But there happen to be better numbers than the ones Cohn and his prophesizing colleagues are citing. And they show Biden well ahead.
The prediction markets for elections — essentially investors putting money on candidates — has a Biden win trading at 43 cents, which implies a 43 percent chance of victory, according to the Financial Times. Trump is trailing at 37 cents, while the other candidates are long shots.
What might make these markets a better indication of the candidates’ prospects than those political polls?
For one thing, they have a better record of accurately predicting the winner.
PredictIt is currently the biggest legal site for political-prediction trading in this country. A smaller political predictions market is Iowa Electronic Markets, at the University of Iowa.
Like PredictIt, the Iowa market operates under the academic exception made by the Commodity Futures Trading Commission. PredictIt works in a nonprofit arrangement with Victoria University in New Zealand.
The Financial Times sets forth the argument made by PredictIt founder John Aristotle Phillips that “prediction markets are a truth generator, powered by the invisible hand. … If you trade based on fake news or half-baked punditry, you’re going to lose your money.”
Last summer, six U.S. senators wrote to the Commodity Futures Trading Commission, calling political prediction markets “a clear threat to our democracy.”
Concern is warranted, but big money is already riding on electoral results, not the least of which are zillions in government contracts.
Wagering on presidential elections has been around since George Washington. Formal markets were organized around the time of Abraham Lincoln.
Major newspapers would carry daily reports of their latest prices. These markets went into eclipse with the invention of scientific polling and the growth of other forms of betting, such as on horse races.
As the Financial Times reports, scholars who have studied political prediction markets found that “their collective forecasts were more accurate than even the most careful aggregations of polls.” That seems the case especially for elections that are months off — like now.
Defenders of these markets further argue that letting the public put money on the line encourages civic literacy.
As Kevin Clarke, a PredictIt trader, said, “It provides checks on how to interpret media, how to not just go by a soundbite, how to not allow a headline to take on a life of its own.”
Undeterred by such criticism, mainstream punditry continues to place enormous importance on that Times/Siena poll “finding” that Biden is in trouble.
Both legal political prediction markets, PredictIt and Iowa, say it’s quite the contrary.
