Yesterday the Senate Finance Committee finally got around to meaningful votes, when it rejected amendments which would have added a public option to the health-care-reform package. It's completely unsurprising that the amendments failed. The Finance Committee is one of the more conservative committees in the Senate. Of the 23 members, the 10 Republicans were all certain to vote No. That meant that if 2 or more Democrats voted No, the amendments would fail. I was expecting Baucus, Conrad, Lincoln, Carper, and possibly Nelson to vote against the public option. It was a surprise on the upside that Carper and Nelson voted Yes for one of the amendments. Carper in particular, I had written off as a representative of all the insurance companies based in Delaware, so his vote is quite good news.
In a week or two the bill will finally be voted out of the Finance Committee, without a public option. At that point, Harry Reid and Obama will huddle together, count votes, and decide how to stitch together the Finance bill with the bills from the other Senate committees, which do have a public option. This full Senate bill is probably the truest test of where Reid and Obama think their vote counts are, and how hard they want to fight to get the public option passed. Reconciliation remains an option, and it may also be possible to convince conservative Democrats to vote for cloture but against the final bill.
Even if the full Senate bill does not include a public option, the House bill will include it. Which means that there would still be a chance, though remote, that a public option gets adopted in House-Senate committee.
In Intrade action, the odds of a public option passing dropped from 25ish to 16. I took advantage of this to close out my short position and load the boat going long. At the very least, I expect a bounce when the House passes its bill.
Olympic Fever!
I made a big bet last night that Obama would bring the Olympics home to Chicago. I bought about 1000 contracts at 60, which for laymen is betting $6,000 to win $4,000. I think the true value here is closer to 75-80%.
Contrary to previous reports, Obama is going to Copenhagen to lobby the International Olympic Committee. This is good news for Chicago's bid in two ways. First, Obama is an international rock star who will impress the hell out of the IOC members. He's the first American President to attend the IOC meeting, and holding the Olympics in his home town resonates well.
More importantly, Obama's trip indicates that Obama and his team think Chicago will win. The mainstream media have universally called this a gamble:
CNN: Obama Olympics trip carries political risks
NBC: Obama's Olympic Gamble
NY Times: In Pitch for Games, a Gamble for Obama
LA Times: Olympics trip a political gamble for Obama
etc, etc.
This overstates the riskiness of the move. If Obama doesn't bring home the Olympics, it'll be mildly embarrassing and forgotten a week later. If Chicago does win, it'll be a nice reminder that our President is popular overseas, and it'll be forgotten a week later.
Still, Obama's political team has undoubtedly studied each of the 100+ IOC members and their likely votes. They've got more information and more at stake than anyone on Intrade, and they've shown a great deal of optimism by sending Obama. I'm following their lead.
Contrary to previous reports, Obama is going to Copenhagen to lobby the International Olympic Committee. This is good news for Chicago's bid in two ways. First, Obama is an international rock star who will impress the hell out of the IOC members. He's the first American President to attend the IOC meeting, and holding the Olympics in his home town resonates well.
More importantly, Obama's trip indicates that Obama and his team think Chicago will win. The mainstream media have universally called this a gamble:
CNN: Obama Olympics trip carries political risks
NBC: Obama's Olympic Gamble
NY Times: In Pitch for Games, a Gamble for Obama
LA Times: Olympics trip a political gamble for Obama
etc, etc.
This overstates the riskiness of the move. If Obama doesn't bring home the Olympics, it'll be mildly embarrassing and forgotten a week later. If Chicago does win, it'll be a nice reminder that our President is popular overseas, and it'll be forgotten a week later.
Still, Obama's political team has undoubtedly studied each of the 100+ IOC members and their likely votes. They've got more information and more at stake than anyone on Intrade, and they've shown a great deal of optimism by sending Obama. I'm following their lead.
Quick answers
"What do you think the odds are on a transaction tax by the end of this year?"
Not going to happen. The idea behind the transaction tax is that it will reduce speculation -- you charge a 1% "sales tax" on financial transactions, which eliminates the incentive for automated traders and day traders to buy and sell over very short time frames. In theory, then, people would only buy for the long term.
In practice, this would shift most transactions to offshore, untaxed exchanges. To the extent the tax actually worked, it would completely destroy the way Wall Street operates. I don't have firm numbers, but I'd estimate the vast majority of trades are done with the goal of capturing a small gain over a short timeframe. Now, this might be a good thing for society. It would severely restrict the Wall Street casino. But it would also cause the market to fall off a cliff. Wall Street's lobby is powerful enough that a transaction tax will not receive serious consideration. The only way something transformative like that passes is if there is a second, worse crash, and politicians decide to fundamentally change the way finance works in this country.
Will Gitmo be empty by the end of the year?
No.
Who will win the air tanker contract?
First Boeing won the contract, but it turned out they had bribed some Air Force officers. Then Northrup/Airbus won it, but Boeing successfully challenged the contract, saying the Air Force had not evaluated the bids fairly. Now it'll probably be Boeing, but it's not a sure thing. The military prefers to contract with domestic rather than foreign companies. Politically, Boeing is supported by politicians from its home state of Washington, while Northrup is supported by Alabama, where its planes would be assembled. The Washington Democrats will have more sway than the Alabama Republicans. Air Force officers who are just trying to get through this without destroying their careers will take the safe route and pick Boeing.
Not going to happen. The idea behind the transaction tax is that it will reduce speculation -- you charge a 1% "sales tax" on financial transactions, which eliminates the incentive for automated traders and day traders to buy and sell over very short time frames. In theory, then, people would only buy for the long term.
In practice, this would shift most transactions to offshore, untaxed exchanges. To the extent the tax actually worked, it would completely destroy the way Wall Street operates. I don't have firm numbers, but I'd estimate the vast majority of trades are done with the goal of capturing a small gain over a short timeframe. Now, this might be a good thing for society. It would severely restrict the Wall Street casino. But it would also cause the market to fall off a cliff. Wall Street's lobby is powerful enough that a transaction tax will not receive serious consideration. The only way something transformative like that passes is if there is a second, worse crash, and politicians decide to fundamentally change the way finance works in this country.
Will Gitmo be empty by the end of the year?
No.
Who will win the air tanker contract?
First Boeing won the contract, but it turned out they had bribed some Air Force officers. Then Northrup/Airbus won it, but Boeing successfully challenged the contract, saying the Air Force had not evaluated the bids fairly. Now it'll probably be Boeing, but it's not a sure thing. The military prefers to contract with domestic rather than foreign companies. Politically, Boeing is supported by politicians from its home state of Washington, while Northrup is supported by Alabama, where its planes would be assembled. The Washington Democrats will have more sway than the Alabama Republicans. Air Force officers who are just trying to get through this without destroying their careers will take the safe route and pick Boeing.
What happens after health care?
The health reform debate has been sucking up all the political oxygen for the past few months. What's next on the agenda?
There are a few Intrade contracts about whether legislation will be passed by the end of the year. You can bet on Cap and Trade, the Employee Free Choice Act, a second Stimulus Bill, and the Freedom to Travel to Cuba Act.
I don't think any of these will be passed in the next 3.5 months. Health care will take up at least another 6 weeks. At the end of that epic battle, that point, everyone will be completely exhausted. Obama will have spent his political capital, and the Democrats will not be able to pass anything controversial.
Progressives would love for Cap and Trade to get passed before a key international climate meeting in Copenhagen. That's not going to happen. Cap and Trade is going to be a very tough bill to pass. It would change the energy industry almost as much as health care reform will change the health industry. The opposition will be equivalently energized. The House has already passed a Cap and Trade bill, which basically gave away the store to energy producers -- instead of using the carbon credits as a revenue source, something like 85% of the credits were given away to industry for the first 20 years. And even that bill just barely passed. It's just inside the realm of possibility that a Senate version could be put together with a crap-ton of pork and incentives tailored to getting individual Senators on board. That's not going to happen this year.
EFCA was once synonymous with "card check," the idea that unions could form without using a secret ballot. Card check appears to have disappeared, but a collection of union-rules reforms going by the name of EFCA is still waiting in the wings. Like Cap and Trade, EFCA would make major changes in the way business works in America. It'll be opposed by almost all Republicans and a handful of Democrats. Again, this bill might be heavily modified and porked out to win passage with 60 votes. It's not going to happen this year.
No, the next item after health care on the legislative agenda is Wall Street reform. After the partisan battles over health care, politicians of all stripes will team up to demonize a group even more hated than politicians themselves: Bankers. Expect a lot of outrage, a lot of high-profile hearings, and then, ultimately, a reform bill that doesn't really change any of the things that led to last year's near-collapse.
There are a few Intrade contracts about whether legislation will be passed by the end of the year. You can bet on Cap and Trade, the Employee Free Choice Act, a second Stimulus Bill, and the Freedom to Travel to Cuba Act.
I don't think any of these will be passed in the next 3.5 months. Health care will take up at least another 6 weeks. At the end of that epic battle, that point, everyone will be completely exhausted. Obama will have spent his political capital, and the Democrats will not be able to pass anything controversial.
Progressives would love for Cap and Trade to get passed before a key international climate meeting in Copenhagen. That's not going to happen. Cap and Trade is going to be a very tough bill to pass. It would change the energy industry almost as much as health care reform will change the health industry. The opposition will be equivalently energized. The House has already passed a Cap and Trade bill, which basically gave away the store to energy producers -- instead of using the carbon credits as a revenue source, something like 85% of the credits were given away to industry for the first 20 years. And even that bill just barely passed. It's just inside the realm of possibility that a Senate version could be put together with a crap-ton of pork and incentives tailored to getting individual Senators on board. That's not going to happen this year.
EFCA was once synonymous with "card check," the idea that unions could form without using a secret ballot. Card check appears to have disappeared, but a collection of union-rules reforms going by the name of EFCA is still waiting in the wings. Like Cap and Trade, EFCA would make major changes in the way business works in America. It'll be opposed by almost all Republicans and a handful of Democrats. Again, this bill might be heavily modified and porked out to win passage with 60 votes. It's not going to happen this year.
No, the next item after health care on the legislative agenda is Wall Street reform. After the partisan battles over health care, politicians of all stripes will team up to demonize a group even more hated than politicians themselves: Bankers. Expect a lot of outrage, a lot of high-profile hearings, and then, ultimately, a reform bill that doesn't really change any of the things that led to last year's near-collapse.
Tomorrow's news today
Mike Huckabee wins the straw poll at the Value Voters Summit. Ron Paul does unexpectedly well. Rick Santorum regrets appearing on the ballot.
Hey Jimmy
Hey. President Carter. We all think you're a great person and all. Thumbs up for your work with Habitat for Humanity. And congrats on the Nobel Prize. But do you think maybe you could stay out of politics and not play the horribly counterproductive race card on behalf of Barack Obama?
Massachusetts special election
I believe Martha Coakley will be the next Senator from Massachusetts. There's been very little action on this market, but I've put up a bid on Coakley at 50.
Olympics: Obama's staying home
I predicted a few months ago that Chicago was the favorite to win the 2016 Olympic Games. I still think they're the favorites, but the news that Obama won't be going personally to lobby the delegates puts a bit of a damper on that. I've hedged by betting on South America as well. My current positions: North America +60 @ 55.0, South America +83 @ 36.0.
Public option update
Despite all the machinations, very little has fundamentally changed for the public option. This is a highly constrained scenario -- we know several things with high certainty.
It has always been clear that a public option would not pass the Senate with 60 votes. It's also been clear that Obama would very much prefer to pass something with 60 votes than pass a bill through reconciliation with only 50 votes.
The question is simply whether Obama can put together 60 votes for the current bill which has a bunch of insurance reforms and a "triggered" public option. With Ted Kennedy's passing, the Dems have only 59 votes. The Massachusetts legislature may or may not change the law allowing the governor to make an interim appointment. If not, Obama will need all 59 Dems plus Olympia Snowe. That's a high hurdle but not impossible. Ben Nelson, the most conservative Democrat, appears to be on board. The rest of the Democratic caucus will surely be mindful of 1994 -- after Democrats failed on health care reform, the Republicans captured both houses of Congress. Failing to act was worse politically than passing a mediocre bill. Therefore the moderates will generally see it in their interests to pass a bill, even it's somewhat unpopular with their constituencies. I think 59 + Snowe is the likeliest outcome.
The House is not going to play a decisive role here. Pelosi has enough credibility with the liberal caucus to get them on board with whatever can pass the Senate. Several very liberal Dems will vote against it symbolically, but Pelosi will twist enough arms to pass it.
What happens if the Senate doesn't get 60 votes? The public option goes back on the table. Then you only need to please 50 Democratic senators. It's not clear that a bill targeted for reconciliation would include a public option -- it might be easier to pass without that feature. But Current whip counts in the Senate have 44 in favor, 2 against, and 13 maybes. Looking through those maybes, there are probably 6 who would support, particularly if the alternative is passing nothing at all.
The calculus remains the same -- the better the outlook for a bipartisan bill, the worse it looks for the public option. My position is -179 lots at an average of 24.0.
It has always been clear that a public option would not pass the Senate with 60 votes. It's also been clear that Obama would very much prefer to pass something with 60 votes than pass a bill through reconciliation with only 50 votes.
The question is simply whether Obama can put together 60 votes for the current bill which has a bunch of insurance reforms and a "triggered" public option. With Ted Kennedy's passing, the Dems have only 59 votes. The Massachusetts legislature may or may not change the law allowing the governor to make an interim appointment. If not, Obama will need all 59 Dems plus Olympia Snowe. That's a high hurdle but not impossible. Ben Nelson, the most conservative Democrat, appears to be on board. The rest of the Democratic caucus will surely be mindful of 1994 -- after Democrats failed on health care reform, the Republicans captured both houses of Congress. Failing to act was worse politically than passing a mediocre bill. Therefore the moderates will generally see it in their interests to pass a bill, even it's somewhat unpopular with their constituencies. I think 59 + Snowe is the likeliest outcome.
The House is not going to play a decisive role here. Pelosi has enough credibility with the liberal caucus to get them on board with whatever can pass the Senate. Several very liberal Dems will vote against it symbolically, but Pelosi will twist enough arms to pass it.
What happens if the Senate doesn't get 60 votes? The public option goes back on the table. Then you only need to please 50 Democratic senators. It's not clear that a bill targeted for reconciliation would include a public option -- it might be easier to pass without that feature. But Current whip counts in the Senate have 44 in favor, 2 against, and 13 maybes. Looking through those maybes, there are probably 6 who would support, particularly if the alternative is passing nothing at all.
The calculus remains the same -- the better the outlook for a bipartisan bill, the worse it looks for the public option. My position is -179 lots at an average of 24.0.
Mark Sanford, shine on you crazy diamond
Mark Sanford really got my hopes up yesterday. After 60 of the 73 Republican members of the South Carolina House called for his resignation on Wednesday, he called a press conference. Now that it's an absolute certainty that he will be impeached, I thought there was at least some chance he would save everyone a lot of grief and resign.
But no. He wanted to warn the media that the House leadership and the Ethics Commission were communicating, and that whatever report the Ethics Commission turned in would be "politicized."
Watching his body language is really interesting. For a man who's been attacked on all sides for the past 3 months, he is remarkably upbeat. Genuine, easy smiles. Quick, bright voice inflection. Nonverbally, he was saying, "Hey, guys, I'm right about this. Just listen to what I'm saying and you'll agree."
Sanford really thinks this is about his business-class travel, and not his Argentinian mistress. He really thinks the people of South Carolina want him to stay on and carry out his agenda. And he really thinks he's been done wrong here.
I would say there's a 0% chance Sanford resigns, and a 99% chance he gets impeached. The only question is whether the SC legislature reconvenes for a special session this year.
But no. He wanted to warn the media that the House leadership and the Ethics Commission were communicating, and that whatever report the Ethics Commission turned in would be "politicized."
Watching his body language is really interesting. For a man who's been attacked on all sides for the past 3 months, he is remarkably upbeat. Genuine, easy smiles. Quick, bright voice inflection. Nonverbally, he was saying, "Hey, guys, I'm right about this. Just listen to what I'm saying and you'll agree."
Sanford really thinks this is about his business-class travel, and not his Argentinian mistress. He really thinks the people of South Carolina want him to stay on and carry out his agenda. And he really thinks he's been done wrong here.
I would say there's a 0% chance Sanford resigns, and a 99% chance he gets impeached. The only question is whether the SC legislature reconvenes for a special session this year.
Can a speech really change people's minds?
Ryan Sager at Neuroworld runs a great blog. Recently he's taken up politics, and he's written interesting pieces about what determines presidential approval. He argues, convincingly, that presidential approval is basically determined by the economy, and other factors play a minor role. I generally agree that the pundit class overinterprets public opinion, and believes that tiny political kerfuffles have a much bigger effect than they really do.
More recently, I think he's taken it a little too far. He writes that previous speeches have, on average, not moved public opinion, and therefore Obama's won't, either.
Ryan and I both write a lot about cognitive biases, and I think he's suffering from one I see frequently in scientists. That is, he's read a study, believed it, and incorporated a simplified version of it into his world view: people's opinions are determined mostly by the economy, and nothing else really matters.
Obama's health care speech is a special case. Obama is universally known as a gifted orator. And health care reform has been immensely confusing to the public. Last week, only 31% of Americans said they had a good understanding of what the reforms would do. Only 37% could identify what the "public option" was, given 3 choices. What's more, the individual provisions in the bill, if they're explained to people in a neutral manner, are quote popular. Even the controversial public option gets support of about 59-34 when it's explained. I think it's entirely reasonable to expect that Obama's address will clarify what health care reform will do, and help the underlying popularity of the measures to win out.
More recently, I think he's taken it a little too far. He writes that previous speeches have, on average, not moved public opinion, and therefore Obama's won't, either.
Ryan and I both write a lot about cognitive biases, and I think he's suffering from one I see frequently in scientists. That is, he's read a study, believed it, and incorporated a simplified version of it into his world view: people's opinions are determined mostly by the economy, and nothing else really matters.
Obama's health care speech is a special case. Obama is universally known as a gifted orator. And health care reform has been immensely confusing to the public. Last week, only 31% of Americans said they had a good understanding of what the reforms would do. Only 37% could identify what the "public option" was, given 3 choices. What's more, the individual provisions in the bill, if they're explained to people in a neutral manner, are quote popular. Even the controversial public option gets support of about 59-34 when it's explained. I think it's entirely reasonable to expect that Obama's address will clarify what health care reform will do, and help the underlying popularity of the measures to win out.
Joe Wilson's War
Well, the speech was good. The early polls are favorable. Ben Nelson, the conservative Democrat, called it a "game-changer." And, like I predicted, it didn't move the Intrade price at all.
The media narrative for the next week or so will be that Congressional negotiators are basically tying up loose ends, and that health care is a done deal. Joe Biden says to expect a signed bill before Thanksgiving. That seems like a longer time than I would expect, or than Obama would like. Giving opponents two more months to fight seems like a bad idea. But, of course, it's just Joe Biden, and who takes anything Biden says seriously anymore?
The only surprising thing was Joe Wilson's "Liar!" What happens when you shout at the president during a joint address to Congress? The guy who's running against you for your seat gets a ton of cash dumped on him. Rob Miller, who Wilson outspent 2-1 in 2008, and defeated with 53.7% of the vote, received $100,000 in overnight contributions.
Joe Wilson will be a bete noire for the left. For a lot of people, the Joe Wilson moment encapsulates the entire health care debate. Obama has put together a carefully thought-out plan, and is explaining it intelligently. Reasonable people can disagree about elements of it, but the plan is certainly intended to improve the lives of Americans throughout the country. The opposition does not engage in reasonable disagreement. Their response is dumb, mean-spirited, and intellectually dishonest. Liberals ought to thank Joe Wilson for putting the contrast into such sharp relief.
The media narrative for the next week or so will be that Congressional negotiators are basically tying up loose ends, and that health care is a done deal. Joe Biden says to expect a signed bill before Thanksgiving. That seems like a longer time than I would expect, or than Obama would like. Giving opponents two more months to fight seems like a bad idea. But, of course, it's just Joe Biden, and who takes anything Biden says seriously anymore?
The only surprising thing was Joe Wilson's "Liar!" What happens when you shout at the president during a joint address to Congress? The guy who's running against you for your seat gets a ton of cash dumped on him. Rob Miller, who Wilson outspent 2-1 in 2008, and defeated with 53.7% of the vote, received $100,000 in overnight contributions.
Joe Wilson will be a bete noire for the left. For a lot of people, the Joe Wilson moment encapsulates the entire health care debate. Obama has put together a carefully thought-out plan, and is explaining it intelligently. Reasonable people can disagree about elements of it, but the plan is certainly intended to improve the lives of Americans throughout the country. The opposition does not engage in reasonable disagreement. Their response is dumb, mean-spirited, and intellectually dishonest. Liberals ought to thank Joe Wilson for putting the contrast into such sharp relief.
Conservative politician in sex scandal
Must be Wednesday again...
California State Rep Michael Duvall caught bragging about his sexual exploits at a meeting in the legislature. He didn't know the microphone in front of him was live.
Of course, his much-younger mistress is a lobbyist for an energy company, Sempra Energy. And, of course, Duvall is vice chair of the Committee on Utilities and Commerce.
I'm sure she likes him for his personality.
______________
Update
Duvall: I totally regret getting caught.
______________
Second Update
Duvall inevitably resigns.
California State Rep Michael Duvall caught bragging about his sexual exploits at a meeting in the legislature. He didn't know the microphone in front of him was live.
So, I am getting into spanking her. Yeah, I like it. I like spanking her. She goes, 'I know you like spanking me.' I said, 'Yeah! Because you're such a bad girl!'
Of course, his much-younger mistress is a lobbyist for an energy company, Sempra Energy. And, of course, Duvall is vice chair of the Committee on Utilities and Commerce.
I'm sure she likes him for his personality.
______________
Update
Duvall: I totally regret getting caught.
______________
Second Update
Duvall inevitably resigns.
Health care
For the most part, I'm going to keep my opinions to myself on this, but here are two predictions:
1. The most likely outcome is that a bill passes with a public option with a trigger. But this is not a lock.
2. Obama's speech tomorrow night will not change the Intrade price very much.
1. The most likely outcome is that a bill passes with a public option with a trigger. But this is not a lock.
2. Obama's speech tomorrow night will not change the Intrade price very much.
Obama's Waterloo
Throughout President Obama's career, his hallmark has been seeking the middle ground. As the editor of the Harvard Law Review, he navigated a calm passage between extremist factions from the left and right. In the Illinois Senate, he co-sponsored many bills with conservative Republicans, taking a liberal but pragmatic stance on most issues.
Ryan Sager dug up this interview with Obama from 1995.
Key soundbite:
Obama's philosophy seems to be that politics is the art of the possible, and that when all sides come together to bargain in good faith, they can come to a consensus on good ideas that make people's lives better.
But what happens when the other party won't bargain in good faith? When Obama came to the White House, the Republican leadership made a conscious, self-interested decision to do everything it had to to stop him from succeeding. Why? Because Obama's success, on any issue, would hurt the Republicans' electoral prospects. Take health care reform. The "public option" issue is hotly debated. But there are plenty of issues where both parties can support reform. For example, banning health insurer rescission, in which insurance companies retroactively cancel a policy after a person makes expensive claims. This is unconscionable, yet it happens to 50% of people who make claims of more than $35,000. Part of the health reform bill would end practices like that.
But even if you pare away anything controversial like the public option, the Republicans still won't support health care reform. They'll just make up new controversial issues out of thin air, like the Death Panels. The calculation for the GOP is simple: pass health care, and lose seats, or block health care, taunt the Democrats for being ineffective, and gain seats.
Obama still doesn't seem to have realized that the Republicans are not and will never bargain in good faith. Early reports of his big nationwide address next week indicate that he will focus on the safe, consensus issues, and not put a big emphasis on the public option. This is good government, it's the approach that has served him well in the past, and it will now fail to win a single Republican vote.
Ryan Sager dug up this interview with Obama from 1995.
Key soundbite:
Interviewer: “You’re willing to stake your political career on the idea of there being a common ground?”
Obama: “That’s the core of my faith.”
Obama's philosophy seems to be that politics is the art of the possible, and that when all sides come together to bargain in good faith, they can come to a consensus on good ideas that make people's lives better.
But what happens when the other party won't bargain in good faith? When Obama came to the White House, the Republican leadership made a conscious, self-interested decision to do everything it had to to stop him from succeeding. Why? Because Obama's success, on any issue, would hurt the Republicans' electoral prospects. Take health care reform. The "public option" issue is hotly debated. But there are plenty of issues where both parties can support reform. For example, banning health insurer rescission, in which insurance companies retroactively cancel a policy after a person makes expensive claims. This is unconscionable, yet it happens to 50% of people who make claims of more than $35,000. Part of the health reform bill would end practices like that.
But even if you pare away anything controversial like the public option, the Republicans still won't support health care reform. They'll just make up new controversial issues out of thin air, like the Death Panels. The calculation for the GOP is simple: pass health care, and lose seats, or block health care, taunt the Democrats for being ineffective, and gain seats.
Obama still doesn't seem to have realized that the Republicans are not and will never bargain in good faith. Early reports of his big nationwide address next week indicate that he will focus on the safe, consensus issues, and not put a big emphasis on the public option. This is good government, it's the approach that has served him well in the past, and it will now fail to win a single Republican vote.
Justice John Paul Stevens' Retirement
Over the past two days, there's been a rush of speculation that John Paul Stevens will be the next Supreme Court Justice to retire. You've got the NY Times, LA Times, and NPR among hundreds of other news outlets, all delivering the "breaking news" that Stevens might be the next one to retire. The spark for this breathless speculation was the report that Stevens hired only one clerk, instead of his usual three.
I've got some news for everybody: the dude is 89 years old. Of course he'll retire soon. Like Souter, he'll do it during the summer after the current Court term is over. It might be next summer, or it might be summer of 2011. A lot of people speculate he wants to be the oldest judge ever to serve on the Court; to achieve that Stevens will have to stay on until February of 2011.
There aren't any other Justices on the verge of retirement. Unless one of them suddenly develops serious health problems, Stevens will be next.
I've got some news for everybody: the dude is 89 years old. Of course he'll retire soon. Like Souter, he'll do it during the summer after the current Court term is over. It might be next summer, or it might be summer of 2011. A lot of people speculate he wants to be the oldest judge ever to serve on the Court; to achieve that Stevens will have to stay on until February of 2011.
There aren't any other Justices on the verge of retirement. Unless one of them suddenly develops serious health problems, Stevens will be next.
As South Carolina Turns
There is some delicious political soap opera going on in South Carolina right now. Last time on As South Carolina Turns, we saw Governor Mark Sanford fighting off calls for his resignation following his affair and travel scandals. This weekend I indulged in some shameless rumor-mongering, reporting that one of the Gov's top appointees would shortly be involved in a new sex scandal. That turned out to be correct: Board of Education Chairwoman Kristin Maguire resigned on Monday following revelations that she had written erotic fiction and published it on the internet.
I actually feel a bit bad for Maguire. I was expecting some kind of Larry Craig-type over-the-top scandal. All she did was write some stories, which, by the standards of internet porn, are pretty tame. Of course, it was a complete dumbass move for someone with a career in conservative politics to publish porn in a way that could be traced back to her.
Of course, Maguire wasn't the big focus in South Carolina politics over the past few days. Evidently Andre Bauer, the Lieutenant Governor who last week called on Sanford to resign, is gay. At least according to Michael Rogers, a gay activist who correctly outed Larry Craig and Mark Foley before their stories became mainstream news. It's hard to tell, but my gut instinct is this is probably true.
This is political hardball. Whether the Bauer rumors are true or not, I have no doubt that they were leaked by operatives for Mark Sanford. This rumor is a three-fer: it distracts from Kristin Maguire's resignation, it retaliates against Bauer for his resignation call, and it significantly damages Sanford's potential replacement.
Sanford followed up with lengthy interviews with the Wall Street Journal and Washington Times. The overall effect is for Sanford to say, "Hey! I'm staying, I still power, I still have dirt on you, and you're going to have to deal with me for the next 18 months."
The strategy of outing Bauer could blow back on Sanford. One of the reasons South Carolina legislators have been slow to move against him is the 2010 gubernatorial race. Bauer is a candidate, and several other powerful Republicans are gearing up to run. If Sanford is removed, Bauer would become governor, and would get a year or more of incumbency. (Bauer claims he wouldn't run if Sanford were removed, but no one really believes him.) Consequently many of the state's heavy hitters don't want to push against Sanford for fear of giving Bauer an advantage. However if Bauer's political career is crippled by this scandal, other candidates for governor won't be scared of letting him become a caretaker governor.
There's more to come. This is a giant political food fight, and no one's saving ammunition for later.
I actually feel a bit bad for Maguire. I was expecting some kind of Larry Craig-type over-the-top scandal. All she did was write some stories, which, by the standards of internet porn, are pretty tame. Of course, it was a complete dumbass move for someone with a career in conservative politics to publish porn in a way that could be traced back to her.
Of course, Maguire wasn't the big focus in South Carolina politics over the past few days. Evidently Andre Bauer, the Lieutenant Governor who last week called on Sanford to resign, is gay. At least according to Michael Rogers, a gay activist who correctly outed Larry Craig and Mark Foley before their stories became mainstream news. It's hard to tell, but my gut instinct is this is probably true.
This is political hardball. Whether the Bauer rumors are true or not, I have no doubt that they were leaked by operatives for Mark Sanford. This rumor is a three-fer: it distracts from Kristin Maguire's resignation, it retaliates against Bauer for his resignation call, and it significantly damages Sanford's potential replacement.
Sanford followed up with lengthy interviews with the Wall Street Journal and Washington Times. The overall effect is for Sanford to say, "Hey! I'm staying, I still power, I still have dirt on you, and you're going to have to deal with me for the next 18 months."
The strategy of outing Bauer could blow back on Sanford. One of the reasons South Carolina legislators have been slow to move against him is the 2010 gubernatorial race. Bauer is a candidate, and several other powerful Republicans are gearing up to run. If Sanford is removed, Bauer would become governor, and would get a year or more of incumbency. (Bauer claims he wouldn't run if Sanford were removed, but no one really believes him.) Consequently many of the state's heavy hitters don't want to push against Sanford for fear of giving Bauer an advantage. However if Bauer's political career is crippled by this scandal, other candidates for governor won't be scared of letting him become a caretaker governor.
There's more to come. This is a giant political food fight, and no one's saving ammunition for later.
lolmarkets: IBM Smarter Cities Prediction Markets
Hat tip to Midas Oracle and Panos Iperotis.
I usually don't pay attention to the play-money prediction markets. But I have to comment on how unbelievably poorly done the IBM Smarter Cities markets (powered by spigit) are.
Where to begin? Well, how about this: 5 minutes after joining, I managed to get second place on their leaderboard.
You could do it too. Register, and allocate all of your "tokens" to the most popular option for each market. We'll end up with identical scores. The program calculates your "Net Worth" by simply multiplying your "shares" by their "probability." It doesn't matter if you bought in at a higher or lower price. It doesn't matter whether the most popular option has any grounding in reality. Winning at this fake market is just a question of picking the option everyone else likes.*
Let's take a step back and think about what a real prediction market should do. That is, if we really want to use prediction markets to determine policy at either the level of public policy or corporate strategy, what characteristics should they have?
1. It should allow traders to make predictions between precisely defined, mutually exclusive options. "Who will win the 2012 US Presidential election?" is a great question. "Which of the following should be a primary objective for a major city over the next five years?" with the choices "Become a low-carbon city," "Implement a smart grid," or "Become a zero-waste eco-city" is a terrible question. There is no objective basis to determine which of these is correct.
2. It should be hard to tamper with. If real policy decisions are to be made on the basis of markets, there will be tremendous incentive to manipulate the markets in order to influence the policy outcome. If I were selling technology for a "smart grid," you can bet I'd be stuffing the ballot boxes on this site. Just to check, I tried registering a second account from the same computer. They let me, with no problem. If I wanted to spend 4 hours doing this, I could easily set any of the probabilities to whatever I wanted. This program fails even the most basic test of tamper-proof security.
3. It should offer participants genuine rewards for making accurate predictions. Intrade uses real money; many corporate predictions markets give prizes to top finishers; play-money sites like Hubdub give players the satisfaction of being on top of real leaderboards. I tend to think the bigger the rewards, the more effort goes into researching and understanding the markets, though this could be tested by comparing Intrade and Hubdub's prediction success. IBM offers only a broken leaderboard.
4. It should be grounded in real outcomes. After the 2012 election, someone's going to be president, and the related contract will expire at 0 or 100 based on what happens in the real world. The IBM markets "expire," whatever that means, in 2 weeks, without any input from the real world. Again, it's a game of simply choosing what the rest of the crowd chooses, rather than paying the least attention to the real world.
Spigit managed to sell this to IBM, so it's obviously got a great marketing department. And the web interface is very smooth. It's just too bad there's no one there who understands how the meat of the program should work.
*So why am I not first? I believe ruthmiller registered before me and made a prediction in a market which was later made inaccessible to new registrants. Therefore she has one more prediction, and hence a higher net worth. Just one more way in which this enterprise has failed.
I usually don't pay attention to the play-money prediction markets. But I have to comment on how unbelievably poorly done the IBM Smarter Cities markets (powered by spigit) are.
Where to begin? Well, how about this: 5 minutes after joining, I managed to get second place on their leaderboard.
You could do it too. Register, and allocate all of your "tokens" to the most popular option for each market. We'll end up with identical scores. The program calculates your "Net Worth" by simply multiplying your "shares" by their "probability." It doesn't matter if you bought in at a higher or lower price. It doesn't matter whether the most popular option has any grounding in reality. Winning at this fake market is just a question of picking the option everyone else likes.*
Let's take a step back and think about what a real prediction market should do. That is, if we really want to use prediction markets to determine policy at either the level of public policy or corporate strategy, what characteristics should they have?
1. It should allow traders to make predictions between precisely defined, mutually exclusive options. "Who will win the 2012 US Presidential election?" is a great question. "Which of the following should be a primary objective for a major city over the next five years?" with the choices "Become a low-carbon city," "Implement a smart grid," or "Become a zero-waste eco-city" is a terrible question. There is no objective basis to determine which of these is correct.
2. It should be hard to tamper with. If real policy decisions are to be made on the basis of markets, there will be tremendous incentive to manipulate the markets in order to influence the policy outcome. If I were selling technology for a "smart grid," you can bet I'd be stuffing the ballot boxes on this site. Just to check, I tried registering a second account from the same computer. They let me, with no problem. If I wanted to spend 4 hours doing this, I could easily set any of the probabilities to whatever I wanted. This program fails even the most basic test of tamper-proof security.
3. It should offer participants genuine rewards for making accurate predictions. Intrade uses real money; many corporate predictions markets give prizes to top finishers; play-money sites like Hubdub give players the satisfaction of being on top of real leaderboards. I tend to think the bigger the rewards, the more effort goes into researching and understanding the markets, though this could be tested by comparing Intrade and Hubdub's prediction success. IBM offers only a broken leaderboard.
4. It should be grounded in real outcomes. After the 2012 election, someone's going to be president, and the related contract will expire at 0 or 100 based on what happens in the real world. The IBM markets "expire," whatever that means, in 2 weeks, without any input from the real world. Again, it's a game of simply choosing what the rest of the crowd chooses, rather than paying the least attention to the real world.
Spigit managed to sell this to IBM, so it's obviously got a great marketing department. And the web interface is very smooth. It's just too bad there's no one there who understands how the meat of the program should work.
*So why am I not first? I believe ruthmiller registered before me and made a prediction in a market which was later made inaccessible to new registrants. Therefore she has one more prediction, and hence a higher net worth. Just one more way in which this enterprise has failed.