Politics: Class-Interest Populism, and Election Contracts Update

Today we came across a very solid analysis from 2006 by labor economist Stephen Rose, in which he challenges a widespread belief among Democrats and the political left that a majority of Americans who vote for Republican candidates do so against their interests. In my experience, categorizing mass human behavior as irrational is the first resort of those who find the outcome of those behaviors personally disagreeable. Thus, we are big fans of critical analyses that dispel convenient untruths, whatever their political stripe.

On an interesting side note, in the wake of his Nobel Peace Prize, bids on Al Gore to win the Democratic nomination have pulled even with those on Sen. Obama, at around 11% each. However, at this point, these are call option bids only, as Senator Clinton’s chances have jumped from 40% to 70% since August–both are likely to expire worthless, barring any major surprises. The Gore Vice President contract is a peculiar example of inefficiency today, trading at 17 times the volume of the other Dem VP contracts while sporting the widest bid ask spread among the top four candidates! Perhaps this relative lack of information shouldn’t be surprising, since the VP nominee typically depends upon a prior probabilistic outcome (ie, the Presidential nominee). If true, we’d expect the VP contracts to "tighten up" once some of the state primaries are settled. 

Also interesting among Dem VP candidates is that the probabilities of a Clinton-Obama ticket and a Clinton-Richards ticket have dropped (too bad, we like Gov. Richards), while Evan Bayh’s chances have increased to around 15%. The highest probability is still placed on Obama however, at 22%, so the ticket-of-historic-proportions theme is still intact.

Not as much intrigue on the GOP side, though Fred Thompson’s chances have fallen since officially entering the fray, and markets are saying that no one seems to know who the presumptive VP candidate will be–the ‘Field’ contract (synonym for ‘Other’ or ‘None of the Above’) leads all named candidates by a wide margin–30% to Mike Huckabee’s 16%.

10/19/2007 — The speculation around Al Gore has largely been dispelled; here’s an example from Lynn Sweet of the Chicago Sun Times.