Let me preface this post by saying that I don’t like these markets.
For one thing, I don’t like betting in markets that hinge on the decision-making of one individual, whose whims and quirks I don’t understand. One of the most dangerous traps in political gambling is assuming that politicians will act rationally, that their perceptions of self-interest will mirror your own, or that they will not act on principal in unexpected ways. At the end of the day, Joe Biden alone has the authority to put forward executive nominees.
I also don’t like betting on markets in which others have access to critical inside information. I think one has to assume that a number of people have privileged information in these markets: Biden’s inner circle, those Biden and his team are consulting, prospective nominees and their orbits, journalists, and vetters.
Finally, there is limited data that offers clues here. There is minimal polling available on how prospective nominees play. And history provides only limited guidance on how the Biden team will behave, as I learned the hard way in the Secretary of State market.
I think it would be an entirely respectable decision simply to buy up No on the Trump people in the Cabinet markets and otherwise ignore the Biden appointment saga.
That said, appointments markets are temping because they offer the opportunity to buy some obvious Nos and make some big, quick profits when Biden names his picks.
Here are a few general assumptions I’m making in betting these markets:
- Congress: Biden isn’t looking to pick a fight with the Hill, whether its with the Republican leadership or progressive Democrats.
- Georgia Senate: The Georgia Senate elections are basically irrelevant. Regardless of which party controls the Senate, there are enough Republicans willing to confirm Biden’s appointees barring obvious alarms.
- Private Industry: There are major industries that care about Cabinet appointments that are hard to ignore. They are a core part of the modern Democratic Party constituency whose influence exceeds traditional constituencies like labor unions and activist groups like environmentalists.
- Token Republican: Biden is probably interested in having at least one Republican in his Cabinet, but probably not in one of the premier positions.
- Senate Volatility: Biden probably does not want to create volatility in the Senate by tapping incumbent Democratic Senators.
- Kamala: Biden and Kamala have conflicting interests. When it comes to potential future rivals for the Democratic nomination, for example, Biden may be inclined to reward people like Pete Buttigieg for his endorsement while Kamala probably wants them to be in low profile positions that will derail their presidential bids.
- Higher Education: The education sector generally, but especially the higher education sector, is a major source of influence in the modern Democratic Party. Even if Biden wants to get away from the Ivy League technocratic theme of the Obama years, the higher education sector is a constituency Biden needs to keep happy.
- National Profile: Notwithstanding the push for diversity and inclusion, I am inclined to think that those with a national profile have an advantage in the first round of Cabinet appointments.
Pratik Chougule is a contributor to Star Spangled Gamblers and author of the book How to Make Money from Political Predictions: A Guide to Generating High, Steady Returns from PredictIt.