Before you do business with anyone, you should ask why they want to do business with you. Last week handed me the world’s most absurd teaching example: A White House teleprompter operator was betting on Kalshi about what the president would say — words he was personally scrolling onto the screen. He cleared about $100,000, and honestly, I’m shocked he didn’t make more.

There’s an important lesson here: every market could have a metaphorical teleprompter guy on the other side of the trade. And once you understand that, markets can simply stop working. This problem — which economists call asymmetric information — can also be fixed by sensible regulation which levels the informational playing field.

Which brings me to another big story that sits adjacent to information economics: Trump Media may soon sell early access to the president’s Truth Social posts. Think about what this means. This is how the president announces war; every embassy on earth has to maintain a Truth Social account just to stay informed of American policy. And we already have a place for official government proclamations — it’s called the Federal Register. But now the president has privatized and monetized it, and anyone active in markets will have no choice but to pay. After all, if you don’t pay, you could be trading with someone a lot like teleprompter guy — a counterparty who has an informational advantage over you.

Time for a confession: I helped build the intellectual case for freeing prediction markets from unnecessary restrictions. The dream was that markets would surface useful information, like election odds or product safety. And part of it came true: market odds beat the polls, the pundits, and Nate Silver. But go look at Kalshi or Polymarket today and you’ll see that roughly 90% of the money is on sports. We built a superior information aggregation machine for the economy, and the ideas are being used to create a backdoor sportsbook.

And I know exactly what that costs: Before I was an economist, I was a teenager working for bookies on Australian racetracks. I once took five dollars from a coworker who “didn’t bet” and put it on number one in the next race. Six months later he was betting thousands a race and stealing from his own family. Compulsive gambling destroys lives — and the families it wrecks have no lobbyists. Meanwhile, the major firms dominating the industry have piles of cash and Donald Trump Jr. on both of their payrolls.

I don’t claim to know the exact right policy answer for America. But I know we never even had a grown-up debate. Perhaps that’s a theme we can come back to in a future newsletter.