Links 2024-06-04 - Predictably Stupid
They won't let us have nice things.
Our overlords are at it again trying to stop us from knowing things and sharing that information.
The CFTC has announced they plan to ban all “election betting”. In other words, prediction markets regarding elections, et al. are under extreme threat.
This is un-American, anti-science, and otherwise contemptible garbage. I long for a day when we live in a country that fully embraces freedom.
As Maxim Lott says,
There’s no evidence of manipulation in hundreds of millions traded so far. If there were a lot of manipulation, we wouldn’t see the kind of accuracy we do.
Additionally, even if it worked, the social costs of market manipulation seems low. Should government also ban people from commissioning biased polls for the purpose of manipulating public expectations of an election? That happens, but it’s not exactly destroying our society.
Tyler Cowen is succinct in stating, “There is simply no good reason for such a ruling”. He adds,
How can you put such people in charge of things? What else do they want to stop us from doing? Is it so difficult for them to imagine a world where the election forecasts we can find on Predictit — among other sources — simply continue and that is perfectly fine, as it has been for years?
Scott Alexander expands upon this,
I don’t know if I like the idea of federal agencies banning things because, if they were allowed, it would create more work for the federal agency. Imagine if the medical regulators banned surgery, because otherwise some surgeons might be accused of malpractice, but the malpractice lawyers want to go home early on Fridays.
Otherwise, I’ll just reiterate the same points everyone made last time they tried this:
The UK has election betting and none of these negative outcomes have come to pass.
There are already hundreds of groups that care deeply about the outcome of elections. Some have billions of dollars on the line, like defense contractors, fossil fuel companies, real estate developers, and investment banks. Others care for non-financial reasons: transgender people, Christians, gun owners, the population of Ukraine, people who think we’ll all die from climate change, people who think the country will become a dictatorship, all Democrats, all Republicans, etc. The idea that adding one more group - “people who have a few thousand dollars staked on Kalshi” - will be the difference between a safe and secure election, and one that’s hacked by motivated parties, is pretty crazy.
Although most election bettors right now are degenerate gamblers, that’s a result of the CFTC making it hard, not an excuse for them to make it harder. If the CFTC got out of the way and let people bet 7-digit-sums on this legally, most election bettors would probably be the groups mentioned above (defense contractors, fossil fuel companies, etc) trying to hedge their risk. These groups have billions of dollars in risk, which is probably enough to overwhelm however much money the degenerates can gather.
I optimistically predict that one day this entire episode will be a very typical example of the kinds of nonsense examined by the Pessimists Archive.