Is this grasping at straws, or an early indicator of a major shift in the 2020 presidential election? I’m inclined to dismiss betting markets as a prognostication device, but my good friend, former radio partner, and expert economist King Banaian has defended their use as leading indicators. If that’s the case, then the latest aggregation from RealClearPolitics should have Democrats hitting the panic button … although maybe not entirely for the same reason that journalist Tim Pool suggests (via Twitchy):
That sound you hear from Democrats?
Thats them realizing they done fucked up by supporting the riots, I mean "peaceful protests" pic.twitter.com/65LjGZAJPt
— Tim Pool (@Timcast) August 31, 2020
All but one of the wager markets has Joe Biden in the lead (the other is a tie), but the margins are all now very small. The difference is dramatic, and it’s natural to assume it has to do with the riots coming out of the “peaceful protests” Pool cites. However, the data suggests that the protests had the opposite effect until just this past week.
Note when the line crossed over to a Biden advantage. For most of this year, bettors leaned toward an incumbent re-election, which is historically the safe bet. (The only elected presidents not to win re-election in the past 50 years are Jimmy Carter and George H.W Bush.) Even the COVID-19 crisis didn’t rattle the wage markets. They changed dramatically at the end of May, however, when the protests over the death of George Floyd erupted — as did riots and wanton destruction. Donald Trump’s fortunes fell lower and lower on these markets for the next three months despite the urban meltdowns, or more likely because of them, as well as the COVID-19 crisis and its passage into chronic status. People yearning for normality and quiet may not naturally see Donald Trump as the best bet to deliver it, after all.
So what has changed? Bettor perceptions, certainly, but why? I’d guess that it’s a combination of absorbing the COVID-19 crisis and adjusting to its long-term implications, plus the fact that Democrats didn’t even address the riots in the cities at their convention. The RNC/Trump theme of law and order may well be resonating too — at least with bettors — and perhaps the convention as a whole, which was much more in depth on policy than the DNC’s, at least in the first couple of days.
This whole election comes down to a bet, as I mentioned in my earlier post, on what one thinks of America. Do you bet on America, or do you bet against America? Perhaps the people participating in these wager markets have begun to grasp the actual stakes involved — or think voters have. On that note, however, let’s just point out that national polls are not exactly leading the way on that prediction.