Regruntled.com

I’ve often said that it’s more likely that I’ll be run over by a bus on the way to the polling place than it is that my vote will make a difference.  I thought I was joking, but a recent study shows an excess 24 auto fatalities and 800 disabling injuries on Election Tuesdays.  Overcoming Bias does a cost/benefit analysis, with additional discussion.

My latest excuse is that I’m betting on the election, so voting would be a conflict of interest.  I rather like being detached from the political process.  Instead of trying to choose the lesser of two weasels, I can find profitable trades on both sides.

According to the Wall Street Journal, Obama is proposing a welfare program disguised as a tax cut.  The trick is that the tax credits can be claimed by people who don’t pay taxes.  Fill out a form, receive a check.  It’s a transfer payment.

The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation’s Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.

The genius of this is that the transfer payments stay “off the books”.  The books show net revenues on the income side instead of total revenues on the income side offset by the welfare program on the expense side.

Instead of a bureaucracy with case workers, the New Welfare will be administered by the IRS.

I made fun of Obama’s “Yes we can”, and now I’ll make fun of McCain’s “My friends, I know how to do it”.  Obama’s slogan is inclusive (”we”), it’s an affirmation of faith and hope, and it can be chanted by a crowd.  McCain’s slogan is unchantable and too big for a bumper sticker.  It’s personal and exclusive; he knows how, and his friends don’t.  He’s not going to tell his friends how to do it, and he’s not going to show them, he’s just claiming that he knows.

Meanwhile, McCain’s whole life story is about perseverance and maverickiness, not competence or know-how.

• My friends, I know how to fix the economy.
• My friends, I know how to find Osama bin Laden.
• My friends, I know how to reform Washington.
• My friends, I know how to fly planes without crashing them or getting shot down.
• My friends, I have a secret plan to end the war.

OK, the last one was Richard Nixon, but you get the idea.

Shankar Vedantam at the Washington Post  has an interesting article about political views and party affiliations.

“Party identification is part of your social identity, in the same way you relate to your religion or ethnic group or baseball team,” said Gary C. Jacobson, a political scientist at the University of California at San Diego.

Referring to political scientist Marc J. Hetherington at Vanderbilt:

Rather, he said, what has happened in recent years is that partisans have come to identify with their parties in much the manner that sports fans identify with their teams. The strong views they feel on many issues do not drive their party affiliation; it is their party affiliation that drives their strong views.

Isn’t there a chicken-and-egg problem here?  If political views come from party affiliations, then where do party affiliations come from?  We seem to have a cultural assumption that information flows upwards in a political hierarchy (representative democracy, the will of of the people, yada yada yada).  On the other hand, in a religious hierarchy we assume that information flows downwards.  So if we substitute religion for politics in the basic premise:

Religious views do not drive religious affiliation; rather religious affiliation drives religious views.

It sounds perfectly reasonable.  I suspect that in politics, the information flows in both directions, but upwards in some people and downwards in others.

Intrade has a contract that pays off if Joe Biden withdraws, voluntarily or involuntarily, his Democratic VP nomination.  (This contract appeared a few days after the Palin withdrawal contract, so I suspect that someone shamed Intrade into it.)  Thursday morning I noticed that the contract had been bid up to 7.5, meaning a 7.5% chance that Biden will withdraw. 

Biden said on Wednesday:

Hillary Clinton is as qualified or more qualified than I am to be vice president of the United States,. She is qualified to be president of the United States of America. She is easily qualified to be vice president of the United States of America, and quite frankly, might’ve been a better pick than me.”

I interpreted this as a roundabout way of implying that Sarah Palin is not qualified, not because she’s a woman, but because she’s not Hillary.  And maybe Biden was sucking up to the Hillary supporters just a bit.  Apparently others interpreted this as an indication that Biden would step down, making way for Hillary to ride in on a white horse and save the election for the Democrats.  Well, of course I sold a few contracts short, but what fascinates me is that the rumor is not really about Biden.  It’s about Hillary.

Hillary looms over this election, larger than life.  When she lost the primaries, people thought she could capture the nomination with the help of the superdelegates.  People thought her supporters would do something at the convention.  Now that Obama has chosen Biden, they think that Biden might step down.  Intrade still shows Hillary with a 3% chance of winning the Presidency in November.  The recurring theme is that somehow Drama will trump Reality.  People are waiting for the writers to introduce the last-minute plot twist that will elevate Hillary to the position she rightfully deserves.

Jonathan Haidt writes at The Edge:

What makes people vote Republican? Why in particular do working class and rural Americans usually vote for pro-business Republicans when their economic interests would seem better served by Democratic policies?

But now that we can map the brains, genes, and unconscious attitudes of conservatives, we have refined our diagnosis: conservatism is a partially heritable personality trait that predisposes some people to be cognitively inflexible, fond of hierarchy, and inordinately afraid of uncertainty, change, and death. People vote Republican because Republicans offer “moral clarity”—a simple vision of good and evil that activates deep seated fears in much of the electorate. Democrats, in contrast, appeal to reason with their long-winded explorations of policy options for a complex world.

“Cognitively inflexible” sounds better than “bitterly clinging to guns and religion”, I suppose.  There seems to be a cottage industry devoted to explaining Republicans, rather than appealing to them.  Condescension is not a viable strategy.

1. Hillary’s original narrative was Destiny; she was the historically inevitable first female President, and this was her moment.
2. Obama countered with Change.  His Destiny as the first black President canceled out Hillary’s Destiny as the first female President, and he had none of her baggage.
3. Hillary lurched from narrative to narrative.  She tried to jump on Change, but was too late; Obama already owned Change.  She tried Experience, and went down in a hail of imaginary sniper fire.  Finally she settled on Regular Folks, drinking beer with steelworkers and painting Obama as a latte-swilling, arugula-eating elitist intellectual.  Too late.
4. Meanwhile, McCain went after Obama with War Hero and Experience.  Obama conceded War Hero, but countered Experience with Judgment.
5. Obama’s choice of Joe Biden as his running mate undercut Change but added some Experience.  With Hillary out of the picture, he regained Destiny.
6. McCain chose Sarah Palin for VP, diluting his own Experience and canceling out Obama’s Destiny again.  They’re offering Reform as an alternative to Change, and they still have War Hero and Regular Folks.  Palin is about as Regular Folks as you can get, being a non-bitter gun-toting, pro-life hockey mom.  (Has anyone else noticed how much she sounds like Principal Victoria on South Park?)

Where do we go from here?  I suppose it’s possible that the politicians could talk about the issues, but I suspect that things will settle down into two dueling narratives again.

Intrade changes the psychology of politics.  As a voter, I can participate twice, once in the primary and once in the general election.  I can show up at the prescribed time and place like a dog that comes when he’s called.  I can stand in line like a good little citizen, show my photo ID, and choose between the Red Team and the Blue Team.  It doesn’t matter who I vote for.  In a national election, I’m more likely to be run over by a bus on my way to vote than I am to tip the election one way or the other.

As an arbitrageur in a prediction market, I can participate early and often.  I can participate in both the Red and Blue primaries.  I can participate in the contests for Vice President.  I can participate whenever it is convenient for me.  I can participate sitting down, with a refreshing adult beverage by my side.  I can even participate in my sleep.  I woke up this morning and found that my short position in Rudy Giuliani got covered at a profit by a limit order.  So I shorted a few more Fred Thompson.

A voter sees an endless spectacle that tries to motivate him to vote for someone.  As an arbitrageur, I see more opportunities in taking positions against someone, simply because there are always more losers than winners.  I shorted 12 different VP candidates in all, including people I’ve never heard of.

It may not matter who I vote for, but it really does matter who I bet against.

Jonah Goldberg at USA Today argues that Obama is running a postmodern campaign.

The Obama campaign has a postmodern feel to it because more than anything else, it seems to be about itself. Its relationship to reality is almost theoretical. Sure, the campaign has policy proposals, but they are props to advance the narrative of a grand movement existing in order to be a movement galvanized around the singular ideal of movement-ness.

 

In Berlin two weeks ago, Obama’s speech was justified solely by the fact that he was giving it. He offered no policy and  —  not being a president  —  really had no reason to be there other than to tell people, essentially, “now is the moment.”

Postmodern or not, it seems to be working.  Obama draws crowds that want to see Obama.  McCain has to chase  crowds that exist for some other reason, like the Sturgis motorcycle rally.  People didn’t go to Sturgis to see McCain; McCain went to Sturgis to be seen.