult, especially about the future.” If we’re sharing mea culpas about our wrong predictions I can offer a couple off the top of my head:

    A few years ago in these environs Midwesterner and I got into a lengthy discussion about Fannie Mae and Freddie Mac, in which I confidently predicted that both were strong enough (given their implicit governmental support) that neither would fail. I was spectacularly wrong about that. (Yes, they’re both in “conservatorship” now, not actual failure, but to me that’s a distinction without a difference.)

    And also back in 2008 or so, at the start of the economic meltdown we’ve been enduring these last 5 years, I expected that in certain respects it would be of relatively short duration, and that the loan securitization market would recover fairly quickly. This was based on my experience of having lived through the dotcom crash earlier in the decade, the Russian default / LTCM collapse of a few years before that, and even the S&L crisis a decade earlier. Again, time has proven me wrong, as we continue to slog through an interminable “non-recovery” with no end in sight.

    Don’t ask me for investment advice.

  • JohnB

    Obama possibly does flow into the shape of the vessels he is poured in to.
    Those vessels have been mainly elitist/Marxist.

  • JohnB – yes, that is so.

  • Snorri Godhi

    My prediction failures:
    I did not expect the Soviet Union to collapse so soon. An excusable mistake, I think.

    I expected the Falklands war, the Bosnian war, the Kosovo war, the Gulf war, and the Afghanistan war to be much harder for “us” than they turned out to be.

    I expected WMDs to be found in Iraq. (But it was Saddam, not W, who fooled me — and Saddam paid for it with his life.)

    My prediction success: I’ll mention just one for now.
    Obama governed pretty much as I expected, and apparently my expectation was much closer to the truth than the expectations of the vast majority of Americans.
    But then, the vast majority of Americans, unlike me, have never worked at the Ivy League.

  • Snorri Godhi,

    Me too about the WMD, and I thought Osama Bin Laden was dead years before he really was killed (although that wasn’t exactly a mistaken prediction, more a mistake about the true situation at that time).

    On the USSR, Robert Heinlein predicted in 1952 that communism would vanish from the planet by 2000. Unfortunately he wimped out of that in a later revision of the list a few decades later. The whole list of predictions is fascinating to read. A flavour is given by these two:

    10. By the end of this century mankind will have explored this solar system, and the first ship intended to reach the nearest star will be a-building.

    11. Your personal telephone will be small enough to carry in your handbag. Your house telephone will record messages, answer simple inquiries, and transmit vision.

  • nemesis

    I’ve been predicting the collapse of the E.U under its own weight for about 20 years now. Still waiting…..

  • Correction, Heinlein revisited his original predictions (the exact date of which is stated differently in different sources) twice, once in 1966 and once in 1980. I had forgotten that, despite reading the 1980 revision a couple of years after it was written. Here’s a blog post I just found comparing all three sets to how things really turned out.

  • Regional

    We’re all effwits

  • Snorri Godhi

    Natalie: thank you for your reply.
    A couple of things I forgot to say:

    However grim my expectations about the Falklands war, the Bosnian war, the Kosovo war, the Gulf war, and the Afghanistan war, I still thought that they needed fighting.

    And even without WMDs, I still tend to think that the Iraq war was worth fighting (though perhaps it’s too early to say): “we” needed to make an example out of Saddam.

    Did I mention that Chinggis Khan is one of my role models in foreign policy?

  • lucklucky

    Bubbles are always bursting around us, they aren’t just big enough for us to notice. Bubbles are part of discovery process of technology or any other human activity. Usually we can only see the limits after over- -investing in something.

    The most important thing is that the bubbles can be allowed to stop.
    But Politicians don’t want that because it means an adjustment period and they loose elections…

    WMD were found in Iraq just weren’t new and were far from quantity expected.

  • Tedd


    To let you off the hook a little (and myself, since I’m in the same boat wrt the financial crisis), a very good case can be made that the other financial crises you mentioned had much the same root cause as this one and that, in sense, it’s not so much a failure to predict the new manifestation as a slowness in recognizing the common cause.


    I feel much the same as you about Obama’s performance. Little if anything he has done has surprised me. I wouldn’t go so far as to say that I predicted much of it; I didn’t think that deeply about it, frankly. But if you’d asked me whether he would do A or B I think I would have got most of them right. The broad brush strokes were depressingly predictable back in 08.

  • Alisa

    Same here about Obama, Tedd – although I didn’t expect him to be as incompetent as he turned out to be. I expected him to be “merely” ill-intentioned.

  • Romney was a Mormon missionary in France for two and a half years. Apparently he met with a slightly less overwhelming proportion of rejection than most, and was promoted. Whatever your opinion of Mormonism, no one can emerge after thirty months of knocking on doors and trying to proselytise the French, in French, and not have developed some debating skills and also seen the limit of what any such skills can do.

    This is a joke, right?

    1. Generally: Mormon missionaries are not the ones who go knocking on doors. Most simply teach English or perform other “Peace Corps” type functions.

    2. Specifically: Romney spent his mission cloistered inside a French palace, complete with butlers, valets and chauffeurs.

    Can’t imagine why you’d adulterate an otherwise good post with such asinine misstatements.

  • KipEsquire,

    According to a New York Times article from 2007,

    The son of a car company chief executive who later became governor of Michigan, Mitt Romney called his mission an “instructive” first experience of deprivation. He lived on about $100 a month, sleeping on cast-off mattresses and crowding into small apartments in groups of four. The only toilet was often down the hall and the only shower in a public bathhouse.

    The 175 missionaries in France all rose at 6 a.m. each day, rang doorbells from 9 a.m. to 9 p.m., and turned in by 10. Each was assigned a “companion,” parting company only to go to the bathroom. Superiors would quiz each partner separately about the conduct of the other, to ensure they stayed in line.

  • Looking around some more, I’ve found the Telegraph’s account of the story you must have been referring to.

    It doesn’t say what you seem to think.

    First, though, let’s clear up one possible misunderstanding. I am not a particular admirer of Romney (though nor do I hate him). I am not a particular admirer of any of the Republicans who sought to be the Republican candidate for president, but I’d have preferred several of the others to Romney. It would not shock me to find that he lied about his experiences.

    However, in fact the Telegraph article offers very thin evidence that he did anything more than exaggerate how tough he had it in his young days in the way that not only practically all politicians but practically all humanity do. It only claims that he spent part of his final year in the “palace”, rather than his whole time as a missionary, and, having looked at the street on Google Street View, it’s a quite narrow street of admittedly fine townhouses, not palaces.

    Also there was no mention in the article of the valets or chauffeurs you referred to, although it does say that there were two people who did the cooking and other domestic chores for the residents. That’s “catered accommodation” rather than “waited on hand and foot.”

    Not that I even mentioned how spartan his accommodation was; he may want to talk about that to make the voters like him, but I scarcely care. What I did mention was that he had done the doorstep proselytising so it should have come as no surprise that he did not crumple in debate.

    The Telegraph article, contrary to what you implied, said that that continued even while he lived in the nice house:

    “Mr Romney and his fellow missionaries worked ten-hour days from 6.30am trying to spread the word of Jesus Christ of Latter-day Saints. Several said that the future Governor of Massachusetts was a gifted doorstep salesman”.

    As I said in the comments to the Brian Micklethwait post I linked to, I don’t so much want Romney to win as want the smug, dishonest media to lose. Whether he will win, I don’t know. I think it will be close.

  • Dale Amon

    I am still waiting for an Iranian revolution which I expected to happen by a couple of years ago.

  • Alisa

    You may have failed to take Obama into account on that one, Dale.

  • Paul Marks

    Yes Alisa.

    Revolutions do not tend to just happen by themselves – lots of ordinary people getting up one morning and saying “let us have a fundementally different system”.

    Even if they do say that – they tend to get smashed.

    No French support – no successful American Revolution (Americans do not like being told that, but it is the truth – without French and other support George Washington would have ended up at the end of a rope).

    No money (and other support) from the Duke of Orleans (the richest man in France) – no French Revolution (although the people he paid later turned on him….).

    No American support in 2009 – no Iranian Revolution

    As for Natalie…..

    How dare you disagree with me – I will stamp my foot and scream (and scream, and scream, till I am sick – like Violet Elizabeth Bott).

    Or, perhaps, I will not.

    There is a little secret about me.

    Under my violently bigoted exterior – there is an even more violently bigoted interior.

    I do not actually care why people are on the same side as me – as long as they are on the same side (tribalism – rather than pure intellectualism).

    People can think that Obama is from the Marxist tradition (as I believe), or that Obama is a sort of evil liquid that takes up whatever vile shape is useful to it (as you believe), or they can believe that Barack Obama is an agent of the Emperor Ming the Mercyless of the Planet Mongo.

    I do not really care.

    As long as they want Barack Obama (and his supporters – the “mainstream” media, the “education system” and…..) kicked out.

  • Julie near Chicago

    In response to Paul Marks, I feel it necessary to relieve myself of the secret truth regarding the erstwhile Incumbent of the White House, known to all right-thinking people as “the Sith.”

    Natalie is close in her characterization of It as “a sort of evil liquid, &c.” It found, approximately 1/2 Earth-century ago, an empty brownish plastic Ken doll into which to pour Itself. Actually a spawn of Cthulhu, It had been sent to Darth Sidious (who later masqueraded as the evil Chancellor Palpatine), for training in commanding the Dark Side of The Force. Alas, It was run over by a battlestar under the command of one Darth Vader on the very day It was to sit for Its finals…with the result that what would become the cranial contents of the Ken-doll were collapsed together into a sort of mush, rendering It incapable of more than the most incompetent imitation of human thought. And it was unable to complete its training by surviving the Final Test. Tsk, such a shame.

    More seriously…it seems to me that ideologically (NOT philosophically–I do not believe It has a philosophy) it has picked up and integrated into Its world-view the neo-Marxist cant and methods of the Communists, Alinsky, and Capone. But in the end, It will put Obama ahead of all else. I think It worships neither Allah nor Marx. As I remarked elsewhere recently , I still think it really aspires to be a combination of Mugabe and Bruce Springsteen.

    I wonder if It’s any good as a golfer.