Before the Iraq war began, Yale economist William Nordhaus estimated the likely cost at between $100 billion and $2 trillion. At the time most of the interest lay in the fact that the bottom end of the range was twice as much as the $50 billion estimate being pushed by the Administration. But with a couple of years’ experience to go on, Nordhaus’ upper range is looking pretty accurate. Assuming that Bush ‘stays the course’, it’s safe to estimate that the war will cost the US at least $1 trillion by the time all the bills come in, and it could easily be closer to $2 trillion.
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Thinking about the German election outcome, it struck me that this would be an ideal test for betting markets. I’ve always thought that, if there’s a bias in such markets it would be towards the right, so the toughest test for them would be predicting a left-wing upset win like this one (I’m calling a win on the basis that left parties got a majority of the vote, not making a prediction about what goverment might emerge). A quick Google reveals that there is such a market, called Wahlstreet but my German isn’t good enough to deal with their site, which has lots of graphs bouncing around without an obvious control. Hopefully someone will be able to help me.

Anyway, if there’s a contract allowing a bet on the share of votes for the three left parties (SPD, Greens, Left party) and if, two weeks in advance, that market was predicting a vote share of more than 50 per cent (as actually happened), I’ll concede that the case for the superiority of betting markets over polls has been established, at least as a reasonable presumption. [I didn’t follow the polls closely but I had the impression that most of them were predicting a CDU/CSU win until the last days of the campaign].
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Wow.

There’s loads of confusion about this story, but it seems to be common ground that British forces used tanks to break down the walls of an Iraqi prison where two soldiers, arrested for firing on Iraqi police, were being held. It’s increasingly evident that the coalition forces have become one of the array of armed militias in Iraq, all pursuing their own overlapping agendas and all claiming not to be answerable to anyone else.

Update This story is, not surprisingly, front page news in Britain and Australia, but the NYT barely covers it. It never made the front page of the website and, on the International page, it appears as a subheading to a story about the murder of an NYT reporter, also in Basra.

The latest statements from the UK government say that the soldiers had been handed over by police to a Shia militia group, presumably one of the Sadrist factions. The provincial governor, who has condemned the British action strongly, is also a Sadrist, it appears, though most of the reports I’ve seen suggest that the police are predominantly associated with the Badr brigade (armed wing of SCIRI, the Supreme Council for the Islamic Revolution in Iraq, who are currently regarded as ‘good guys’, being part of the national government). There’s more on this in the comments thread.

There’s a lot of commentary on the German election results at Fistful of Euros. Mrs Tilton predicts the early demise of Christian Democrat leader Angela Merkel, and given that she was expected to win easily, this seems reasonable. More from saint, who takes the same view.

Strikingly, the only reason the CDU is even in the game is because of divisions on the left, with Social Democrat Schroeder refusing to contemplate a coalition with the Left party. This BBC report gives the combined left vote (SPD+Greens+Left Party) at 52 per cent, compared with 45 per cent for the right (CDU/CSU + FDP) yet quotes Merkel as claiming she has a mandate to govern. As elsewhere, the right relied heavily on the race card, in this case appeals to anti-Turkish prejudice.

I know that there are historical reasons for party nomenclature, but I still find it disturbing that we have an explicitly religious and now openly sectarian party contending for the government of a major European country.

The polls are just closing in the NZ election, for which the opinion polls have been all over the place. I’m surprised the result is even close. Helen Clark seems to have done a pretty good job, the Nationals were terrible when last in office, and while Don Brash seems like a nice enough guy in personal terms, he wasn’t much of a success as head of the Reserve Bank. The Monetary Conditions Index he introduced was a disaster and he zigged where the RBA zagged at the time of the Asian crisis, producing an unnecessary recession. However, we’ll know the result soon enough.

Update 6:30 pm Although I don’t have any knowledge of the details of the NZ system (such as which areas are counted first), the Nationals have a big lead with 20 per cent of the vote counted, and will presumably form the new government, either with an outright majority or with the support of NZ First.

Further update Sunday AM A premature concession last night! As in Australia, it appears that rural polling places finish counting first. It looks as though Labour may be returned, although the complex relationships between the various minor parties may complicate this. A sidelight of interest in relation to the debate over economic reform is that ACT (Association of Consumers and Taxpayers) was wiped out. It originally stood for uncompromising support of the free-market reforms of the Rogernomics era, but broadened its basis with law-and-order and anti-Maori rhetoric. The disappearance of ACT is not really good news, since the Nationals have adopted much of the same rhetoric on race issues, but it can reasonably be said to mark the end of the era of radical reform.

Yet Further update Sunday PM Wrong again! Rodney Hide of ACT got back in with an electorate seat, and MMP may give ACT one more. That’s what comes of trying to follow elections while in dialup mode, I guess.

The Egyptian elections were the subject of plenty of triumphalism when they were announced earlier in the year, and now it looks as if it was all justified. Not only did the elections go ahead, but with 88.6 per cent of the vote going to the pro-American incumbent, Hosni Mubarak, all that talk about how the ‘Arab street’ is opposed to US foreign policy has been refuted once again.

Tom Stafford points to academic publisher Elsevier’s involvement in the international arms trade. Even the legal aspects of this trade are deplorable, given the excessive readiness of governments and would-be governments to resort to armed force, but the boundary between legal and illegal arms trade is pretty porous. For example, there’s evidence that the arms fairs organised by Elsevier subsidiary Spearhead are venues for the illegal trade in landmines. Tom has a number of suggestions for possible responses.

The news about the shooting of an innocent man, Jean Charles de Menezes, on the London Underground just gets worse. We’ll have to wait for the results of the current inquiry, and possibly longer before any firm conclusions can be reached (many recent inquiries in Britain have been politicised to the point of whitewash, so there are no guarantees here). Still, it’s hard to conceive of any explanation that doesn’t involve serious stuffups and multiple layers of coverup, going up as far as Metropolitan Police Chief Ian Blair.

One point that hasn’t been mentioned or not much is the implications of this tragedy for any assessment of the anti-terrorism effort. In a case as public as this one, and with a victim as obviously innocent as Mr de Menezes, it was impossible to keep the truth from coming out sooner or later, but it still took nearly a month. Suppose that the victim had been a Muslim – it seems certain that he would have been labelled a terrorist, at least by the method of undenied leaks used to accuse de Menezes of being responsible for his own death.

And for those prone to argue that we shouldn’t be so concerned about a single death in a situation where terrorists have killed dozens, what about failures in the opposite direction? Suppose that in the course of recent operations, mistakes were made that allowed accomplices or masterminds of the bomb plots to escape. How likely is that such things would ever come to light, given the culture of coverup that has been revealed here? And if failures don’t come to light, they won’t be corrected.

Via Harry’s Place, it appears that the US is going to be evicted from its base in Uzbekistan. Although no reason has been given, it’s reasonable to assume that the Karimov dictatorship objects to US pressure for an investigation into the Andijan massacre.

This is unequivocally good news, and the Bush Administration should be given due credit for not backing down. There’s no mention of the policy of extraordinary renditions (shipping suspects to Karimov’s torture chambers for interrogation), but now that his regime is openly hostile, it is to be hoped that this dreadful practice will cease also.

This morning’s email included one urging me to sign a statement headed “United Against Terror”. As the email said

The statement begins:

Terrorist attacks against Londoners on July 7th killed at least 54 people. The suicide bombers who struck in Netanya Israel on July 12 ended five lives including two 16 year old girls. And on July 13 in Iraq suicide bombers slaughtered 24 children. We stand in solidarity with all these strangers hand holding hand from London to Netanya to Baghdad: communities united against terror.

The statement ends:

We invite you to sign this statement as a small first step to building a global movement of citizens against terrorism.

Based on these extracts, I would have been happy to sign the statement, for what such gestures are worth. Having read the full statement, however, I decided not to, and concluded that the statement tended more towards disunity in the face of terrorism than unity. After reading some of the supporting statements on the website, I was very glad of this decision.
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