Friday, 31 October 2008

November 2nd 2004 – the night John Kerry thought he would wake up as President

Are there lessons from what happened last time?

[The main site is having temporary problems so I am publishing here what I was going to to there]

At 1.05am EST on November 3rd 2004 the US news channel, CNN, showed the above graphic on the screen illustrating the result of an exit poll in Ohio, the key state that Senator John Kerry had to win if he was to beat George W. Bush for the Presidency.

The message was clear. Kerry was ahead in Ohio and the chances were that the state would give him enough votes in the electoral college to become the next President. The exit polls and the leaks about them the previous evening had completely turned the White House Race betting market on its head.

When the polling stations had opened on the day before Bush was an odds on favourite to win. By the time the exit polls had been published things had changed dramatically.

Those few hours saw the biggest political gambling spree ever seen with an estimated £25m being bet in the UK alone.

The exit poll results had been produced for a consortium of the major US news organizations, working as the National Election Pool (NEP). They were based on interviews with voters in 49 states. In the days and months that followed there were huge investigation into why the NEP figures, particularly in key states such as Ohio, has been wrong.

The co-director of NEP, Warren Mitofsky, was quoted as saying “the Kerry voters were more anxious to participate in our exit polls than the Bush voters”. Another suggestion was that women, who were marginally more pro-Kerry and certainly in the early polls they represented 58% of the sampled voters.

Whatever the post-elections explanations this was completely irrelevant to the betting. Punters were making decisions in an instant and the conclusion from what was being reported about the polls was that Kerry had won. Many gamblers lost a lot of money that night and one of the bosses of a spread-betting company told me later that it was one of their most profitable sessions ever.

Mike Smithson

Thursday, 30 October 2008

Glenrothes by-election competition

The election game for next Thursday's by-election in Glenrothes is now available.

Entries will close 7am Thursday.

If you would like a copy of the game, please drop me a line at:

Double Carpet

The best democracy money can buy...

Why the complaints about the cost of the US election?

Last night I went to a debate at the British Library, hosted by the Eccles Centre and the wonderful Benjamin Franklin's House museum (go and see them at 36 Craven Road near the National Liberal Club). The debate was chaired by Sir Bob Worcester, one of's favourite contributors, and the speakers were the respective chairmen of Democrats and Republicans abroad.

I have heard so many debates on this Presidential election, that I know the vast majority of the questions that will inevitably be asked. One cropped up last night that gave vent to a shared position by the questioner and both speakers, which I found vaguely absurd.

Much has been made of Obama's ability to fundraise - he is the best fundraiser in the history of these contests, both with respect to total dollar amount, and number of cotributors, even adjusting for population size and wealth. Whilst lauding this ability, it seems many Democrats are still uncomfortable with such a talent.

The Chair of Republicans Abroad was quick to lambast Obama for breaking his promise to take public funds (and their corresponding spending limits) - for what it's worth, I would have broken that promise too, but can still recognise that it falls quite some way short of being a virtuous act. John McCain took public money, though less from a sense of honour, and more because he was broke and needed it as collateral for private loans. He also tried to escape its limits by giving the money back, but was forced to concede that it was firmly accepted under the law. That has been one of the key features of this entire campaign.

Another point that the Republican speaker raised was that Obama had raised unprecedented amounts in volumes less than $200 - this means that a higher proportion of his fundraising was not subject to full checks on the origins of the money, and could indicate irregularity. Both campaigns have been forced to return about $1 million to the FEC for such reasons, but I don't consider this a huge concern - there is less threat to democracy from widening the net and allowing hundreds of thousands to donate with a few illegal donors, than to make candidates reliant on donors who only ever give massive sums of money.

What both speakers, and the person who asked the question, agreed upon was that there was too much money in American politics. I categorically disagree.

There is perhaps too much money in the races for the US House of Representatives. A Congressman in a swingable district (of which there are stunnningly few left, thanks to outrageous Gerrymandering by both parties to create impregnable majorities in each state) needs to raise about $10,000 a week for his biennial re-election. One million dollars per candidate per House seat over a two year cycle seems a lot.

Senate races vary in cost - some are impossible for one party to win, either because of the leanings of the state (Republicans in Oklahoma, Democrats in Massachusetts) or because the Senator is so long standing (Senate Pro Tem Robert Byrd of West Virginia). A competitive race in a big state, with an expensive media market might cost $5-10 million every six years though.

This Presidential contest will be famous for being the first to cost more than $1 billion dollars, maybe almost $1.1 billion. That sounds obscene, but is it?

American teenagers spend about $1.2 billion per annum on chewing gum. Why should the contest to determine how 120 million Americans choose the most powerful man in the world cost less than the combined revenues of Orbit, Wrigleys and Trident?

If this Presidential election (including Primaries) costs $1.1 billion, and there have been two cycles of Congressional elections (2006 midterms, and 2008 elections) for the House and Senate, then how much have Federal Elections raised and spent in the last four years?

Presidential election (inc primaries) both candidates: $1.10 billion
435 House seats x 2 elections x 2 candidates x $1m per candidate: $1.74 billion
67 Senate races plus 2 special elections x $5m per candidate: $0.69 billion
Administrative costs (inc Conventions and election machines): $0.5 billion

TOTAL = 1.10 + 1.74 + 0.69 + 0.5 = approx $4 billion dollars over 4 years

This assumes that all House races are tight, and that an incumbant Congressman spends as much as his opponent, at about $1m per campaign for each side. It also assumes that a dead-cert Senate race in Vermont costs as much as a race for US Senate in California. It attributes costs for electoral process paid for by the States, which would be used for State elections anyway - and I reckon my guess is high. I reckon that the true cost may be only about 60% of what I have stated as the total.

So, at $4bn for a 4 year cycle, that's a billion dollars a year, for a country of just over 300 million citizens. That's $3.30 per citizen per year, or $10 per voter who actually votes per year. I think that is a very reasonable cost for having free, fair, transparent elections to some of the most powerful political posts in the world - electing almost 1000 office holders over the four years.

So, America spends more on its Federal Elections than almost any other nation - thing is, I'm not sure that's an unfortunate boast at all. It engages hundreds of thousands of people as activists, it runs caucuses and primaries, it pays for TV advertising that puts policy positions in the public domain, it creates conventions and debates that are the talking point of the whole country for days. We can't expect British General Elections to excite that many people when we are not prepared to pay for the campaigning and the debating, the activists and the adverts - we run our democracy on the cheap, and thus get exactly what we pay for. I wonder whether the criticism of America is completely misplaced - I reckon they actually have the best democracy that money can buy.

Tuesday, 28 October 2008

Is this Chuck Schumer's 60th seat?

    Sen Ted Stevens (R-AK) found guilty of corruption

A Washington DC jury yesterday found Alaskan Senator Ted Stevens guilty on seven charges of corruption, relating to unbilled home improvements gifted by a local CEO. Although he has sworn to appeal, he faces a five-year maximum jail sentence, though a date for sentencing has not yet been set.

Stevens has been the US Senator from Alaska for 40 years, and was voted 'Alaskan of the Century' by the state's inhabitants. He is President Pro Tempore Emeritus, having been Senate Pro Tempore (4th in the Presidential Line of Succession after POTUS, VPOTUS, and the Speaker of the House) when the Republicans held the US Senate. That said, he was already facing his toughest Senate re-election bid to date, facing Democratic Mayor of Anchorage Mark Begich. Begich is a good candidate by all accounts, and in the irresistable tide of Obamamania in such a difficult year for the GOP, Stevens looked vulnerable for the first time in years. Alaska has been a fairly solidly Republican state for some years - GW Bush enjoyed a 20% lead over John Kerry here, but doesn't hold the same antipathy for Democrats that you might find in Idaho or Wyoming.

Begich was leading by between 3% and 5% until late July. A poll had just put him on a 9% lead, when news of Stevens' corruption charges broke. Very few politicians would have survived that week - I can think of none who would have not only contested the charges, but insisted on running for re-election only 100 days later. Stevens knows his reputation, and knew that unless jailed, he was better placed than anyone to beat Begich. Some talked of the little-known Alaska Governor Sarah Palin taking on the race to beat Begich, but her 80% approval ratings were not considered worth wasting by a loss, and there were concerns that her own scandal ('Troopergate') would render her a vulnerable electoral candidate in November.

Stevens gutsily insisted on a trial in Washington DC, to be concluded only two weeks prior to election day. All eggs in one basket, he figured that being acquitted would give him a bounce that could see him still retain his seat. That said, he knew that his poll numbers (not to mention fundraising) would take a hit in the short term. They did. At one point, he was 20%+ down against Begich, and Alaska fell into the 'Likely Democrat' column for a couple of weeks. No prizes for guessing what changed all that.

The luckiest man this entire election cycle has been Pat Dougherty. He is the editor of the Anchorage Daily News, which has fast become a globally-recognised newspaper. As well as the excitement of Stevens' court case in the midst of a tight re-election race, he also got to act as the authoritative voice on the Gubernatorial prowess of Sarah Palin when she was surprisingly chosen by John McCain as his Vice-Presidential nominee. Having now decided to back Barack Obama, the newspaper was itself the story once again this week.

Palin's unveiling, and the recognised boost of a favourite son/daughter on a party's polling, suddenly turned the tables on Begich. He, above all others, has my sympathy if he loses in November. From one of the toughest incumbants to beat, he fought to a slim and growing lead. He got a glimpse of a complete and crushing victory for but two weeks, before the impulsive and unpredictable choice of Sarah Palin blew the Democrats out of the water in America's biggest, northernmost, easternmost, and westernmost state.

I wrote in an article the weekend before last that Stevens' trial was the key issue, and that if he lost, he would almost certainly lose the seat. For the sake of Mark Begich's nerves, I hope that is the case, but it would be dangerous to write off the old goat yet. He has sworn to appeal, he will continue to run, and if Sarah Palin encourages massive GOP turnout in state, the crowds eager to recognise their favourite daughter for the profile she has given Alaska in this campaign might just keep Stevens in his seat.

Of course, even if he won, there are two dangers. His appeal could fail, and whilst a conviction does not render him ineligible as a Senator (though it would a member of the House of Commons), serving jail time would effectively prevent him from carrying out his duties (inc voting) and he would likely step down, prompting a special election that I'd expect Begich to win *unless Palin stood for the GOP*.

The second danger on the horizon is that he wins, but is expelled from the Senate. This requires a two thirds majority, but this would be reduced from the normal 67 Senators (needed to vote guilty at an Impeachment Trial) to 66 in Stevens' case, as I believe it is established that a person cannot vote on a challenge to themselves. If Stevens wins Alaska, I think the limit of Democrats will be 57 (plus Lieberman and Sanders). Thus 7 Republican Senators would have to vote to expel him, and I cannot see that happening. In fact, I cannot see many Democrats supporting such a measure. The Senate is much more collegial than the House, and the members are usually friends personally, even where politics diverge. The only cross partisan friendship I can think of in the House is Barney Frank and Ron Paul, and that must surely come out of a shared recognition of belonging to their parties' fringeworthy wings. In the Senate, Ted Kennedy is beloved of several Southern Republicans, and Stevens is close to Daniel Inoue, the Democratic Senator from Hawaii. John Kerry and Joe Biden are/were both close to John McCain, and Dick Lugar and Barack Obama were known to be cordial. Only a true partisan would introduce an expulsion bill, unless the target was truly beyond the pail - a Joe McCarthy perhaps. Stevens is too long-standing to be expelled, and I would say he is probably safe however big the Democratic majority is - indeed, the bigger it is, the greater the danger of them looking like abusing it for partisan advantage. He just needs to win his election, and win his appeal. Nothing to it.

Alaska is now my favourite Senate race to watch, even more so than Oregon or North Carolina. I think it could be quite close, and wonder if the InTrade market will be one to watch until the very end of the night.


Monday, 27 October 2008

US Election Competition

If anyone would like to enter the US election game, please drop me a line at:

Simply predict the winner in each state and complete the two tie-breakers - full form guide available.
Entries close 1am GMT Tuesday 4th November.

The Election Game now has a 24-country portfolio and features extensive coverage of British, American, European and international elections and politics, as well as finance and economics, all wrapped up in a Formula 1-style championship.

There will also be a game out this week for the Glenrothes by-election.


Double Carpet

But what will happen to the blogosphere...?

Is there a "blogosphere incumbancy factor"?

We've already looked in some detail at what might happen to the Republicans in the US and the Labour Party in the UK when they cease to hold the highest seat in Government - predictions range from the Labour party withdrawing to its hard-left/working-class roots, or the GOP formally becoming the party of the Religious Right at the expense of moderates. A question less often asked is what might happen to the blogosphere as it encounters its first changes of government.

    To give a broad brush-stroke picture, the UK and US blogospheres differ in one very obvious way. Whilst in the UK (at least until this year) the right-of-centre has been largely dominant (in terms of readership, influence, Technorati authority, traffic and revenue), our friends across the pond have created a blogosphere that (outside of the online outposts of the MSM at least) is notably left-wing.

There are a number of theories as to why this might be. Perhaps because the tech revolution began and flourished in that most liberal of States (California) whereas the Labour heartlands of the UK are more likely to be without broadband access than the better-off (and Tory-voting) South East of England. Conversely, maybe it is a sign of the use of funds, though Iain Dale did well to demolish this particular critique of the right-wing UK blogosphere by pointing out the number of one-man-bands. Others note that the American media (whilst TV and newspapers are accused of a soft 'liberal bias') allows room for highly energetic right-wing reporting, especially on FOX and through Talk Radio - the blogosphere might have developed to counter that most partisan and tubthumping of media, whereas in the UK the blogosphere seems to consider the Guardian and the BBC as its principle enemies in shaping political debate (a mark of their influence on the Labour Government, no doubt).

The theory that I intuitively have supported posits that the blogosphere (which, let us remember, is a medium not an outlet) is inherently oppositional - the room and license afforded for often vitriolic attacks on government suits a mode of being that launches attacks on governmental records, rather than defence of them. The irony of the blogosphere's reputation as a home to conspiracy theorists is best-illustrated by the fact that it is the open-source scrutiny of political claims that has made the blogosphere such an invaluable contributor to debate. No all-powerful newpaper editor to say that a line must be taken, or a story suppressed - all is leaked and dissected, and a volume of knowledgeable (and less-knowledgeable) opinion descends upon it to tear the truths from the carcass of spin.

The blogosphere is still a young world - few of the 'must-read' blogs on either side of the Atlantic were available even 4 years ago. Prior to the turn of the Millennium, only the Drudge Report (more of a news aggregator than a blog) comes to mind (for higlighting the claims about Lewinski''s Blue Dress) as having had a significant influence on politics from outside the MSM. YouTube, as if you can imagine an election without it, was scarcely a factor in 2004 - it grew to political prominance as a result of Virginia Sen. George Allan's 'macaca' comment in his (ultimately unsuccessful) re-election campaign against Jim Webb in the 2006 Midterms.

Even looking at the essential sites in 2008, many were at-best little-known before this electoral cycle. The astonishing importance of Real Clear Politics and, and during the primaries DemConWatch, is a new phenomenon - the sheer bulk of content, numbers, and stories demanding an explosion in top-end political comment from close to the ground, feeding the specialist interests of readers dissatisfied with the Dead-Tree Press, and their general-audience and space-constraints.

    Yet with this youth comes a little naivity. The most active wings of the political blogosphere are likely to be confronted with upheaval in the next 18 months, on both sides of the Atlantic. If I am correct in diagnosing the 'inherently oppositional' nature of the blogosphere, a view shared by Markos Moulitsas (founder of Daily Kos), what will happen to the Leviathans of the liberal Left when they are forced to defend power, rather than mock and oppose it, as a result of an Obama presidency? How will Iain Dale, Dizzy, and ConservativeHome learn to adapt in the event of David Cameron becoming Prime Minister?

I don't wish to overstate the case - the blogosphere is independent of political masters to a greater extent than the MSM can ever be, and I have little doubt that Daily Kos will attack an Obama White House from the Left as earnestly as Devil's Kitchen or Guido Fawkes will bemoan Cameron's failure from the perspective from the Right. That said, this sort of change in government (a reversal of political direction) has never been seen in the few years since the political blogosphere reached its first test of maturity in either the US or the UK. I wonder if the dominance that has been enjoyed by the American Left and the British Right will survive the association with the failures of government.

This is not too say that superb, independent writers will become as lick-spittle-loyal as a generation of journalists have become, but the challenge of writing significant volumes of content is a significant committment for many bloggers who hold full-time jobs as well. Family committments, social lives, paid work (few bloggers make proper money from it) - there are so many constraints on time, that I wonder if the lack of vitriolic hatred of government (to the same degree as could be enjoyed as when 'the enemy' were in charge) might dampen the fires of some stalwarts and pioneers of political blogging. It would be excusable if that were the case.

At very least, I would expect that the thus-far-dormant wing of the political spectrum in each nation would experience a delayed burst of creative energy, as they begin to find their feet in Opposition. If Cameron and Obama are their respective heads of government in two years' time, expect the Republicans and the Labour Party to have begun significant investment in levelling the online playing field of political activism.

    And yet, this projected trend is untried and untested. The thesis might be completely wrong, or at least rendered indistinguishable by this counterweight: the Blogosphere Incumbancy Factor.

All astute readers of know the claim that a first-term Liberal' Democrat MP, seeking re-election, enjoys an estimated 'bounce' of around 6% in the polls. Attributed variously to good local politics, a strong localist activist base, focus on constituency work in the absence of Government or Official Opposition roles - there is an 'incumbancy factor' that makes the Liberal Democrats better at holding recently acquired seats than might normally be expected. Might the same be true of the blogosphere?

Assuming the 'oppositional nature of the blogosphere' thesis to be true, might there have been some benefit to the UK Right and US Left in that the birth of blogging happened when they were in electoral decline? Can what is fundamentally a (media) market, with defined demographics and a growing (but not high-attrition) consumer base *really* change allegiance so quickly? I wonder if the sheer luck of the technological advances (at consumer level) coming when they did will give a distinct advantage to the currently-dominant political wings in each country for many years to come - that they will leverage their size and established authority to limit the encroachment of 'enemy' blogs on already-defined turf.

It is looking increasingly likely that the Conservatives will win back 10 Downing Street before Summer 2010, and that Barack Obama will be resident in the White House from January 2009. Those changes in government will be abrupt - I wonder whether the fast-moving world of political blogging will be quite as responsive, and how long it will take us to realise that it might not be.


Sunday, 26 October 2008

The Tote ‘Ten To Follow’ Competition tries again

OK, so we didn’t win anything last year but it was good to see PB’s name in the Racing Post when we were front-running early in the main competition and again when we got close to the January prize.

For those not already familiar with it, the Tote’s popular Ten to Follow competition is a decent value bet and can provide a lot of fun throughout the jumps racing season at relatively modest cost. The general idea is that you pick out ten horses from the Tote’s list and score points if and when they win, or finish second in the big ‘bonus’ races. Entry is £12 per line. Top prize is likely to be about £500,000 and there are monthly prizes of £10,000 each with a special £25,000 prize for the Cheltenham Festival in March.

Team entries are common; in fact, in view of the fierce competition, individual entries are unlikely to be successful. You really need to put in a lot of lines to have much chance. When I floated the idea of a PB syndicate entry last year, I was almost overwhelmed by the response, so this year I intend to impose a maximum stake of £50 and I will cap the entry at £1,000 so that it doesn’t get too unwieldy. Any prize money (don’t laugh) will be split pro-rata according to stake.

It helps if I have a couple of other PBers as Committee Members to help with picking horses, running the thing and ensuring fair play. Last year, Cheltboy, StJohn, Icarus and Yokel lent valuable assistance. I’ll be leaning on them again but if anybody else wants to join in, just let me know. I would also welcome any suggestions for horses to put in our entry, especially if they are unlikely to be on anybody else’s radar.

If interested, please drop me a line at . State how much you want to be in for and give your real and ‘stage name’ and the email address to which you want communications sent. Please note that this email address will be visible to other members of the syndicate. (Sorry, but the admin becomes impossibly time-consuming otherwise.) The competition starts on November 14th but the sooner you get in touch the better; if oversubscribed, it will be first come, first served.

Full details of the competition can be found here.

Hope to hear from a good few of you soon.

Peter Smith (Peter the Punter)

Wednesday, 22 October 2008

YouGov marginals poll suggests Tory majority of 54

Sorry - the main site is down.

A new YouGov poll of 60 marginal seats where Labour's majority was between 6% and 14% suggests that there's been a significant move to the government in the past month.

In September the poll projected an overall Tory majority of 110 seats - today's survey puts that down to 54 seats.

The actual voting shares in the poll have the Tory lead at 5% - but remember the seats polls were all solidly Labour last time.

The poll was carried out by YouGov for Channel 4 - see here

Monday, 20 October 2008

This is the emergency site for PB

This site has been created so that can stay operational when, for whatever reason, the main site goes down

Please switch discussions to here in that eventuality. I'll let you know here as soon as normal service has been resumed. 

Mike Smithson

The money piles on the Tories

What's the reason behind the eight seat shift?
Welcome to our new emergency site - the place that's been created for when our main site is down.

Spread betters who risk hundreds and sometimes thousands of pounds on the outcome of the next election have moved back sharply against Labour. There have been shifts of a massive eight seats on the markets where the number of MPs the parties will end up with are traded like stocks and shares.

This in spite of the big opinion poll stories in the papers yesterday about the move back to Labour in the wake of Brown being designated a 'superhero' round the world for his and the UK's handling of the banking crisis.
The media narrative says that Brown is benefiting so those are the numbers that are selected to support their stories. Tories shouldn't moan - the narrative had been all their way until about a month ago. So the voting intention figures in the BPIX poll are ignored and all the focus is on the non-voting figures that support their perceived trend.

Normally this is an ideal moment for smart spread betters to make their move. Betting against the all-prevailing narrative can be quite profitable.

Alas that has not happened. The money is going against Labour and for the Tories. We should see several polls in the next few days to see if gamblers are right.

Mike Smithson

PoliticalBetting: the back-up site

Occasionally when we have massive traffic or technical problems PB goes down. When that happens the problems of getting it back up again are made that much harder because so many users are clicking on refresh to see if we are up again.

In future please could you come here. It's not satisfactory but at least you will get news when the main site is working again and you can continue the discussion.
  • During these times I will post here.
Many thanks for all your help and support.

Mike Smithson