I. Some numbers

I read a series of letters to the Editor of The Globe and Mail this morning, all on the results of the US election, which continues to feature prominently in Canadian media, and certainly in the G&M. One letter-writer fumed that democracy had not triumphed in the recent US election, and went on to cite a number of reasons for believing that, including that ‘….the US Supreme Court has flooded US elections with corporate and special interest money.’

It seems to be a common belief among Canadians that because US elections involve the spending of so much more money than what is spent here in Canada on a federal election campaign, that winning elections in the US is all about outspending your opponent. That was certainly the attitude among the Canadians in the US Election discussion group I joined recently. A consequence of that need to outspend your opponent is the need to raise a lot of money, hence the belief that it is money, and those who have it, that matters to the outcome.

This prompted me to try to find out just how much was spent in this last US election, and by whom. The obvious place to go for such data is to the FEC, the US’s Federal Election Commission, as all spending by candidates, parties and political action committees (PACs) is supposed to be reported to this body. The FEC says that between Jan 1 of 2023 and Oct 31 of 2024, candidates for President and Congress spent $3.1B, the Party Committees together spent another $1.5B while PACs spent $7.3B, which adds up to just under $12B in total spending by all groups for US federal positions. That’s a lot of clams, and of course the good ol’ rule of 10 says that if Canadian spending is anything like in the same league, total spending in the next Canadian federal election (some time in 2025) will come to $US1.19B. Anyone care to bet it will be that high?

So far as I can tell, the FEC site doesn’t provide a breakdown of spending by party or candidate for the entire campaign. I found some tables that compiled spending up to June 30, 2024, but that ends well before the big spending spree just before Election Day. Which is not to say there isn’t a lot of info on the site. You can go in and find out that Nikki Haley for President, Inc, spent $49.58 on an Uber, date of the ‘disbursement’ being 12/31/2024, which is more than a month into the future, so…..I dunno what that means. Anyway, the site claims to have over 130 million records in its ‘disbursements’ database, all of which you can see, but I didn’t think I had the time to go through and add them up, and as a retiree I no longer have research assistants so I looked for another source.

A report from NBC news, dated Nov 8, reports on spending on advertising by the various parties and candidates, saying it is using data gathered by AdImpact. NBC reports that AdImpact reports as follows on the Presidential election:

“Overall, the Democratic campaign and pro-Democratic outside groups spent almost $1.8 billion, while the Trump campaign and pro-Republican outside groups spent $1.4 billion.”

So, the Dems outspent the Reps on this Presidential campaign by some $400million, and Harris lost. The story is similar in Congress, quoting again from the NBC story –

“The campaign for the Senate, which will be controlled by Republicans at the start of next year, drew about $2.6 billion in spending — $1.4 billion from Democratic candidates and outside groups and $1.2 billion from Republican candidates and pro-Republican groups.”

And……

“House races drew $1.7 billion in ad spending — $940 million from Democrats and $760 million from Republicans…”

It now appears the Republicans will have a slim majority in the House, also.

It leads me to wonder how evil all that money really is if it is not actually effective in winning elections. The Dems outspent the Reps on ads in all three cases, and lost. Of course, campaigns also spend on other things; the so-called ‘ground game’ of getting supporters to the polls, one way or the other. But I don’t think folks who worry about US elections being ‘bought’ worry about that. Helping folks get in their ballot is seen as virtuous spending, it’s all that ‘misinformation’ on TV and social media, financed by the evil rich, that is evil.

There is a substantial body of research showing that political contributions to Senators and Congressmen do not correlate with how they vote on legislation. That is, there seems to be no evidence that contributions from, say, the AFL-CIO or UAW to a legislator results in their voting more favourably on labour legislation, etc. One response to this is to note quite correctly that ‘no evidence’ does not mean that there is no effect. Finding good evidence that x has an effect on y, which is what most social science research tries to do, is difficult, and ‘no evidence found’ is a very common result of such research. (Research that finds ‘no evidence’ doesn’t often get published, which is why all you read about in the media are stories that include a sentence that starts ‘ a new study shows that….’. What those studies ‘show’ is very often baloney, but that’s a topic for another post.)

Another response to this particular ‘no evidence’ finding is that this is because what political contributions actually do is determine who ends up being elected to be a legislator in the first place. The 2024 election says maybe not so much, or at minimum, not always. The Dems outspent the Reps at every turn and ended up with a Republican president and Republican-controlled Congress. Their majorities in the latter are both very slim, and could be reversed in the 2026 mid-term elections, of course.

It will be interesting to see what happens in 2026. Who ends up controlling the House and Senate after those elections will be of interest, but also how the campaign fundraising and spending go. Will the Dems be able to again outspend the Reps, and will it get them control of Congress if they do?

Just for fun, I went back and checked on the last Canadian federal election in 2021, and discovered that the limits set by Elections Canada on spending by the various federal parties were set at $30Cmillion or less, depending on how many candidates each party ran, so that came to an overall ceiling of just under $150Cmillion in spending by all the federal parties combined. Canada doesn’t have PACs, but third parties do spend money in Canadian election campaigns. I could not find any figures for spending by such groups, but Canadian legislation prevents them from spending more than $150,000 in any one election, so their spending cannot add up to much, it would seem. In short, there is no way total campaign spending in the next Canadian federal election is going to get anywhere near $US1.19B, as that would translate into about $C1.6B.

Does that lower spending mean we get better electoral outcomes in Canada? What do you think? Electoral campaigns are certainly much shorter in Canada, a fact for which I know I am very grateful. But – would it be better or worse for all if parties and candidates were allowed to spend more? I’m betting no one reading this thinks it would be better….

II. A Hypothesis

One way to understand this high level of US campaign spending is to view it as an arms race, much like the one that Pepsi and Coke are involved in. That is, no one in North America can possibly be ignorant of the existence of, or the taste of, either Pepsi or Coke. Yet in 2019 Coca Cola spent $154million advertising just its Classic and Lite brands in the US, while PepsiCo spent $118million advertising just its Pepsi brand in the same year. Why so much for a product everyone already knows about? Answer: it’s an example of an arms race, like what happened in Europe before WWI.

The key characteristic for a strategic situation to be an arms race is that each party believes that it’s chance of winning is greater the greater is their own spending and the less is their opponents’ spending. Winning a war in 1914 was more likely the more a country spent on arms and the less its potential opponents spent. Check. The more Pepsi spends on advertising Pepsi the greater will be Pepsi’s sales, the more Coke spends on advertising, the less will be Pepsi’s sales, and conversely. Check. The more Trump spent on political ads, the more likely he was to win the election, but the more Harris spent the less likely he was to win, and conversely. Check. This all leads to each side in an arms race trying to outspend their opponent, and means that the more your opponent raises/spends, the more you feel you must raise and spend. Hence, ever-increasing fundraising and spending.

The logic of this all leads to the conclusion that both parties would be better off if a third party could come in and impose an outside limit on their spending. In the political case, that would mean a law limiting contributions or spending or both, such as Canada has. It is also the impetus, at least partially, for arms control agreements and treaties in the warfare example – although Hitler in the 30s showed that there is an enforcement problem with those. In the case of Coke and Pepsi, there is no third party, and if those companies sat down together and agreed to mutually limit their own ad spending, they would almost certainly get in trouble with US anti-trust authorities. That is illegal collusion, man.

A case in commerce where a third party did more or less impose an ad spending limit was in the early 70s, when cigarette ads were banned from TV by the US government.

This was done for health reasons, not to help out the tobacco companies, but I have heard that tobacco company stock prices rose after that ban, which would be outstanding proof they were in an arms race up until then. I haven’t been able to find any credible evidence of that rise – it happened back in 1970 – although it does seem to be true that overall industry spending on advertising dropped after the ban on TV ads. If anyone out there can point me at evidence about those tobacco stock prices, please do. I won’t hold my breath…..

Anyway, the analogy with political campaign advertising is pretty clear. There was no possibility that anyone in the US who might possibly vote was ignorant of the looming election or of either of the two candidates. The media provides unending streams of information about it all independently of any advertising by the two candidates and parties. Do all those campaign ads induce people to vote who otherwise would not, or is each campaign just worried about losing vote share to the other side if they don’t advertise? If so, then maybe Canada’s campaign spending limits regime is superior – at least for the political parties, and maybe for the voters. No one claims that the media were made better off by that 1970s TV advertising ban on cigarettes.

An attempt to limit campaign spending in the US would likely not get past the first amendment, but I’m betting the media would be at the front lines of trying to stop any such effort in any case. To them, after all, that $12B is revenue.

…..writing about the US election. There’s just so much silliness.

Sometimes the best thing I can do in this blog is point my readers to other sources at which they can find things really really worth reading. One such is The Free Press https://www.thefp.com/  a website founded by former NYTimes staffer Bari Weiss. I subscribe, but you can read much of its content for free, and it consistently features commentary that I find both educational and stimulating. And, best of all, at least from my perspective, it is not just a mindless conservative/right-wing/Republican mouthpiece. In the long article that I quote below the author spends two paragraphs explaining how the Republicans’ likely control of both the executive and legislative branches of the US Federal government is not going to be a good thing and then explains what a fool is Tucker Carlson.

I quote below from a weekly Free Press column titled TGIF, written by Nellie Bowles . You should go here to read the entire thing, it is quite long but almost uniformly awesome. I am repeating here just what she writes about how the leftish US media intelligentsia is writing about Harris’s loss to Trump.

→ Our campaign was perfect: In the wake of their staggering defeat, Democrats have figured out what went wrong. It’s simple: The voters are bad. Americans are bigots. Case closed.

“I mean, this really was a historic, flawlessly run campaign,” said MSNBC’s Joy Reid. “She had—Queen Latifah never endorses anyone. She came out and endorsed her. You know, I mean, she had every prominent celebrity voice. She had the Taylor Swift—she had the Swifties, she had the Beyhive. You could not have run a better campaign in that short period of time.”

You’re telling me Queen Latifah didn’t move the needle for Kamala? I need to sit down.

Or there’s Emma Vigeland, a host of the influential progressive radio show Majority Report, who said: “Can’t believe I actually had faith in other white women to choose our collective reproductive rights over their own whiteness. Naive and dumb.”

B-b-b-but, the Swifties are white!

Here’s Washington Post associate editor Jonathan Capehart on PBS: “I can’t help but wonder if the American people have given up on democracy.” USA Today columnist Michael Stern slammed a piece that dared ask the question of where Harris went wrong: “Nope, I won’t read it. Harris ran a great campaign. The story should be titled ‘where the American people went wrong.’ ”

Frankly, the American people should have had to earn Kamala’s vote.

How, one might ask, could voters fail such a simple test? As Reid summed it up: “One side stands for freedom while the other meets the textbook definition of fascism: namely, a far-right dictatorial regime like Hitler’s Germany or Franco’s Spain or Mussolini’s Italy. But also, white-ruled South Africa before Mandela and the black majority took control. Or Vladimir Putin’s Russia, Viktor Orbán’s Hungary, or Nicolás Maduro in Venezuela today.”

All of those places in one, that’s America today. They took Hitler’s Germany, Franco’s Spain, Mussolini’s Italy, and apartheid South Africa and rolled them all up into a dictator burrito and ate it for breakfast. They saw Putin’s Russia and said I’ll take three, thanks. Americans drained the swamp and then reconstituted it with Orbán’s Hungary. That’s what voters did.

You might take all of these shifts and think: Wow, American voters rejected Democrats in this cycle. Or you could have The New York Times’ take on it, which is that we have been conquered.

Never before seen in our 248-year history? He was president four years ago.

As I often write: you can’t make this shit up. There’s plenty more in the article worth reading, including where Bowles notes that Instagram took down a post by Piers Morgan (remember him?) in which he congratulates Trump for his win, the Instagram nannies having determined the post constituted ‘hate speech’.  https://twitter.com/piersmorgan/status/1854273724327059936

A parting shot. The exit poll info below was also in the article, but is in fact originally from The Financial Times. It shows, subject to the usual caveats about exit polling, how all-encompassing was the vote shift away from the Democrats relative to 2020.

Can’t make that up either, Dems.

I may or may not post more on the just-completed US federal election in the future, but here on the day after I want to write a few things that occurred to me today or in the course of the campaign.

1. Mainstream Media. A couple of months ago, just after Harris magically became the Democratic nominee, I was sitting in my living room writing a blog post, as I do. I was also listening to the CBC’s Tempo program, in which CBC plays classical music from 9am to noon. Tempo also features a four-minute newscast at the top of each hour. CBC thought a good use of some of that four minutes was to inform me every hour that Taylor Swift had endorsed Kamala Harris for president. My tax dollars at work.

2. Charlatans. Every US Presidential election season, shallow media outlets like the New York Times and NPR drag out historian Alan Lichtman, proclaiming him as ‘The Prophet of Presidential Elections’. If you want to know why this moniker is balderdash, you can read statistician Andrew Gelman’s blog articles about it here and here. One can hope that Lichtman won’t get the usual media coverage in four years, given he predicted a Harris win this time – but I would not bet on it.

3. Snowflakes. In the run-up to said election, it appears that the School of Public Policy at Georgetown University felt that their students were so stressed by this looming election that special services had to be set up for them. You can read about it all here, but to give you the idea, here’s a brief quote from the article, written by Free Press (No, not the London one) columnist Frannie Block:

Here’s the agenda (and no, you can’t make this up):

10:00 a.m.-11:00 a.m.: Tea, Cocoa, and Self-Care

11:00 a.m.-12:00 p.m.: Legos Station

12:00 p.m.-1:00 p.m.: Healthy Treats and Healthy Habits

1:00 p.m.-2:00 p.m.: Coloring and Mindfulness Exercises

2:00 p.m.-3:00 p.m.: Milk and Cookies

4:00 p.m.-5:00 p.m.: Legos and Coloring

5:00 p.m.-6:00 p.m.: Snacks and Self-Guided Meditation

I wanted to ask Clevenger [the school’s director of student engagement’] why college and graduate students needed milk and cookies to recover from their stress—and how being coddled in college might someday affect American diplomacy—but she didn’t respond to my calls or emails.

I am very much looking forward to reading about what Georgetown are doing for their students now to help them deal with an election win by The Anti-Christ. Stay tuned for updates.

4. Apocalypse. To finish up, I quote here a paragraph from the article by Andrew Coyne that appeared in today’s Globe and Mail. I plan to save the entire article for future reference, but I am posting this much here so we can all revisit Andrew’s predictions in a few months.

“There is no sense in understating the depth of the disaster. This is a crisis like no other in our lifetimes. The government of the United States has been delivered into the hands of a gangster, whose sole purpose in running, besides staying out of jail, is to seek revenge on his enemies. The damage Donald Trump and his nihilist cronies can do – to America, but also to its democratic allies, and to the peace and security of the world – is incalculable. We are living in the time of Nero.”

Yikes. Gotta find my Lego set.

I open with a tip of my hat to Andrew Coyne, whose op-ed piece in the Oct 4 Globe, titled ‘Nice little news network you got there. Pity if anything should happen to it’ inspired this post. [I will add – that’s a good headline for the article, not something I say often.]

A word about Coyne. I have been reading him since he was The National Post’s token liberal commentator, and continue to do so now that he is the Globe’s token conservative. I also watch him on CBC’s At Issue panel on Thursdays, but in truth I watch that mostly to hear what the redoubtable Chantal Hebert has to say about Canadian politics. Chantal is awesome.

Andrew has a few things that he write about regularly, from which I infer they matter to him a lot. Here are three of them, which I’m bothering to list here because they matter to me, also.

1. First-past-the-post (otherwise known as plurality rule) electoral systems, as are used in Canada, England and in US congressional elections, are bad, and should be replaced by proportional representation systems.
2. Much of what is wrong with current Canadian politics and governments arises because it is now necessary to have the approval of the Party leader to be nominated to run in any riding as the candidate for that Party.
3. It was wrong and will lead to a diminishment of Canadian democracy for the federal government to set up a system for subsidizing (selected) news media outlets.

Full disclosure – I disagree completely with Mr Coyne about issue 1, but agree with him almost entirely with regard to issues 2 and 3. I am going to say nothing here about 1, it is a complex subject, one I spent a good bit of my professional career thinking and teaching about. Someday I may write a long post or three about it, but not now.

I agree with Coyne about 2, and I will at this point say only this about it. If you wonder why MPs from the Liberal Party of Canada did not long ago force their highly unpopular PM and party leader to step down, you have only to note issue 2. Those MPs rely on the leader of the party to sign off on their nomination if they are to have even the chance to run for office in their riding in the next election. They are not about to piss JT off. I say no more at this point, even though there is much more to be said.

On to 3, the topic of this post. To his credit, from the moment the idea of having ‘approved’ news media organizations receive financial subsidies from the federal government was suggested, Coyne has written piece after piece saying ‘this is a terrible idea’. The press cannot, must not, be seen to be in the debt of the federal government if they are to play their role of holding government ministers and bureaucrats accountable for their decisions. Full Stop.

That argument is unassailably correct, as far as I am concerned, but of course those subsidies are now in place anyway. The first big problem with this system is  – which orgs get such a subsidy and how much does each get? That the CBC gets a subsidy in the current regime, on top of the more than $1Billion they get directly from taxpayers, should tell you immediately that the subsidy-receivers are going to be tilted toward BIG establishment news outlets. According to CTV news (a CBC competitor, to be sure), CBC got $1.4B in the most recent federal budget, an increase of about $90million from the year before. How much of this is the ongoing subsidy they receive every year and how much is from this new, broader subsidy regime, is not clear.

Coyne’s Oct 10 piece above simply points out two more emerging consequences of the existence of this subsidy regime. One is Pierre Poilevre’s recent attack on CTV News, which included forbidding Conservative MPs from speaking to reporters from that org. He did this in response to two CTV employees splicing together some video of Poilevre so as to make him seem to say something he did not actually say.

I agree with Coyne that what those CTV employees did was flat out wrong, but Coyne’s point is that CTV was over-the-top apologetic about it, issuing two separate apologies, firing the two employees, and that CTV did that – in Coyne’s view – because they know they have pissed off a likely future PM, who is going to soon be in a position to influence their subsidy.

The larger point is: how can news org’s claim to be ‘independent watchdogs’ of the government  of the day – you know, the vaunted ‘fourth estate’ – while receiving a subsidy from that government? Coyne goes on to say that political abuse of the system is already a bi-partisan matter, citing a tweet on X in which a Liberal MP says to a National Post reporter “Your paper wouldn’t be in business were it not for the subsidies that the government that you hate put in place – the same subsidies your Trump – adjacent foreign hedge fund owners gladly take to pay your salary.”

In other words – ‘what are you doing criticizing my party, you ungrateful cur. You would not have a job without the subsidies my Liberal-party-led government pays your employer’.

This is a terrible situation news orgs have put themselves in, and it’s only going to get worse. The Conservatives have for decades been unhappy with what they see as a CBC that is Liberal-sympathetic and antagonistic to them. I think the Conservatives are not wrong about that bias, but the point is that they will find a way to reduce its subsidy if they form a majority government. I will not be terribly unhappy if they do, but that is not the point – one must ask, will every change in government now result in a list of previous subsidy recipients being taken off the news media gravy train and replaced by others? Is that the kind of ‘free press’ Canadians want?

Coyne is right, government subsidized journalism is a terrible idea. That implies that the CBC was a terrible idea before this added subsidy regime was born, but widening the subsidies to take in more organizations makes a bad idea worse. A press that relies on government subsidies to stay in business is not, in any relevant sense, a free press.

I understand that the claimed reason for this is the inarguable fact that the news business is in bad financial shape. Few media orgs are able to make any profit in our brave new internet world, and almost no local news orgs can do so. Local radio stations and newspapers and even TV stations are closing their doors on a regular basis. However, Coyne’s concern – which I share – is that this subsidy regime represents a cure that is worse than the disease that spawned it. A better way to support local news media needs to be found.

I was going to title this post ‘Arithmetic Matters’.

Canadian politics has actually become somewhat interesting of late, which is saying something, given that Canadians – and Canadian media – generally pay more attention to US politics than to the domestic variety. However, Jagmeet Singh’s recent decision to renege on the NDP’s Supply and Confidence agreement with Trudeau’s Liberals, plus the occurrence of two by-elections on Monday, September 16 has given the chattering classes in Canada something domestic to write about.

In that vein, John Ibbitson has an op-ed in the Sept 17 Globe (read it here) with the headline With the Liberals Losing Once Safe Seats, an Election Can’t be Far Off and that title pretty much says what is the point of the column. The Liberals have indeed now lost safe seats in both Toronto and Montreal in recent months, and the NDP yesterday hung on – barely – to a once-safe seat in Winnipeg. Ibbitson thus predicts an imminent dissolution of the House of Commons and election.

Ibbitson is just wrong about this. Two facts say that is so. One, the Liberals need only one of the Bloc, The Conservatives or the NDP to support any legislation in Parliament that is a matter of confidence, to prevent the dissolution of the House. Just one.

Two, if you look at the website 338 Canada and take into account all you like the fickleness and inexactitude of polling in the 21^st century, you are still left with the following numbers.

Current stated support for the major parties is as follows:

Liberals 24%

Conservatives 43%

NDP 16%

Bloc 8%

Because of the way support for these parties is distributed around the country (a key matter for the Bloc in particular), 338Canada projects that if an election were called today, the parties would win seats in the following ranges (current seats held are in () )–

Liberals 49-95 (154)

Conservatives 189-240 (119)

NDP 9-25 (25)

Bloc 31-44 (33)

Thus, even in the best possible scenario, the NDP will find itself in third place in number of seats held in a Conservative majority government, and very possibly a distant fourth, after an election held right now.

I’m sorry, Mr. Ibbitson, but while the Bloc and Conservatives might happily bring down the government tomorrow if given the chance, the Liberals need only the NDP to keep that from happening, and the NDP can read the 338Canada website, too, and so has no reason to want an immediate election, their close win in Winnipeg notwithstanding.

Happy to bet Mr. Ibbitson – or anyone else – a cold beer on this: No Canadian federal election in 2024. You read it here first, folks. Ok, maybe not first……

These two articles both arose from that damnable US Presidential debate, which, against my better judgement, I did watch for the first half-hour.  I have nothing useful to add to the gazillion words that have been written about the debate itself, other than to say that I switched back to watching a baseball game after 30 minutes because I was getting depressed.

Other than arising from that one event, these posts have nothing in common.

I. The BBC and the Election

The BBC website for the US and Canada is one I check regularly, despite my belief that the BBC, once among the most reliable and fact-oriented of all news-reporting institutions, is now no better than any other, and worse than some.

On Sept 12, I found the following story posted on the US and Canada BBC News website.

What the world thought of US debate

The first showdown between Kamala Harris and Donald Trump was closely watched not only in the US but around the world.

The debate in Philadelphia featured some tense exchanges on foreign policy between the two presidential candidates.

From Beijing to Budapest, here’s how the debate went down, according to BBC foreign correspondents.

…..

What then follows are brief segments from BBC reporters stationed around the world, purporting to reveal reactions to the debate from people in the countries/regions where they are stationed. In fact, there is almost nothing, beyond one cryptic quote from Ukrainian president Zelensky and two sentences from two media outlets in Hungary, that tells you what anyone around the world, be they leader, media organization or citizen, thought of the debate. It is all what the BBC correspondents think such people thought of the debate, which makes it not reporting but yet another opportunity for said correspondents to write what they wish. Not a fact to be seen anywhere. Gathering facts, going out and interviewing foreign individuals or leaders, that takes effort, and resources, and that clearly didn’t happen. So, the piece offers the reader no reporting or news-gathering, just more reporters saying things.

More sadly, one part of the piece is much worse than that, as one correspondent takes a dip into conspiracy theory. Here is one entire section of this report, nominally about the Middle East.

White House race keenly watched in Middle East

By Paul Adams, international correspondent, Jerusalem

The two candidates did not stray much from their previously stated positions last night, even if Trump did add, with characteristic hyperbole, that Israel wouldn’t exist in two years if his opponent becomes president.

Here in the Middle East, the race for the White House is being keenly watched.

With the war in Gaza raging and a ceasefire deal still elusive, some of Benjamin Netanyahu’s critics suspect that Israel’s prime minister is deliberately stalling until after the election, in the hope that Trump will be more sympathetic to Israel than Harris.

There’s a whiff of history perhaps being about to repeat itself.

In 1980, Ronald Reagan’s campaign team was suspected of urging Iran not to release American hostages held in Tehran until after he had beaten President Jimmy Carter, saying Reagan would give Iran a better deal.

Could something similar be afoot now? Certainly Netanyahu’s opponents believe he is now the chief obstacle to a ceasefire deal.

That’s Mr. Adams entire contribution, and all I can say is – Oh, my god. As I wrote, he talked to no one, quotes no one who live in the Middle East, but then – A whiff of history? The BBC’s intrepid correspondent in Jerusalem tells readers nothing about what anyone in the Middle East actually said about the debate, and then does not mention that this suspicion (he does at least use that word) about the Reagan campaign’s interactions with the Iranian government in 1980 was investigated by two separate US Congressional committees, who found no credible evidence of its truth. Indeed, the Chairman of the House task force, a bloody Democrat, went to the trouble of publishing an editorial in the NYTimes in 1993, shortly after his investigative committee published its findings, saying there was no credible evidence to support the claims of Reagan campaign efforts to delay the hostage release, and most of the people who testified that it had occurred could not be believed. No mention of any of that in the BBC story. You can actually read the report of the Congressional Task Force here – all 998 pages of it. Yea, I know, not likely – I’m betting Mr. Adams hasn’t read it, either, but there’s no need to if your only intent is to find another bad thing to attach to Netanyahu, if only by implication.

As I said, how the mighty have fallen. A BBC correspondent reviving what can only be seen as a (rather old) conspiracy theory, in the guise of reporting on an ongoing US presidential campaign.

II. The Debate’s Impact on Two Prediction Markets

I got this idea from a blog I follow by Rajiv Sethi, called Imperfect Information. He is very interested in prediction markets, and this post is about how two such markets reacted after the debate. If you want to read his (more techy and detailed) take on this, it’s freely available here.

For those who don’t know, a prediction market refers to a platform on which you can buy a ‘share’ in the outcome of some future event. In this case, you can either buy a share that Kamala Harris will be elected president, or buy a share that Donald Trump will be elected president. This is really placing a bet, because what buying a share in, say, Kamala Harris gets you is a payment of a dollar if Harris wins, and nothing if she loses. The terms of that bet then depend on what you paid for that share. In the graph below, which I reproduced from Sethi’s blog post, the prices at which one could buy a Harris share on two different prediction markets is displayed, during the hours just before and just after the debate.

Note that on PredictIt a Harris share was priced at 50cents four hours

before the debate. That means that betting on Harris by buying a share was an even bet; you pay 50cents and get a dollar back if she wins and lose your 50cents if she loses. Someone who thinks she has better than an even chance at winning might therefore buy a share, and someone who thinks she is more likely to lose would not. On the Polymarket site, a Harris share cost only 47cents four hours before, so that would be a good bet perhaps even for someone who thought she had only a 49% chance of winning. [It’s actually a bit more complicated than this, as Sethi explains in his long post, because Harris and Trump contracts are traded separately. What I write above is close enough for a basic understanding of these markets.]

As you can easily see, the price of a Harris contract jumped on both markets right after the debate, even though they continued to be different.

Sethi’s post delves into how these two sites can offer different prices on a Harris contract at the same moment in time, and the possibilities of making money by betting on both markets when this is true. I am writing about it here just to note that both markets saw the price of a Harris share (contract) jump immediately after the debate, reflecting the fact that people trading on those markets in general thought her chances of winning went up, and this was reflected immediately in the price of a Harris share. It would also be reflected in a drop in the price of Trump shares, which are not depicted here.

This contrasts with the fact that so far, none of the opinion polls that have updated since the debate, so far as I know, have seen any change in the ‘intend to vote for’ numbers for the two candidates. This is a big difference in how prediction markets and polls, both of which can be said to ‘predict’ the electoral outcome, operate. Markets are always open, so right after the debate, or even while it was ongoing, people can go and buy and sell shares if they think what is happening has changed the probability of a Harris win. Polls have to wait until a new survey is done and compiled before they can reflect the effect of an event like the debate.

However, along with the fact that markets react more quickly to events than do polls, there is the fact that they can offer different predictions. As I say, no poll of which I am aware thinks the debate changed either candidate’s support, whereas the two markets above reflect considerable movement. I admit I don’t know what has happened since the time frame depicted on the graph, prices can change constantly on these markets.

Now, whether polls do a better job than markets in predicting outcomes is – so far as I can see – undecidable. With an event like this election, one candidate wins, and all either a poll or market tells us any time prior to that is a probability. If the market says the probability of a Harris win is 0.55 at some point in time, and Harris eventually loses, there is no verifiable sense in which the market was ‘wrong’. There was, after all, a probability of 0.45 that Harris would lose at that same point in time. Unless a poll or market states a probability is either 0 or 1, it cannot be wrong. One can of course just declare that if the prediction of something happening is greater than 0.5 and that something does not happen, then the prediction is ‘wrong’, but I think that is based on a misunderstanding of the concept of probability. Similarly, if a poll says Harris has a 50% chance of winning and at the same time a market says it is 55%, and she wins, does that mean the market prediction was ‘better’? One can declare that to be so, but again, it’s not clear to me what that really means, since both allowed that her losing was a legitimate possibility.

None the less, one can easily find people who will argue for the superiority of one over the other. Folks do like to argue.

Interestingly, it is very difficult to operate a prediction market devoted to the US Presidential election in the US itself. The SEC and other US regulators have come down hard on the ones that did exist (one of the first was built by economist George Neumann at the University of Iowa) as being unregulated trading platforms, which forced them to shut down or leave the US. PredictIt is based at The Victoria University of Wellington in Australia, and Polymarket operates on crypto currency only, and although it now seems to be operating legally in the US, it was fined $1.2million in 2022 by The Commodity Futures Trading Commission. Wikipedia (not my favourite source for credible info) claims over $700million has been wagered on the presidential election on Polymarket.