Intrade is the online futures market for current events hounds. With it, you can gamble on whether Bush will be impeached, if Hillary will get the party nod, whether Ehud Olmert will resign this month or next and so forth. I’d forgotten all about it until reading The Wisdom of Crowds by James Surowiecki.

Intrade was originally started as a government project that would allow people to “invest,” gamble really, on current events, ranging from the toppling of governments to political races in a futures market fashion. The notion behind it was that prediciton markets, those made up of hundreads of random people making their own decisions based on their own information and for their own interest (winning a bet) do better as a whole than any professional think tanks or professional, highly paid analysts and CNN talking heads at predicting outcomes. The Iowa Caucus, and subiquently the Iowa Electronic Markets, are examples of this. Lots of people, incuding dumb ones in their midst, are better at reading the future than a small group full of really smart ones.

There are a few of these markets around now, but InTrade is my favorite because it will offer a market on just about anything in a really dry, objective fashion. It also has the dubious history of being the offsring of a government program. The Policy Analysis Market was the government’s answer back in 2003 to the horrible record that the US intelligence community had when it came to predicting the future based on current information. The idea was to open it to a betting pool and analyze the results. Innovative, possibly the most inspired idea and quite perhaps the most American of answers to the problem, it was crushed by Democrats, who have an annoying tendency of being the only alternative to Republicans without ever really doing anything to actually be an alternative to Republicans. One of my usually favorite Democrats, Ron Wyden, went so far as to say “The idea of a federal betting parlour on atrocities and terrorism is ridiculous and it’s grotesque.”

He was wrong about that one. It’s of course, not at all. What Ron was in a big snit about is essentially what you see when you look at how the stocks of Halliburton and its ilk  are doing. Prices rise when people think more wars are going to take place. But it was also a simplificaton of the market process.

Intrade actually has a dire shortage of the sorts of betting pools that Wyden thinks are “grotesque.” I’d like to see more Iraq there; troop death toll figures, civilian death toll figures, abduction count bets and so forth. More Afghanistan as well. It would have been good to have the chemical weapons question on an Intrade type market, had one been around to tackle it.

Futures makets have the potential to do something else: A lot of the talk about faulty intelligence on Iraq, Sept. 11 and so forth hasto do with the selective hearing impairment that the current White House occupants seem to suffer from. Markets don’t wait for the Bush administration to ask questions and don’t care what it wants to hear.

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