Gambling on the Presidency
T he College of Business Administration at the
University of Iowa runs the Iowa Electronic Market, a futures market on this
year's presidential election. Anyone can buy a contract on President Clinton,
the yet-to-be-designated Republican candidate, or someone else. It's a
winner-take-all market: Contracts on the winner pay off at $1 on November 6,
while others expire worthless. On the day of the New Hampshire primary,
Clinton's contracts, which had risen in recent weeks, were bid at 51.1 cents,
while those of the Republican stood at 39.3. Political insiders watch these Iowa
numbers closely: In the two last presidential elections, the Iowa futures market
accurately predicted the results at the ballot box.
Gambling used to be considered deeply reprehensible, especially by
conservatives. Gambling casinos were shunned by respectable people and
politicians (who we do not...
The conventional wisdom is that the Democrats are now merely the reflecting "moon" of American politics and Republicans the "sun." But demographic and voting data suggest the Democrats could create a new majority without sacrificing progressive concerns.
T he 1994 election devastated the self-confidence of the Democratic Party, and 1996 only partially restored it. After narrowly escaping the "Republican revolution," many Democrats have lowered their expectations and become resigned to the prospect of center-right government. And now President Clinton's budget and tax deal with the Republicans in Congress has left his own party without a clear long-term agenda or any resources for new initiatives. Especially on the party's liberal side, Democrats are thoroughly demoralized, gloomy about the prospects for recovering control of Congress in 1998 and reviving momentum on what at least used to be the party's distinctive progressive concerns. Skepticism about progressive possibilities does not simply reflect the latest voting returns, opinion polls, or signals from the White House. Even sympathetic observers don't see why the underlying trends in American society and politics should return the Democrats, much less liberals, to a majority...
Even before this campaign, he was a familiar figure in our public lifethe high-minded politician, detached from partisan passions, divorced from interest groups, devoted to higher purposes for the good of all, disdainful of image-making, fundraising, and negative campaigns. To varying degrees, Adlai Stevenson, John Anderson, and Paul Tsongas played the part; now it is Bill Bradley's turn, and we will see whether he plays it to the same conclusionpolitical defeat.
High-mindedness is both a style of public self-representation and a way of dealing with the practical aspects of politics. As a style, it seems to appeal toaffluent liberals and independents who also feel uncomfortable with the practices of mass democracy. But the same detachment and aloofness may not go down nearly as well with Americans who are less well off and unashamed to ask, "What are you going to do for me?" They want to know whether a politician can deliver .
THE UPSIDE OF UNEMPLOYMENT Our last issue described PaineWebber's "happiness index" for bonds, which goes up when unemployment increases. But unemployment, we've now learned, can prolong your life too. Our impeccable source is a new study from the National Bureau of Economic Research: "Are Recessions Good for Your Health?" by Christopher Rohm (NBER Working Paper No. 5570). Rohm finds that recessions do indeed promote good health, at least if you're young; in fact, according to an NBER summary, "a one percentage point rise in unemployment lowers the predicted death rate of 20-44 year olds by 1.3 percent." Strangely, however, unemployment seems to have no effect on 45- to 64-year-olds and just a slightthough still positiveeffect on those over 65. Here's the breakdown on the good news. With 1 percent more unemployment, deaths from car crashes drop by 2.4 percent, from homicides by 1.5 percent, from liver ailments by 0.8 percent, and from heart disease and cancer by 0.2 to 0.5 percent...
HAPPINESS IS . . . According to The Economist , PaineWebber has created an index of "happiness" for bonds that goes up when unemployment rises. If others would only follow this example and strike a blow against hypocrisy, we could have a series of more accurate social indicators: an index of happiness for hospitals that jumps when epidemics hit; one for journalists that goes up when scandals break out; another for lawyers and accountants that climbs whenever a company goes bankrupt. Ninety years ago, Ambrose Bierce defined happiness as "an agreeable sensation arising from contemplating the misery of another." Nothing has changed, except the Federal Reserve has turned Bierce's observation into national policy. If you get fired these days, you can at least take comfort in this consoling thought: You did your part to keep interest rates down, and to make bonds happy. THROUGH A GLASSMAN, DARKLY "If Bob Dole were a stock, I would be buying the hell out of it," the Washington Post columnist...