Intrade is small enough to be manipulated, if you have a little spare change, and therefore its predictions aren’t trustworthy. Double-check any important prodictions with the Iowa Electronic Market and Betfair.
There are McCain supporters out there who are willing to spend, and lose, large amounts of money to influence an outlying marker of the campaign’s success.
Thanks to John Gruber for pointing to Austrian coverage of last night’s debate, complete with this bizarre picture of McCain. I think the caption says that he was reacting after he mistakenly turned the wrong direction to shake hands with the moderator. But there couldn’t be a worse image to sum up his debate performance last night:
The commentariat are going to love this moment, because it sums up some things that the conventional wisdom has been saying about McCain — cranky, really angry, hotheaded — and surfaces some new memes. Like disrespectful. Like borderline racist. Like, can’t believe he’s losing to this guy.
My friend and undergrad classmate Erik Simpson has been following an interesting trend on Intrade, the prediction market that allows predictive “bets” on realworld events. Specifically, Intrade’s prediction results were diverging from other predictive models, specifically those of fivethirtyeight.com. More research dug up the interesting fact that Intrade doesn’t agree with other predictive markets either. Yesterday Erik followed up these posts with the logical question: why not simply arbitrage the difference? If Intrade and the Iowa Electronic Markets are really efficient markets, there should be no persistent price spread, but since there is a price spread there’s an opportunity to make risk free money by selling on IEM and buying on Intrade, then reversing the trades after the election, when the outcome is locked. (As of this writing, Intrade has a 70% probability of Obama winning, vs. a 74.9% chance on IEM.)
The persistent difference in value can be explained by one of two market frictions: either there are one or more irrational actors who are making trades based on something other than rational economic decisions, or there is information asymmetry: the trader knows something that we don’t about the outcome of the election. I’m inclined to think it’s the former. But I don’t rule out the latter, for the reason that the GOP and its followers are starting to scare the hell out of me (anyone else wonder why someone shouting “Kill him” at a GOP rally wasn’t immediately brought in for questioning by the Secret Service?).
It’s not hard to see why the GOP might be frustrated at this point. The Democrats have done a superb job of keeping their powder dry, waiting until McCain really stepped up the smears to point out that he has deep roots in banking and real estate corruption through his membership in the Keating Five. This campaign has refused to roll over and play dead while smears and attacks were directed at them, and while they’ve played hard in return, it’s been to point out how McCain and Palin have specific unsuitabilities to deal with the issues in front of the country right now.
The downside of this campaign–one of the few really well contested matches we’ve seen in recent years–is that it doesn’t leave much room for discourse on the issues. I’d love to see Obama clear enough of the smoke to start talking about how we get out of this mess, but I think he’s going to be facing enough crap for the next few weeks that we won’t hear substantive proposals for a while.
…because something tells me this race is going to be a rollercoaster for the next few weeks.
Screenshot below from the excellent Election ’08 iPhone App, from Pollster.com and Slate. For a more nuanced view, look to the fine folks at Electoral-Vote.com, which shows Obama’s lead 338 to 185 electoral votes, with 15 ties. This high margin is pretty new in the race–back in early September, the lead was only about 100 electoral votes.
For more context, check out the historical trends on Electoral-Vote.com, where you can see what happens if you don’t count the states with a less than 5% margin of victory (answer: we don’t have a clear winner yet).
There are some moments of karma that are just too good not to post. This is one of them: GOP delegate’s hotel tryst goes bad when he wakes up with $120,000 missing. An attendee of the RNC convention who argued that the US should “bomb the hell” out of Iran and seize its resources to pay for the invasion picks up a woman in the hotel bar, who … makes him drinks, gets him bombed, and seizes his resources:
In an interview filmed the afternoon of Sept. 3 and posted on the Web site LinkTV.org, Schwartz was candid about how he envisioned change under a McCain presidency.
“Less taxes and more war,” he said, smiling. He said the U.S. should “bomb the hell” out of Iran because the country threatens Israel.
Asked by the interviewer how America would pay for a military confrontation with Iran, he said the U.S. should take the country’s resources.
“We should plant a flag. Take the oil, take the money,” he said. “We deserve reimbursement.”
A few hours after the interview, an unknown woman helped herself to Schwartz’s resources.
American representative democracy is based on some non-intuitive principles–that we the people should care enough about how we are governed that we develop an informed opinion on it, that power is best when dispersed and checked–and on some non-obvious assumptions. The one assumption that is absolutely key is that the people will have access to enough information on the candidates to make an informed decision.
This election is testing that assumption. With one side, we had a bitterly fought primary that lasted almost eighteen months and went right down to the wire, a candidate who has written two books and multiple detailed position papers about his views and policy proposals, who has said all along that he wanted to get above politics as usual to address core issues. On the other side, we have a ticket that has played fast and loose with the truth about themselves, particularly about Palin, and about their opponent. In this environment, there’s information asymmetry and the voter loses.
So how do you get back to the point where a balanced and fair exchange of views is possible? Well, maybe you run an ad that calls the other candidate on the lies he’s been telling, and you do it by summing up all the independent press coverage across the political spectrum that’s been written about it. An ad something like this:
Will it move the base, who are hoping against hope that McCain and Palin, against all odds, will actually embody the small government principles they want to see in Washington? I don’t know. I just hope it moves some independent voters. But I’m happy to see the campaign going on the attack about this.
So far, John McCain’s nomination of Sarah Palin on the basis of a 15 minute interview is proving to be the best illustration of why you should carefully vet vice presidential candidates–particularly those who haven’t run for national office before.
I’m still trying to figure out whether this choice of McCain’s is desperate or brilliant. The arguments for both:
Brilliant: McCain needed to differentiate himself from Obama while seizing hold of the “change” meme to pick up independent voters, but he also had to play to his base, who were late to fall in line behind the one-time “maverick.” Picking Palin on the basis of who she was (conservative, anti-choice, pro-guns, a short history as a reformer) helped shore up the base.
But more than this, maybe there’s a new calculus in play, a short-term thought process that says that the American people are going to be more likely to think whether a candidate for the second highest office in the land is “like them” than they are to worry about the person’s fitness for the job. In this short-term way of thinking, someone can be good to vote for simply because they are empathetic, because the voter wants to be that person. It’s kind of a “politician as celebrity” play.
Update: Illuminating in light of the above: McCain campaign manager Rick Davis says “This election is not about issues. This election is about a composite view of what people take away from these candidates.” So in other words, the McCain camp is betting on the celebrity view of politics that I describe above. Which is ironic, given their ads bashing Obama for being a celebrity.