Economic Optimism? Yes, I'll Take That Bet

Economic Optimism? Yes, I'll Take That Bet

www.nytimes.com

Five years ago, Matthew R. Simmons and I bet $5,000. It was a wager about the future of energy supplies — a Malthusian pessimist versus a Cornucopian optimist — and now the day of reckoning is nigh: Jan. 1, 2011.

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This wager was similar to one made by neo-Malthusian doomsters, Paul Ehrlich, John Holdren, and John Harte about future natural resource availability. The wager was lost, quite handily to economist Julian Simon in 1990. They chose a basket of five metals worth $1,000 in 1980 betting that their collective prices (indexed to inflation) would rise by 1990. Simon would pay the three whatever amount above $1,000 it would cost to buy the same basket of metals in 1990. Presumably the doomsayers would have used their winnings to refurbish the caves into which they retired to escape the starving hordes that would be ravaging the countryside a decade later. Note that the upside of the bet was essentially unlimited, whereas Simon would only have won $1,000 if the metals had become free. In October 1990, Paul Ehrlich mailed Julian Simon a check for $576.07. In other words the prices of the metals had fallen by more than 50 percent.
Back in 2005, the clamor from the peak oil crowd was growing. New York Times reporter, John Tierney, siding with cornucopians, arranged a bet with oil doomster investment banker Matthew Simmons about what the price of oil would be on January 1, 2011.

History has, once again, repeated itself with Tierney coming out the winner of this new wager.

One has to wonder why people like Ehrlich and Holdren with such miserable track records have had such professional success.


www.nytimes.com
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The guy who predicted $200 barrel oil will only be off by 18 months. He should have made the date 06/01/12. Watch and see.