Next President for Sale: Cheap
The overlap between money and politics is nowhere more blatant than in the Iowa Electronic Market (IEM). Run by faculty at the University of Iowa Henry B. Tippie College of Business, for educational and research purposes, this endeavor offers the chance to place bets on, among other things, who will win what percentage of the popular vote in 2012. They also sell the chance to bet on the winner of the Iowa Republican Caucus (currently Romney has a huge lead), but not the Democratic one. Bets can be as low as $5.
Markets exist to connect buyers and sellers. Well functioning markets stimulate demand just as poorly run ones kill it (think ECM/Greece). Speaking of Greece, some (my grad school profs) would argue governmental intervention is there to smooth boom/bust cycles. Others (fill in the blank here with your favorite right-wing pundit) profess that governmental intervention itself is the source of those same rollercoasters.
Speaking of regulation, the IEM notes: “The IEM is an experimental market operated for academic research and teaching purposes. The IEM is not regulated by, nor are its operators registered with, the Commodity Futures Trading Commission or any other regulatory authority” (http://tippie.uiowa.edu).
And the CFTC is sniffing around but hasn’t done anything major yet…Should everything be subject to betting, or are some things “sacred”? Even human life, and by human I mean yours and mine, are the subject of market speculation. The person who wants to sell you life insurance is betting that you will be breathing for a long time, while you are hedging your bet that you won’t be. If whole industries exist to bet on human life it’s no wonder nobody blinks an eye on potential oxymorons like “the art market.” The improv equivalent of an art market is the “cage match.”
In a cage match, troupes perform for audience votes. Naturally the troupes with the most friends win, regardless of the quality of their performance. So the art is cheapened a little bit, who cares? Cage matches boost ticket sales, expand audiences, and give the winners street cred. So we have them, but only once in awhile. And the theater, like the IEM, is a non-profit which implies the tempering of capitalism’s feverish pitch.
Ok, so what about bets on bets (e.g. derivatives)? Or bets on bets on bets? At some point does the market become a game and in doing so, cheapen the very election, life, art which spawned its very existence?
Or, do markets, no matter how far along the food chain not only stimulate demand but offer actual insight? The IEM, for example, came closer to predicting McCain’s share of the popular vote in the 2008 presidential election than did Fox News, NBC, CBS, and Gallup, among others.
Maybe we hire them to vote on us as prep for our next cage match?