More terror attacks

More than 50 people have been killed in the latest terror attacks in Delhi. As usual in a globalised world, the victims apparently include Indians and foreign visitors, Hindus and Muslims and people of all social classes. Its premature to speculate on which particular group is responsible for this crime, but almost certainly it’s a group horrified by the prospect that peace might break out between India and Pakistan as the two countries work together to respond to the tragic earthquake in Pakistan.


The Weekend Fin (registration only) quotes Gloria Jean’s executive chairman, Nabi Saleh, as complaining that his competitors sold lousy coffee. Saleh wants to establish some sort of trade body to squeeze out independent competition.

My view is summed up by the AFR’s exercise in voxpop. They asked a couple in a Sydney GJ’s. The wife said you could get as good or better at plenty of plenty of places in their hometown of Bowral (not the sticks but not exactly the centre of cafe culture either), while the husband generously allowed

This isn’t the worst coffee I’ve had though. That was in the army

It seems appropriate to me, in a variety of ways, that GJ’s is closely associated with Hillsong Church.

Make them pay

I’m really getting annoyed by the continued onslaught of ads in support of the Liberal Party’s proposals for IR reform. I think it’s time Labor actually stood up to them over this. I suggest nominating a cutoff date and saying that if the ads aren’t stopped after that, a future Labor government will legislate to recover the money from the Liberal Party (or from members of the Cabinet personally). Of course, the chance that they would actually do something like this, let alone follow through on it, is near zero. More likely, this outrage will be treated as a precedent, and taxpayer-funded ads supporting the government will become routine.

Weekend reflections

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

More blog panic

The mainstream media panic about blogs reaches new heights with a piece by Daniel Lyons in Forbes (free registration required). Thanks to David Heidelberg for the alert.

The title Attack of the blogs is about the most level-headed sentence in the whole piece. The author’s main concern is “attack blogs” that have the temerity to criticise corporations. Bloggers are variously described as “online haters”, “evil” and “an online lynch mob spouting liberty but spewing lies, libel and invective”. He suggests using the Digital Millennium Copyright Act (which requires hosts to take down copyrighted material used without permission) as a way of silencing critics.

Interestingly, Lyons suggests that “50% to 60% of attacks are sponsored by competitors”, which rather suggests that the appropriate target of his ire should be the corporate sector rather than the blogosphere.

There’s a lengthy critique at Americablog.
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The purchasing power parity hypothesis in Europe

One of the big issues in the debate over the euro is whether Europe is an optimal currency area, that is, whether prices in Europe move sufficiently closely together to make a common monetary policy a reasonable idea. Looking at the issue when the move to the euro was agreed most observers would have said that Europe wasn’t an optimal currency area. A plausible counterargument is that monetary union will produce the kind of economic integration required. A quick scan of the web didn’t turn up much[1], so I thought I’d do a quick and rough check of my own, so I World Economic Outlook Database, which gives, among lots of other useful things, estimates of purchasing-power-parity adjusted exchange rates for all the countries in the data set. Since the calculations are based on the EU-centric international comparisons project, comparisons of relative price levels between EU countries should be pretty good.

So I looked at the log variance of the $US PPP exchange rate for the euro-12 countries from 1995 to 2005 and here’s what I got


The log variance is a measure of the extent to which real price levels differ and, as the chart shows it has declined smoothly since the beginnings of the move to the euro.

Another interesting feature of the data is the average PPP exchange rate is around $US1.16 to the euro, very close to the rate that actually prevails.

fn1. I found one study by Robert Hill of UNSW, but it only went up to 2000 and covered the whole EU not just the eurozone. Hill found some convergence in price levels, but not as strong as this, but a surprising divergence in relative prices. It would be interesting to check on this.

Darfur again

Until fairly recently, it seemed as if the worst of the tragedy of Darfur was over. The Sudanese government appeared set to rein in the terrorist Janjaweed militia, the rebels seemed willing to negotiate and the international community seemed finally to be taking some action.

But in the last few months, things have gone from bad to worse and ethnic cleansing on a large scale has resumed. There are lots of reports at Passion of the Present

No-one comes out of this with much credit. It’s no surprise, of course, that the Chinese Communists have pursued their standard line of non-interference in the internal affairs of brutal dictatorships. But the position of the democracies is just as bad. The Bush Administration started out with a firm line, arguing that the actions of the Sudanese government and its proxies constituted genocide. But now it’s backed off and is actually siding with Sudan in the Security Council. In part, this is for the creditable reason that Bush wants the separate peace deal that ended the long-running civil war in southern Sudan to hold, and is therefore treating the government gingerly. But Bush is also siding with Sudan in trying to undermine the International Criminal Court.

If Bush has been bad, the Europeans have been even worse. This is a situation very like Bosnia and Kosovo, or Rwanda, the kind of thing the new EU was not going to let happen again. What’s needed here is an effective peacekeeping force. The African Union has supplied some troops but without robust rules of engagement and backup (including both military components like air and logistic support and technical expertise of various kinds) they have proved ineffectual. This is a chance for Europe to show that it can achieve more, at much lower cost, through effective peacekeeping, than can Bush’s militarism. So far, the chance is being blown.

It is a disgrace that the kind of slow-meaning ethnic cleansing we are seeing in Darfur can be allowed to continue, month after month, and year after year, without any real action being taken.