More Predictions That Didn’t Come True

(Photo: Julian Povey)

(Photo: Julian Povey)

Thank you, Politico (the Magazine), for taking a look back at various predictions for 2013 to see how they worked out.

In our “Folly of Prediction” podcast, we discussed how the incentives to predict are skewed. Big, bold predictions that turn out to be true are handsomely rewarded; but predictions that turn out to be false are usually forgotten. With the cost of being wrong so low, the incentives to predict are high.

In his Politico piece called “Crystal Balderdash,” Blake Hounshell doesn’t let us forget the bad predictions. A few examples:

Slate writer Matt Yglesias: “I wanted to once again take the opportunity to lay down a marker and say once again that Obamacare implementation is going to be a huge political success.” And here: “…conservatives are certainly fooling themselves if they’re expecting a backlash driven by problems around implementation. … Snafus will be real enough, but broadly speaking, the rollout is going to be a huge success.” Slate.com, July 17

Republican strategist Karl Rove: “Syria’s Bashar Assad will be forced from power, but Mr. Obama’s failure to provide active, sustained U.S. leadership will result in a new Islamist regime in Damascus friendly with Iran.” Wall Street Journal, Jan. 2, 2012

Citigroup’s Michael Saunders: “We assume Grexit occurs on January 1, 2013, with Greece staying in the EU and receiving external loan support.” Note to clients, May 23, 2012

I post these not in the spirit of ridicule — let’s assume that Yglesias, Rove, and Saunders were right about plenty of other things, or at least didn’t always feel the need to predict the unpredictable — but rather to suggest that the next time you read a prediction like these, you won’t pay much attention. Or at least demand that the predictor put his money where his mouth is.

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  1. Mark Brucker says:

    Hidden due to low comment rating. Click here to see.

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    • Dave says:

      Social Security is a gov’t sanctioned pyramid scheme. The reason is “popular” is because people paid into it and expect something for that payment. Like any other pyramid scheme, the people at the top when it was first instituted were the ones who benefited the most. The people at the bottom (when it goes bankrupt) will be the losers in the deal. I wouldn’t use the word popular to describe something like that, but that’s just me.

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      • Voice of Reason says:

        Apparently FDR gave convoluted reasons for why it was a good idea at the time. In his defense, it used to be a system where benefits weren’t paid out until people were passed the age that they were expected to already be dead. It was a system to give people a lifeline when they were destitute, that would only have a modest impact on the working man’s paycheck. Now it’s out of control. People expect to be able to retire at a relatively young age, and have the reward of living 20-30 years or more without working.

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      • James says:

        But I could do the “retire and live 20-30 years (or more, with luck) without working” thing without help from SS. Make a reasonable but not spectacular income, spend a good bit less than I earn, invest the rest. Though my reward is not not working, but the freedom to choose interesting work and set my own hours…

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      • Voice of Reason says:

        I think that we’ve seen that people are pretty incapable of saving for their future unless their forced to. And, I was talking about people who are well passed the age that they were expected to live. Wouldn’t it make sense to financially plan to live to age 80 or 85, and then have the masses pay a very small fee to insure the risk of living well passed they ever expected to live?

        By planning to live until your 90′s without any government safety net is leaving a lot of money on the table that you’ll probably end of wasting when you die too early.

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    • Steve says:

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  2. James says:

    The problem here is that these examples are not predictions in any real sense, they’re just expressions of wishful thinking. (Particularly the Obamacare one.) We can certainly find plenty of examples of successful predictions, grounded instead on evidence and known science.

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  3. steve cebalt says:

    “Folly” was one of your best podcasts ever. Just this week: The Federal Reserve announced the “taper” that virtually every market expert predicted would cause stocks to dive. Business networks were filled with round-the-clock “taper talk” for most of 2013, almost all of it predicting stock losses. Stocks rallied nearly 300 points instead within minutes of Wednesday’s announcement.

    Rarely have so many been so wrong so publicly.

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  4. Isaac says:

    The real danger is when policy is justified by using these types of predictions (think Iraq, Obamacare). As Taleb said in Antifragile these prognosticators should be held accountable for their predictions.

    I biblical times if a prophet was wrong once they lost credibility (Duet 18:22) we should have a similar standard…

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  5. dizzy d says:

    To be fair to Rove, he did publish a recap in the WSJ a few weeks ago recapping his predictions and what he got wrong/right. If I remember correctly, he claimed 10/14 right. Granted, we’d need a much larger sample size to determine any sort of skill… but it’s a little unfair to quote only one (of the four) predictions he got wrong on out of an entire list of predictions.

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