New Economist

London shoppers and the bomb: an update

An update on my earlier piece about retail sales in London in the wake of the July terrorist bombings. Yesterday the British Retail Consortium (BRC) reported a 9% year-on-year fall in London retail sales:

Retail sales in Central London during July were 8.9% lower, on a like-for-like basis, than in July 2004. This compares with a 3.6% increase in June 2005. July's fall was the worst ever since the data began in October 2002 and comes after several difficult months for Central London retailers.

However excluding London, like-for-like sales were flat in July, indicating that the rest of Britain was not significantly affected. While it is reassuring that the slump in London retail spending did not affect national figures more strongly Kevin Hawkins, director-general of the BRC, warned it was too early for London-based retailers to draw comfort.Yesterday's Financial Times reported him as saying:

Analysts may think that these results are not as bad as many feared. But it should be remembered that the June sales continued well into July and there was a spell of good weather in the middle of the month. Taking these factors into account, the decline in sales is very serious, compounded by the 60 per cent increase in the congestion charge which retailers need like a hole in the head.

The potential impact of last month's big jump in the London congestion charge has received little press attention so far. But Mayor Ken Livingstone must be nervous. According to the BBC, he has just launched a bid to 'revitalise London' :

More than 100 events, festivals and special days out will be staged across London as part of a multi-million pound campaign to boost economic recovery.  ...The Mayor of London's project aims to coax visitors back after the bombings.

Meanwhile the Bank of England regional agent's Summary of Business Conditions for August reported that:

Contacts in and around London reported a sharp slowing in consumer spending on both goods and services following the terrorist attacks on 7 July. But demand returned to more normal levels in the weeks following the bombings.

Official UK retail sales figures for July are due on Thursday morning.

Your holiday reading sorted

Worried about what to read on your summer break? Worry no longer. Today the 2005 Man Booker Prize for Fiction 'longlist' was announced. At 17 novels it was one of the shortest longlists for some time, but more than enough for a few days at the beach. And as the Guardian Culture Vulture blog noted, it is "already being hailed as one of the strongest lists in years":

...the roll call is seriously heavyweight heavy and includes four previous winners – Ian McEwan, Salman Rushdie, Kazuo Ishiguro and 2003 Nobel prize winner JM Coetzee, who’s actually picked up the Booker gong twice before. Some very strong women, too: Zadie Smith, Ali Smith and Hilary Mantel all made the cut...

The Booker was launched in 1969 and rewards the best novel of the last 12 months written by a citizen of the Commonwealth or the Republic of Ireland. The 17 novels, listed below, were chosen from 109 entries. They include three first-time authors: Lewycka, Aw and Thompson. Here is the longlist:

London: Back to normality

The most remarkable thing about London today is how unremarkable it is. Though trains and buses were less busy than usual for a Friday morning, London appears more or less back to normal as people go about their business.

One could have expected this after the calm, stoic and polite manner of London commuters yesterday. People just got on with it, patiently, with precious little hysteria or panic. The police and emergency services were calm and efficient, Parliament continued to sit, and financial markets to trade. The Bank of England kept rates unchanged for the eleventh month.

In my office yesterday quite a few people were clustered around the TV for a while, but drifted back to their desks as the coverage started to get repetitive. Not quite 'just another day in the office', but not too far from it.

Of course, The Independent reminds us today, this is not the first time London has been targeted by bombing campaigns. The resilience of Londoners to the Blitz, and the spate of IRA bombings during the 1970s and 1980s, is well known. That is why yesterday's rather hysterical statement by the alleged perpetrators, the Qaeda't al-Jihad in Europe, was so ill-judged:

And this is Britain now burning from fear and panic from the north to the south, from the east to the west.

Sorry guys, not much fear and panic here. Tim Worstall's riposte is worth repeating:

And it goes on. You know, I’m not sure that these people have quite understood us. We’ve just spent 30 years being bombed by a bunch of terrorist nutters. Whatever your views on Irish nationalism, Eire, the rights of the IRA and so on, it is an inescapable truth that there were a series of bombings "on the mainland" and no, it didn’t spread "fear and panic from the north to the south."

That's why Ian McEwan's short piece in today's Guardian jars. After some nicely wrought accounts of what it was like to be in London yesterday, he concludes with this:

It is unlikely that London will claim to have been transformed in an instant... But once we have counted up our dead, and the numbness turns to anger and grief, we will see that our lives here will be difficult. We have been savagely woken from a pleasant dream. The city will not recover Wednesday's confidence and joy in a very long time. Who will want to travel on the tube, once it has been cleared? How will we sit at our ease in a restaurant, cinema or theatre?

Nice line in rhetoric, Ian. But as analysis this is utter tosh. We already are traveling the tube again, and eating out. Most of last night's gigs and theatres were cancelled, but the West End should reopen tonight. As Richard Pulford, chief executive of the Society of London theatre, said today:

We expect to be fully operational unless the police advise otherwise. Theatre people are a pretty hardy bunch. The show must go on.

Londoners are a pretty hardy bunch too. This won't stop us.

London in chaos after series of terrorist bombings

Dozens of Londoners may have been killed, many more are injured, hundreds of thousands are stranded and public transport has been shut down across the capital after at least six explosions ripped through central London trains and buses during this morning's rush hour. The train blasts were initially blamed on a power surge, but it soon became clear that it was a co-ordinated and bloody terrorist attack on London Underground trains:

There was no official death toll but survivors of blasts at Edgware Road station and between Aldgate and Liverpool Street reported seeing piles of bodies.

And also buses. A crowded London bus in Russell Square was ripped in two, according to Sky News:

Belinda Seabrook said: "I was on the bus in front and heard an incredible bang, I turned round and half the double decker bus was in the air." Mrs Seabrook said the bus was travelling from Euston to Russell Square and had been "packed" with people turned away from Tube stops.

"It was a massive explosion and there were papers and half a bus flying through the air, I think it was the number 205," she said. "There must be a lot of people dead as all the buses were packed, they had been turning people away from the tube stops. We were about 20 metres away, that was all."

These bombings occur only a day after national jubilation at London at winning the 2012 Olympic bid, and on the opening day of G8 meeting. Prime Minister Blair said the "barbaric" London blasts were terrorist attacks, designed to coincide with the G8 summit in Gleneagles, Scotland. However they have not derailed the summit:

The PM will fly back to London soon before returning to the summit later today. He and the other leaders have agreed to carry on today's meetings without him.

Home Secretary Charles Clarke said in an official statement this morning:

There've been a number of dreadful incidents across London today. ...As far as the Police are concerned they are in operational command and dealing with the situation in accordance with very well established procedures in an extremely professional way. Health services are in support to deal with the terrible injuries that there have been and I want to express sympathy on behalf of the whole Government to the families and friends of those who have been injured.

The scale of the explosions and the disruption to transport network has obvious parallels to the al Qaida attack on Madrid, and indeed according to Sky News a previously unknown group calling itself "Secret Organisation al Qaeda in Europe" said it carried out the attacks as revenge for British "military massacres" in Iraq and Afghanistan.

Most office workers have been told to stay inside, although I have been told some buildings in Canary Wharf and elsewhere were evacuated. Foreign embassies have been evacuated. Police cars periodically whiz by my office window, sirens wailing, and there are reports that British troops are streaming into the city to secure key buildings and transport networks.

I doubt the London Underground will reopen before Friday, as the entire network will first need to be checked for bombs. If it doesn't reopen, then expect more traffic chaos this evening as commuters try to make their way home - though Zone 1 buses may be operating by then. A work colleague or friend may well be sleeping on our sofa bed tonight!

As the CNN website's London timeline shows, first reports were of an explosion and collision on a train between Liverpool Street and Aldgate East. This occurred just before 9am. I was standing on a Circle Line platform at the time, waiting for my train. We were told there had been a "power failure" at Aldgate, Liverpool Street and several other East London stations. Then we were told there had been a "derailment" (later dubbed an "incident") at Edgware Road Station. Then were told to leave the platform and make alternative travel arrangements.

By that time all the taxi company phone lines were jammed, but we were were lucky enough to hail one down the street from our flat as it dropped off a customer. As we were driven to work we passed literally thousands of people on the streets of West London either walking to work or - somewhat optimistically - waiting at bus queues. The terrorists timed the bus bombs to go off after the Tube had been suspended, when they knew London buses would be packed. Sick bastards.

My thoughts, like most Londoners, are with the casualties from these horrific crimes.

UPDATE 1: According to Sky News:

Scotland Yard has denied reports they were warned of an attack by Israel minutes before the blasts. Two people have been confirmed dead and at least 90 people injured in the explosion at Aldgate Station.

ITN quotes "a Government spokesman talking of 20 people dead."

The BBC website has a reporter's log and harrowing eyewitnesses accounts.Here's Scott Wenbourne account; he was on a train near Aldgate Station:

I saw three bodies on the track. I couldn't look, it was so horrific. I think one was moving but I'm not too sure. There were also, I think, some bodies in the carriage, some were moving but I couldn't really look. No-one was attending to them.

We walked to the platform, which took about half an hour as there were so many of us, after all it was rush hour. There were police at the platform and some of the injured were tended to.

UPDATE 2: The Home Secretary told to the House of Commons that "four explosions have been confirmed", not six as previously reported: three in the London Underground and one on a double deck bus.

Tim Worstall has a useful, updated post today, with bunch of links. Robin Grant at perfect.co.uk is live blogging, as is Europhobia, Normblog, Bloggerheads and The Guardian NewsBlog. The Guardian blog reports:

Suddenly, the terrible scale of today's attack becomes clear. Ambulance sources, reported on Sky, suggest 23 people have been killed at King's Cross, nine at Edgware road, seven at Aldgate, two at Russell Square. There are hundreds - possibly more than a thousand - injured. We're trying to verify the numbers.

David at A fistful of Euros has created a Kinja Digest of bloggers on the London bombings. A fistful of Euros also has several posts and updates itself.

Flickr has a slide show of London bomb blast images, though mostly web and TV screen shots. InstaPunk has some grim Scenes from London. And powerful images can be seen at the BBC and Sky News (click the pop-up) websites.

Meanwhile BBC News have a post discussing how blogs responded to the London blasts.

Econobloggers take on "tedious", "low-life" "Marxist" Live 8 organisers

Many econobloggers tend to be a bit grumpy at the best of times, but this weekend's Live 8 concerts have certainly brought out their inner curmudgeons. Well-known bloggers have characterised the concert organisers and their supporters as boring, stupid, naive or ignorant.

Stephen Pollard, for example, claims to have found Live 8 concerts a tedious yawn:

Some people staged a pop concert yesterday. It was a big one. A lot of people went to see it. Even more watched it on the telly.

But far, far more of the country than watched it had zero interest in either the music (most of which, when I heard it on the news, seemed quite painful to listen to) or the deeply misguided campaign which prompted it.

In terms of news impact, nothing which happened yesterday in Hyde Park was of any more importance than what I chose to eat for dinner.

...So why is every paper today stuffed full, almost to the exclusion of all else, with reports and pictures? And why are the TV bulletins today still banging on about it? Tedious doesn't even come close to describing it all.

Stephen, I feel your pain. How dare the biggest musical event in history, featuring many of the most popular musicians of our time, merit front page attention? Oh, the horror!

Dave at VoluntaryXchange thinks "It's particularly galling to me that low lifes who promulgate the sort of drivel found on the Live8 site get any attention at all. Folks ... they are statistical murderers." He recommends the latest rant from Michael Stastny at Mahalanobis:

Live8 organizers apparently believe in some syndicalist-marxist-mercantilist theory of economics. Bill Gates, Kofi Annan, Brad Pitt, etc, they aren't stupid, they certainly aren't dishonest, but they are naive, ignorant about empirical data on trade, aid, and growth, and most importantly needing to master the basic model of international trade so they understand exactly what kind of market power is necessary for trade to make a country worse off.

Stasny does highlight some dubious arguments on the Live 8 website, particularly on 'trade justice'. However not all G8 activists, donors or people attending the Live 8 concerts share those mercantilist views. And in an era of massive US and European agricultural subsidies, surely no one really thinks small developing countries face either genuinely free trade or a level playing field in trade negotiations?

Stephen Pollard, while bored by Live 8, has nothing but praise for the Allister Heath's "excellent critique of the Make Poverty Permanent/Live8 crowd" in Sunday's The Business. Heath's piece, Live8: a triumph for sentiment, not for results, contains both a rant and some more sensible points:

Welcome to the brave new world of pop star economics, where sentiments matter more than results, emotion triumphs over reason and hedonistic Westerners can feel good about themselves in Londons Hyde Park, safe in the belief that they are doing their bit for starving African babies while listening to Madonna, U2, Pink Floyd and the rest.

Predictable enough. The more important point is the scepticism about aid among economists in developing countries:

Geldof is wrong to question the motives of those with whom he disagrees. What unites protesters, concert-goers and politicians on the one hand and their critics on the other is a passionate belief in tackling global poverty. ...The disagreement between the two camps is about means, not ends.

The real question is: why are some countries rich and others poor? To the Make Poverty History crowd, the answer to this question, by far the most important in economics and all of the social sciences, usually lies with Western exploitation, insufficient aid and the alleged ravages caused by free trade or greedy multinationals. This conveniently omits to explain how so many poor nations in Asia have got rich; and many economists in developing countries no longer agree.

Heath then recounts the views of "a growing band of young and educated Africans" who argue that more foreign aid is not the answer. (Of course, not all their fellow Africans would agree).

Dave Altig at Macroblog has a more measured and interesting blog entry. I also appreciate his picking up the Christian Science Monitor piece (via Mark Thoma), How can the West help Africa? A global Q&A, which interviewed both Africans and people attending the Live 8 concerts.

And Chris Dillow at Stumbling and Mumbling calls Gordon Brown "a contemptible hypocrite" for calling the campaign to Make Poverty History "the greatest moral crusade of our times" but preferring to spend £6bn on ID cards.

What's next? Why, the G8 summit at Gleneagles, of course. For media and other G8 links see Robin Grant's post on blogging the G8. Meanwhile Channel 4 asked some bloggers Does the G8 Summit matter? Most of the blogger's replies were short, provocative and worth a read.

Of course there is plenty of other blog comentary on this topic. Amazingly, over 12,00 blog posts have tagged Live 8 so far according to a special Technorati sub-site. One example is Thinker's Room, a black African who is "deeply sceptical" about Live 8. His 28 June post generated plenty of comments and a long follow up. His conclusion? "The only people who can solve Africa's problems are Africans."

London talks: Labour, inequality

For those in London this week, the LSE have two interesting evening debates. On Monday 25 April at 6.30pm Professors Nicholas Barr, Nicholas Crafts, John Gray and John Hills debate What has Labour done for us? Venue is the Hong Kong Theatre, Clement House. This event is free and open to all but a ticket must be requested online, and collected at the venue from 6pm on Monday. Here is the blurb:

Following eights years of a Labour government, this discussion between a panel of LSE academics will examine the record of the Blair administration. Have the government delivered on their promises of 1997 and 2001? Have their been real improvements in the public services, or have the billions of pounds of extra public spending been wasted on bureaucracy and red tape? Has a government which has enjoyed huge parliamentary majorities squandered its chance to make a real and lasting impact on Britain?

On Tuesday 26 April at 6.30pm, Professors Thomas Pogge (Columbia, ANU) and Robert Wade (LSE) ask Does Inequality Matter? Venue is the Old Theatre, Old Building. This event is free and open to all with no ticket required.  Entry is on a first come, first served basis.

Inequality is one of the most contested topics of our time. Yet, does inequality matter and if so, why? Can it be argued that poverty and social exclusion are far more significant than inequality?

Burning down the (opera) house

Composer and conductor Pierre Boulez, who once advocated burning down the world's opera houses, turned 80 on March 26. A Sunday Times piece by Brian Appleyard on March 20 (link missing) quotes him as saying:

I have not mellowed, but I am less aggressive in a way. When you are young, you are like a dog barking outside the house to make people aware you are outside. Later, you don't need to bark because you are in the house.

Tyler Cowen links to comments and appreciations by other composers from The Guardian. And for those of you in London, there are still tickets left to see/hear Boulez conducting the Chicago Symphony Orchestra playing Bartok on April 4 at Royal Festival Hall.

RSA debates in London

The RSA organises regular free public debates in London. The next two of interest to economists are:

RSA Economist Debate: Companies that put time and money into corporate social responsibility are digging their own grave on Thursday 7 April at 6.30pm.

RSA TIME Europe Round Table - The UK today: as good as it gets? on Tuesday 26 April at 6.30pm.

To register for your free place at either of these debates, visit www.theRSA.org/events But register fast - they usually book up well in advance.

London talks this week

Apologies for the lateness. In future these will be posted by Sunday morning, so you have time to arrange to go...

On Tuesday 15 March, Barbara Petrongolo gives a labour market workshop at the LSE's Centre for Economic Performance on Unequal Pay or Unequal Employment: A Cross-Country Analysis of Gender Gaps (12.45-2pm, CEP Conference Room, R405, 4th Floor, 10 Portugal Street). And the Social Market Foundation have a lunchtime seminar on Increasing Parental Choice in Education (12.30-2pm, registration required).

On Wednesday 16 March, Francesco Giavazzi from Bocconi University will be presenting the paper he co-authored with Blanchard and Sa, The US Current Account and the Dollar, at the CEP/LSE International Economics Seminar (12:30-2pm, free, R405,  CEP Conference Room, 4th Floor, Research Laboratory, entrance in 10 Portugal Street, London WC2A 2HD).

Demos are hosting their latest city salon, Can big ever be beautiful? Matthew Pike, Director of the Scarman Trust, and Roger Madelin, Chief Executive of the Argent Group, will explore the schism in regeneration between top-down 'urban transformations' and bottom-up 'soft' regeneration. (More details online; prior registration essential).

The Society of Business Economists has Ed Balls, former Chief Economic Adviser at HM Treasury, speaking at its monthly meeting (6pm, CIPFA, 3 Robert Street, London WC2N 6BH - off John Adam Street). This event is on Wednesday 6 April. Bookings essential; phone Katie on 01264 737 552.

Thursday 17 March is a hectic day for policy wonks. It sees a PSI Employment and Social Policy seminar series. Jackie Taylor Sanchez from the University of Leeds will be talking about Cosmetic Surgery and Work1.30am-1pm, Policy Studies Institute, 100 Park Village East, London, NW1 3SR - registration required).

The IPPR host their latest Manifesto for a Digital Britain event, A Panacea for all ills? What can media literacy achieve? (1:45pm-5:30pm, Ofcom, Riverside House. Contact Kay Withers: [email protected] for more details).

Demos launch a new pamplet, Manufacturing Dissent by journalist Kirsty Milne. It examines the axis between single-issue protest and media-driven campaigns. (6-8pm, Demos, Third Floor, Magdalen House, 136 Tooley Street, London, SE1 2TU)

The IEA have an evening panel discussion, Towards fewer and simpler taxes, with Tim Congdon, Lord Newby, Derek Scott and others (Starts 6.30pm, IEA, 2 Lord North Street, Westminster, SW1. RSVP to: [email protected])

Finally on Friday 18 March the Centre for European reform launches Mark Leonard's new book Why Europe Will Run The 21st Century (1-2pm, ticket required, Old Theatre, LSE).

If you are in London tomorrow

You may wish to attend the Friday afternoon seminar at Treasury organised by the Work Pensions and Labour Economics Study Group (WPEG). Three labour economics papers are to be presented:

• Nick Crafts (LSE). Some Implications of Increasing Life Expectancy in the UK during the 20th Century
• Francis Green (Kent). Can changing job characteristics explain national trends in job satisfaction
• Andrew Clark (DELTA). Looking for Labour Market Rents with Subjective Data

But you must register by email before Friday.