Stable price levels in the real-money betting markets at Intrade.com and Iowa Electronic Markets suggest that the Abu Ghraib revelations haven’t hurt Bush’s reelection chances, which have been >50% at Iowa and around 60% at Intrade for the past several weeks. These markets aren’t crystal balls, and Bush’s reelection odds aren’t a perfect proxy for public support for the war, but I think the markets are pretty good indicators that the POW-mistreatment scandal isn’t the confidence-shaking earthquake that some of the press and Democrats make it out to be. Glenn Reynolds is absolutely right that public demoralization is the goal here. People should take notice of who benefits politically from it.
UPDATE: As of May 11 the midpoint of the bid/ask spread on Bush’s reelection odds has dropped by a couple of points. I don’t know if this is a significant shift but it suggests some weakening in the Administration’s public standing.
UPDATE 2: EconoPundit compares Intrade’s odds estimates to those derived from conventional opinion-polling.