Arnold Kling  

Bet Accepted

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One-Party Democracy Is Not Com... Exactly Wrong: The Real Uninte...

Bryan writes,


I predict that Republicans will regain control of at least one branch of the federal government at some point between now and January 20, 2017 (two inaugurations from now). So Arnold, how about a $100 bet at even odds?

Done. There are effectively 10 elections over that period--two Presidential elections and four Senate/House elections. The Dems have to retain 50+ in the Senate, 218+ in the House, and the Presidency through all 10 elections for me to win.

Why I think I will win:

1. The larger Hispanic population poses a challenge for Republicans.

2. For the next few years, the Federal government will dominate the economy as never before. Corporate leaders will come to realize that it is a business necessity to support Democrats financially and to co-operate with them in terms of public relations (for example, the health care trade groups promising to help President Obama with health care costs).

3. As I recall, the Senate elections in 2010 will have more vulnerable Republican seats, so that the Republicans should be deeper in the hole for 2012 and 2014.

4. The census in 2010 is likely to show much bigger population increases in urban areas. Although the fastest-growing states are Red states, the shift within those Red states is probably toward more urban, Democratic populations. That will hurt Republican chances of gaining in the House. Also, note that the White House has taken control over the census.

5. The Republican Party leaders are not exactly impressive.

6. The divisions within the Republican Party seem difficult to overcome. Both economic libertarians and social conservatives fear being betrayed. Yet all sorts of people are telling the Republicans that in order to broaden their appeal they have to be either less socially conservative, less economically libertarian, or both.

7. Young voters are neither socially conservative nor economically libertarian. Look at how badly the Republicans did in 2008 with voters born after 1980. Over the next several elections, the proportion of the electorate born after 1980 is going to increase.

I think Bryan's best chance is with the Presidency. It's possible for one individual to use charisma to overcome generic party disadvantages In 1952, Eisenhower was able to win--otherwise, the Republicans lost every election from 1932 through 1964. The other thing that can happen with the Presidency is that things can go so badly that the incumbent has no chance (Hoover in 1932, Johnson in 1968, Carter in 1980).


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COMMENTS (23 to date)
paul writes:

Can I get some of that action? I think the political world is more random than that.

Eric writes:

Number of times all three (Presidency, Senate, House) controlled by same party since 1901:

R 1901-1910 (win the bet)
D 1913-1916 (lose the bet)
R 1921-1930 (win the bet)
D 1933-1946 (win the bet)
D 1949-1952 (lose the bet)
R 1953-1954 (lose the bet)
D 1961-1968 (lose the bet)
D 1977-1980 (lose the bet)
D 1993-1994 (lose the bet)
R 2001-2006 (lose the bet)

(I hope I got that all correct. If someone feels like it, they can check me)

Overall 3-7. Is there some reason to expect the 2009 start point to be "better" for this bet than recent history?

Joe Marier writes:

Should the bet be inflation-adjusted?

RL writes:

Either Eric or I don't understand the bet. I don't think the Republicans have to take ALL THREE (House, Senate, Presidency) for Bryan to win. They only have to take any ONE.

Bill Mill writes:

@RL:

it's you, I think. Eric is saying that had the bet started in 1901, 1921, or 1933-1937, it would have won. In all other years it would have lost.

This leads into my question: Arnold, shouldn't you get more than even odds on this bet that would only have won in 7 of the last 106 years? Seems like Bryan should be taking this bet simply on principle at even odds.

Bryan Caplan writes:

Excellent, Arnold. It's a pleasure to co-blog with a betting man.

Barkley Rosser writes:

I am one who sneers at all this betting and do not do it, but the obvious time when Bryan might win would be Congressional election of 2014. Historically, when a party controls both the White House and Congress, and the prez gets reelected, the ruling party becomes very vulnerable in the Congress in that mid-term election in the second term. See 2006, for that matter, 1986.

As for the prez change bet, Obama is very charismatic and historic and playing the middle skillfully. Probably the best bet for the GOP is Romney, but he does not look like the man to beat Obama without some catastrophe that can be clearly pinned to Obama. I do not bet, but I would not bet on that one. Look to 2014, by when many of the things on Arnold's list could have changed in unforeseeable ways, and the electorate could be very tired of the Dems.

fundamentalist writes:

I have to go with Bryan on this one. The muddled middle decides elections. As with most elections, the past one was quite close on the popular vote. I think Republicans will retake Congress next Fall because Prez O will have scared the crap out of the middle.

BTW, an econ prof at the U of Central Oklahoma (Edmond) has his own econometric model of presidential election results. He has one variable--GDP growth in the second quarter of the election year. If growth is 2.5% or better, the incumbents party wins. Lower and the challenger's party wins.

He doesn't apply it to Congressional elections, but I'm betting that jobs won't have recovered by election time next year and inflation will be booming. People will blame Prez O and the Democrats and vote in Republicans.

Not that it matters much. Democrats are socialists and Republicans are socialist-lite.

Steve Sailer writes:

The 2008 voting statistics by ethnicity are somewhat anomalous in that the Democrats had a candidate who excited minorities to turn out who might often have not bothered, while the GOP candidate didn't excite whites (other than fellow Scots-Irish who liked his pugnacious foreign policy) because of his Kennedy-McCain amnesty bill in 2006.

Eric writes:

Bill & RL

Yes, if the bet had started in the 7 years of 1901, 1921, or 1933-1937 it would have won, and all other years it would have lost. I think the best comparison years to 2009 (the first year that all three were controlled by one party) are the ten years 1901, 1913, 1921, 1933, 1949, 1953, 1961, 1977, 1993 and 2001. Bets started in those years would have won 3 times and lost 7. So it seems (all things equal which, of course, they aren't) that 3/10 or 30% is the best estimate of success (not 7/106 because Bryan and Arnold wouldn't be thinking of betting this way in, say, 1982).

Billare writes:

I would not bet on the Presidency; it can be used an electoral figurehead for the direction voters wish to signal the country to go. But Republicans will never again control the House or the Senate. Demography is destiny, and the arrow is pointing firmly towards political stagnation.

Carl The EconGuy writes:

Arnold wins the bet, and we all lose. Resistance is futile, we will all be assimilated. The Commissars Rule!

Zac Gochenour writes:

@RL- Bryan said "I predict that Republicans will regain control of at least one branch of the federal government at some point between now and January 20, 2017 (two inaugurations from now). So Eric is right in his understanding.

@Bill Mill- If I were Arnold, I'd want much more than even odds, and probably better than 7-3, considering the last time you would have won the bet is in the 1930s. Personally I think Arnold is quite overconfident and, like commenter paul, wish I could get in on some of the action. At even odds, I'd bet my entire net worth.

I understand Arnold's reasons for expecting a lot of democratic victories, and its admirable for him to put his money where his mouth is, but Bryan has already won the gamble. Or more precisely, he can make other bets such that he will not lose money no matter what the outcome.

For simplicity let's say the democrats are guaranteed to control the house and senate until 2017, and only the presidency will be contested. Obama is currently getting 4-5 on major online books for 2012, and assuming he does carry, its still hard to imagine the democratic nominee for 2016 will have better odds. If Bryan bets $99 on Obama and Obama wins, Bryan makes $70 (if Obama loses, the bet is over, and Bryan makes $1). If we go to 2016 and Bryan stakes his $70 on the dem nominee who also has 4-5 odds, he makes another $50 for a total of $120 with a dem victory, only $100 of which he must pay to Arnold. With a dem loss, he still makes $1. Of course, the fact that the bet also includes house/senate control can only help Bryan.

So if Arnold is really confident in what he's saying, he's playing the books in addition to taking this bet, since to offer Bryan even odds for democratic victories across the board, he must think he knows something that the prediction markets don't in a major way.

Barkley Rosserr writes:

Of course. Steve Sailer is right. If the Republicans get back to bashing the hell out of immigrants, especially the Hispanic ones, they will win!

Karl Gallagher writes:

I think there's a lot of people who'd pay $100 to get divided government back.

Jeremy, Alabama writes:

At least 3 of the 7 reasons Arnold lists are examples of the US having become a banana republic.

#1 - immigrate, and grant votes to, foreigners and purchase their vote with social goodies.

#2 - steal from, threaten and terrorize the titans of industry, making them buy political protection.

#4 - take control of the census, to work the numbers any way you please.

We could add:

#8 - loot $3.5 trillion to pay back your constituencies at the expense of taxpayers

#9 - perfect the dead-person voting scam through ACORN, while finding ways to stop soldiers votes. They lost the Bush recount - and they will not be losing any more.

Banana republicans do not lose elections. I am with Arnold on this one.

Babinich writes:

"Look to 2014, by when many of the things on Arnold's list could have changed in unforeseeable ways, and the electorate could be very tired of the Dems."

By that time the damage will have been done.

Zac Gochenour writes:

Anyone who agrees with Arnold, I expect you are getting rich right now off the rest of us by trading on Intrade.

Current asks:

SENATE.DEM.2010 90.0
HOUSE.DEM.2010 82.0
PRESIDENT.DEM.2012 68.0
HOUSE.DEM.2012 80.0

If you think the p of all of these being true (plus 6 other events) is better than .5, then these numbers represent a tremendous moneymaking opportunity! The prediction markets wouldn't have given Bryan even odds even if the bet only went to 2013.

I'd like to channel my inner Hanson and ask Arnold to "break down" his prediction. There are 10 total chances for the Republicans to take control of the House, Senate, or Presidency in the period described. What are the chances, in each case, that the Democrats hold on?

Constant writes:

A correlation of the value of money with outcome affects the interpretation of the bet. At the extreme, suppose that Dem dominance will destroy America and reduce the value of the dollar to nothing, and suppose that a Rep victory will perfectly preserve the current value of the dollar. Then regardless of the probabilities, one side has already won the bet, because the person who votes against Dem dominance is assured of never losing anything of value (from the bet itself, that is).

IWantCookieNow writes:

They should make this an Intrade bet or so.

Alternatively, it would be very cool if you could extend this bet to outsiders to me so we can ... be ripped of by you (or alternatively rip you off). But then, you probably don't want to do this.

Which brings me to another idea: Maybe you do this not for the money but for the signaling towards outsiders.

Political Observer writes:

In reviewing your points as to why you will win the bet I find agreement with some and disagreement with others.

I agree with your first three points, especially number 1. Hispanics should be more attuned to the Republicans if the republican message were more focused on growth and opportunities along with tradtional values. Most Hispanics coming to this country want opportunity (much as all of the other waves of immigration that we have faced).

I'm not quite in agreement with point 4. Many of those fleeing the blue states to the red states is because they are fed up with high taxes and overburdensome government. I suspect that what will happen is that the blue states will become more blue and the red states more red.

No argument with point 5 except that it looks much the same as the Democrats during the 80's.

Point 6 is reminisent of the Democrats during the 80's and 90's. Even with a Democrat in the White House there was continued debate over the purity of the party. The Democrats drove out a number of prominent traditional conservative and blue dog democrats because they just didn't fit with the leftist elements of the party. Even Bill Clinton had difficulty with his "new Democrat" approach to try to bring in more moderates. Today though there are conservative elements of democrats in the congress the overwhelming voice of the party is leftist/socialist.

Each party has gone through the process of redefining its principles and identity as it has struggled through the wilderness of defeat and minority status. The current debates within the Republican party are well grounded in each parties history.

With regard to point 8 - lets not confuse the young voter with the college student vote. Since the 70's we have had a tendency to define the young voter by what we see on the college campuses. Despite all of the programs to increase college enrollments they are still the minority of all potential voters for that age group. What has made them a more potent vote than before is the total disregard for the voter laws in most states. As an example, during the 2004 election, the Kerry campaign in conjunction with democrat front groups sponsored an outdoor concert in Madison Wisconsin to attract large numbers of students. During that concert the city government registered students and provided them with absentee ballots despite the fact that an absentee ballot can only be cast when a voter certifies that they cannot cast their vote at their polling place on the day of election for specific reasons that do not include sleeping late or attending class.

Where the Republicans are failing in this regard is working to attract the large portion of the middle class young voters who are working for a living while their counterparts are in college classses (paid for with the working groups taxes). Ultimately a portion of this group becomes voters and are as likely to vote Republican as Democrat depending on the election.

In the meantime I hope you don't take this personally but I hope you lose the bet.

Dr. T writes:

"In the meantime I hope you don't take this personally but I hope you lose the bet."

I'm sure Arnold Kling wants to lose the bet, but I believe he'll win it. This probably will be the most costly $100 "winnings" in his lifetime.

Amy writes:

At even odds, this seems like a walkaway win for Bryan. I'm not sure why you would agree to take up a bet like this (even if, admittedly, $100 is no big amount).

The points that are valid indicators that the Democrats are likely to do well in the next ten years. But to expect them to actually go 10 for 10, is just way too much.

Then again, it's a bet that you really don't mind losing. So I guess that's justification enough, since like I said, it isn't a big pot at stake.

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