Freakonomics Radio: Episode 606 - "How to Predict the Presidency" Summary

Release Date: October 11, 2024

In episode 606 of Freakonomics Radio, host Stephen Dubner delves into the intricacies of presidential power, the rise of demagogues, and the evolving landscape of election prediction methods. Featuring insightful conversations with legal scholar Coleman Strumpf and economics professor Eric Posner, the episode offers a comprehensive analysis of the current state and future of the U.S. presidency.

1. Revisiting Presidential Power and Demagoguery

The episode begins with a reflection on a previous conversation held in 2016 between Dubner and legal scholar Eric Posner about the concentration of presidential power. Coleman Strumpf joins the discussion, expressing how his views have shifted since then, especially in light of Donald Trump's presidency.

Coleman Strumpf [03:33]:
"I listened to the interview this morning and I will say that I have changed my views about the presidency to some extent because I do think Trump was a shock and not the sort of person I expected to become a president at the time."

Strumpf and Posner explore whether the U.S. presidency is inching towards dictatorial tendencies, with Strumpf cautiously affirming:

Coleman Strumpf [02:01]:
"Yes, I think that is happening. Although you know, dictatorship is such a freighted term."

2. Defining Demagogues and Their Role in Modern Politics

A significant portion of the episode is dedicated to understanding what constitutes a demagogue. Strumpf provides a historical context, likening modern figures to ancient Greek leaders who manipulated public sentiment for personal gain.

Coleman Strumpf [09:31]:
"First of all, a demagogue is a politician who tries to obtain and keep power by dividing the population, usually by choosing an enemy."

He cites examples like Donald Trump and Jair Bolsonaro, emphasizing that demagoguery thrives in times of societal distress, such as economic downturns or crises.

3. Evaluating Donald Trump's Presidency

Strumpf offers a nuanced critique of Trump's tenure, acknowledging both his ambitions and shortcomings. While Trump initiated significant policies like Operation Warp Speed for COVID-19 vaccines, Strumpf points out his inability to effectively implement wider agendas due to temperament issues.

Coleman Strumpf [07:35]:
"But nobody ever thought it was a good way to stop illegal immigration... He just lacked the temperament and experience."

He contrasts Trump's approach with President Biden's more structured and conventional governance style, highlighting Biden's effective use of legislative tools compared to Trump's ad-hoc strategies.

4. The Judiciary and Legal Challenges in Elections

The discussion shifts to the judiciary's role in maintaining democratic norms, especially concerning legal actions against political figures like Trump. Strumpf underscores the judiciary's cautious approach to avoid politicizing the legal system.

Coleman Strumpf [26:41]:
"There's always been this worry that one way that a democracy will collapse is that the people in power will use the legal system to harass their political opponents."

He defends the Supreme Court's decision to uphold Trump's eligibility to run again, arguing that removing him would set a dangerous precedent.

Coleman Strumpf [30:25]:
"No. As bad as Trump has been, it would be worse if the judiciary were to intervene and remove from the ballot the leader of one of the parties."

5. Prediction Markets vs. Traditional Polling

A central theme of the episode is the exploration of prediction markets as a tool for forecasting election outcomes. Eric Posner provides an in-depth analysis of how these markets have historically outperformed traditional polling methods.

Eric Posner [40:29]:
"The history goes back well before 1896... These markets were really popular in this period."

Posner discusses modern platforms like Polymarket and Kalshi, highlighting their ability to offer real-time, dynamic insights that polls cannot match. He argues that while prediction markets face regulatory challenges, they hold significant promise for more accurate election forecasting.

Eric Posner [40:41]:
"A market doesn't delay information. A market doesn't spin numbers. A market just gives you numbers."

6. Legal and Ethical Implications of Election Betting Markets

The conversation also touches on the concerns surrounding election betting markets, such as potential manipulation and the erosion of election integrity. Posner contends that these fears are largely unfounded, citing historical data and the inherent transparency of markets.

Eric Posner [50:32]:
"I don't see a basis for this in history, in our modern experience... We just don't see examples of this."

He emphasizes that regulatory bodies like the CFTC have limited control and that demand will inevitably drive the emergence of these markets, regardless of legal constraints.

7. The Resilience of American Democracy

Towards the end, Strumpf reassures listeners about the robustness of American democratic institutions despite current challenges. He draws parallels with historical empires, suggesting that democracies are resilient against the rise of flawed leaders.

Coleman Strumpf [35:18]:
"I just don't think it's approaching an end to any kind of democracy. I think things will just sputter on as they have."

He remains optimistic that future leaders will not follow the destabilizing path set by Trump, maintaining that strong institutions will safeguard democratic principles.

Notable Quotes

• Coleman Strumpf [14:28]:
  "He persuaded a lot of people that the mysterious powerful elites in government and elsewhere are arrayed against him."

• Eric Posner [43:06]:
  "Let's begin with the Iowa Electronic Market... it was always intended as an academic exercise."

• Coleman Strumpf [56:46]:
  "I'm pretty interested in politics, but what I'm definitely not interested in is watching cable shows of people opining about what's going on."

• Eric Posner [54:22]:
  "One of the things that he [Nate Silver] cannot do is he can't generate a real time forecast."

Conclusion

Episode 606 of Freakonomics Radio offers a thorough examination of the complexities surrounding presidential power, the dangers of demagoguery, and the potential of prediction markets to revolutionize how we forecast elections. Through expert insights from Strumpf and Posner, listeners gain a deeper understanding of the mechanisms that safeguard democracy and the innovative tools that could enhance electoral predictions.

Key Takeaways:

• Presidential Power: The U.S. presidency has gained substantial power, raising concerns about democratic erosion, but current institutions remain robust.

• Demagoguery: Leaders who exploit societal divisions can destabilize democracies, but historical and institutional checks help mitigate this risk.

• Prediction Markets: These offer a promising alternative to traditional polling, providing real-time and diverse insights into election outcomes despite regulatory hurdles.

• Legal Safeguards: The judiciary plays a crucial role in maintaining democratic norms, preventing the misuse of legal systems for political gain.

For those interested in the intersection of economics, politics, and human behavior, episode 606 provides valuable perspectives backed by rigorous analysis and historical context.