http://www.zerohedge.com/article/nicolas-sarkozy-joins-afl-cio-demanding-tobin-tax-all-financial-institutions

That post particularly annoys me. He says something untrue – that only large, institutional high frequency traders would be affected by tobin tax – that is very aggressive towards a swath of his readers and simultaneously suggests a lack of experience. (Not to mention the later naive-sounding comment about the politics of the situation, which I really hope was just sarcasm.) Overall, you wonder whether he’s more interested in reporting on finance or stirring up controversies to charge his self-aggrandizement capacitor.

Where does this guy post comments?

P.S.: You didn’t commit any crime, since you sticked with your anonymous comment. All was ethical. Emile drinks too much coffee.

I share disdain for anonymity that provides cover for gutter-sniping, particularly when facts are stylized. Sometimes the “Tyler Durden” @ Zerohedge guy goes in that direction.

Good, so I was right to publish that comment, then. [Few comments on Midas Oracle are anonymous. When they are, they are sometimes helpful in starting a discussion, as in this case.]

I can understand Emile’s irritation of the “Deep Throat” comment. A “Deep Throat” may be useful where there’s inside information that would otherwise not be known (aka back-room CFTC issues), and would be hazardous for that individual to reveal. But when it comes to simple commentary, it’s cowardly to stand behind a pseudonym.

Jed’s comment resembles Jason’s comment:
http://www.midasoracle.org/2009/09/24/deep-throats-take-of-emiles-take-of-the-save-program/#comment-25671

There is a grey middle ground, which is essentially down to the internal mechanisms of the organization running the market. Are they lazy and only ever look at the outcomes that get a lot of votes? Then that is very close to the beauty contest. Or do they process everything separately and come to their own conclusion, no matter what the market says? Then that would be a classical prediction market.

The devil is in these details. And unfortunately, the details are rarely discussed, making threads like these a bit more opaque.

Jed’s post: Starting from the wrong metaphor – Prediction Markets and Ideas

Chris’s post: Are IBM Smarter Cities prediction markets too smart for people?

As you presented the idea, you suggest betting on what the OMB will short list, or what the President will pick. Given the inherently political nature of OMB and Presidential decisionmaking, these picks will not necessarily be the best idea on the merits but instead the best idea as constrained by the politics. I suppose the political constraint is inherent in governmental decisionmaking – and certainly not caused by your proposed mechanism – but my first point was only that the best betting would similarly not aim for the merits but rather aim for the political choice.

However, if the OMB’s choice of short list is, as you put it, “informed by the crowd’s aggregate choice,” then a bit of the beauty contest creeps back in because the payoff becomes linked to which ideas are most favored in the betting. My second point is a conjecture that only if the OMB’s selection process is independent of betting results does the process fully escape the beauty contest problem.

You of course have practical experience using related approaches, and my commentary is more theoretical. In practice, there may be factors which prevent the mechanism from devolving in the beauty contest fashion.