FacebookTwitterGoogle+RedditEmail

What Was Behind the Pentagon’s Betting Parlor?

 

What was behind the Pentagon’s screwball scheme to establish an online futures market for acts of terrorism?

The $8 million betting parlor was scuttled only three days before its scheduled debut on August 1. Was it just a one-time fluke? If so, it raises questions about who is running the Pentagon. If it was part of a pattern, then it raises some serious questions about the Bush administration.

The announced purpose of the Policy Analysis Market, as it was known, was to harness the “anonymous forces of market capitalism” to predict the likelihood of acts of terrorism – much as commodity-trading speculates on the future price of coffee or pork bellies. The Pentagon’s justification was that “markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information.”

But critics in the Senate raised moral, as well as tactical concerns, in pointing out the obvious. Not only were markets faulty predictors of the future (witness the last stock market bubble and its collapse), but if anonymous online traders could bet on the probability of various acts of terrorism in the Middle East – assassinations and coups – the setup was an invitation to mischief, including insider-trading by terrorists themselves. This may have been the Pentagon’s real intent all along: to use its cyber-surveillance capability to track buyers and sellers. But even as a long-term sting operation, it was ripe for abuse by speculators of every stripe.

“Can you imagine,” asked Senator Byron Dorgan of North Dakota, who helped blow the whistle in the Senate, “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?”

The new toy came from within Pentagon’s Defense Advanced Research Project Agency, DARPA, where John M. Poindexter had been put to work brainstorming ideas for the War on Terrorism after 9/11. Poindexter’s cyber-surveillance project, called Total Information Awareness, had already drawn fire, but was called “brilliantly imaginative” by his boss, Paul Wolfowitz, Deputy Secretary of Defense, according to the New York Times.

The idea was anything but brilliant, of course. It was, as one Congressman put it, “unbelievably stupid.” A New York Times editorial called it “wacky,” and demanded Poindexter’s resignation, without asking how the idea had gotten past Wolfowitz. In response to the bipartisan outrage, Wolfowitz lost no time distancing himself from the project, suggesting that the brainstormers at DARPA “got too imaginative.”

The project was scuttled. Poindexter resigned. Heads of state in the Middle East can presumably sleep better. Was it a fluke? The facts suggest otherwise.

First, never mind that this is the same rear admiral John Poindexter who was indicted during the Reagan years for his role in the scheme by which arms were sold to Iran and the proceeds funneled to the right-wing rebels in Nicaragua. Never mind that Poindexter lied to Congress, and escaped a prison sentence on a technicality. Never mind, even, that the Bush administration put this same John Poindexter in charge of DARPA, where he concocted a plan for wholesale surveillance of U.S. citizens.

The problem goes far wider and deeper than Poindexter or his boss, Wolfowitz. Or Wolfowitz’s boss, Donald Rumsfeld. Or Condi Rice. Or even George W. Bush.. Poindexter’s follies are the quintessence of what this administration has been about from the beginning. This latest scheme simply exposes the tip of an ideological iceberg that is no less wacky or dangerous, but which has escaped such noisy condemnation because it floats in a sea of general acceptance. It is the ideology of privatization, carried to extreme. At its most benign, this ideology rests on the very dubious assumption that every aspect of government, from elections to social institutions, to foreign policy, can be governed by the so-called free market. At its most vicious, it is simply monopoly capitalism masquerading as government: profoundly antidemocratic, as well as anti-competitive, with no thought beyond lining the pockets of the powerful.

The war on Iraq reflects this more vicious mode. The war was motivated by corporate greed, and sold with false advertising. Allies were bullied and bought. Underlying the administration’s steamroller approach was the arrogance of a monopoly. No alternatives would be considered. The largest-ever mass demonstrations around the world were brushed off like consumer complaints.

The Pentagon itself is run according to a more competitive model. Troops were delivered to Iraq in accordance with industry’s just-in-time standards of efficiency, with Donald Rumsfeld playing the role of a CEO downsizing the Pentagon as if it were a recent acquisition. Instead of the supplying the 240,000 or so troops requested by Pentagon brass, Rumsfeld delivered 170,000 – not enough to perform the many tasks of occupation In both cases, the corporate model is flawed. Wholesale greed does not yield intelligent foreign policy. And a military occupation is not the same as a corporate takeover. As the occupation grinds on, with more loss of American lives and political rumblings at home, the corporate brainstormers running the administration have resorted ever more desperately to the ploys one would expect from runaway capitalism – the placing of bounties on Saddam Hussein, dead or alive, the degrading attempt to buy the loyalty of former Iraqi army troops with hundred dollar bills. The cynicism of these devices, and the grumbling of our own troops, all convey the essential failure to secure a just peace for the Iraqi people.

But that objective was missing all along.

The corporate model for the war is flawed in other ways as well. The Pentagon outsourced some of its manpower requirements to Mexican nationals who were willing to join the U.S. Army. But while this may blunt the political impact at home, it does not translate into lower wages – the Army being the Army, and not a multinational sweatshop. We are still spending $4 billion a month in Iraq. And Americans reading of mounting U.S. casualties might not notice how many surnames are Hispanic.

As for those fat, cost-plus contracts awarded to Halliburton and other politically connected U.S. firms for rebuilding Iraq’s infrastructure, they will cost U.S. taxpayers far more than would the services of European firms that are more competitive and better positioned geographically to do the job.

Which takes us to the essential fallacy so evident in the wacky betting parlor scheme. It is not just Poindexter’s folly; it is the bogus assumption that privatization translates into efficiency and that marketplace greed should govern human affairs.

DAVID MORSE is a journalist whose work has appeared in Esquire, The Nation, Japan Economic Journal, and elsewhere. He writes about the globalized economy and the impact of privatization on public policy. He can be reached at: dmorse@david-morse.com

 

More articles by:
September 20, 2018
Michael Hudson
Wasting the Lehman Crisis: What Was Not Saved Was the Economy
John Pilger
Hold the Front Page, the Reporters are Missing
Kenn Orphan
The Power of Language in the Anthropocene
Paul Cox – Stan Cox
Puerto Rico’s Unnatural Disaster Rolls on Into Year Two
Rajan Menon
Yemen’s Descent Into Hell: a Saudi-American War of Terror
Russell Mokhiber
Nick Brana Says Dems Will Again Deny Sanders Presidential Nomination
Nicholas Levis
Three Lessons of Occupy Wall Street, With a Fair Dose of Memory
Steve Martinot
The Constitutionality of Homeless Encampments
Kevin Zeese - Margaret Flowers
The Aftershocks of the Economic Collapse Are Still Being Felt
Jesse Jackson
By Enforcing Climate Change Denial, Trump Puts Us All in Peril
George Wuerthner
Coyote Killing is Counter Productive
Mel Gurtov
On Dealing with China
Dean Baker
How to Reduce Corruption in Medicine: Remove the Money
September 19, 2018
Bruce E. Levine
When Bernie Sold Out His Hero, Anti-Authoritarians Paid
Lawrence Davidson
Political Fragmentation on the Homefront
George Ochenski
How’s That “Chinese Hoax” Treating You, Mr. President?
Cesar Chelala
The Afghan Morass
Chris Wright
Three Cheers for the Decline of the Middle Class
Howard Lisnoff
The Beat Goes On Against Protest in Saudi Arabia
Nomi Prins 
The Donald in Wonderland: Down the Financial Rabbit Hole With Trump
Jack Rasmus
On the 10th Anniversary of Lehman Brothers 2008: Can ‘IT’ Happen Again?
Richard Schuberth
Make Them Suffer Too
Geoff Beckman
Kavanaugh in Extremis
Jonathan Engel
Rather Than Mining in Irreplaceable Wilderness, Why Can’t We Mine Landfills?
Binoy Kampmark
Needled Strawberries: Food Terrorism Down Under
Michael McCaffrey
A Curious Case of Mysterious Attacks, Microwave Weapons and Media Manipulation
Elliot Sperber
Eating the Constitution
September 18, 2018
Conn Hallinan
Britain: the Anti-Semitism Debate
Tamara Pearson
Why Mexico’s Next President is No Friend of Migrants
Richard Moser
Both the Commune and Revolution
Nick Pemberton
Serena 15, Tennis Love
Binoy Kampmark
Inconvenient Realities: Climate Change and the South Pacific
Martin Billheimer
La Grand’Route: Waiting for the Bus
John Kendall Hawkins
Seymour Hersh: a Life of Adversarial Democracy at Work
Faisal Khan
Is Israel a Democracy?
John Feffer
The GOP Wants Trumpism…Without Trump
Kim Ives
The Roots of Haiti’s Movement for PetroCaribe Transparency
Dave Lindorff
We Already Have a Fake Billionaire President; Why Would We want a Real One Running in 2020?
Gerry Brown
Is China Springing Debt Traps or Throwing a Lifeline to Countries in Distress?
Pete Tucker
The Washington Post Really Wants to Stop Ben Jealous
Dean Baker
Getting It Wrong Again: Consumer Spending and the Great Recession
September 17, 2018
Melvin Goodman
What is to be Done?
Rob Urie
American Fascism
Patrick Cockburn
The Adults in the White House Trying to Save the US From Trump Are Just as Dangerous as He Is
Jeffrey St. Clair - Alexander Cockburn
The Long Fall of Bob Woodward: From Nixon’s Nemesis to Cheney’s Savior
FacebookTwitterGoogle+RedditEmail