Predictable Insights - 5.14.21
Predictable Insights provides a unique, crowdsourced perspective at the intersection of politics and prediction markets.
Each edition includes an update on the politics driving the week that was as well as highlights from PredictIt's market analysts.
It's Friday and here are the insights we've been keeping an eye on: Infighting in the Republican Party, centered around Rep. Liz Cheney’s (R-WY) ouster from her leadership position on Wednesday, has only continued to heat up through the week and it’s not likely to come to a resolution any time soon. All that’s at stake is the future of the Grand Ole Party. We’ll look at how this storyline has developed this week and how it’s likely to play out in a few key Senate races.
Then, an update on Rep. Matt Gaetz’s (R-FL) potential legal troubles and how that could impact his committee assignment. We end with a quick look at just how badly public opinion polls failed in 2020.
This Week in the Markets
Rep. Liz Cheney (R-WY) speaking with House Minority Leader Kevin McCarthy (R-CA) in the background. Photo: Rep. Liz Cheney / Cheney.house.gov / CC BY-SA 4.0.
A Battle for the Soul of the GOP
The battle embroiling the House Republican caucus this week came to a close this morning when Rep. Elise Stefanik (R-NY) was voted in as the party’s House Conference chair – replacing Rep. Liz Cheney (R-WY) as the highest-ranking Republican woman in the chamber. The vote to remove Cheney took only 15 minutes after weeks of nasty infighting over conflicting visions for the immediate future of the Republican Party.
The anti-Cheney crowd supports moving the party leadership firmly in support of former President Donald Trump while pivoting attention away from the Jan. 6 attack on the Capitol and toward becoming a united front against President Joe Biden’s agenda. Many representatives, including House Minority Leader Kevin McCarthy (R-CA), who lobbied for Stefanik ahead of this morning’s vote, believe that removing a staunch Trump critic from her leadership role was the only way forward if Republicans hope to take the majority in the 2022 midterms. The hope is that it will take some of the heat off members being constantly pressed about their position on the Jan. 6 riot and Trump’s actions surrounding the election.
Market Data at 7 a.m. EDT: Who will win the 2024 Republican presidential nomination?
But Cheney has no intention of letting this fight go, and now that she is out of leadership there is nothing holding her back, telling reporters after the vote to oust her earlier this week that she “will do everything I can to ensure that the former president never again gets anywhere near the Oval Office.”
“We cannot both embrace the ‘big lie’ and embrace the Constitution…the nation needs a strong Republican Party…a party based on fundamental principles of conservatism.” – Rep. Liz Cheney
With that, Cheney has set herself up as one of Trump’s most well-known and outspoken opponents as we head into a midterm election season in which both parties have all of Congress on the line. Republicans only need a handful of seats to win the House majority, and only one in the Senate.
Market Data at 7 a.m. EDT: What will be the balance of power in Congress after the 2022 election?
Some Republicans, more privately than publicly, are expressing concern over the vote to remove Cheney, viewing it as a troubling sign of Trump’s continued grip over the party – which at this point can hardly be denied. Right now should be an easy time for the party out of power to unify in opposition, but Republican leaders and potential 2022 candidates will continue to cater to Trump as long as they are worried that their rank-and-file voters will punish them for disloyalty.
So Republicans have a difficult line to walk. They may not be able to survive a primary without Trump’s support (or at least not his ire), but that loyalty could kill them in a general election. A NBC News poll last month found that Trump’s favorability rating was down to 32% among all voters and 14% among independents.
Market Data at 7 a.m. EDT: Traders are banking on a split Congress after 2022's midterm elections.
We can look to Virginia’s Republican nominating convention last weekend for a look at how this dynamic could play out over and over again between now and the midterms, particularly in blue-leaning states. Republicans nominated Glenn Youngkin, a voter integrity advocate who has so far refused to say that Biden won the 2020 election fairly, to be their candidate for governor. In his statement responding to Youngkin’s nomination, the likely Democratic nominee, former Gov. Terry McAuliffe, mentioned Trump’s name three times in as many sentences. A preview of how Democrats plan to campaign in the general election.
This is a concern Republicans are facing as they attempt to challenge Democratic-held Senate seats in Arizona and Georgia, as well as hold onto Pennsylvania. We’ve already seen this dynamic play out in 2018 in South Carolina and 2020 in Colorado, and with partisan tensions even more heightened there’s no reason to expect next year will be different.
Market Data at 7 a.m. EDT: Which party will win the 2021 Virginia gubernatorial election?
Market Pulse: The common consensus is that if Trump decides to run for the Republican nomination for president in 2024, he’ll likely win. After spending most of April trailing Florida Gov. Ron DeSantis (R) as the likely GOP nominee , Trump is back on top at 27¢, currently 6¢ ahead of DeSantis. If he does run, PredictIt traders are favoring the odds that Trump files in 2022, rather than this year, though there’s not strong confidence with either market at this point.
As for the Virginia gubernatorial election, traders are virtually certain that McAuliffe will be the Democrat’s nominee, at 98¢. Republicans gained slightly this week following the party’s nominating convention, likely a small showing of confidence in their pick, but overall Democrats are heavily favored to win the governor’s seat – at 82¢ to Republicans’ 22¢.
Pennsylvania Lt. Gov. John Fetterman at the press conference with Gov. Tom Wolf. Photo: Office of Pennsylvania Gov. Tom Wolf / Flickr / CC BY 2.0
Here’s a look at how these dynamics could play out in a few key Senate races that we’re keeping an eye on:
In Pennsylvania, a Republican primary to replace the retiring Sen. Pat Toomey (R-PA) is already heating up, with candidates competing to tie themselves to Trump for an eventual endorsement. There’s former congressional candidate and close friend of Donald Trump Jr., Sean Parnell, who announced his candidacy earlier this week. Trump’s former ambassador to Denmark, Carla Sands, who is considering a run, and former lieutenant governor candidate Jeff Bartos, who is a Trump supporter and was the first top-tier candidate to enter the race.
Trump lost the state to Biden in November 2020, but Republicans in Pennsylvania tend to strongly support the former president and his economic message. The Democratic side is also expected to be contentious, with Lt. Gov John Fetterman, state Rep. Malcolm Kenyatta and Montgomery County Commissioner Val Arkoosh already declared. Fetterman, the current front-runner has come under fire from state party leaders who argue he doesn’t represent the party’s diversity.
Prices at 7 a.m. EDT: Pennsylvania Lt. Gov. John Fetterman and Rep. Guy Reschenthaler (R-PA) lead their respective primary races.
Redistricting will also be a factor since Pennsylvania is one of seven states that will lose a congressional seat, and the resulting impact is expected to have implications for Democrats more so than Republicans. The likely outcome could push Rep. Conor Lamb (D-PA) to run for statewide office, making him a likely favorite in the Democratic primary.
Market Pulse: As of now, Democrats are strongly favored to gain control of Pennsylvania’s open Senate seat next year with a 20¢ advantage. This market has remained pretty consistent and closes out this week with 62¢ to 41¢ that Democrats will win. The Democratic primary market is playing out as expected, with Lamb gaining on Fetterman since the beginning of May as rumors heat up that he will attempt the jump to statewide office. Fetterman still leads with 66¢ to Lamb’s 34¢ as of Thursday. In a distant third is Kenyatta with 6¢, followed closely by Rep. Chrissy Houlahan (D-PA) with 5¢.
Prices at 7 a.m. EDT: Pennsylvania's GOP primary is lead by Sean Parnell while Democrats are the early favorites to flip Sen. Toomey's seat next year.
On the Republican side, Donald Trump Jr. is rumored to be thinking about a run, but that appears unlikely and traders have a yes outcome at only 7¢. Much more likely is that his buddy, Parnell wins the Republican nomination. Parnell sits at 42¢, 7¢ ahead of Bartos, but over the last month the two have traded first and second-place. Parnell was in the lead mid-April before nosediving to a contract low of 13¢ and then climbing his way back to the top as of Monday.
Sen. Chuck Grassley (R-IA) in a committee hearing. Photo: Ninian Reid / Flickr / CC BY 2.0
In Iowa, Republican Party hopes hang on whether 87-year-old incumbent Sen. Chuck Grassley (R-IA) decides to run for re-election or not. If he does run, most people agree that he will likely win, but if he doesn’t it turns that seat into a toss up and makes the GOP road to a Senate majority much more difficult. Grassley has said that he will make up his mind this fall, and not a moment sooner.
“Listen, there’s nothing I see that’s going to keep me from serving another six years if I decide to do it,” he has said. But that’s hardly a confirmation that he’s running. Five Republican senators have already announced their retirement for this cycle, which puts one of the oldest members of Congress under immense pressure to save his party from defending yet another open seat. Grassley has spoken with Trump twice since he left office, but remains tight-lipped in public about the Trump legacy. He has expertly towed the line between establishment Republican and Trump-era hardliners.
A Des Moines Register/Mediacom Iowa poll taken in March showed just 28% of Iowans surveyed hope he decides to run again, and 55% say they hope he doesn’t, and 17% were unsure. This likely has more to do with his advanced age and less about Grassley himself, who was re-elected in 2016 by 24 points.
Until Grassley makes his decision, Democrats in the state are frozen. Some names have been thrown around, but no one is rising to the top or speaking publicly about their aspirations.
Market Data at 7 a.m. EDT: Who will win the 2022 Iowa Republican Senate nomination?
Market Pulse: Grassley remains favored to win the Iowa Republican nomination for his re-election, but at only 53¢ it shows that traders confidence that he’ll run is about as good a chance. The 90-day high for the market has Grassley never getting above 56¢. If he doesn’t run, his grandson, Pat Grassley, a state senator, is rumored to be a possible candidate. He currently sits second in the market with 19¢.
Traders may be hedging their bets on Grassley, though. They give Republicans a strong vote of confidence at keeping the Senate seat – a move that would be much harder if Grassley decides not to run. Republicans are at 91¢ to Democrats’ 9¢.
Rep. Matt Gaetz (R-FL) speaking with supporters at a "Liberty for Trump" event at the Graduate Hotel in Tempe, Arizona. Photo: Gage Skidmore / Flickr / CC BY 2.0
Gaetz Could Be in for a Bad Monday
The man referred to as Rep. Matt Gaetz’s (R-FL) former “wingman” will appear in federal court on Monday to enter a guilty plea on (an unknown number of) the 33 federal charges against him. Joel Greenberg, who has every incentive (33 charges!) to cooperate with federal investigators to build their case against Gaetz for alleged violations of federal sex trafficking, prostitution and public corruption laws, appears to be making moves toward a deal, though the details are not yet known.
Gaetz has strongly denied any wrongdoing since the Department of Justice investigation became public six weeks ago, and he has not been charged with any crime. His spokespeople also denounce the Greenberg development as substantial, saying that he has a history of fabricating allegations against others.
While this may be true, if federal prosecutors file charges against Gaetz, they won’t be relying solely on Greenberg’s testimony. Investigators are reportedly also discussing an immunity deal with a former girlfriend, and they’ve been talking to the alleged victim of the underage sex allegations. Information from these women, especially if they corroborate Greenberg’s confessions, could drastically increase the changes of Gaetz being indicted.
Market Data at 7 a.m. EDT: Will Matt Gaetz sit on the House Judiciary Committee on Sept. 1?
Market Pulse: The market tracking if Matt Gaetz will resign showed a bump in price and increased trading volume on Thursday with the news of Greenberg’s impending guilty plea – from a market-low of 19¢ to 26¢ by the end of the day. Through the life of the market, there has never been strong sentiment that Gaetz will resign. It opened at 32¢ and quickly fell to 22¢ a few days later, which is around where it has stayed since. This isn’t surprising considering the outright refusal of other politicians to resign amid recent sexual misconduct allegations, like New York Gov. Andrew Cuomo (D), for example.
Whether Gaetz will keep his seat on the House Judiciary Committee is an entirely different matter. Traders have the odds of him keeping his post through the summer months at 36¢ after a 7¢ drop on Thursday. In the last 90 days, Gaetz’s odds of keeping his committee seat barely eeked above 50¢ once, on April 28 at 52¢. Especially with the Democrats controlling the House, if Gaetz is indicted on federal charges this may be inevitable. Democrats already removed one Republican member, Rep. Marjorie Taylor Greene (R-GA), from her committee assignments earlier this year.
President Donald Trump delivers an update in the Rose Garden of the White House. Photo: Official White House Photo by Tia Dufour.
A Look at How Polling Missed the Mark in 2020
An expert panel convened by the American Association for Public Opinion Research this week found that public opinion surveys ahead of the 2020 presidential election were the most inaccurate in 40 years. The panel said they have not yet determined precisely why this happened, or how to correct the mistake.
In the aggregate, polls overstated support for Joe Biden by 3.9% in the national popular vote in the final two weeks of the campaign. In Senate and governor races, this error was closer to 6%. This is a drastic increase from 2016, when the 1.3% error favored Hilary Clinton, who won the popular vote but lost in the Electoral College.
The 2020 polls overstated Democratic support up and down the ballots, and across polling methods – online and over the phone. While there isn’t yet a consensus on how to correct for this error by the 2022 midterm elections, experts did say that the factors that plagued 2016 were not the same issues as last year. Notably, there was no late swing of undecided voters to Trump, and the polls had accommodated for the 2016 failure to include lower-educated voters. One hypothesis is that Democrats were more willing to answer polls than Republicans, and that the Republicans who were willing to talk to pollsters might have been more open to supporting Biden.
Not to toot our own horn here, but…toot, toot! In the final two weeks ahead of 2020, PredictIt traders were accurately predicting the final outcomes of the presidential election and many of the down-ballot races in a majority of the most heavily contested and closely watched battleground states. That’s another win for the collective wisdom of the crowd!
In Case You Missed It!
Former President Donald Trump at a campaign rally. Photo: The Epoch Times / Flickr / CC BY-SA 2.0.
PredictIt markets making the news this week include:
Al-Monitor: “Users of the popular prediction exchange website can now place bets on Iran’s upcoming elections in addition to bets on Israeli politics.”
As well as: Blue Virginia.
Our friends at Old Bull TV started a “PredictIt Live” daily podcast and video series this week. Host, Flip Pidot, brings together a panel of the smartest PredictIt traders around for a daily look at what’s new to the site, as well as fresh takes on some markets that have been around for a while.
Listen LIVE daily at 1 p.m. EDT on YouTube and subscribe to the podcast.
New PredictIt traders also have a chance to get $25 FREE by signing up for an account with the Old Bull promo code — so if you like your friends and want them to get on PredictIt, share this info!
Star Spangled Gamblers podcast: Caitlyn Jenner Bears + Andrew Yang & Crypto Bulls. In this week’s episode, the SSG crew talks about opportunities to play the California governor’s market, especially if Gov. Gavin Newsom (D) gets caught in another scandal, and a look at the New York City mayor’s race — is Yang overpriced?
Here's a taste of what you'll hear this week:
“A big thing to understand too is, I think people just name a bunch of names and people are like ‘oh, Andrew Yang, I’ve heard of him,’ a lot of it just has to do with how early we are in the market and most New Yorkers haven’t heard of any of these people.”
Recently Launched Markets
Obama hands over presidency to Trump at 58th Presidential Inauguration. Photo: US Air Force Staff Sargent Marianique Santos / Public Domain.
We launched markets this week on the number of votes to confirm Don Graves as Deputy Secretary of Commerce and Chiquita Brooks-LaSure as CMS Administrator; who will be first in in the 2021 mayoral primary in Cleveland; who will come in second place in the New York City Democrat primary for mayor and if the first round leader in that race ends up winning the primary; if Trump will file to run for president before the end of next year; the number of votes to install Stefanik as the House GOP conference chair; and the Democratic and Republican nominees for Ohio’s gubernatorial election.
We've also just launched a new market for today: who will win the 2021 Atlanta mayoral; if Alaska Sen. Lisa Murkowski will be re-elected in 2022; and the number of votes to confirm Lina Kahn as Federal Trade Commissioner.
Finally, we are always crowdsourcing new market ideas from traders. Send ideas to email@example.com and be sure to include a legitimate resolution source.
Thanks for following the markets!
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