Economist Paul Krugman Has a Dark Theory About the Iran War

[Uncle Joe]

A flurry of activity in the oil-futures market, minutes before Donald Trump made a big announcement about not striking at Iranian infrastructure, has all the appearance of someone using classified national security information to turn a profit.

Guest: Paul Krugman, Nobel-Prize winning economist and author of paulkrugman.substack.com.

[usonian]

1. Krugman on Substack

https://paulkrugman.substack.com/p/treason-in-the-futures-markets

We have another word for situations in which people with access to confidential information regarding national security — such as plans to bomb or not to bomb another country — exploit that information for profit. That word is “treason.”

Why is profiting from insider information about national security decisions effectively a form of treason? First, it’s hard to think of a more fundamental principle for officials we entrust with important decisions, especially those that involve national security, that they or people they know should not be allowed to exploit their positions for personal gain.

Second, financial trading based on what should be closely held secrets reveals information to current or potential foreign adversaries. To exaggerate a bit, but only a bit, who needs to bribe agents within the government, or recruit them with honey traps, when you can infer the same information by keeping track of transactions on futures markets?

Finally, there isn’t that big a gap between using knowledge of national secrets to make lucrative financial trades and simply selling those secrets to the highest bidder. Once you’re breached the line that says you shouldn’t profit personally from access to information that is or should be highly classified, the line between trading based on state secrets and selling those secrets directly is a blurry one.