Wolfowitz, answering a question about the program from Sen. Barbara Boxer, D-California, defended the Pentagon's Defense Advanced Research Projects Agency (DARPA), which created the program and set up a Web site describing it.
"The agency that does it is brilliantly imaginative in places where we want them to be imaginative," he said. "It sounds like maybe they got too imaginative in this area."
"There is something very sick about it," a clearly angry Boxer said, adding that those responsible should be fired.
I thought at the time that the futures market idea may well have been brilliant and that to dismiss it - when so much was at stake - because some folk thought that it was in bad taste was ridiculous.
Again earlier this year - I remembered Senator Boxer's contribution to killing the initiative during her extraordinarily boorish treatment of Condoleezza Rice during the Secretay of State's confirmation hearings. I have been thinking about it again in the light of London's recent unpredicted attack. Victor Hanson has been watching the Senator for longer than I have, and noted back in February that, "Boxer, the Bay Area�s premier progressive and crankiest of the questioners, has had a history of defining political disagreements in terms of personal partisanship, of us-versus-them rather than of mere opposing ideas".
I did a lot of work on oil market futures as an MBA project. Markets are incredibly powerful aggregators if information. Exchanges tend to predict events really well when no one person knows the answer and when information is distributed among many people with different types of knowledge. Expert appointed panels may often have blind spots caused by conventional thinking and unspoken assumptions. Markets can allow people who may have insight and relevant knowledge but not generally accepted quailifications to contribute to moulding opinion.
Anyone whose grandstanding has possibly contributed to robbing the USA's intelligence agencies of a tool with a strong history of accurately predicting future events bears a heavy responsibility in my view.
Back in 2003, Justin Wolfers and Eric Zitzewitz wrote the following in the Washington Post.
While the joke about military intelligence being an oxymoron is an old one, it bears repeating here. It's no coincidence that we don't have the same doubts about financial markets. Recent events have underscored the difficulty of aggregating information from lower levels of the intelligence bureaucracy. Imagine if a "Niger Uranium sale" contract had been trading in January; our guess is that this would have been close to valueless, reflecting the hard intelligence available at the time that such sales never occurred.
Nearly 24 months down the road, with the White House reeling from the revelation of Carl Rove's involvement in discrediting and/or pressurising Joseph Wilson on the Niger controversy by leaking the fact that Mrs. Wilson was a CIA agent, this is an even stronger argument for markets over spin than it was at the time.