However, as we begin to hold actual primary elections, I can no longer pretend that it's too early in the race to pay attention. I watched the last Republican debate, and I started reading more of the coverage than I had before.
I'm still convinced that Trump will not win the Republican nomination. (I suppose I should explain the American primary system for our non-US readers, but as I discovered a while back trying to explain this to an Indian co-workers, it really is fairly unique and hard to explain. The really short version is: each political party holds a series of elections at the state level where party members vote on which candidate should be the party's nominee for president. When all these elections have taken place, the winner becomes the party nominee, who will then run in the general election in November against the other party's nominee.)
However, now that Trump has won two of the first three primaries, he's clearly more than a joke candidate. I'm relieved that Jeb Bush at last dropped out. The guy should never have got in. He's the one person who clearly can't accuse Clinton of running as a dynasty candidate, and though I think he's a decent enough politician we simply cannot and will not elect a third member of the Bush family president. This is not a monarchy.
Talk, however, is cheap, and I've been saying that Trump won't win for months while he's continued to lead in the polls (though still with a minority of the party's support.) So am I serious when I say that I don't think he will win the nomination?
As it turns out, we have a way of testing that, and of measuring public opinion at the same time. Prediction markets provide an investment market type environment in which people essentially place wagers on what they believe the outcome of an event will be. So, for instance, if you believe, as I do, that Trump will not get the Republican nomination, you can go to PredictIt and purchase shares in a "contract" that Trump will not get the nomination. Here's PredictIt's explanation of how their markets work:
PredictIt allows you to make predictions on future events by buying shares in the outcome, either Yes or No. Each outcome has a probability between 1 and 99 percent. We convert those probabilities into US cents.
For example, Trader A thinks an event has at least a 60 percent chance of taking place so she offers 60 cents for a Yes share. PredictIt matches her offer with that of Trader B, who is willing to pay 40 cents for a No share. Each trader now owns a share in the market for this event on opposite sides.
The prices of shares will change over time and both traders could decide to sell their shares at any time. A key to success at PredictIt is knowing when to sell in order to take a profit or prevent a loss.
If an event does take place, all Yes shares are redeemed at $1.
Shares on the "No" proposition for Trump are hovering right around $0.50 per share, meaning that in general people on the exchange think there is a 50% chance that he'll be the nominee. So I put $50 on the proposition that Trump will not be the GOP nominee, and another $50 on the proposition that he will not be elected president, since I think that if he were nominated (or if he isn't but runs third party) he will lose. If I'm right on both of those, I make a hundred dollars. If he's nominated but loses to the Democratic nominee, I break even. If he's nominated and wins -- well, we'll all have bigger problems than my lost $100.
Then, I figured that I better stop wishing there were better candidates and get behind my favorite viable non-Trump candidate, so I went and gave Marco Rubio's campaign $50. It's been twenty years since I last gave money to a political candidate's campaign, and I'd been holding off because I didn't think any of the candidates was good enough to put money behind. At this point, though, I'm willing to back Rubio because he's my marginal favorite among the non-Trump candidates.
It's three weeks until we have our primary in Ohio, and a lot will happen between now and then, but now at least I've broken out of my inactivity.
8 comments:
I was going to leave a comment on Matt Walsh's blog regarding an anti-Trump post, but it will work here.
There are two important victories that need to happen:
1. We need to elect a Republican non-Trump for president.
2. The Republicans need to block Obama from nominating anyone for the Supreme Court.
I don't see either of those things happening. Too many people want to be "liked" rather than actually working to make things better in this country. Trump is "winning" because he is popular and has name recognition, not because his politics are good, nor is he a good individual.
If neither of those conditions come true, I don't expect to bother voting for national elections ever again. I think I will still vote for local stuff, but I don't expect to be heard from on the national level.
Seems to me that we're about to find out if the Republican party leaders really can control who the nominee will be. Or perhaps better to say we're about to find out just how much they can influence the popular opinion and turnout. I still hold out hope that they can, just to avoid contemplating a world in which Trump is nominated.
I wish Rubio had more charisma like Christie and experience like Kasich or even Walker, but he's the best they've got right now. I hope he can grow into it. Trump and Cruz are both dead letters.
The third option is not voting. This is actually a principled option, given that the GOP refuses to field legitimate candidates. Legitimate candidates being nominees who do not cheerfully promise to violate the constitution.
If Trump wins, at least a chunk of America that has been unjustly dealt with the last few years will feel vindicated. Then again we will probably sit through a terrible four years as the insiders stop playing monetary tricks and let the stock market fall so that they can run again in four years with an 'I told you so' message.
Meanwhile, we have a strange sort of race in which Trump is likely preferable- the race to violence. We are on the path- the justice system is an internal proxy for violence. The courts no longer dispense justice. As time goes on, more and more people will turn to violence. It is a simple reality- maybe made a little harder here in the West since we've become so atomized. But, notice, we destabilized some Baathist states, and the Muslims still have their sheiks, and their extended family. They put a few cousins on the street with AKs to protect their street, and don't respect anyone else pretending to be the legitimate government.
Won't be surprised to see it here.
Like August above, I'd say not voting is the most principled option. Of course, here in California my (conservative) vote is even more insignificant than yours in Ohio.
I applaud Brendan however for putting his money where is mouth is, and on his sure $100 gain.
I console myself with my token vote for each of the state and local candidates endorsed by my local Pro-Life chapter. That, and raising my children well. Culture starts with strong families, and may yet stem the tide.
The cumulative odds of all the existing contracts for who will win the general election add up to 114%, so you can make around $100 today if you just buy No contracts for the entire field.
The way it works is that when you buy a No contract you pay full price, but if you then buy a No contract for another candidate it credit you part of your money back. When the cumulative odds add up to more than around 107%, you end up with more money than when you bought the original contract (the extra 7% is because of fees).
So, for example, I deposited $20 two weeks ago and turn it into $150 by buying No contracts for the oversubscribed markets.
Some caveats if someone wants to try the betting against the field option I described in my last comment:
PredictIt puts limits on how much you can have at stake in any one market. Those limits kick in earlier for contracts with higher No values (e.g. $.99 before $.50). Likewise, the number of contracts where you get credit for varies based on the price of the contract. So, for example, if Trump is at $.50 and Bloomberg at $.98 and you buy 100 No Trump contracts, you may only be able to buy 97 Bloomberg contracts at negative prices before it starts charging you again.
The upshot is that you should start buying with the most unlikely contracts and then work your way up. So, for example, if the prices were Clinton $.45, Trump $.25... Bloomberg $.98, Biden $.99, you would start by buying contracts for No Biden, then buy an equal number of No Bloomberg, and so on. Then you could go back and buy extra contracts for the higher odds candidates until it stops giving you back money.
August,
I'd tend to think that our country is a long, long way from descending into political violence. Yes, frustration is really high. But I think that frustration can often just lead to disengagement rather than violence -- unless people become so convinced that they have nothing to lose by resorting to violence that it begins to seem worth while.
In post-invasion Iraq, at a certain point, Sunni militias began to feel like violence was worth it -- but that was with their ethnic group locked out of the government and out of cronyism, with sky high unemployment, with little economic development, etc. Arguably, life might seem pretty cheap there.
I'm not sure that many people in the US are that hopeless -- and many who are seem to express their feelings by doing meth rather than by resorting to civil war.
Josiah,
Huh, I didn't think through the rules in that way. I had noticed that if you think through various implications of the predictions there are arbitrage opportunities. For instance, the chances of a woman being elected president in 2016 show as higher than the chances of Hillary being elected, but there's no real choice other than Hillary, so you could go long on one, short on the other, and be guaranteed a return.
But I figured my main point on there was to put weight behind my convictions, not make money. Now you're making it sound so fun that I'm tempted to fool around more...
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