2010: The Year in Failed Predictions
We’re coming to the end of the year and the pundits are lining up to tell us what’s going to happen in the one to follow. And why not? People want to hear predictions. And for the expert, there’s no way he can lose. If the prediction hits, he can boast about it and reporters will cite it as proof of his wisdom. But if it misses, no one will ever hear about it again.
Heads, I win. Tails, you forget we had a bet.
Of course the rules of the game would be a little different if, at the end of the year, instead of asking for new predictions, we looked back at what was predicted to happen in the year ending. Think of it as holding people to account for the predictions they make.
So let’s get on with the humiliation.
Whoah! Did I write that? I meant “fair and judicious review of past predictions.” Or, as this exercise might more accurately be described, “a bunch of predictions presented in no particular order and selected for no reason other than that they made me smile.”
— In a German aquarium, Paul the Octopus nailed all eight of his predictions for the 2010 World Cup in South Africa. In doing so, Paul either demonstrated successful predictions are often the product of nothing more than dumb luck, or he proved that octopi are a vastly superior species.
–“There will be blood,” Harvard history professor and global guru Niall Ferguson told the Globe and Mail in February, 2009. The economic crisis was at it’s worst and Ferguson was sure he knew what it would unleash. “A crisis of this magnitude is bound to increase political as well as economic (conflict). It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable.”
Ferguson’s comments got a lot of attention around the world. And then they were forgotten. Which is fortunate for Ferguson. “The economic crisis that started in 2008 had a strong negative impact on parts of the developing world, but did not lead to the expected increase in political violence,” notes the latest Human Security Report, released December, 2010.
— Former White House counter-terrorism official Richard Clarke was even scarier than Niall Ferguson when he took to the pages of The Atlantic in January, 2005. Imagining an address by an imaginary professor looking back on the 10th anniversary of the 9-11 attacks, Clarke detailed a cascade of disasters, each worse than the last, that culminates in the horrific year 2010. A wave of bombings at casinos, shopping malls, and subways. Muslims sent to detention camps. Shoulder-launched missiles knocking out jetliners. American transportation grinding to a halt, and the American economy with it. Catastrophic attacks on chemical plants. A coup in Saudi Arabia. Martial law in the U.S. A worldwide global depression.
None of it happened. Except that last bit, almost. But the terrorists responsible for that wore pinstripes. And they didn’t have the decency to blow themselves up.
— In 2010, a Japanese bank foreclosed on the White House and the United States became a wholly owned subsidiary of Japan Inc. Or rather, that would have happened in 2010 if the predictions made by hordes of experts in the late 1980s and early 1990s had come true. But they didn’t. In fact, in 2010, Japan fell from second to third spot in the ranking of the world’s largest economies. It was passed by China. And today, all the experts know it’s only a matter of time before China bumps the United States from the top spot – notwithstanding the fact that they said exactly the same thing about Japan 20 years ago.
But don’t forget the dark horse in this race. In the 11th edition of Paul Samuelson’s classic economics textbook, published in 1980, the renowned economist had a chart which shows that sometime around 2011 the economy of the United States will be surpassed by that of the Soviet Union. “The range of estimates shown here can make no claim to nice accuracy,” wrote Samuelson, “but they do represent the spread of best expert opinion.” Indeed.
— In his hugely influential 1992 New York Times best-seller, Head to Head: The Coming Economic Battle Among Japan, Europe and America, MIT economist Lester Thurow assured readers that China “will not have a big impact on the world economy in the first half of the 21st Century.”
In 2010, China’s booming economy was the envy of the world, Chinese bankers kept the United States afloat, and Thurow’s call was officially inducted into the Failed Predictions Hall of Fame.
— “I believe we will see the outbreak of civil disturbance at many levels in 2010,” wrote James Howard Kunstler, author of The Long Emergency and guru to the gloomy. Leftist radicals. Rightist nuts. All sorts of scary, violent types will “come out of the woodwork,” Kunstler wrote in the last days of 2009.
Some of the signs at Tea Party rallies had nasty things written on them, and the crowds at Justin Bieber concerts got, like, totally out of control, but it’s still safe to say that Kunstler’s dire vision didn’t pan out. No matter, though. Kunstler’s got plenty more dire visions to share and you can be sure his legions of fans will find them just as frightening as all the other things he predicted which did not happen.
–Castro will die, Newsweek forecast at the end of 2009. And Cuba’s relations with the U.S. will improve.
Wrong and wrong. And Fidel says, “up yours.”
–In the dismal waning days of 2008, Russian academic and dean of Moscow’s foreign service school Igor Panarin got an enormous amount of media attention – including a large write-up in the Wall Street Journal – for predicting the demise of the United States in 2010. Mass immigration, economic decline, and moral degradation would trigger a civil war and the collapse of the American dollar by the autumn of 2009, Panarin said. By mid-2010, the United States would break into six pieces. And Alaska would revert to Russian control.
It did not happen. Sarah Palin still has to look way over there to see Russia.
–In 1996, a group of leading foreign policy experts convened by the National Intelligence Council in Washington D.C. expected that by 2010 the world would be delighted to see “the transformation of North Korea and resulting elimination of military tensions on the peninsula.”
Sadly, North Korea was not so much transformed as it was preserved in amber. And since North Korea sank a South Korean warship this year, and it unleashed an artillery barrage on a South Korean island, and since South Korea threatened massive retaliation if there’s another attack, and the world held its breath as South Korea conducted live-fire training exercises, we can say that military tensions have not been eliminated on the peninsula.
Korea is something of a graveyard of expert predictions. Consider a survey conducted by The Atlantic at the end of 2007, when relations between North and South Korea were improving modestly. How likely is it “that North and South Korea will continue to reconcile and normalize relations over the next five years?” the magazine asked 39 foreign policy giants such as Warren Christopher and Joseph Nye. “Highly likely,” said 41 per cent. “Somewhat likely, ” said another 54 per cent.
A mere five per cent were pessimistic. That’s two respondents. And one of them was a German octopus.
–In 2000, Fortune magazine boasted that it had consulted with “some of the best stock pickers in the country” to come up with a list of “ten stocks for ten years.” These stocks may have some short-term volatility, Fortune said. But they were sure-fire winners if you hang on to them until 2010.
And Fortune was right. About one stock. The other nine were losers. Two of Fortune’s favourites? Nortel and Enron.
–Ever since oil became an industrial commodity in the late-19th century, smart people have tried to predict its future price. And they’ve failed. Over and over again. But still, they keep trying.
In 1993, the International Energy Agency looked out to 2010 and foresaw the price of oil rising gradually to $30 per barrel by 2005, then remaining flat. What actually happened is that oil generally stayed flat until 2003, then it soared until 2008, crashed, bounced back, and is now in the $90 range. Which is pretty much the opposite of the IEA’s forecast in every conceivable way.
One guy who disagreed with the IEA way back when oil prices were low and stable was then-CIBC economist Jeff Rubin. In 2000, he said oil prices would rise quickly. When they did, he became a guru and his 2008 prediction of $200 a barrel oil in 2010 caused a sensation.
As it turns out, Rubin was off by about $110 a barrel. But he’s still in the game, as confident as ever. Next year? Triple-digit oil prices, Rubin says. You can take that to the bank. Or the casino.
–As always, those of us who trade in failed predictions made a killing on the stock market this year. There was the “January barometer,” which supposedly forecast a year of terrible losses in 2010. Didn’t happen. Then in August there was a flood of stories about the “Hindenburg Omen,” which indicated unspeakable bloodshed to come. Ditto.
It was the same for countless calls by those gloomy analysts known as perma- bears. The U.S. dollar will crash. So will stock markets. “Zimbabwe-style hyperinflation” will ravage economies. We’ve heard this for the past several years from Peter Schiff and many others. Still waiting.
Special mention should be made of Robert Prechter, the stock analyst who had a massive following as a successful bull in the 1980s. In 2010, Prechter said the Dow would crash to 1,000 this year or in the near future. The media loved it. Prechter’s call was reported all over the world. Which was nice for Prechter. Even better, very few reporters mentioned that Prechter has been making pretty much the same prediction since 1987.
Heads, I win. Tails, you forget we had a bet.
There really is no way to lose the expert prediction game.