The Pentagon yesterday scrapped a plan to establish a futures market that would have allowed investors to bet on the probability of coups, assassinations, terrorist strikes and other events in the Middle East.
See the Washington Post article if you don't believe me.... But what is all the fuss about. Fortune argues that it is not such an outlandish idea and I am certain that the hoopla is mostly the result of liberal politics and a tendency to knee jerk in the direction of the politically correct.
Senator Hilary Rodham Clinton (D-N.Y.) said the plan would have created "a futures market in death." Well isn't that a nice soundbite.
News alert! Prisoners being held without trial in cuba is the news. The administration lying to congress and to the American people about weapons of mass destruction is the news. John Ashcroft eroding your civil liberties is the news.
The initiative had been seen by its Pentagon sponsors as a way of using the predictive ability of markets to anticipate terrorist events or other crises. It was based on the notion that futures trading has proven effective in predicting other events such as oil prices, elections and movie ticket sales.
Under the plan, traders could have bought and sold futures contracts on the likelihood of, say, Palestinian leader Yasser Arafat being assassinated or Jordanian King Abdullah being overthrown. Those who predict correctly would have profited over those who guess wrong.
The Pentagon had listed the program in defense budget plans sent to Capitol Hill and had briefed congressional staff members about it earlier this year. A Web site had promoted the program, and the registration of up to 1,000 traders had been due to begin on Friday, with trading set to start Oct. 1.
Called the Policy Analysis Market, the project arose under a DARPA division called FutureMAP, or "Futures Markets Applied to Prediction." Two companies were involved -- Net Exchange, a market technologies company, and the Economist Intelligence Unit, a division of the publisher of the Economist magazine. The Pentagon had planned to spend $8 million on the effort through 2005.
The program was supervised by retired Adm. John Poindexter, who served as national security adviser to President Ronald Reagan and was convicted for his role in the 1980s Iran-contra scandal, although the conviction was set aside.Posted by tstubbs at July 30, 2003 08:49 AM | Trackback