Commentary: Failed controversial proposal of online futures market to 
predict terrorist activity could have other applications in the economic and 
financial marketplace 

1 August 2003
CNBC: Louis Rukeyser's Wall Street

LOUIS RUKEYSER, host: 

You know, that's the trouble with Washington. On those rare occasions when 
they come up with a really good idea down there, everybody shoots it down 
before we have a chance to explore its possibilities. Take this week's 
decision to abandon the plan to establish an online futures market to bet on 
Mideast assassinations, coups and terrorist strikes, and to force out of 
government the genius involved in launching the idea. Now there were, to be 
sure, certain problems in implementing this new federal activity. Some 
nitpickers might have found something a tad awry in the US government's 
encouraging and possibly even rewarding global nutcases and murderers, for 
example. People can get awfully picky these days. And it might have ruffled 
a few feathers among potential allies like Jordan's King Abdullah II to 
learn that there was Washington-backed financial speculation on his possible 
overthrow. These foreigners can get unreasonably touchy, you know. 

But while there may have been some piddling problems in conducting markets 
on issues like those, just think of some of the other topics on which the 
government could have profitably pursued this plan as a sort of `securities 
and insane commission.' On the economy, for example, we could have a 
contract on how long we will have to wait before anyone offers an economic 
analysis that is not predetermined by the analyst's political biases. This 
week, for example, those who think the government's policy is on the right 
track for economic recovery loudly cited such upbeat reports as those 
indicating that manufacturing has finally begun to expand, that consumer 
confidence is firming again, and that the unemployment rate has declined for 
the first time in a year. On the other hand, those who oppose White House 
policies devoted their attention to reports that companies are still 
reducing jobs, many of which have moved abroad, and that even the good news 
on unemployment owed more to discouraged workers leaving the work force than 
to any genuine surge in hiring. 

Who's right about what this portends for the next 12 months? Think how much 
it would add to national productivity if, instead of wasting time arguing 
about things like this, you could just turn on your computer, go straight to 
your friendly Washington OTB parlor and bet on it. Surely they killed this 
idea too quickly. They just got off track, so to speak, by trying to tie it 
to the Middle East. 

There are any number of other potential new contracts on which our newly 
empowered federal bookies could be taking a handsome cut, thereby reducing 
everybody's regular taxes. How about a contract, for example, in which 
everybody could speculate on how big a dent in the ceiling was made by Don 
Rumsfeld's head when he first learned of this foolishness? Or perhaps 
another contract on which everybody around the world could openly bet on how 
long it will be before our noble public servants come up with a new idea 
that's even more harebrained than this one? You could have a series of 
expiration dates starting, say, 15 minutes from now. Talk about finally 
getting your money's worth out of your taxes. This could be the most 
rewarding government venture since the Louisiana Purchase.