For you gamblers and dystopia-philes - from today's New York Times
OK, I can understand the idea that it might be a useful predictor. But
not only is it in hideously bad taste, what's to stop the perception -
or even actuality - that people, including government people potentially
- will attempt to carry out assassinations in order to make money on
this new "stock"? This "futures" market sounds straight out of a
dystopian "future" movie, where the lone guy has to stop the murder and
uncover the conspiracy ... John Frankenheimer, where are you?
*****************
Pentagon Prepares a Futures Market on Terror Attacks
By CARL HULSE
WASHINGTON, July 28 - The Pentagon office that proposed spying
electronically on Americans to monitor potential terrorists has a new
experiment. It is an online futures trading market, disclosed today by
critics, in which anonymous speculators would bet on forecasting
terrorist attacks, assassinations and coups.
Traders bullish on a biological attack on Israel or bearish on the
chances of a North Korean missile strike would have the opportunity to
bet on the likelihood of such events on a new Internet site established
by the Defense Advanced Research Projects Agency.
The Pentagon called its latest idea a new way of predicting events and
part of its search for the "broadest possible set of new ways to prevent
terrorist attacks." Two Democratic senators who reported the plan called
it morally repugnant and grotesque. The senators said the program fell
under the control of Adm. John M. Poindexter, President Ronald Reagan's
national security adviser.
One of the two senators, Byron L. Dorgan of North Dakota, said the idea
seemed so preposterous that he had trouble persuading people it was not
a hoax. "Can you imagine," Mr. Dorgan asked, "if another country set up
a betting parlor so that people could go in - and is sponsored by the
government itself - people could go in and bet on the assassination of
an American political figure?"
After Mr. Dorgan and his fellow critic, Ron Wyden of Oregon, spoke out,
the Pentagon sought to play down the importance of a program for which
the Bush administration has sought $8 million through 2005. The White
House also altered the Web site so that the potential events to be
considered by the market that were visible earlier in the day at
www.policyanalysismarket.org could no longer be seen.
But by that time, Republican officials in the Senate were privately
shaking their heads over the planned trading. One top aide said he hoped
that the Pentagon had a good explanation for it.
The Pentagon, in defending the program, said such futures trading had
proven effective in predicting other events like oil prices, elections
and movie ticket sales.
"Research indicates that markets are extremely efficient, effective and
timely aggregators of dispersed and even hidden information," the
Defense Department said in a statement. "Futures markets have proven
themselves to be good at predicting such things as elections results;
they are often better than expert opinions."
According to descriptions given to Congress, available at the Web site
and provided by the two senators, traders who register would deposit
money into an account similar to a stock account and win or lose money
based on predicting events.
"For instance," Mr. Wyden said, "you may think early on that Prime
Minister X is going to be assassinated. So you buy the futures contracts
for 5 cents each. As more people begin to think the person's going to be
assassinated, the cost of the contract could go up, to 50 cents.
"The payoff if he's assassinated is $1 per future. So if it comes to
pass, and those who bought at 5 cents make 95 cents. Those who bought at
50 cents make 50 cents."
The senators also suggested that terrorists could participate because
the traders' identities will be unknown.
"This appears to encourage terrorists to participate, either to profit
from their terrorist activities or to bet against them in order to
mislead U.S. intelligence authorities," they said in a letter to Admiral
Poindexter, the director of the Terrorism Information Awareness Office,
which the opponents said had developed the idea.
The initiative, called the Policy Analysis Market, is to begin
registering up to 1,000 traders on Friday. It is the latest problem for
the advanced projects agency, or Darpa, a Pentagon unit that has run
into controversy for the Terrorism Information Office. Admiral
Poindexter once described a sweeping electronic surveillance plan as a
way of forestalling terrorism by tapping into computer databases to
collect medical, travel, credit and financial records.
Worried about the reach of the program, Congress this year prohibited
what was called the Total Information Awareness program from being used
against Americans. Its name was changed to the Terrorism Information
Awareness program.
This month, the Senate agreed to block all spending on the program. The
House did not. Mr. Wyden said he hoped that the new disclosure about the
trading program would be the death blow for Admiral Poindexter's plan.
The Pentagon did not provide details of the program like how much money
participants would have to deposit in accounts. Trading is to begin on
Oct. 1, with the number of participants initially limited to 1,000 and
possibly expanding to 10,000 by Jan. 1.
"Involvement in this group prediction process should prove engaging and
may prove profitable," the Web site said.
The overview of the plan said the market would focus on the economic,
civil and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi
Arabia, Syria and Turkey and the consequences of United States
involvement with those nations. The creators of the market envision
other trappings of existing markets like derivatives.
In a statement, Darpa said the trading idea was "currently a small
research program that faces a number of major technical challenges and
uncertainties."
"Chief among these," the agency said, "are: Can the market survive and
will people continue to participate when U.S. authorities use it to
prevent terrorist attacks? Can futures markets be manipulated by
adversaries?"
Mr. Dorgan and Mr. Wyden called for an immediate end to the project and
said they would use its existence to justify cutting off financial
support for the overall effort. In the letter to Admiral Poindexter,
they called the initiative a "wasteful and absurd" use of tax dollars.
"The American people want the federal government to use its resources
enhancing our security, not gambling on it," the letter said.
Received on 2003-07-29 09:28:17
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