WSJ: It’s a Safe Bet that Bala Cynwyd Billionaire Jeff Yass Thinks He Has an Idea to Improve Politics, Policy

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Bala Cynwyd billionaire Jeff Yass believes politics could benefit from a prediction market (or betting market) model.

Bala Cynwyd billionaire Jeff Yass, who started the options-trading powerhouse Susquehanna International Group, wants to introduce prediction markets into politics. Holman W. Jenkins, Jr. covered the idea in The Wall Street Journal.

Pennsylvania’s richest person believes that using betting markets could improve our political debate and policy outcomes, especially in the areas of war and climate policy.

For example, he pointed out that Bush White House economist Lawrence Lindsey was reprimanded for predicting that the price of the Gulf War could be around $50 billion. The actual cost ended up being more than $1 trillion.

Yass wonders, if betting markets had anticipated $500 billion of that amount, “Would we have gone to war in Iraq?”

And while he believes that introducing prediction markets and disciplined odds-making into the political and policy arena “would be the greatest gift to society,” the Commodity Futures Trading Commission (CFTC) disagrees.

The agency frowns on tying prediction markets to political outcomes and has been the main roadblock to Yass’ attempts.

Still, the CFTC did approve an instrument to bet on future changes in the corporate income-tax rate sponsored by Susquehanna, which Yass believes is a good step forward.

Read more about Jeff Yass in The Wall Street Journal.

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