Smash the Machines! Oh...And No Betting Either

Here's a little snippet of news that probably escaped your notice.

This from the NY Times:
"The Pentagon office that proposed spying electronically on Americans to monitor potential terrorists has quickly abandoned an idea in which anonymous speculators would have bet on forecasting terrorist attacks, assassinations and coups in an online futures market.
The discarded program was met with astonishment and derision almost from the moment it was disclosed.
In the proposed futures market, traders bullish on a biological attack on Israel, say, or bearish on the chances of a North Korean missile strike would have had the opportunity to bet on the likelihood of such events on a new Internet site established by the Defense Advanced Research Projects Agency (DARPA)."

Another:
"Appalling," " repugnant," and "incredibly stupid" were a few of the choice words used by two U.S. Senators, Byron Dorgan (D-ND) and Ron Wyden (D-WA) over a Pentagon proposal to create a futures market aimed at predicting events in the Middle East. Senate Democratic leader Tom Daschle chimed in, "I must say this is perhaps the most irresponsible, outrageous and poorly thought-out of anything that I have heard the administration propose to date." In reaction, an embarrassed Defense Department swiftly canned the project. What nefarious activity is Pentagon up to? Creating an online betting parlor to enable insider traders at the Defense and State Departments to feather their retirement nests?"

Sounds pretty bad, doesn't it? What WILL those evil Bushie capitalist warmongers think of next? Betting on the death of millions so they can eat turtle soup and venison served on gold spoons...while the jobless poor huddle around their fuel-barrel fires in our gutted cities.... I makes me want to weep.

Perhaps by now, though, you've come to the conclusion, as I have, that you can take NOTHING that comes from the mainstream press or its political masters on the left at face value. Such a conclusion might have led you here.

And here.
And, eventually, here.

The truth? This was a good idea...no, a series of brilliant ideas, worthy of St Andrews Academy (those who have ears to hear, let them hear). Here, in a nutshell, is why:
Free futures markets are powerful predictors, with proven track records. They are more accurate than opinion and election polls and a lot more accurate than long-range weather forecasting. If you don't believe me, try here. and here.
DARPA set up a policy analysis market (PAM), to trade worldwide in futures contracts dealing with underlying issues in the Middle East (economics, the fate of regimes, etc.), experimenting with them as a form of predictive intelligence gathering. There are many such markets in the private sector, many of them "betting" on nasty things, and they've worked for years.

"Why not harness the predictive power of markets for intelligence purposes? Markets have demonstrated time and time again that people have a lot of dispersed and hidden information that the prospect of profit can lure into the open."
"Why wouldn't terrorists just hop online and start betting if they couldn't either mislead American authorities about their plans or make money to fund more al Qaeda operations?" [Senator] Wyden asked. Why not indeed? If terrorists were trying to use PAM to make money that "would mean that they are giving up information to gain money," says Hanson. "In other words, we're bribing them to tell us what they are going to do. That's kind of like normal intelligence gathering when we bribe agents for information."

Might work, might not. But it was certainly worth a try. You'd never see this side of the matter in the press, though.

"In the end, a promising research program that might have enhanced U.S. intelligence gathering was killed off by cheap moral posturing on the part of a couple of U.S. Senators."
...And fed, I might add, by compliant leftists in the mainstream media.

"Who's incredibly stupid now?"

Monk