David R. Henderson  

Unemployment Bet

Pension Fact of the Day... My 2003 Bet...

Bryan is right to record bets. In 2003, at the Mont Pelerin Society meetings in Chattanooga, I made a bet about the Middle East for outcomes in 2008. I bet $1,000, her acknowledgement of it was in my computer in-box, and then my office burned down in Feb. 2007 along with my computer. Therefore I had no written record. In 2008, I reminded her of it and she said, basically, "No way I would have made that bet." So here's my one outstanding bet that I have not written down, other than in e-mail with the other bettor.

Thomas Cheplick bet me $100 in May 2010 that, "In five years the U-6 unemployment rate [he means the number of unemployed people] will be above 50 million."

That's one I plan to win. If I lose, I will be doubly upset--at losing $100 and at the sick economy that would give rise to 50 million people unemployed by U-6 standards.

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CATEGORIES: Labor Market

COMMENTS (8 to date)
Mitch Oliver writes:

Who knew that gambling would be an argument for effective disaster recovery planning?

Bob Murphy writes:

You should be a stickler. Even if the unemployment rate is 99%, you should say, "I win. You claimed 50 million."

David R. Henderson writes:

Good one, Bob. That's like the old trick that I played and, of course, didn't collect on, when I said to someone, "I'll bet you $100 that I can tell you the exact score of the game between Dallas and Green Bay before it starts." The bet is made and then I say, "0-0."

david writes:

And in April 2015 a freak accident sinks EconLib's server and backups :P

The lesson here is to keep geographically spread-out redundancies!

Incidentally, it seems likely that the 2003 bet you made probably exists on her outbox... but I suppose we'll never know.

Dan Weber writes:

I might burn down someone's office to not lose $1000 in a bet.

P Allen writes:

I like your odds. In fact, I think now would be a good opportunity to attempt to double it! I believe that the natural rate of unemployment for this current long-term landscape is somewhere around 2.00 percent. Like I told my senior level finance students last year, "there is a ton of work to be done out there and not enough people to do it, just don't expect to get paid for it (relatively of course).

David R. Henderson writes:

@P. Allen,
Good point. And an additional point to make to your students (depending on who they are), is that one of the things in the way of their getting jobs or at least in the way of low-skilled people getting jobs, is the relatively high (in real terms) minimum wage.

T Myers writes:

The good news is that if unemployment is that high in 2015, you can borrow the $100 and increase aggregate demand! That should solve the economic downturn.

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