Thursday, June 30, 2005

The Underused Iraq Index

Unlike, apparently, 99% of reporters in the print media (and 100% of TV talking heads), I regularly check in with Brookings' excellent Iraq Index to see what the recent trends are in certain areas of the American war effort in Iraq.

This is interesting and informative, but it also leads to a lot of heartburn when I read the columns and articles of the myriad high-paid journalistic poobahs who have never laid eyes on the thing.

This morning I was chagrined to read an analysis in the Post that mentioned "near-daily car bombings" in Iraq. I suppose I shouldn't be so hard on Peter Baker and Dan Balz, who probably do not have enough time in their busy days to do the type of in-depth analysis that it takes to wrest the elusive car-bombing rate from the arcane text of the Iraq Index.

For those who do have massive amounts of time to do difficult, mind-bending research, here is the statistical process I use:

Step One. Open the Iraq Index (pdf).
Step Two. Turn to page 10.

Here you will find a chart titled "Car Bombs in Iraq," broken out by month. You'll notice that for the last three months (March, April, and May, with June numbers not yet available), the number of car bombings has greatly exceeded the number of days. In fact the average number of car bombs per day over the last three months is 3.75. In the last two months, it's over 4.

That's not "near-daily," boys and girls. And if you don't like Brookings, the AP did their own slightly different count in early June and found the same thing generally - that car bombings in Iraq are suddenly way up (and way more than once daily.)

But it's not just an issue of fact-checking. The massive increase in car bombings is THE story in Iraq right now. Anyone who was taking seriously his job to report on Iraq would know this without having to look it up. These guys have exposed themselves as worthless hacks with this lame error. It's not just like a baseball analyst misquoting Hank Aaron's career home run total, which would be bad enough - it's like a baseball analyst asserting that Hank Aaron was a spray-hitting second baseman. It reflects a fundamental unfitness to report in any way on the subject as a whole.

There is one other story that the Iraq Index suggests, one that I have not seen one single news article about since the data became available a few months ago. For some reason, in 2005 Iraq suddenly began flirting with hyperinflation. According to the Iraq index, inflation in January was double-digits, and in February it increased slightly. That's the last month we apparently have data for.

Now, 10% inflation in a month is a really bad sign, but it's probably not hyperinflation. For the non-economics people out there, hyperinflation is hard to define, but it basically means the point at which inflation is devaluing currency so fast that it ceases to become a useful medium of exchange.

To give you some perspective, with inflation running at 10% per month, a gallon of milk that costs $2.50 today would cost about $8 this time next year. So, not a good sign.

It's also a little ominous to me that after those two months, we don't have any data. As hyperinflation sets in, it becomes very difficult to measure inflation accurately because prices become extremely erratic.

Why should anyone care about hyperinflation in Iraq? If the Iraqi economy collapses (as it may already be), the U.S. will have to take back command of the entire economy, setting up the sort of totalitarian system that they probably should have created from the beginning. That means a massive appropriation for building command economy distribution networks, probably running into the hundreds of billions of dollars.

Which of course will never happen. The alternative is millions of people starving to death.

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