The Time I Offered to Bet $10,000

Note: I wasn’t going to post this, but after all the flack Willard Romney is receiving about offering to bet his fellow millionaires $10,000, I find myself in the unusual position of being sympathetic to him.  Therefore, the story of the day in early November of 1992 on which I offered to bet $10,000:

UPDATE: Paul Mulshine (h/t Blue Jersey) claims that had Perry taken the bet—that is, had the courage of his convictions—he would “have awarded him the 10 grand.”***** Instead, Perry claimed he’s “not a betting man,” all evidence contrariwise (e.g., his continuing this campaign) notwithstanding. Instead, the multimillionaire lied. Good thing he’s not running on character.

I am, truth to be told, probably a lousy poker player.  Not so bad as Barack Obama, but—aside from tells—when I see a sucker, I don’t hesitate.

So, a while back, when Lance Mannion (of Lance Mannion is Still Wrong fame) started tweeting about how Obama’s recent activities meant that liberals need to double-down and work to get large Democratic majorities for Obama in 2013. Since that worked so well in 2009-2010, I went looking for an opening.  And found one:

Really, Boehner almost lost his Speakership over this, he may yet, and he sounds like he won the World Series –

which required an appropriate, calm, measured reply*:

@LanceMannion Really, Obama lost his Presidency over this, and he sounds as if he’s cruising toward multimillion dollar CofC [Chamber of Commerce] speaking fees.

which produced the bet:

@klhoughton Dinner says he’s re-elected.

which lead to a discussion of betting on Presidential elections, which I admitted I only did once before:

K: I did bet $10K that WJC would win. But that was the day of the election. Now, my biggest risk is that Romney beats Bachmann.

L: You bet HOW MUCH?????

K: $10,000. (Trade was vetoed by my boss. Long story. Still bitter.) Other side was someone who is prominent [and from what I can tell a major source] in [William D. Cohan’s] House of Cards.

The bitter story below the fold.

It’s Election Day, 1992.  I am (somewhat) young, single, paying about $600/month in rent, and making Real Money for the first time in a year or so. (Ask your grandfather about the recession of 1990-1991.) In short, I am not liquidity-constrained.

Alan “Ace” Greenberg—the last CEO of Bear Stearns who was worth paying—had endorsed William Jefferson Clinton several months previously. He was the first head of a Wall Street firm to do so, but not the last.

Meanwhile, George H. W. Bush has been going around the country for the past week, campaigning as if he doesn’t want to win.  Or at least that’s the way it sounded to me, and I suspect the majority of the American people. It’s long after the Supermarket Scanner incident,** but he has spent the past two days yelling—calling Al Gore “Ozone Man” in Detroit—and generally Not Being Serious. For a candidate whose major strength is that he is Serious, it was clear that he was expecting to lose.

When the candidate expects to lose, it’s not a bad idea to bet against him. His information is likely better than yours, and his “tell” is showing.

So when one of the salespeople, who had a rather short temper, was pontificating at the end of the day about how GHWB was going to win that evening, I offered a friendly wager. At least, it started out that way.  But this is Wall Street.

Ken: “Bet you $10 Clinton wins.” As I said, trying to keep it a friendly wager. We would spend more than $10 on lunch (which was a company expense anyway).

Salesman (irritated at being challenged): “Make it $100.”

Well, when the mark says, “Take my money!” it’s at least a venial sin not to do so.  But if we’re going to talk about real money…

Ken:  “Make it $1,000.”

Salesman (getting angrier): “If you’re that certain, make it $10,000.”

At this point I hesitate. Not for effect, but just to do the calculations.  I know I have about $20,000 in liquid assets*** at the time, so another order of magnitude is out of the question.****  Can I afford to lose A Sure Thing?  Absolutely.

Ken: “Done.”

At this point, my boss—who had met the soon-to-be-former President and still thought fondly of him—intervened. (It is left as an exercise whether he made it up to me in bonus.)

So when millionaire Willard “Mitt” Romney offers to bet $10,000 with millionaire Rick Perry or millionaire Newt Gingrich, he’s basically fitting the minimum criterion for “this should get your attention.”  It’s hardly an “all-in”bet; as Hendrik Hertzberg notes, it’s more a casual wager.

As Francis Scott Key’s descendant once noted, “The rich are different.” And Papa’s rejoinder, “Yes, they have more money” is especially relevant when judging how sincerely the person believes their position to be correct.

Mitt’s offer to his fellow multimillionaires isn’t notable for its size; what is notable is that—as with me nineteen years ago—neither Gingrich nor Perry was willing to call and raise him.


*Those who have read my last two posts will realize that I say this without the slightest hint of irony, and that your mileage may vary.

**I’m sympathetic to GHWB on that one, by the way.  I lived and shopped in Washington Heights at the time, so we didn’t have scanners in any of our supermarkets either.  No one managing those stores would even think about making that type of capital investment.  And I shopped in stores a lot more often than the President—or even the Vice President—of the United States ever would. Those being the two jobs GHWB had had since 1981, the odds of him having encountered a supermarket scanner are about the same as [pick famous actress not related to my neighbor’s husband or filming one of her novels] showing up on my front door.

***I may have been counting Lines of Credit as part of liquid assets.

****I’m certain, in retrospect, that he would have said “done” on $100K. And given that I would have estimated the probability of losing at less than 10%, economic theory says that I should have offered the higher amount, even knowing I couldn’t cover it.  I believe this is the theory recently used by MF Global, who were dealing on direct-from-Mario-Draghi information.

*****The AP disagrees, but I find myself agreeing with Mulshine—a strange feeling in itself.