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Forecasting the Future of Election Prediction Markets
After flying under the radar as academic experiments, the markets are facing close regulatory scrutiny. But they are worth preserving, our columnist says.I’ve used prediction markets for years, never for trading but rather as a source of information, an interesting adjunct to polls, economic and political models, and traditional reporting, especially when elections grow near.But the U.S. prediction markets that allow people to place legal bets on American elections have run into regulatory problems.PredictIt, the larger of the two prediction markets operating in the United States, has emerged over the last several years as a go-to source for journalists and academics seeking to harness the “wisdom of crowds” for a sense of where the elections are heading.At the moment, the bets on its site amount to a forecast of Republican control of both the House and the Senate. PredictIt’s older and more purely academic counterpart, the Iowa Electronic Markets, is showing the same essential picture.Kalshi, a third and overtly commercial derivatives market, had hoped to start trading contracts on the outcome of the midterm elections by now, but its application has stalled at the Commodities Futures Trading Commission.The various markets — PredictIt, the Iowa market, overseas markets like Betfair in Britain and predecessors like the Irish sites Intrade and Tradesports — have had plenty of glitches through the years. They aren’t always accurate, and their results, if not interpreted carefully, look deceptively extreme. A thin edge in election polling can be magnified in these markets as a definitive advantage, but they are often fundamentally correct. Academic studies have found that they stack up quite well against opinion polls and standard political forecasts.Such markets have also provided compelling results in experiments aimed at estimating Hollywood movie box office results, improving weather forecasts and providing corporations and the Defense Department with information on security, health care and product quality control issues.They all work on the basic notion that when markets are broad and efficient enough and money is at stake, the collective information embodied in their prices is closer to the truth than the conclusions that most individuals can come up with on their own.This may well be true over the long run, but one flaw in this approach is obvious if you have been following the stock, bond, foreign exchange or commodity markets this year: Over short periods, markets are as fickle as a cat. I see no reason to assume that election markets are inherently wiser or steadier than the stock market, which I don’t trust as a guide to much of anything over short periods.Still, prediction markets are fascinating, and provide a worthwhile source of data on a vast array of subjects. They also have tremendous financial possibilities.The State of the 2022 Midterm ElectionsElection Day is Tuesday, Nov. 8.Biden’s Speech: In a prime-time address, President Biden denounced Republicans who deny the legitimacy of elections, warning that the country’s democratic traditions are on the line.State Supreme Court Races: The traditionally overlooked contests have emerged this year as crucial battlefields in the struggle over the course of American democracy.Democrats’ Mounting Anxiety: Top Democratic officials are openly second-guessing their party’s pitch and tactics, saying Democrats have failed to unite around one central message.Social Security and Medicare: Republicans, eyeing a midterms victory, are floating changes to the safety net programs. Democrats have seized on the proposals to galvanize voters.“Prediction markets are going to be a very big business,” said William R. Hambrecht, an early investor in Silicon Valley companies like Apple and Adobe and a major investor in Aristotle, the company that runs PredictIt. “I don’t think you can overstate the potential, once the regulatory issues are resolved.”An Old American PastimeBetting on elections is, technically, illegal in the United States. But the reality is that it has been commonplace since the early days of the republic, Koleman Strumpf, a Wake Forest University economist, said in an interview.By the late 19th century, New York City had become a national center for betting on both finance and politics. Early in the 20th century, whenever elections rolled around, traders outside the New York Stock Exchange placed high-volume wagers on the Curb Market, a rollicking, over-the-counter outdoor marketplace for stocks, bonds and politics.In the current era, the Commodities Futures Trading Commission has permitted the two low-stakes markets — the Iowa Electronic Markets and PredictIt — to operate under academic exemptions.But in August, the commission ordered PredictIt to cease operations by Feb. 15. The agency hasn’t publicly explained its reasons for the cancellation, which PredictIt is fighting in the courts. One issue may be PredictIt’s popularity — the volume of betting on the site has sometimes exceeded the limits set when PredictIt began operating as an educational venture in 2014.A week ago, the commission staff recommended against Kalshi’s bid to start a higher-stakes trade in futures contracts on the control of Congress resulting from the midterm elections. The commission tends to side with its staff’s recommendations, but has not indicated how it will rule on the Kalshi case.In an email, Steven Adamske, a commission spokesman, said only: “Kalshi’s application is still pending, and I don’t have a timeline for when it will be announced.”In an interview, Tarek Mansour, a founder of Kalshi, pointed out that his exchange already offered robust trading on important questions like the future of inflation in the United States and the path of Federal Reserve interest rate increases, and that it was running an unofficial contest asking people to forecast the elections.“That’s an effort at educating people about our site,” he said. “We agree that we need regulation, and we are waiting patiently for guidance from the C.F.T.C.”The Two Election MarketsIt is possible that once the midterms are over, only the Iowa market will remain as a legal outlet for election betting. It has functioned since 1988 as a modest, money-losing “Internet-based teaching and research tool” that allows up to 2,000 people — students of the University of Iowa and anyone else with the money and interest — to place bets of $5 to $500 on the outcome of events, including U.S. elections.As long as it sticks to these unequivocally educational goals and people at the university are willing to take the time and effort to keep it running, its future seems reasonably secure.“It’s a labor of love,” said Thomas S. Gruca, the director of the prediction market and a professor at the university’s Tippie College of Business. “It takes a lot of time from a lot of volunteers to keep it going. But a lot of people are learning a lot because of it.”PredictIt is something of a hybrid. It is a joint venture. One partner is Victoria University of Wellington, a New Zealand institution. The other is Aristotle, a for-profit American political consulting, compliance, data and software company, whose founder, John Aristotle Phillips, first gained national attention in 1976 as “the A-bomb kid” — a Princeton undergraduate who successfully designed an atomic bomb in a physics class project.“It was about arms control,” he told me in an interview. “I showed that a bomb could be built, and that we needed more controls.”Aristotle does the day-to-day work running PredictIt, and the university has been playing a passive role. While the data from the prediction market at the University of Iowa is regularly used in classrooms and in research there, that is not the case for Victoria University.“We are not aware of any scholars at Victoria University of Wellington using the data, but, as they don’t need to come through us to access it, that would be a question better directed to PredictIt,” Katherine Edmond, the university’s director of communications, said in an email.PredictIt is used extensively by scholars around the world, but mainly by Americans, who are listed on its site, and have relied on it for years, as have journalists like me. In addition to filing suit, Aristotle has applied for permission to become a commercial exchange, like Kalshi, a move that would end the restrictions on its size and scope.A Modest PredictionFrom the standpoint of many economists, the prediction markets, for all their flaws, have been spectacularly successful.“There’s tremendous social utility to having these markets operate, and having this information available,” said Eric Zitzewitz, a Dartmouth professor who has studied prediction markets extensively. “There’s a lot of demand for them — people enjoy participating in them and consuming the information they provide.”Betting on elections won’t go away, no matter what the regulators decide. Such betting could migrate to overseas markets or to unregulated markets in cyberspace that are outside U.S. regulatory control.Far better, I think, would be to allow them to operate within U.S. borders as transparent, robust — and carefully regulated — operations. Until now, both the Iowa market and PredictIt have been small enough to be fairly innocuous in terms of their effects on elections themselves. When big money flows into prediction markets — as I suspect it one day will — the potential for real trouble will be far greater. Markets can be manipulated and corruption flourish, so smart and active regulators are needed to keep markets honest.That’s true for the stock market. Regulating U.S. prediction markets will become far more critical when large sums are focused directly on the outcome of elections, which are, after all, the foundation of our democracy. Prediction markets are important enough to be preserved. But elections are important enough for regulators to move slowly and carefully. More
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U.S. and Russia Duel Over Leadership of U.N. Tech Group
Member countries vote on Thursday for an American or a Russian to lead the International Telecommunication Union, which sets standards for new technologies.WASHINGTON — The United States and Russia are tussling over control of a United Nations organization that sets standards for new technologies, part of a global battle between democracies and authoritarian nations over the direction of the internet.American officials are pushing more than 190 other member countries of the International Telecommunication Union, a U.N. agency that develops technical standards for technology like cellphone networks and video streaming, to vote on Thursday for Doreen Bogdan-Martin, a longtime American employee, to lead the organization. She is running against Rashid Ismailov, a former Russian government official.The American campaign has been especially intense. President Biden endorsed Ms. Bogdan-Martin last week, capping months of public and private lobbying on her behalf by top administration figures and major U.S. corporate groups.Whoever leads the I.T.U. will have power to influence the rules by which new technologies are developed around the world. While the organization is not well known, it has set key guidelines in recent years for how video streaming works and coordinates the global use of the radio frequencies that power cellphone networks.The election has become a symbol of the growing global fight between a democratic approach to the internet, which is lightly regulated and interconnected around the world, and authoritarian countries that want to control their citizens’ access to the web. Russia has built a system that allows it to do just that, monitoring what Russians say online about topics like the invasion of Ukraine, while the United States largely does not regulate the content on social networks like Facebook and Twitter.Some worry that Russia and China, which also has closed off its internet, could use the I.T.U. to reshape the web in their images. The two countries put out a joint statement last year calling for preserving “the sovereign right of states to regulate the national segment of the internet.” They said they were emphasizing “the need to enhance the role of the International Telecommunication Union and strengthen the representation of the two countries in its governing bodies.”Doreen Bogdan-Martin of the United States at the opening session of the International Telecommunication Union in Bucharest, Romania, on Monday.Andreea Alexandru/Associated PressErica Barks-Ruggles, a State Department official and former ambassador to Rwanda who is representing the United States at an I.T.U. conference this week, said the organization would help determine if people around the world could have affordable access to new technology and communicate across borders, and “whether their governments are able to disconnect them from the internet or not.”“That’s why we’re putting time, money, energy into this,” she said.The I.T.U. was founded in 1865 to tackle issues involving telegraph machines. It traditionally focused on physical networks rather than the internet, but has become involved in setting standards for everything from smart home devices to connected cars. The agency’s plenipotentiary conference, which takes place every four years, began on Monday in Bucharest, Romania.Last week, Mr. Biden said Ms. Bogdan-Martin “possesses the integrity, experience and vision necessary to transform the digital landscape.” Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and other senior administration officials have also backed her candidacy.At a recent conference in Kigali, Rwanda, the United States hosted a reception at the city’s conference center where attendees heard a pitch from Ms. Bogdan-Martin, saw a video endorsement from Vice President Kamala Harris and listened to music from a local band.In response to emailed questions, Ms. Bogdan-Martin said she hoped her leadership of the I.T.U. could expand global access to the internet and improve transparency at the organization. She said she hoped to lead in “bringing an open, secure, reliable and interoperable internet to all people around the world.”Moscow is supporting Mr. Ismailov, a former deputy minister for telecom and mass communications for the Russian government and a former executive at Huawei, the Chinese telecommunications company that American officials worry could leak data from its products to Beijing.The Russian Embassy in Washington did not respond to a request for comment.The proxy battle of the election may be the first of many more.“I see the U.S. really engaged in a new kind of foreign policy attack, where they see our adversaries and our competitors are wanting to change the rules of the game to shut off access,” said Karen Kornbluh, a senior fellow at the German Marshall Fund. More
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Why Zombie Reaganomics Still Rules the G.O.P.
What’s my plan for the next two years? I will be happy, healthy and successful. What will I do to achieve these things? What are you, a Marxist?I’ve now summarized the essence of the Commitment to America announced by House Republicans last week. This “plan” was obviously meant to evoke Newt Gingrich’s 1994 Contract With America, which was followed by a Republican takeover of Congress.But the Contract With America, love it or hate it — put me in the latter category — offered a fairly specific policy agenda, with a list of planned legislation. What Republicans have just released, by contrast, is mainly a list of good things they claim will happen, with barely a hint of how they propose to make them happen.If you squint hard at the economics section of the Commitment to America, however, you can see the faint outlines of a familiar set of ideas — zombie Reaganomics. Which raises a question: Why are deregulation, benefit cuts and tax breaks for the rich still the ruling ideology of a party that now claims to stand for the working class?Before I get there, a couple of notes on what the economics portion of the commitment actually says.First, it’s striking how many of the economic complaints are about things that are barely, if at all, affected by government policy, like the price of gas (which has come down a lot since its peak) and supply-chain disruptions (which have been diminishing).Second, immediately after declaring that “we have a plan to fix the economy,” House Republicans say that they will “curb wasteful government spending.” As anyone who follows budget debates knows, that’s the ultimate weasel phrase. What spending are we talking about, specifically?Bear in mind that the federal government is basically an insurance company with an army: The great bulk of spending is on health care, retirement and the military. You can’t meaningfully cut expenditure without attacking at least one of these. So which parts of that spending are wasteful?Well, Senator Rick Scott, the chair of the National Republican Senatorial Committee, has called for sunsetting all federal programs — including Social Security and Medicare — every five years, which would open the door to gutting America’s social safety net. Other Republicans have tried to distance themselves from that idea, although without removing Scott from his position. But again, what is this wasteful spending they propose to cut?But back to the commitment. Its economic program, such as it is, calls for “pro-growth tax and deregulatory policies.” No specifics, but this is clearly a call for zombie Reaganomics.Why “zombie”? Because we now have four decades’ worth of experience showing that deregulation and tax cuts for the rich do not, in fact, produce higher wages and faster economic growth. So the idea that tax cuts are the secret of prosperity should be dead, yet somehow it’s still shambling along, eating Republican brains.Of course, I’m just saying that because I’m a Marxist. (I’m not, but that’s what modern Republicans call anyone who supports progressive taxation and social insurance.) But for what it’s worth, financial markets share my skepticism. Look at what’s happening in Britain, where Prime Minister Liz Truss’s recent announcement of a Reaganite economic plan sent interest rates soaring and the pound plunging.Which brings me back to my original question: Why is the G.O.P. still committed to a failed economic ideology?For a long time, the G.O.P. seemed to fit the portrait famously drawn by Thomas Frank in his book “What’s the Matter With Kansas?” That is, it was a party mostly dedicated to making the rich richer that managed to win elections on social issues — which in practice meant catering to bigotry while campaigning, then pivoting to tax and benefit cuts immediately afterward.With the rise of MAGA, however, catering to bigotry is no longer a marketing device; it’s the party’s main agenda. In that case, however, why continue plutocrat-friendly policies? Why not add some actual populism to the mix? Why did Representative Kevin McCarthy, who will likely become speaker if Republicans take the House, declare that his first bill would be one to repeal additional funding for the Internal Revenue Service, allowing wealthy tax cheats to breathe easy?Part of the answer may be that anti-abortion, anti-L.G.B.T.Q., anti-immigrant warriors don’t know or care much about economic policy, so they’ve left it in the hands of the usual suspects — congressional staff members, conservative think tankers and other apparatchiks who’ve spent their whole careers promoting the tax-cut mystique.But there may also be a strategy here. Billionaires may no longer run the G.O.P. the way they used to, but the party still wants their money. So plutocrat-friendly policies may be a way of keeping wealthy donors and corporations on board, even if many of them are uncomfortable with the right-wing social agenda.This strategy depends, however, on working-class voters not realizing what Republicans are up to. Hence the vacuous nature of the Commitment to America; any acknowledgment of what the G.O.P. might actually do could be a big political problem.The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More
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Your Friday Briefing: Men Flee Russian Conscription
Plus Japan props up the yen and Cambodia concludes its Khmer Rouge trials.A billboard in St. Petersburg promoting military service.Olga Maltseva/Agence France-Presse — Getty ImagesMen flee Russia, fearing draftOne day after President Vladimir Putin announced a plan to bring 300,000 civilians into military service, thousands of Russians received draft papers and boarded buses to training sites. Many others left the country in a rush, paying rising prices to catch flights to Armenia, Georgia, Montenegro and Turkey, some of the countries that allow Russians to enter without visas.Russian officials said the call-up would be limited to people with combat experience. But one journalist said her husband, a father of five with no military experience, had been summoned.Our reporter spoke to a 23-year-old who bought a plane ticket to Istanbul, wrapped up his business and kissed his crying mother goodbye — all within about 12 hours of Putin’s announcement. He said he has no idea when he will return. “I was sitting and thinking about what I could die for, and I didn’t see any reason to die for the country,” he said. Here are live updates.Reaction: The E.U. is scrambling to decide how to respond. Countries are weighing security concerns against their desire to help those fleeing an unjust war.Surveillance: The Times obtained nearly 160,000 files from Russia’s powerful internet regulator, which the government uses to find opponents and squash dissent. Compared with China, much of the work of Russian censors is done manually, but what Moscow lacks in sophistication, it has made up for in determination.The Japanese yen has been sliding against the U.S. dollar.Kim Kyung-Hoon/ReutersJapan props up the declining yenJapan announced yesterday that it had intervened to prop up the value of the yen for the first time in 24 years, in an effort to stop the currency’s continuing slide against the dollar.Yesterday, the yen passed 145 to the dollar after the U.S. Federal Reserve’s announcement on Wednesday that it would raise its policy rate by an additional three-quarters of a percentage point. The yen has lost over 20 percent of its value against the dollar over the past year, and it has been the worst performing currency among major developed economies this year.Context: The yen’s plunge has largely been caused by Japan’s determination to keep interest rates low. The government’s intervention followed an announcement by the Bank of Japan that it would stick fast to its longstanding ultralow interest rate policy — even as most other countries have begun to follow the U.S. Federal Reserve’s increases.Explore the World of the ‘Lord of the Rings’The literary universe built by J.R.R. Tolkien, now adapted into a new series for Amazon Prime Video, has inspired generations of readers and viewers.Artist and Scholar: Tolkien did more than write books. He invented an alternate reality, complete with its own geography, languages and history.Being Frodo: The actor Elijah Wood explains why he’ll never be upset at being associated with the “Lord of the Rings” movie series. A Soviet Take: A 1991 production based on Tolkien’s novels, recently digitized by a Russian broadcaster, is a time capsule of a bygone era. From the Archives: Read what W.H. Auden wrote about “The Fellowship of the Ring,” the first volume of Tolkien’s trilogy, in 1954.History: For years, a weak yen was widely seen as a boon for its export-driven economy, making Japanese products cheaper and more attractive for consumers abroad.Elsewhere: The Bank of England raised its key interest rate by half a point to 2.25 percent yesterday, the highest level since 2008. It is the latest effort to tame high inflation.Khieu Samphan, 91, is the last surviving Khmer Rouge leader. Nhet Sok Heng/Extraordinary Chambers in the Courts of Cambodia, via Associated PressProsecuting the Khmer RougeFor more than 15 years, a court in a military camp in Cambodia has been working to prosecute the crimes of the Khmer Rouge regime, which caused the deaths of an estimated 1.7 million Cambodians in the late 1970s.In its final hearing yesterday, it rejected an appeal by Khieu Samphan, 91, the fanatical communist movement’s last surviving leader, upholding his conviction and life sentence for genocide and other crimes.Many victims think the United Nations-backed tribunal, which spent over $330 million, was a hollow exercise conducted far too long after the atrocities were committed. Only three people were convicted, and many of the Khmer Rouge’s senior figures — including its notorious top leader, Pol Pot — were long dead by the time the court was created.Background: From 1975 to 1979, the Khmer Rouge caused the deaths of nearly a quarter of the population from execution, torture, starvation and untreated disease as it sought to abolish modernity and create an agrarian utopia.THE LATEST NEWSAsia PacificKim Jong-un, North Korea’s leader, with Vladimir Putin, Russia’s president, in 2019.Pool photo by Alexander ZemlianichenkoNorth Korea denied a U.S. intelligence report that it was selling millions of artillery shells and rockets to Russia, accusing the U.S. of spreading a “reckless” rumor.The Malaysian businessman known as Fat Leonard, who was at the center of a U.S. Navy bribery scandal, was recaptured after he escaped house arrest two weeks ago.Tonga’s enormous underwater volcano that erupted in January may have caused a short-term spike in global warming, scientists said.Yoon Suk Yeol, the South Korean president, was caught on a hot mic calling U.S. lawmakers “idiots,” The Washington Post reports.Around the WorldDavid Malpass, the president of the World Bank, refused to acknowledge human-caused global warming earlier this week. Yesterday, he said he accepted the overwhelming scientific conclusion.A U.S. federal appeals court allowed the Justice Department to resume using sensitive documents seized from Donald Trump in its investigation.U.S. veterans are pushing Congress to grant Afghan evacuees a pass to residency, but some Republicans argue they pose security risks.A deadly cholera outbreak is spreading in Syria, where millions of people, displaced by civil war, lack clean water and health care.What Else Is HappeningCameron Smith/Getty Images for Laver CupRoger Federer will play the last competitive match of his career today in London.For the first time, Catholics outnumber Protestants in Northern Island, a striking demographic shift that could eventually fuel calls to reunite Ireland.The U.S. Senate ratified an international treaty to phase out hydrofluorocarbons, the planet-warming chemicals found in refrigerators and air-conditioners.The U.S. is on track to break its record for guns intercepted at airport checkpoints in one year. So far 4,600 have been discovered, and nearly 90 percent are loaded.A Morning ReadMohammed Zubair, second from the right, is a founder of Alt News. He was jailed this summer over a complaint from an anonymous Twitter user.Atul Loke for The New York TimesFake news is rising in India, with a surge of disinformation after the rise of Narendra Modi, the Hindu nationalist prime minister. Alt News, an independent website, has emerged as a leading debunker of misinformation, such as stories about child-kidnapping gangs and Muslims spreading Covid.But highlighting hate speech against minority groups has put it on a collision course with Modi’s government: A founder was recently arrested and is accused of spreading communal unrest.ARTS AND IDEASTolkien, for Italy’s right wing?Italy’s national election is on Sunday. Giorgia Meloni, the hard-right politician who is the front-runner to become the country’s next prime minister, has a surprising personal manifesto.Meloni loves “The Lord of the Rings” and sees the fantasy adventure series, written by J.R.R. Tolkien, as something of a sacred text. As a youth activist in the post-Fascist Italian Social Movement, she used to dress up as a hobbit.That might seem like a youthful infatuation. But in Italy, “The Lord of the Rings” has informed generations of post-Fascist youth. They have looked to Tolkien’s traditionalist mythic age for symbols, heroes and creation myths free of Fascist taboos, from which they could reconstruct a hard-right identity.Meloni, 45, said that she had learned from dwarves, elves and hobbits the “value of specificity” with “each indispensable for the fact of being particular.” She extrapolated that as a lesson about protecting Europe’s sovereign nations and unique identities.“I think that Tolkien could say better than us what conservatives believe in,” Meloni said. “I don’t consider ‘The Lord of the Rings’ fantasy.”PLAY, WATCH, EATWhat to CookKelly Marshall for The New York TimesThis roasted mushroom and halloumi grain bowl is warm and adaptable.What to Read“Getting Lost,” a series of diary entries by the French writer Annie Ernaux, recounts an all-consuming romance with a younger man.DrinkThe appletini is back, and it’s ushering in a new martini era.Now Time to PlayPlay today’s Mini Crossword, and a clue: Even the slightest bit (five letters).Here are today’s Wordle and today’s Spelling Bee.You can find all our puzzles here.That’s it for today’s briefing. See you next time. — AmeliaP.S. Phil Pan is our next International editor. He was the first Asia editor of The Times based in Hong Kong and previously served as our Beijing bureau chief. The latest episode of “The Daily” is on Vladimir Putin’s escalation of the war.You can reach Amelia and the team at briefing@nytimes.com. More
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3 Senate Hopefuls Denounce Big Tech. They Also Have Deep Ties to It.
For Republicans running for the Senate this year, “Big Tech” has become a catchall target, a phrase used to condemn the censorship of conservative voices on social media, invasions of privacy and the corruption of America’s youth — or all of the above.But for three candidates in some of the hottest races of 2022 — Blake Masters, J.D. Vance and Mehmet Oz — the denunciations come with a complication: They have deep ties to the industry, either as investors, promoters or employees. What’s more, their work involved some of the questionable uses of consumer data that they now criticize.Mr. Masters and Mr. Vance have embraced the contradictions with the zeal of the converted.“Fundamentally, it is my expertise from having worked in Silicon Valley and worked with these companies that has given me this perspective,” Mr. Masters, who enters the Republican primary election for Senate in Arizona on Tuesday with the wind at his back, said on Wednesday. “As they have grown, they have become too pervasive and too powerful.”Mr. Vance, on the website of his campaign for Ohio’s open Senate seat, calls for the breakup of large technology firms, declaring: “I know the technology industry well. I’ve worked in it and invested in it, and I’m sick of politicians who talk big about Big Tech but do nothing about it. The tech industry promised all of us better lives and faster communication; instead, it steals our private information, sells it to the Chinese, and then censors conservatives and others.”But some technology activists simply aren’t buying it, especially not from two political newcomers whose Senate runs have been bankrolled by Peter Thiel, the first outside investor in Facebook and a longtime board member of the tech giant. Mr. Thiel’s own company, Palantir, works closely with federal military, intelligence and law enforcement agencies eager for access to its secretive data analysis technology.“There’s a massive, hugely profitable industry in tracking what you do online,” said Sacha Haworth, the executive director of the Tech Oversight Project, a new liberal interest group pressing for stricter regulations of technology companies. “Regardless of these candidates’ prospects in the Senate, I would imagine if Peter Thiel is investing in them, he is investing in his future.”Mr. Masters, a protégé of Mr. Thiel’s and the former chief operating officer of Mr. Thiel’s venture capital firm, oversaw investments in Palantir and pressed to spread its technology, which analyzes mountains of raw data to detect patterns that can be used by customers.Palantir’s initial seed money came from the C.I.A., but its technology was adopted widely by the military and even the Los Angeles Police Department. Mr. Masters and Mr. Thiel personally pressed the director of the National Institutes of Health to buy into it.Sharecare, a website whose consortium of investors included Mehmet Oz, answered consumer questions about health issues.Dr. Oz, the Republican nominee for an open Senate seat in Pennsylvania, was part of a consortium of investors that founded Sharecare, a website that offered users the chance to ask questions about health and wellness — and allowed marketers from the health care industry the chance to answer them.A feature of Sharecare, RealAge Test, quizzed tens of millions of users on their health attributes, ostensibly to help shave years off their age, then released the test results to paying customers in the pharmaceutical industry.Mr. Vance, the Republican nominee in Ohio and another Thiel pupil, used Mr. Thiel’s money to form his venture capital firm, Narya Capital, which helped fund Hallow, a Catholic prayer and meditation app whose privacy policies allow it to share some user data for targeted advertising.The Vance campaign said the candidate’s stake in Hallow did not give him or his firm decision-making powers, and Alex Jones, Hallow’s chief executive, said private, sensitive data like journal entries or reflections were encrypted and not sold, rented or otherwise shared with data brokers. He said that “private sensitive personal data” was not shared “with any advertising partners.”Peter Thiel has bankrolled Mr. Masters and J.D. Vance in their Senate campaigns.Marco Bello/Getty ImagesAll three Senate candidates have targeted the technology industry in their campaigns, railing against the harvesting of data from unsuspecting users and invasions of privacy by greedy firms.“These companies take this data and sell precisely targeted ads so effective they verge on predatory,” Mr. Masters wrote in an opinion article last year in The Wall Street Journal. “They then optimize their platforms to keep you online to receive ever more ads.”In a gauzy video posted in July 2021, Mr. Masters says, “The internet, which was supposed to give us an awesome future, is instead being used to shut us up.”Mr. Vance, in a campaign Facebook video, suggested that Congress make data collection illegal — or at least mandate disclosure — before technology companies “harvest our data and then sell it back to us in the form of targeted advertising.”In a December video appearance soon after he announced his campaign, Dr. Oz proclaimed, “I’ve taken on Big Pharma, I’ve gone to battle with Big Tech, I’ve gone up against agrochem companies, big ones, and I’ve got scars to prove it.”It is not surprising that more candidates for high office have deep connections to the technology industry, said Michael Rosen, an adjunct fellow at the conservative American Enterprise Institute who has written extensively about the industry. That’s where the money is these days, he said, and technology’s reach extends through industries including health care, social media, hardware and software and consumer electronics.“What is novel in this cycle is to have candidates ostensibly on the right who are arguing for the government to step in and regulate these companies because, in their view, they cannot be trusted to regulate themselves,” Mr. Rosen said.He expressed surprise that “a free-market, conservative-type candidate thinks that the government will do a fairer and more reliable job of regulating and moderating speech than the private sector would.”Technology experts on the left say candidates like Mr. Masters and Mr. Vance are Trojan horses, taking popular stances to win federal office with no intention of pursuing those positions in the Senate.On his website, Mr. Vance says, “I’m sick of politicians who talk big about Big Tech but do nothing about it.”Maddie McGarvey for The New York TimesMs. Haworth, whose group has taken aim at platforms like Facebook and Amazon, said states like California were already moving forward with regulations to prevent online marketers from steering consumers to certain products or unduly influencing behavior.She said she believed that Republicans, if they took control of Congress, would impose weak federal rules that superseded state regulations.“Democrats should be calling out the hypocrisy here,” she said.Mr. Masters said he was sympathetic to concerns that empowering government to regulate technology would only lead to another kind of abuse, but, he added, “The answer in this age of networked monopolies is not to throw your hands up and shout ‘laissez-faire.’”Multinational technology firms like Google and Facebook, Mr. Masters said, have exceeded national governments in power.As for the “Trojan horse” assertion, he said, “When I am in the U.S. Senate, I am going to deliver on everything I’m saying.”It is not clear that such complex matters will have an impact in the fall campaigns. Jim Lamon, a Republican Senate rival of Mr. Masters’s in Arizona, has aired advertisements tarring him as a “fake” stalking horse for the California technology industry — but with limited effectiveness. At a debate this month, Mr. Lamon said Mr. Masters was “owned” by his paymasters in Big Tech.But Mr. Masters, who has the endorsement of former President Donald J. Trump, appears to be the clear favorite for the nomination.Representative Tim Ryan, Mr. Vance’s Democratic opponent in Ohio, has made glancing references to the “Big Tech billionaires who sip wine in Silicon Valley” and bankroll the Republican’s campaign.John Fetterman, the Democratic opponent of Dr. Oz in Pennsylvania, has not raised the issue.Taylor Van Kirk, a spokeswoman for Mr. Vance, said he was very serious about his promises to limit the influence of technology companies.“J.D. has long been outspoken about his desire to break up Big Tech and hold them accountable for their overreach,” she said. “He strongly believes that their power over our politics and economy needs to be reduced, to protect the constitutional rights of Americans.”Representatives of the Oz campaign did not respond to requests for comment. More
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How Rules Fuel Populist Anger in Rural America
ROCK HALL, Md. — When Dave Harden decided to run for Congress as a Democrat on Maryland’s conservative Eastern Shore, a friend gave him a piece of free advice.“Democrats lose on three things: abortion, guns and regulations,” the friend said. “If you keep one, you have to give up the other two.”Abortion and gun rights have both inspired passionate activism and countless front-page news articles. Regulations — not so much. Yet nitpicky government rules remain a potent and underappreciated source of populist anger against Democrats, especially in rural areas.On the campaign trail, Mr. Harden has gotten an earful from voters about maddening and arbitrary restrictions: Why are wineries in Maryland limited to serving only 13 kinds of food? Why does a woman who sells her grandmother’s cobbler have to cough up tens of thousands of dollars to build a commercial kitchen? Why does a federal inspector have to be on hand to watch wild catfish get gutted — but not other kinds of seafood? The short answer is that restaurant associations tend to wield more political clout than wineries, and catfish farmers in Mississippi are more powerful than seafood harvesters in Maryland. Big businesses can afford to hire lawyers to help them cut through red tape and lobbyists to bend government rules to their will. Small businesses, especially in rural places, get slammed.Dave Harden campaigning during the annual fireman’s parade in Ocean City.“The claim of overregulation is especially animating on the political right,” Joshua Sewell of Taxpayers for Common Sense told me. He said misleading rumors that the Environmental Protection Agency planned to regulate farm dust or that President Biden’s Build Back Better plan would have taxed belching cows played right into the stereotype of Democrats as city folk who were infuriatingly eager to regulate almost anything in rural America.In 2006, Democrats and Republicans had similar views on government regulation of business: About 40 percent of Republicans said there was too much, compared to about 36 percent of Democrats. But the percentage of Republicans who felt that way climbed steadily under President Barack Obama, who enacted more economically significant rules than his predecessors. By the end of his first term, 84 percent of Republicans thought that government meddled too much in business, while only 22 percent of Democrats agreed, according to Gallup. Democrats were more likely to say that the government doesn’t regulate businesses enough.With business owners more likely to be Republicans and government workers more likely to be Democrats, you have the makings of a yawning partisan divide. Donald Trump campaigned on a promise to remove two rules for every new one that was put in place.Can Democrats flip the script and win over conservative districts, particularly small- business owners in those areas, by speaking out against government red tape? Mr. Harden, a 59-year-old former Foreign Service officer who is running for Congress in Maryland’s First District, is trying. He hopes to replace Andy Harris, the sole Republican in Maryland’s congressional delegation. (Mr. Harris voted to overturn the results of the presidential election in 2020 and reportedly once tried to bring a gun onto the House floor.)Mr. Harden greets Bobby Higgins, the owner of an all-you-can-eat crab house in Ocean City.Crabs are Maryland’s iconic cuisine.Mr. Harden must first win a July 19 primary against Heather Mizeur, a progressive herb farmer who once represented Montgomery County, a much more urban area, in the state legislature. Ms. Mizeur has more money and name recognition than Mr. Harden, but he believes he has a chance because she seems out of step with the conservative district, which is considered a safe Republican seat.Mr. Harden is trying to chart an alternative path for Democrats in rural areas. He’s no fan of Donald Trump. He left a 22-year career in the Foreign Service in 2018 because he didn’t want to serve the Trump administration. But when it comes to regulations, Mr. Harden doesn’t sound all that much different from Mr. Trump.“The regulations in rural economies are ridiculous,” he told me.Mr. Harden is trying to walk a difficult line, appealing to voters who are angry about government overreach without turning off the Democratic base. He says he doesn’t oppose reasonable environmental regulations, but he rails against rules that make it harder for small businesses to survive.It’s a message that comes naturally to him. He spent years trying to improve the business environments in Iraq and the Palestinian territories as a senior U.S.A.I.D. official. He led a program in the West Bank town of Jenin that opened up a border crossing with Israel and prevailed on the Israeli government to allow more Israeli cars into Jenin so that Israeli Arabs could shop there, helping to start an economic revival.Mr. Harden’s campaign manager, Marty Lostrom, on Chris Lingerman’s lawn. Lingerman’s shop, Chester River Seafood, is behind his house.Ford’s Seafood in Rock Hall, Md., is family-owned.Mr. Harden is now trying to bring those lessons home to Maryland, where he grew up. On a recent Saturday, he squinted out at Chesapeake Bay, riffing about how to promote local economic development with Capt. Rob Newberry, the head of the Delmarva Fisheries Association, which represents licensed watermen in the area. Captain Newberry is a Republican who once hung a sign cursing Joe Biden on his boat. But he supports Mr. Harden, who listens patiently to his complaints about regulations.Captain Newberry represents people who harvest crabs, Maryland’s iconic cuisine, from the Chesapeake Bay, and he complains that excessive regulations are putting watermen like him out of business. He contends that the roughly 1,800 fishermen, clammers, crabbers and oystermen in his association are among the most highly regulated workers in the state.Captain Newberry, right, listened as Mr. Harden spoke to Chris Lingerman, the owner of Chester River Seafood, about regulations that hurt watermen.A Maryland blue crab.“When you get halfway to work and you pull up at a stoplight, does a policeman pull you over?” he asked. “When you get into work, does he come in and bother you two or three times and ask you what are you doing, do you have a license? That happens to me every time I go out on the harbor.”Captain Newberry has grievances with people across the political spectrum: with the environmentalists who lobby for more restrictions on the watermen; with the cities and companies responsible for faulty wastewater treatment systems and runoff that pollutes the bay; and with Mr. Harris, the incumbent.He told me that Mr. Harris refused to speak out against a nonsensical regulation that stipulated that catfish had to be treated like meat under federal law. The rule, which advantages catfish farmers in states like Mississippi at the expense of foreign fish farmers and Maryland fishermen, requires federal inspectors to be on site when catfish get gutted, even though there’s little evidence of a risk to public health.The rule is so outrageous that the Government Accountability Office once called for it to be repealed. Yet it remains in place. When the watermen complained to their congressman, Mr. Harris arranged for the government to pay for the inspectors. But inspectors still have to be called in whenever a fisherman brings in catfish for processing. (Mr. Harris’s office said he’s still working on it.)Captain Newberry says he has become disillusioned with the political sausage-making behind government rules. But he still works within the system to try to change them. He testifies before lawmakers and serves on committees, hoping that it will make a difference.On the campaign trail, Mr. Harden has gotten an earful from voters about maddening and arbitrary restrictions.However, those same frustrations have led some other watermen to fall under the sway of the “sovereign citizens” movement, which preaches that the federal and state governments have no right to require licenses for hunting, driving or owning a gun. Some adherents believe that the local sheriff is the only legitimate authority under the Constitution. Beliefs about the illegitimacy of the federal government appeared to be at the root of an armed standoff between federal authorities and cattle ranchers in Nevada in 2014.Maryland’s Eastern Shore hasn’t seen anything like that, Somerset County’s sheriff, Ronald Howard, told me. But he said he has faced mounting pressure to defy state rules and allow watermen to harvest oysters from sanctuaries that have been declared off limits. He refused. “I said, ‘Look, if I interfere, that’s obstruction of my duties; I can be charged criminally,’” he told me. “I had one waterman tell me, ‘That’s a chance you’ve got to take.’”Sheriff Howard doesn’t blame the watermen; he blames the rigid rules made by politicians who rarely take the time to listen to rural people. That’s where Dave Harden sees an opening for himself, however slim.Democrats have to find a way to reconnect with rural America, Mr. Harden told me. Frank talk about regulations is a good place to start.The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More
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Barack Obama’s New Role: Fighting Disinformation
The former president has embarked on a campaign to warn that the scourge of online falsehoods has eroded the foundations of democracy.SAN FRANCISCO — In 2011, President Barack Obama swept into Silicon Valley and yukked it up with Mark Zuckerberg, Facebook’s founder. The occasion was a town hall with the social network’s employees that covered the burning issues of the day: taxes, health care, the promise of technology to solve the nation’s problems.More than a decade later, Mr. Obama is making another trip to Silicon Valley, this time with a grimmer message about the threat that the tech giants have created to the nation itself.In private meetings and public appearances over the last year, the former president has waded deeply into the public fray over misinformation and disinformation, warning that the scourge of falsehoods online has eroded the foundations of democracy at home and abroad.In a speech at Stanford University on Thursday, he is expected to add his voice to demands for rules to rein in the flood of lies polluting public discourse.The urgency of the crisis — the internet’s “demand for crazy,” as he put it recently — has already pushed him further than he was ever prepared to go as president to take on social media.“I think it is reasonable for us as a society to have a debate and then put in place a combination of regulatory measures and industry norms that leave intact the opportunity for these platforms to make money but say to them that there’s certain practices you engage in that we don’t think are good for society,” Mr. Obama, now 61, said at a conference on disinformation this month organized by the University of Chicago and The Atlantic.Mr. Obama’s campaign — the timing of which stemmed not from a single cause, people close to him said, but a broad concern about the damage to democracy’s foundations — comes in the middle of a fierce but inconclusive debate over how best to restore trust online.In Washington, lawmakers are so sharply divided that any legislative compromise seems out of reach. Democrats criticize giants like Facebook, which has been renamed Meta, and Twitter for failing to rid their sites of harmful content. President Joseph R. Biden Jr., too, has lashed out at the platforms that allowed falsehoods about coronavirus vaccines to spread, saying last year that “they’re killing people.”Republicans, for their part, accuse the companies of suppressing free speech by censoring conservative voices — above all former President Donald J. Trump, who was barred from Facebook and Twitter after the riot on Capitol Hill on Jan. 6 last year. With so little agreement about the problem, there is even less about a solution.Whether Mr. Obama’s advocacy can sway the debate remains to be seen. While he has not sought to endorse a single solution or particular piece of legislation, he nonetheless hopes to appeal across the political spectrum for common ground.“You’ve got to think about how things are going to be consumed through different partisan filtering but still make your true, authentic, best case about how you see the world and what the stakes are and why,” said Jason Goldman, a former Twitter, Blogger and Medium executive who served as the White House’s first chief digital officer under Mr. Obama and continues to advise him.“There’s a potential reason to believe that a good path exists out of some of the messes that we’re in,” he added.As an apostle of the dangers of disinformation, Mr. Obama might be an imperfect messenger. He was the first presidential candidate to ride the power of social media into office in 2008 but then, as president, did little to intervene when its darker side — propagating falsehoods, extremism, racism and violence — became apparent at home and abroad.“I saw it sort of unfold — and that is the degree to which information, disinformation, misinformation was being weaponized,” Mr. Obama said in Chicago, expressing something close to regret. He added, “I think I underestimated the degree to which democracies were as vulnerable to it as they were, including ours.”Mr. Obama, those close to him said, became fixated by disinformation after leaving office. He rehashed, as many others have, whether he had done enough to counter the information campaign ordered by Russia’s president, Vladimir V. Putin, to tilt the 2016 election against Hillary Rodham Clinton.He began meeting with executives, activists and other experts in earnest last year after Mr. Trump refused to recognize the results of the 2020 election, making unfounded claims of widespread voter fraud, those who have consulted with Mr. Obama said.In his musings on the matter, Mr. Obama has not claimed to have discovered a silver bullet that has eluded others who have studied the issue. By coming forward more publicly, however, he hopes to highlight the values for corporate conduct around which consensus could form.“This can be an effective nudge to a lot of the thinking that is already taking place,” Ben Rhodes, a former deputy national security adviser, said. “Every day brings more proof of why this matters.”The location of Thursday’s speech, Stanford’s Cyber Policy Center, was intentional, bringing Mr. Obama to the heart of the industry that in many ways shaped his presidency.In his 2008 presidential campaign, he went from being an underdog candidate to an online sensation with his embrace of social media as a tool to target voters and to solicit donations. He became an industry favorite; his digital campaign was led by a Facebook co-founder, Chris Hughes, and several other tech chief executives endorsed him, including Eric Schmidt of Google.During his administration, Mr. Obama extolled the promise of tech companies to strengthen the economy with higher-skilled jobs and to propel democracy movements abroad. He lured tech employees like Mr. Goldman to join his administration and filled his campaign coffers with fund-raisers at the Bay Area homes of supporters like Sheryl Sandberg, the chief operating officer of Meta, and Marc Benioff, the chief executive of Salesforce.It was a period of mutual admiration and little government oversight of the tech industry. Though Mr. Obama endorsed privacy regulations, not a single piece of legislation to control the tech companies passed during his tenure, even as they became economic behemoths that touch virtually every aspect of life.Looking back at his administration’s approach, Mr. Obama has said he would not pinpoint any one action or piece of legislation that he might have handled differently. In hindsight, though, he understands now how optimism about online technologies, including social media, outweighed caution, according to Mr. Rhodes.“He’ll certainly acknowledge that there’s things that could have been done differently or ways we were all thinking about the tools and technologies that turned out at times to see the opportunities more than the risks,” Mr. Rhodes said.Mr. Obama’s views began to change with Russia’s flood of propaganda on social media sites like Facebook, Twitter and YouTube to stir confusion and chaos in the 2016 presidential election. Days after that election, Mr. Obama took Mr. Zuckerberg aside at a meeting of world leaders in Lima, Peru, to warn that he needed to take the problem more seriously.Once he left office, Mr. Obama was noticeably absent for much of the public conversation around disinformation.“As a general matter, there was an awareness that anything he said about certain issues was just going to ricochet around the fun house mirrors,” Mr. Rhodes said.Mr. Obama’s approach to the issue has been characteristically deliberative. He has consulted the chief executives of Apple, Alphabet and others. Through the Obama Foundation in Chicago, he has also met often with the scholars the foundation has trained; they recounted their own experiences with disinformation in a variety of fields around the world.From those deliberations, potential solutions have begun taking shape, a theme he plans to outline broadly on Thursday. While Mr. Obama maintains that he remains “close to a First Amendment absolutist,” he has focused on the need for greater transparency and regulatory oversight of online discourse — and the ways companies have profited from manipulating audiences through their proprietary algorithms.Mr. Goldman compared a potential approach to consumer protection or food safety practices already in place.“You may not know exactly what’s in a hot dog, but you trust that there is a process for meat inspections that ensures that the food sold and consumed in this country and other countries around the world are safe,” he said.In Congress, lawmakers have already proposed the creation of a regulatory agency dedicated to overseeing internet companies. Others have proposed stripping tech companies of a legal shield that protects them from liability.No proposals have advanced, though, even as the European Union has moved forward, putting into law some of the practices still merely bandied about in Washington. The union is expected to move as soon as Friday on new regulations to impose audits of algorithmic amplification.Kyle Plotkin, a Republican strategist and former chief of staff to Senator Josh Hawley of Missouri, said Mr. Obama “can be a polarizing figure” and could inflame, not calm, the debate over disinformation.“Adoring fans will be very happy with him weighing in, but others won’t,” he said. “I don’t think he will move the ball forward. If anything, he moves the ball backward.” More
