There are a few rational objections. Someone over at CalPundit noted that the system may be very gamable by people who want to conceal the possibility of their own terrorist activity. Kevin Drum notes that there’s the possibility of pissing off allies who would prefer that we not enable a market for futures based on negative events occurring in their country.
On the other hand, I’ve got to look askance at the people who are complaining about the immorality of betting on tragedy. You may not have noticed, but the New York Stock Exchange trades stock in real companies. Those companies employ real people. Every time someone sells a stock short, they’re betting that something bad will happen to those people — something that may cause salary reductions or layoffs.
“Oh, but that’s not a matter of life or death.”
No. Not usually. But sometimes it is. And any way you cut it, it’s still bad things happening to good people.