DEATH MARKET?!

ABC News/AP reports what may be the strangest story of the year:

The Pentagon is setting up a stock-market style system in which investors would bet on terror attacks, assassinations and other events in the Middle East. Defense officials hope to gain intelligence and useful predictions while investors who guessed right would win profits.

Two Democratic senators demanded Monday the project be stopped before investors begin registering this week. “The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it’s grotesque,” Sen. Ron Wyden, D-Ore., said.

The Pentagon office overseeing the program, called the Policy Analysis Market, said it was part of a research effort “to investigate the broadest possible set of new ways to prevent terrorist attacks.” It said there would be a re-evaluation before more money was committed.

The market would work this way. Investors would buy and sell futures contracts essentially a series of predictions about what they believe might happen in the Mideast. Holder of a futures contract that came true would collect the proceeds of investors who put money into the market but predicted wrong.

Has Laurence Simon been put in charge of the Pentagon?!

FILED UNDER: Military Affairs
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Matthew says:

    I didn’t think it was that strange. Then again, I’m into game theory and all sorts of crazy stuff. I think investing real money is a little untoward, but running a mock futures game program could work, especially with enough player input.

  2. joy says:

    Yeah, I had heard about this for the first time on NBC Nightly News tonight too. I don’t know about the rest of you, but for some reason, it made me think of BlogShares.

  3. melvin toast says:

    I think the idea which liberals who don’t understand free market economy are missing is that information
    about terrorist attacks would leak into the market place.
    If Muhammed want’s to make some bucks and he know where Osama is going to hit, he’ll invest. The surer he
    is the more he’s willing to bet. Wanna know where to
    look for terrorists? Just look at the ticker.

    Kinda clever if you ask me. Only problem is morons
    think it’s grotesque.

  4. Cam says:

    I don’t consider myself a moron, but the chances of being able to thwart a terrorist attack using this system are probably a little smaller than using remote viewing.

    Problem number one: there are only going to be 10,000 people registered. And yes, you’ll have to register. How many of those 10,000 people that are willing to give their information to the government are going to be card carrying members of al Queda? I’m thinking not too many.

  5. Paul says:

    I might be a moron on this one… I’m not sure yet.

    Two things make me think it IS a good idea.

    1) The Dems think it is a bad idea and when the Dems are against something involving National Defense it is usually a good idea.

    2) You guys really should follow Matthew’s link above and then follow the links off that post. Pretty persuasive stuff.

    But it is sorta morbid.

    Paul

  6. Kristopher says:

    Here is the website for this abomination: Policy Analysis Market.

  7. melvin toast says:

    It’s the old paradox of how to achieve peace.
    You can’t win a war by dying for your country.
    Sometimes you have to do something that
    is outwardly cruel but ultimately results in
    health and prosperity. Open-heart surgery looks
    grotesque to someone who is completely
    ignorant of its purpose.

  8. The plan has been scrapped, after meeting with immediate and widespread disbelief and repugnance from both Democrats and Republicans. Among other things, critics suggested that it would actually provide a financial incentive for more acts of terrorism — and without safeguarding against the possibility that terrorists themselves might participate and profit from their own atrocities. AP story here.

  9. mmunich says:

    Why is this wrong, and a poll asking “Do you think there will be a terrorist attack on U.S. soil in the next 12 months” okay?

    When the next democratic candidate says that we are “more unsafe” because of Bush, WHY does he think this? Will he put money on it? The futures market will let people do that – and the futures markets that exist today for presidential candidates, etc. at Iowa have proved to be accurate since people do a lot of thinking before putting money behind their opinions.

    This won’t help prevent the attack, but it shows a basis of people’s opinions. Because people put their money where their opinion is, their opinions will not (as likely) be based on their political affiliation. (example: I voted for Dole, but would have bet that Clinton would have won, and would have been right).

    Will it prevent an attack? No, but it will give an indication how safe people feel in the U.S., which will actually give better feedback to the Pentagon on where to direct programs (Fact: a poll asking if you are safe will skew immediately to political preference, especially in an election year).

    Hyprocracy of the press and the liberals, as usual.