No major-party US presidential nominee has ever dropped out. Then again, no-major party US presidential nominee has ever frozen during a debate for multiple seconds before saying “We finally beat Medicare.”
I wrote an article in February exploring the possibility that Joe Biden would stand aside. There was this special counsel report, and this Ezra Klein article, and the Manifold market on “Will Biden be the 2024 Democratic nominee?” dropped from 96% to 89%, which felt like a lot. So I consulted with Manifold’s top forecasters, and I concluded it was a possibility, but I didn’t think it would actually happen.
But this time, the Manifold market dropped to 75% — and then 65% — within hours.
It’s been bouncing around between roughly 65 and 80 as bettors have been trying to read the tea leaves to determine whether Biden would do the unprecedented. Is Manifold overreacting or underreacting? (PredictIt and Polymarket have his nomination chances closer to 60%.)
Regardless, what happens in the next few days — whether the momentum continues or grounds to a halt; and the results of the Biden family discussion at Camp David — will be crucial.
I have a confession to make. When I watched the debate, I didn’t think that Biden was underperforming that much. Maybe it’s because I was watching at 1.5x speed, or because I was going back and forth between Manifold TV and a Sarah Cooper reaction lipsyncing livestream (which is sadly now unlisted), or because I’d seen clips of Biden in the last year, or because Trump lied so much, or because this election has been atypically stagnant and normal and I feel like nothing matters anymore.
But when the debate ended, and the livestream turned to the CNN panel, I watched in shock as the normally Democratic-aligned panelists were unanimous: they thought Biden should be replaced.
Since then, economist Paul Krugman wrote a New York Times editorial titled “The Best President of My Adult Life Needs to Withdraw.” Generally Biden-sympathetic pundits including Tom Friedman, Nicholas Kristof, Tom Nichols, Ron Brownstein, and Franklin Foer (with the title “Someone Needs to Take Biden’s Keys”) argued the same, along with Nate Silver in a blog post and podcast (titled “The President Has No Clothes”). The editorial boards of The New York Times, Washington Post, and The Economist echoed these calls. As Politico puts it, the pundit class turned on Biden.
Yet it will take more than pundits. Democratic politicians — including Kamala Harris, Barack Obama, and the Clintons — have been publicly defending Biden. And the president himself gave a rally in North Carolina where he appeared more vigorous, saying that “when you get knocked down, you get back up.”
The Biden family reportedly headed to Camp David to discuss the path forward. He may stay in the race, in which case he’ll be losing — Nate Silver’s new model gave him a 34% chance before the debate, and that’s likely to decrease after his polls drop — but he’ll have time to catch up.
Or if he stands aside, who will replace him? Kamala Harris, who is also unpopular? Gavin Newsom? Gretchen Whitmer? Someone else? Like so many things, it’s unclear.
Now that I included the thumbnail image, I want to officially say hello and welcome! Before I get into the alternate potential Democratic nominees, however, I want to discuss a different mystery.
Why Haven’t Trump’s Odds Increased?
Prior to the debate, Manifold assigned Donald Trump a 57% chance to win the election. As I check the market now, it’s exactly the same: 57%.
Wait, what? Didn’t Trump defeat Biden in the debate? Does Manifold think that debates don’t matter?
The underlying mechanism here is this: if Biden ends up being replaced, his replacement will be someone with a better chance of defeating Trump. If it seems Biden is here to stay, Trump’s chances will likely increase (Manifold now gives him a 71% chance to win, conditional on the Trump vs. Biden matchup) — but if Biden is dropping out, Trump’s chances would decrease. It just so happens that, in the opinions of traders, these exactly cancel out!
By the way, this bolsters Nate Silver’s theory that the White House played the debate-scheduling game shrewdly. By negotiating for two debates instead of four, the Biden campaign reduced its exposure. Meanwhile, by having a debate historically early, in June, they allowed this conversation to happen now, when it’s potentially actionable, as opposed to more in September or October when it would probably move Trump’s chances significantly upward — and when it would loom larger in voters’ minds on Election Day.
Anyway, let us all take a moment to appreciate the irony that it didn’t help Trump’s chances (yet). And for someone like me who is very worried about the implications of a second Trump presidency, this debate fiasco is surprisingly net-neutral.
However, Trump’s chances are fairly sensitive to the potential Democratic nominee. So will it be Biden, or someone else?
The Potential Preference Cascade
Manifold’s #1 leaderboard trader, Joshua, wrote a great comment on how to think about the developing situation:
I've taken a day to think about all this with no position, and here's where I'm at:
1) I think this post-debate media cycle is the last, best chance the Democrats have to convince Biden to step aside. If they can't do it in the next few days and weeks, it becomes much harder to do later.
2) This means the momentum from debate night has to keep moving against Biden every day. More people have to keep saying they want to consider other nominees. Polls need to show things getting worse for Biden, not just in favorability but in actual voting intention. Biden needs to have more bad moments on camera to cement that it wasn't just him having a cold.
3) I see the momentum slowing. Lots of people who didn't want Biden as the nominee in 2020 have come out saying they want to consider alternatives, but I've yet to see the same from people who were with Biden from the start. Post-debate polls are mixed, though it's still early. The first post-debate head-to-head polling doesn't show Harris, Newsom, or others doing better than Biden against Trump.
So, I think this price should be moving up every day we don't see a good reason it should be moving down. So I bought up to 80. Open to counter-arguments, I post my reasoning in the hope that I'll be proven wrong.
Joshua changed his mind about point #3 after reports broke that Biden would discuss his potential campaign with his family during the weekend, but I think the overall paradigm is important.
The Democratic coalition may be in the midst of a preference cascade. Privately, they may have worries about Biden, but saying them out loud might negatively impact the campaign or their future career prospects. (Top trader Michael Wheatley wrote that “I think important figures like Obama and the potential replacements will stay mum until the moment a decision is made at which point they will all endorse it.”) Right now, the preference cascade has reached pundits and newspapers, but it’s stopped short of elected officials. This is interesting, since the two groups have tended to be in sync lately. eigenrobot posits an explanation related to “divergent incentives faced by the Dems whose careers and positions are at stake and the media complex that is sympathetic to them but knows which way the wind is blowing.”
If the preference cascade stops here, and Biden makes it clear that he’s in it to win it, then it will be interesting to see if any of the pundits walk their statements back or apologize. In a tweet (X post) linked on the main Manifold market, Richard Ngo writes, “If you want to understand the Dems’ internal dynamics right now, the book to read is Seizing Power by Naunihal Singh. He models coups as coordination games where everyone’s main priority is not being on the losing side, making expectations self-fulfilling. Really insightful read.”
Who Would It Be?
One of the challenges in the coordination problem of replacing Biden in this very unprecedented way is that it’s very unclear who the replacement nominee would be. Kamala Harris, as the vice president, is the obvious choice, but she’s also very unpopular. Gov. Gavin Newsom has been trying to position himself for the job, but he’s not that popular either.
A poll from Data for Progress (a B-rated pollster according to Nate Silver) did not show any of the other Democrats clearly ahead of Trump. However, it showed them with a higher percentage of undecideds, and thereby more upside risk.
One thing to note about these markets, as always, is that they measure correlation, not causation. In scenarios where someone replaces Biden, this is because the Biden team and/or Democratic Party think they have a better chance to defeat Trump. Presumably this is correlated with having a better chance to defeat Trump.
The Mechanics of Replacing Biden
Joe Biden is the presumptive nominee, which means that a majority of delegates are legally required to vote for him at the first ballot of the convention. If he dropped out, those delegates would be released to vote for who they chose. But note that the delegates are still appointed by Biden, making it unlikely that they would pick a candidate significantly more left-wing than Biden.
Another option that is reportedly being considered by the Biden team is dropping out after the convention, which might give them even more control over the replacement. And according to the market below, if Biden drops out, it won’t be very soon.
Concluding Thoughts
I wasn’t planning to write another politics article so soon. Philosophically, I believe in writing when there’s something to write about. I don’t think it’s inherently virtuous to follow the news if the main result is stress and anxiety. But this is such a crazy, unprecedented situation that I wanted to provide a rundown!
Anyway, now we’ve gotten to the point in the article where I try to make it fun by talking about lighter things.
Like, y’all there was a debate prop bets market. Everyone was talking about whether Biden and Trump would shake hands. And did anyone predict that the candidates would keep not using all their available time?
Debate Quotes
Here’s a link to a transcript of the debate (which, according to Claude and ChatGPT, was won by Biden). Below I’ve selected a few quotes:
Biden: But we are not for late-term abortion, period, period, period.
(which, if you think about it, is an ellipsis…)
Trump: People are coming in and they’re killing our citizens at a level that we’ve never seen. We call it “migrant crime.” I call it “Biden migrant crime.”
Trump: I really don’t know what he said at the end of that sentence. I don’t think he knows what he said either.
Biden: Number two, he got $2 trillion tax cut, benefited the very wealthy. What I’m going to do is fix the taxes. For example, we have a thousand trillionaires in America – I mean, billionaires in America. They’re in a situation where they, in fact, pay 8.2 percent in taxes. If they just paid 24 percent or 25 percent, either one of those numbers, they’d raised $500 million – billion dollars, I should say, in a 10-year period. We’d be able to right – wipe out his debt. We’d be able to help make sure that – all those things we need to do, childcare, elder care, making sure that we continue to strengthen our healthcare system, making sure that we’re able to make every single solitary person eligible for what I’ve been able to do with the COVID – excuse me, with dealing with everything we have to do with. Look, if – we finally beat Medicare.
Trump: But I took – I was willing to take a cognitive test. And you know what, if I didn’t do well – I aced them. Dr. Ronny Jackson, who’s a great guy, when he was White House doctor. And then I took another one, a similar one, and both – one of them said they’d never seen anybody ace them.
Trump: Let’s not act like children.
Biden: You are a child.
Debate Tweets
Some commentary from X.com:
https://x.com/drewjanda/status/1806497712969584681
https://x.com/ChrisJBakke/status/1806545545978319319
https://x.com/NoamChompers/status/1806499388161990950
https://x.com/tracewoodgrains/status/1806527255922753966
https://x.com/jarvis_best/status/1807228286738842003
One Last Market
And how could I talk about the debate without discussing the surreal moment when the two men argued about who was better at golf? (Slate describes them both as “absolutely, utterly full of shit, though Biden was at least factually close to the pin in describing his own handicap.”)
I’ve personally added a M$1,000 subsidy to the above market to encourage accuracy.
I’ve been Jacob Cohen, known on Manifold as Conflux. I blog at tinyurl.com/confluxblog, make puzzles at puzzlesforprogress.net, and don’t release any new episodes of the Market Manipulation Podcast on your favorite podcast platform. Check out Manifold Politics at manifold.markets/politics, or via its Politics or 2024 Election categories. And if you enjoyed this newsletter, don’t forget to like, share, and/or subscribe to Above the Fold on Substack!
Maybe it doesn't count, but LBJ dropped out of the presidential race in late March 1968, a few weeks after the New Hampshire primary but before the DNC.