The cheap shot about economic forecasters is that God put them on Earth to make astrologers look good. One reason that’s unfair is it’s not just economists who get things wrong. As a way to say a not-so-fond farewell to 2021, I’ve compiled 10 of the worst predictions made about the year by overconfident people from many walks of life.
1. “With the vaccine, with mass testing and with the knowledge of how to prevent and treat this virus, I think the pandemic will end in 2021.”
Prime Minister Leo Varadkar of Ireland said this in an interview on Dec. 9, 2020, daring to predict the course of a pandemic that has flummoxed the experts repeatedly. To his credit, he did qualify his prediction with “I think.”
2. “With improved equipment, it is expected that there will also be improved and safer navigation along the canal.”
That’s a quote from an article in Egypt Today about the Suez Canal that appeared on Sept. 28, 2020, and was based on an announcement by the Suez Canal Authority of its investment plan for 2020 to 2021. In March 2021, commerce was disrupted worldwide when the Ever Given, a container ship, got stuck crosswise in the canal for six days. (Maybe it wouldn’t have happened if the authority had managed to complete those investments.)
3. “The unemployment rate is set to remain at or above the peak level observed during the global financial crisis, reaching 7.7 percent by the end [of] 2021 without a second wave (and 8.9 percent in case of a second wave).”
This overly pessimistic forecast by the Organization for Economic Cooperation and Development, issued on July 7, 2020, applied to the jobless rate across the organization’s 38 member countries. The organization’s latest estimate for average unemployment in those nations as of the fourth quarter of 2021 is just 4.4 percent. And that’s after several waves of the pandemic.
4. “It’ll start getting cooler. You just — you just watch.”
Donald Trump said that on Sept. 14, 2020, when, as president, he went to California to get a briefing on the state’s wildfires. Narrowly speaking, this prediction may have been correct. According to the National Oceanic and Atmospheric Administration, the worldwide average land and ocean temperature through November this year is only the sixth highest in 142 years of record-keeping; 2020 was No. 2. Broadly speaking, though, for Trump to say the world will “start getting cooler” is quite a stretch.
5. “I wouldn’t change the view that over the next year or two the dollar is going to steadily weaken.”
Kim Juckes, a macroeconomic strategist for Société Générale in London, said that on Bloomberg TV on Nov. 9, 2020, when the Federal Reserve’s broad, inflation-adjusted index of the dollar was at 106.1. This November it was at 109.3. That’s steady strengthening, not steady weakening.
6. “We studied a range of potential risks under both normal and extreme conditions, and believe there is sufficient generation to adequately serve our customers.”
Pete Warnken, the manager of resource advocacy for the Electric Reliability Council of Texas, said that in a statement released on Nov. 5, 2020. Three months later, power failures caused by Winter Storm Uri plunged millions of Texans into blackouts.
7. “I mean, this is a company trading at half-a-trillion-dollar market cap. It’ll have revenue this year of $30 billion, and despite what everyone says they’re still an automobile company.”
The investor James Chanos said that about Tesla in an interview by Bloomberg TV that was broadcast on Dec. 3, 2020. His point seemed to be that the market value of Tesla was bound to fall because it was too high in comparison to its revenue. Since then, Tesla shares have gone from under $600 apiece to over $1,000, and the market cap is over $1 trillion. This past year Tesla sales rose an estimated 64 percent, while earnings per share jumped an estimated 169 percent. Chanos did get one thing right: Tesla is still (mostly) an automobile company.
8. “N.Y.C. is dead forever. Here’s why.”
That’s what James Altucher, a blogger and podcaster, wrote in a post on LinkedIn on Aug. 13, 2020. People who fled the city because of Covid-19 would not come back, he said. “Not this time.” In a New York Times essay, the comedian Jerry Seinfeld responded indignantly to what he called “some putz on LinkedIn.” The next month Altucher spun his message in a video, saying, “Let’s focus on solutions because the faster we do that, the faster forever ends.” He thus redefined death as a temporary condition and forever as a period of time that is potentially quite brief. For the record: New York City is still hurting but far from dead.
9. “Taking a drone and flying it on Mars might be a cool sounding idea, but scientifically it’s almost a non-starter concept.”
So wrote someone named David Brace on the website Quora on July 15, 2020. On April 19, 2021, the helicopter Ingenuity ascended 10 feet above the Martian surface, becoming the first craft known to fly under power and under control on any planet other than Earth. It flew 17 more times in 2021. This December Brace conceded that Ingenuity’s flights are “a major significant achievement for the human race.” But he said his prediction hadn’t been wrong because there are still many things Ingenuity can’t do because of the thinness of the Martian atmosphere, like carry heavy loads.
10. “Such an argument would suggest that this move could potentially peak in December 2021, at the high of the channel, suggesting a move to as high as $318k.”
That’s what Tom Fitzpatrick, a Citibank analyst who predicts markets by analyzing historical price movements, wrote about Bitcoin in a note to clients that someone posted on Twitter on Nov. 13, 2020. Actual price last month? About $50,000. True, Fitzpatrick said “could” and “potentially.” But you can bet that he’d be bragging now if Bitcoin were trading around $300,000.
Wait, I have one more:
11. “The hawks may still turn out to be right, but for now, the preponderance of evidence is that today’s high inflation is anomalous and transitory.”
Who wrote that howler? I did, on June 2, 2021, in one of my last articles for Bloomberg Businessweek before I came to The Times. Then again, if James Altucher can argue that “forever” can be a very short time, maybe I can argue that by “transitory” I meant a very long time ….
Number of the week
The estimated number of job openings in the United States on the last business day of November, according to the median of estimates of economists surveyed by FactSet. That would be up from 11.033 million at the end of October and would roughly equal the July level of 11.098 million, which was the highest since records began in 2000. The Bureau of Labor Statistics will report the official number on Tuesday.
Quote of the day
“One thing you will note about shopping-center theory is that you could have thought of it yourself, and a course in it will go a long way toward dispelling the notion that business proceeds from mysteries too recondite for you and me.”
— Joan Didion, “The Shopping Center,” in Esquire (December 1975)
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