Ken Rogoff, former chief economist at the International Monetary Fund, has poked some fun at Paul Wolfowitz’s teetering tenure as President of the World Bank.
Rogoff has spoof-written a Wolfowitz memo to his staff to not get caught betting on one of the on-line gambling sites which has contracts available on whether he will resign or not. It opens:
Dear Staff:
As long as I remain Bank President, I intend to continue enforcing my signature anti-corruption initiative at the world’s most important international development agency. My past life as Deputy Secretary of Defense under Donald Rumsfeld has taught me the importance of carrying out a plan with unwavering certainty.
In that regard, I am writing to you with a stern warning. It has come to my attention that many of you are turning your internet browsers to TradeSports.com, where there is an active market in “Paul Wolfowitz resignation” contracts for 2007. (For those of you who don’t know, this is a website where you can take bets on a variety of political events.)
I hope you understand that any attempt by World Bank Staff to buy or sell these contracts will be considered insider trading in clear violation of my anti-corruption guidelines. Your knowledge of normal World Bank personnel procedures gives you a clear information advantage in predicting whether I will be forced to resign. You must not abuse it. Please note: the Bank’s prohibition on insider trading applies not only to immediate family but also to significant others (e.g., girlfriends).
Some of you have already queried my office about whether it would still be insider trading if, when you buy “Paul Wolfowitz resignation” contracts (betting that I will leave before 2008), you also sell short “Alberto Gonzalez resignation” contracts. (This is a bet that my friend, the U.S. Attorney General, will hang on through end 2007.) My emphatic answer is no! Long Wolfowitz, short Gonzalez is only a “relative value play” that hedges out the value of loyalty to President Bush. You would still be guilty of insider trading on your Bank-specific knowledge. (And who says I don’t know enough about finance for this job!)
I was watching this gambling site for a while actually. I used to check the huge swings on the “John Bolton resignation” contracts long ago — and ever since Rogoff’s article got posted, the volume on Wolfowitz contracts has surged.
I have a friend who does well in the betting world, and he believes that we all ought to be better trained in mathematical probability theory. It would help get us out of the win-lose, binary choice on the Iraq War trap we are currently in, and help us to understand that probabilities are, well, probabilities.
And the probability that Wolfowitz is out is growing — but has no doubt grown even larger when someone of Ken Rogoff’s reputation and prestige as the former Chief Economist of the World Bank’s sister institution — jests at Wolfowitz’s increasingly dismal chances of surviving this mess.
— Steve Clemons
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