We need a better class of plutocrat

Are the financial markets really being run by people who think Romney is going to win? Scary!

Comparing

(1) this tweet from Nate Silver yesterday:

Between national + battleground state polls so far today: 29 Obama leads, 3 Romney leads, 5 ties.

with

(2) this anecdote from Josh Marshall

Listening to a story from a friend this evening. Guy in a social setting talking to a group of Wall Street heavyweights. Every single one in the room certain Romney wins. Has Ohio locked. Has the whole thing tied up. No doubt.

and

(3) the fact that you can get nearly 4:1 on Romney at Betfair

makes the financial crisis much easier to understand.

Hoping that your guy will win even though he’s down? Reasonable. Figuring out a way he might actually win, despite the evidence? Not reasonable, maybe, but normal.

But being subjectively certain of a very unlikely outcome? Scary, in people who get to play with billions of dollars’ worth of other people’s money.

And the Murdochized Wall Street Journal isn’t helping. It used to be that the crazies got to do their thing on the editorial pages, but the news columns played it straight. No longer.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

15 thoughts on “We need a better class of plutocrat”

  1. I don’t think anyone can have confidence what will happen, right now. The move to difficult-to-poll cell phones, the Benghazi discussion, the Jeeps in China ad, the effect of weather on the Philadelphia vote – and all the polls show close races in a number of crucial states. A neighbor of mine asked me for my prediction, and I said “Narrow margin of victory and bitter losers”. I think that’s a safe bet.

    1. To the extent the data exist, they certainly do not provide the basis to confidently predict a Romney victory. It’s fine to question the quality and validity of the existing data: there could be a systemic flaw in the polls, or a bunch of such flaws. It’s always fine to say you’ll wait and see, that making predictions is a mug’s game. Still, it is weird for a room full of people who crunch numbers for a living to proclaim they’re certain of a Romney win, when the available numbers can either be discarded interpreted to suggest the opposite result. Unless you want to get into speculation about rigged voting machines, of course (FWIW I’m rather agnostic about those worries; I find it a bit hard to believe the word wouldn’t have leaked out – but I do insist that the use of voting technologies that can’t be audited to dispel such rumors is a scandal).

      It is a little unfair of Mark to bash the WSJ for running the same story CNN is running (some version of ‘national polls say it’s a dead heat’). Even the NYT on their election page stresses that they see the race as being 243-206 in the electoral college, with 89 swing state votes, rather than featuring Nate Silver’s prediction prominently.

      1. I agree that Mark’s being a little unfair to the WSJ. The national polls really do show a very close race. The poll-reading done by Silver et al is a lot more sophisticated than what journalists are used to. You have to give the NYT credit for playing Silver as prominently as they do.

        1. “I agree that Mark’s being a little unfair to the WSJ. The national polls really do show a very close race. The poll-reading done by Silver et al is a lot more sophisticated than what journalists are used to. You have to give the NYT credit for playing Silver as prominently as they do.”

          The national polls show a close ‘overall’ number which doesn’t matter; it’s the EC which matters.

          And has for 200 years. Any journalist who doesn’t understand that doesn’t understand sh*t.

          1. I’d not disagree with you, but Mark suggested the WSJ put forward this “dead heat” spin in order to please its notoriously meddlesome Conservative overlord. Given that CNN and a number of other outlets did the same, and even the NYT did fairly similar, I suspect it’s more Horserace-ism than Conservatism at play, along with a dollop of the American Journalistic Ethos of never taking a side when there’s the slightest controversy, even if the evidence is heavily weighted to one side – what Krugman calls “Is The Earth Flat: Opinions Differ”.

      2. Warren: “…a room full of people who crunch numbers for a living…”

        You may be exaggerating the degree to which Wall Street ‘heavy hitters’ actually crunch any numbers. They probably rely more on reading people’s ‘tells’ and other psychological manipulations. Minor peons they hire out of MBA programs (or to a lesser extent quantitative PhD programs) do any actual mathy stuff.

  2. Shorter Mark Kleiman: powerful and unaccountable people are thinking delusionally, which is a problem.

    Shorter dave schutz: ** I ** ‘m not thinking delusionally!

    Congratulations, dave; but Mark’s point stands.

    1. It sounds like you’re pretty confident in the outcome yourself. If Mark’s point is that these people are delusional, it only stands until tomorrow night if Romney wins, at which point references to delusion are likely to be replaced with suspicion of manipulation, reinforcing Dave’s point. Even if Obama wins, the delusion point is only valid and Dave’s point irrelevant to the extent that he wins by a wide enough margin to justify 4:1 odds against Romney. Today I wouldn’t make the prediction that that will be the case tomorrow.

      1. Suspicion of manipulation?

        Dear sir, there is no need whatsoever to suspect manipulation when it is as plain as the nose on Karl Malden’s face. Look at the actions of Republican governors and Secretaries of State nearly nationwide. They have acted to make voting more difficult for people not belonging to their in-group.

        That, sir, is manipulation.

  3. What makes you think the plutocrats have not arranged a Romney victory – that is, they are confident that restrictions on registration and ability to vote will not swing the election their way?

  4. What Peter T says.

    On this from Warren Terra: “(FWIW I’m rather agnostic about those worries; I find it a bit hard to believe the word wouldn’t have leaked out – but I do insist that the use of voting technologies that can’t be audited to dispel such rumors is a scandal).” Holy God! We never begin to worry about these voting machines until just before an election, then we immediately forget about them until the next election. La dee dah. We ARE sheep.

    And anybody thinking that an Obama victory is proof the machines aren’t rigged needs to think again. God help us.

    What to do if we get shorn again? Start banks and insurance companies that deal honestly with the people. Consumer power.

  5. The only credence I can give to the Finance Guys in their confidence is if they know something we don’t, like perhaps there is some electronic vote -rigging going on in OH right now.

    1. The Finance Guys operate in a world where if you’re confident enough and boorish enough, you can make deals go through even if the numbers dweebs say they shouldn’t. So why should an election (see The Brook Brothers Riot) be any different?

      Seriously, I think that this has a grain of truth to it. Bullies in the business world are used to being able to change the “facts” and win arguments simply by making their opponents unwilling to continue. They then generally insulate themselves from repercussions by pointing out that their former opponents “agreed” with them. So it’s quite plausible that they wouldn’t understand that in larger contexts the facts don’t care how big their bonus is.

  6. “A better class of plutocrat”

    Plutocrats have never been terribly concerned about the “public interest”, but there used to be a strong element of condescending patrician concern to “manage society” for the longer term. That style of old money noblesse oblige has largely given way to a more grasping, short term attitude. Our plutocrats have “gone Galt” by adopting the attitude of absentee slumlords. To these new Galtian plutocrats, we economy-class citizens are just so many shiftless slum-dwelling renters who need to pay up. Platinum-class citizens absolve themselves of any responsibility for the larger state of society.

    What a sweet deal to be BOTH a Master-of-the-Universe AND a poor benighted victim of mean ‘lucky duckies’. Power without responsibility.

    1. Maybe they just know something about planetary colonization that we don’t. Because IBG,YBG may work for maximizing deal bonus, but on a larger scale it has yet to be implemented.

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