The Dead Pool

The latest product of John Poindexter's fertile brain is a "Policy Analysis Market" a futures market in which information on the possibilities of future terrorist acts would be traded much like oil futures or pork bellies. The idea being that the financial incentives offered by markets are an efficient way to gather and assess the thinking of large numbers of interested parties on the current state of the threat of acts terror. In other words such markets would serve as a bellwether, alerting government officials to an impending danger.
On NPR this morning several economists defend this idea arguing that information markets will grow in the future and they are an efficient way to poll the thinking of interested and knowledgeable individuals about the probability of future events.
Many members of Congress and others reacted with horror and outrage viewing this as a crude attempt to gamble on American (and others) lives. The program has been terminated.
Was Poindexter correct? Are markets efficient collectors and assessors of information and predictors of future behavior? Or as Karl Marx sarcastically predicted, has the ethos of capitalism so completely permeated our culture that we are now willing to sell the rope that will hang us?