A Stubborn Mule’s Perspective

On the eve of the US election, occasional commenter here at the Stubborn Mule, Michael Michael, sent me links to a couple of articles on Slate on the merits of voting.  Of course, as an Australian citizen, I don’t have the option of voting in the US election, but the issues raised are relevant to democracies around the world.

In the first, Don’t vote, Steven E. Landsburg argued that the chances of your vote determining the result of the election are so slim that it would make more sense to play the lottery. In the second, Vote!, Jordan Ellenberg responds with a detailed mathematical analysis (including a dose of Bayesian inference) to argue that the odds of affecting the result, while long, are better than winning the lottery.

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Financial markets around the world remain extremely anxious as the US Congress ponders the Troubled Asset Relief Program (”TARP”) proposal, aka the Mother of All Bailouts (”MOAB”). Under this proposal, the US Government will spend up to US$700 billion to buy “troubled” mortgage-backed securities in the hope that this will lubricate the markets that have well and truly seized, encouraging banks to start lending once more to each other, corporates and individuals.

There has been criticism of the plan both from some Democrats who want to see curbs on executive salaries and from some Republicans who are decrying the plan as financial socialism. Nevertheless, most observers expect the plan to be passed by the end of the month particularly since Paulson seems to be conceding ground on the subject of executive compensation.

One interesting perspective on the chances of success comes from the prediction market intrade which allows bets to be placed as to whether or not the plan will be passed. At the time of writing, this market puts the chances at 77%.

US Government Bailout to be Passed on/before 30 Sep 2008

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