Presidential Primaries Bets

[AvivaSimplex]

I didn't post picks in 2004, but I doubled my tradesports account during that primary season. I'd appreciate commentary.

Part 1: Democrats
The value right is in betting Obama to win the nomination. Nearly +400? That's crazy.

Here's why. The nominee will be one of the top tier candidates. That means Obama, Clinton, Gore, or Edwards. In 2003 Dean came out of nowhere with huge amounts of money through his net-roots supports. This time the big names know how much money is available, and are assiduously courting sites like dailykos for their support. Dean also broke things open by being the first to overtly criticize Bush, back when his approval ratings were still pretty high. You can argue about whether that's a good overall strategy, but there's no doubt he appeal to a lot of liberals who were sick of their party rolling over and appeasing Bush. Again, this year, there's no space for an unknown to break through this way. Though actually, now that I think about it, Obama has already broken through, by being optimistic and trying to transcend ordinary politics.

Given those choices, I'd put their odds at Obama 50%, Clinton 30%, Edwards 10%, Gore 10% (if he decides to run). The primaries are fundamentally a money contest. Candidates run until their financial support runs out--they do poorly in Iowa and New Hampshire, and nobody wants to write them big checks anymore.

Clinton clearly has the connections with the traditional Democratic money machine, and would have sucked all the air out of the room had Obama not been such a phenomenon. The problem with her is, nobody seems to like her. When's the last time you saw somebody really excited about Hillary Clinton becoming president? 1993, maybe? As an example, my mother is exactly in Clinton's demographic. She's a white, well-educated liberal who has a subscription to Ms. magazine and earns more than my father. And even she thinks Hillary's a cynical power-hungry bitch. So while Clinton has the calculated institutional support of people who want influence with the White House, she utterly lacks grass roots or personal appeal. I don't want to totally neglect her other advantages--her husband is a master strategist and campaigner (though he also brings some big disadvantages), and she has great name recognition and surprisingly strong support in the black community. But overall she has failed to create the aura of inevitability that she would have liked.

Edwards has some degree of independence from the money race due to his personal fortune. Also, he'll get the early support from trial lawyers, who of course have deep pockets and a need for influence. I personally don't see his appeal. He basically disappeared during his run as the 2004 VP candidate. He has good stage presence, but he is clearly an actor, and lacks authenticity. In 2004 Republicans called him "the Breck Girl," which neatly sums up his authenticity problem. Apparently he's spent the last 3 years in Iowa, under the impression from the 2004 campaign that whoever wins Iowa wins the nomination. The problem with this strategy is that the Iowa and New Hampshire primaries, more than anything else, are expectations games. Thus even if Edwards does well in Iowa, everyone will say it's because he spent so much time and resources there. An Iowa win would make other primary voters take a look at him, but that's about it.

Despite Rolling Stone's pleading, I doubt Gore will run again. He genuinely seems to be disgusted by the political process. If he does decide to do it, he'll have the money and a devoted base of upper-middle-class liberals. Overall, though, the public seems to see him as a smug smarty-pants who invented the internet. In the polls I've seen, his unfavorable ratings are very high, especially considering how long he's been out of politics (45%, vs. 19% for Obama, 31% for Edwards, and 40% for Clinton).

And then there's Obama. Okay, let me just get my personal bias out of the way. I really like Obama. He's the first politician I've seen in my lifetime who can really make people feel inspired. I mean, all politicians say things about "moving America forward together," but Obama really makes you believe it. I think people are looking for sincerity and authenticity, and Obama really communicates those qualities. Obama has what none of the other Democrats have: people like him and trust him and believe he wants the best for America.

Let's deal with the standard knocks against Obama. "People won't vote for a black candidate." That's how it's always phrased. Never "I won't vote for a black candidate." Or "I won't vote for someone whose name sounds like 'Osama.'" Everyone seems to think that the rest of America is made up of racist illiterates. I acknowledge that there are some people who won't vote for a candidate because he's black (5%, according to the latest poll, compared to 7% who wouldn't vote for a Jew, or 11% who wouldn't vote for a woman). How many of those 5% are liberal enough to vote in the Democratic primary, and how many would support a woman or a trial lawyer instead? Similarly, in Iowa and New Hampshire, every likely voter is contacted several times by volunteers. How many are likely to confuse "Obama" with "Osama?"

The one danger I see for Obama is that he starts to believe his own hype. It's very important that he not be perceived to have some kind of savior complex. There are a couple hints of this recently. He indirectly compared himself to Lincoln by announcing his candidacy in the same place Lincoln did, and talking about another "skinny Illinois lawyer." He frequently invokes the civil rights struggle, which is inspiring but opens him to criticism. Basically, his Achilles' heel is that some people may like him too much, allowing his opponents to paint him as a megalomaniac.

[KUJustin]

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I acknowledge that there are some people who won't vote for a candidate because he's black (5%, according to the latest poll, compared to 7% who wouldn't vote for a Jew, or 11% who wouldn't vote for a woman)

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A poll is definitely a terrible way to try to find out that info.

[Thremp]

Obama is young inexperienced and black.


I'd lay some decent odds he'd lose in the ideal world where I had to take bets, but in reality the wait on this is absurd.

KUJustin brings up an excellent point as well. Polling is very biased, look at exit polls results unless you believe that elections are fixed, which is a whole nother issue on why we shouldn't be touching this.

[adanthar]

I think you're letting personal bias cloud your view...yes, Obama has 'a chance', but it's not 30%. Hillary will have 100 million raised *solely for Iowa and NH* (and now Florida...where she has to have a decided edge over Obama for a multitude of reasons). Even if you were right, it'd be a 4:1 bet on a 7:3 shot, and there are plenty of better, faster ones out there on the political markets.

Moreover, with the scheduling changes this year, the primaries are not a 2 election, then 48 predetermined outcome contest anymore. This will be a dogfight early and might be a dogfight late, and Obama will not have the money available if it gets late.

[AvivaSimplex]

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I acknowledge that there are some people who won't vote for a candidate because he's black (5%, according to the latest poll, compared to 7% who wouldn't vote for a Jew, or 11% who wouldn't vote for a woman)

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A poll is definitely a terrible way to try to find out that info.

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Sure, people may be reluctant to say they're racist to a pollster. But it's not like people were shy about their views. More than 20% wouldn't vote for a Mormon. Fewer than 50% would vote for a homosexual. (These results are available at pollingreport.com)

Maybe the real number is 10% that wouldn't vote for a black candidate. Then the real number who wouldn't vote for a woman should be around 22%. Prejudice will hurt Clinton more than Obama. And in any case, very few of these people are the hard-core Democratic activists that vote in the primaries.

[adanthar]

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Maybe the real number is 10% that wouldn't vote for a black candidate. Then the real number who wouldn't vote for a woman should be around 22%.

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Those numbers do not scale that way at all.

[AvivaSimplex]

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Hillary will have 100 million raised *solely for Iowa and NH* (and now Florida...where she has to have a decided edge over Obama for a multitude of reasons).

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There has to be a point of diminishing returns, though, especially in the smaller states. As we saw with Dean, a mass of money doesn't translate directly into votes. Hillary's money means she will definitely have more than 2 shots at beating Obama. Unless she does just horribly in IA and NH, she'll keep going for quite a while. Even I think this will be an extended contest.

Why do you think she has an advantage in FL?

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Even if you were right, it'd be a 4:1 bet on a 7:3 shot, and there are plenty of better, faster ones out there on the political markets.

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Well, I have Obama at 50%--I'm happy tying up some of my money for more than a year with an estimated 150% ROI. What faster ones do you see?

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This will be a dogfight early and might be a dogfight late, and Obama will not have the money available if it gets late.

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Anyone who is still a viable candidate can continue to raise money. Hillary's early funds lead gives her a cushion if the early primaries don't go her way, but Obama will be competitive financially if he is competitive in the polls.

Maybe most importantly, do you know anyone who is enthusiastic about Hillary Clinton? The responses I've seen range from virulent hatred on the far right to moderate approval from DLC-type Democrats. No matter how much money you have, you can't sell something no one likes.

[KUJustin]

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Maybe the real number is 10% that wouldn't vote for a black candidate. Then the real number who wouldn't vote for a woman should be around 22%.

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Those numbers do not scale that way at all.

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Exactly. It's MUCH more acceptable in our culture to say you won't vote for a woman than to say you won't vote for a black person. Even in an anonymous poll people worry about how they're viewed.

Regardless, I like your analysis and the only recommendation I would make is to give the other side of the argument and address it. In other words, if what you say is true then why is Hillary so heavily favored and what are the flaws in those reasons?

[Thremp]

Aviva,

That bet is horrid over that time period. Perhaps maybe taking a couple arbs a week is possible and a much better situation, even if your math is correct.

[TheRover]

I thought the Dem. primaries were front loaded to give the heavy favorite (Hillary) essentially a guaranteed win. No?