Is the Surge Working? Ask the Data, Not the Politicians

[On the Road]

September 15, 2007, 11:55 am
Is the Surge Working? Ask the Data, Not the Politicians
By Steven D. Levitt

One of the most important political questions of the day is whether the troop surge in Baghdad is working. If you ask politicians, the answer you get to that question is very predictable. Republicans say yes, Democrats say no.

What do the data have to say about this question? Michael Greenstone, an M.I.T. professor, good friend, and one of the best young economists in the world, has just released an incredibly thorough and thoughtful analysis of the impact of the surge. He finds the answer is mixed.

---snip

The most interesting part of Greenstone’s paper is his analysis of the pricing of Iraqi government debt.... If Iraq completely implodes, it is highly unlikely that these bonds will be paid off.... The bond data, unlike the other sources he examines, tell a clear story: the financial markets say the surge is not working. Since the surge started, the market’s estimate of the likelihood of default by the Iraqi government has increased by 40 percent.

http://freakonomics.blogs.nytimes.com/2007/09/15/is-the-surge-working-ask-the-data-not-the-politicians/#more-1886

I like the Freakonomic site. They try to stay apolitical, which can be frustrating, but in the long run I think it makes for a stronger case when they publish studies like this.

[JDPriestly]

1. Thanks for posting this. It is very interesting.