Thursday, August 14, 2003
Dave,
You make an interesting point regarding the "betting on assassinations" issue. Actually, most of the rumors I've been hearing are that the futures market program was the thing that did him in. Unfornately, both you and the people switched over to the anti-Poindexter camp over this matter (I do not by any stretch of the imagination approve of the Total Information Awareness program, and have doubts about him for that program alone.) are dead wrong on the issue, and frankly we're all at a little more risk of getting blown up or shot for your citicism's killing of the program. Thanks.
One of the major issues in the intelligence world is not the gathering of data but the distribution and collation of data to people who can draw conclusions about that data. In general, there isn't a trickle, but rather a torrent of relevant information to draw the conclusions necessary to counter the actions of those who would act against our country's interests. Most of that data isn't particularly relevant information, but is merely static or white noise. The intelligence community needs to have some method to sort out the wheat of information from the chafe of white noise. The reality is that they don't. Thats why the conspiracy-minded on the right and left have been able to say that Roosevelt knew beforehand about Pearl Harbor and Bush knew about 9/11 beforehand. After all, the little bits and pieces of data were available (albeit scattered around the government in both cases).
Financial markets have proven time and again to be not a great, but an amazing predictor of future events. The truth of the matter is that they consistently on isssue after issue after issue beat any single given expert. Thats because any given expert rarely has every single bit of information to make a decision and rarely has every single possible perspective on the evaluation of that information. Futures and forward market prices, by and large, do. Thats why the best predictor of future interest rates are the yield curve's implied forward rates and the futures markets' interest rate levels. Thats why private markets such as University of Iowa's Electronic Marketplace can routinely routinely best the results offered by the nation's top polling organizations and political scientists, or other online futures markets generally do a better job of calling things like who'll win the World Series, how well a Hollywood picture will fare or how many copies of an album will be sold than the top sports reporters, movie producers, or music critics.
Access to precisely this sort of data can do an incredible amount to resolve the filtering issue the intelligence community faces that I discussed earlier. It provides a signal that some set of data about the world provides is of greater urgency. That conversation that was recorded of the Saudi militant talking to his Egyptian friend about delivering a crate of pineapples might be a little more important and a little more worth following up on if the price of bombing futures has just risen 25% over the last two weeks.
Just as importantly, pricing data provides a valuable way for the intelligence community to allocate scarce resources. You can try saying that the intelligence community should always be ready for anything that might happen all you want. And, I'll respond that either you're too intelligent to make such a statement or you should drop the rhetoric. Focusing on everything means focusing on nothing. I find it somewhat telling that such claims are most often forthcoming from individuals who seem most interested in slashing intelligence spending and seemed most ready to attack the terrorism futures idea. The data provided by a futures market would make clear to intelligence analysts where they might want to pay a little more attention. For example, lets say you're a CIA counterterrorism planner. You have five guys working on figuring out where Palestinian terrorists might be plotting, and say two working on activity in Indonesia. Does this make sense if Hamas and Hizballah futures have been stable while Jemaah Islamiyah futures have been rising steadily, or are you going to think seriously about reallocating a few of your people?
But lets face it. The real reason this idea got attacked was precisely the thing you were relying on in your satire (and my most abject apologies if the comment was a throw-away line): it sounds icky. "Its betting on death". I'll ignore the fact that this country has a huge industry devoted in its entirety to precisely that - life insurance. The entire objection reminds me of the midieval prohibition of experimentation and dissection of corpses for research. Sure, you might be able to learn how to stop people from getting sick and dying an early death, but its akin to grave-robbing, its ghoulish, its ICKY!
Look, I had a big problem with Total Information Awareness: it bore a huge cost in terms of freedom and provided us little in the way of protection. But the terrorism futures market was different. It could have provided us with data to make us a lot safer and would have cost us damn near nothing. The only thing I see as sad about the entire proposal was that we were too damn backward to follow up on it.
You make an interesting point regarding the "betting on assassinations" issue. Actually, most of the rumors I've been hearing are that the futures market program was the thing that did him in. Unfornately, both you and the people switched over to the anti-Poindexter camp over this matter (I do not by any stretch of the imagination approve of the Total Information Awareness program, and have doubts about him for that program alone.) are dead wrong on the issue, and frankly we're all at a little more risk of getting blown up or shot for your citicism's killing of the program. Thanks.
One of the major issues in the intelligence world is not the gathering of data but the distribution and collation of data to people who can draw conclusions about that data. In general, there isn't a trickle, but rather a torrent of relevant information to draw the conclusions necessary to counter the actions of those who would act against our country's interests. Most of that data isn't particularly relevant information, but is merely static or white noise. The intelligence community needs to have some method to sort out the wheat of information from the chafe of white noise. The reality is that they don't. Thats why the conspiracy-minded on the right and left have been able to say that Roosevelt knew beforehand about Pearl Harbor and Bush knew about 9/11 beforehand. After all, the little bits and pieces of data were available (albeit scattered around the government in both cases).
Financial markets have proven time and again to be not a great, but an amazing predictor of future events. The truth of the matter is that they consistently on isssue after issue after issue beat any single given expert. Thats because any given expert rarely has every single bit of information to make a decision and rarely has every single possible perspective on the evaluation of that information. Futures and forward market prices, by and large, do. Thats why the best predictor of future interest rates are the yield curve's implied forward rates and the futures markets' interest rate levels. Thats why private markets such as University of Iowa's Electronic Marketplace can routinely routinely best the results offered by the nation's top polling organizations and political scientists, or other online futures markets generally do a better job of calling things like who'll win the World Series, how well a Hollywood picture will fare or how many copies of an album will be sold than the top sports reporters, movie producers, or music critics.
Access to precisely this sort of data can do an incredible amount to resolve the filtering issue the intelligence community faces that I discussed earlier. It provides a signal that some set of data about the world provides is of greater urgency. That conversation that was recorded of the Saudi militant talking to his Egyptian friend about delivering a crate of pineapples might be a little more important and a little more worth following up on if the price of bombing futures has just risen 25% over the last two weeks.
Just as importantly, pricing data provides a valuable way for the intelligence community to allocate scarce resources. You can try saying that the intelligence community should always be ready for anything that might happen all you want. And, I'll respond that either you're too intelligent to make such a statement or you should drop the rhetoric. Focusing on everything means focusing on nothing. I find it somewhat telling that such claims are most often forthcoming from individuals who seem most interested in slashing intelligence spending and seemed most ready to attack the terrorism futures idea. The data provided by a futures market would make clear to intelligence analysts where they might want to pay a little more attention. For example, lets say you're a CIA counterterrorism planner. You have five guys working on figuring out where Palestinian terrorists might be plotting, and say two working on activity in Indonesia. Does this make sense if Hamas and Hizballah futures have been stable while Jemaah Islamiyah futures have been rising steadily, or are you going to think seriously about reallocating a few of your people?
But lets face it. The real reason this idea got attacked was precisely the thing you were relying on in your satire (and my most abject apologies if the comment was a throw-away line): it sounds icky. "Its betting on death". I'll ignore the fact that this country has a huge industry devoted in its entirety to precisely that - life insurance. The entire objection reminds me of the midieval prohibition of experimentation and dissection of corpses for research. Sure, you might be able to learn how to stop people from getting sick and dying an early death, but its akin to grave-robbing, its ghoulish, its ICKY!
Look, I had a big problem with Total Information Awareness: it bore a huge cost in terms of freedom and provided us little in the way of protection. But the terrorism futures market was different. It could have provided us with data to make us a lot safer and would have cost us damn near nothing. The only thing I see as sad about the entire proposal was that we were too damn backward to follow up on it.
