Broder, Iran and the Economy
David Broder offers up some odd ideas on the relationship between a war with Iran and the economy.
Writes David Broder in today’s WaPo:
What else might affect the economy? The answer is obvious, but its implications are frightening. War and peace influence the economy.
Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II.
Here is where Obama is likely to prevail. With strong Republican support in Congress for challenging Iran’s ambition to become a nuclear power, he can spend much of 2011 and 2012 orchestrating a showdown with the mullahs. This will help him politically because the opposition party will be urging him on. And as tensions rise and we accelerate preparations for war, the economy will improve.
I am not suggesting, of course, that the president incite a war to get reelected. But the nation will rally around Obama because Iran is the greatest threat to the world in the young century. If he can confront this threat and contain Iran’s nuclear ambitions, he will have made the world safer and may be regarded as one of the most successful presidents in history.
It is an article of faith of the conventional wisdom that war is good for the economy. Now, the mass industrial mobilization needed for the second world war was clearly stimulative to the US economy. However, I have my doubts that subsequent wars (e.g., Korea, Vietnam, Gulf War I) were likewise helpful to economy. I am certain that the two wars we currently find our involved in have not been an economic boon.
First, let’s consider that going to war now (as opposed to WWII) does not mean a massive industrial push. We already have built the planes, tanks, and ships needed for massive military activity. Yes, there would be some need for additional manufacturing to support a war effort, but nothing on the scale of what happened in WWII.
Second, the recent record is one of massive deficit spending to support military action (indeed, there was massive deficit spending for WWII as well). This has not been good for the economy and will not be in the future.
Third, war with Iran would actually be devastating to the global economy as it would have significant effects on oil prices. We all know what massive spikes in oil prices do to our personnel economic circumstances, let alone to the broader economy. Further, another war would mean additional uncertainty in the global economy, which is not what we need at the moment. If you think firms are scared to invest now, wait and see how they react to global economy facing yet another war in the Persian Gulf.
It has been fashionable for years to opine as to why David Broder is treated with such reverence within the Washington media establishment, and columns like this help to underscore why.
The notion that war is good for the economy is, was, and always has been claptrap. It’s the ultimate example of the Broken Window Fallacy. War is breaking tens of thousands of windows.
As to whether yet another war would be good for the country economically or for President Obama politically I definitely have my doubts. Have we ever been more strategically vulnerable than we are at this moment? As evidence I would submit that rare earth elements are strategic materials, 97% of the world’s production is produced in China, and U. S. production may not resume for years.
From a political standpoint there would be competing responses: Rally ’round the president and Throw the bum out!. I don’t know which would prevail. I don’t think that Iran’s mere possession of nuclear weapons would be sufficient to make the first response dominate. Quite to the contrary I think it might give the edge to the latter response.
If Iran were to use nuclear weapons against the U. S. or direct U. S. interests all bets are off.
Conservatives will attack a Democratic president no matter what he or she does. It’s just a given.
On the merits, Broder is insane and grossly immoral to boot.
Can’t envision any war with Iran scenario that does not include massive disruption of oil shipments from the middle east and a probably depression as a result.
Wow. Just… wow. I’m not sure when I’ve last read a column that manages to be wrong in so many different ways.
“Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II.”
A boilerplate lie told by wingnuts to deny how much the U.S. economy grew under that Commie Roosevelt during the 30s.
Lying about the performance of the U.S. economy during the 30s has become a cottage industry for the Right.
Mr. Taylor pointed out the obvious problems with Broder’s economic argument. Here are a few more problems:
How can Broder say this with a straight face after writing a column that clearly suggests exactly what he claims he is not suggesting? Flat out Orwellian doublespeak.
I wonder what metric he uses to decide what nation is the greatest threat to the world in this century.
Perhaps it is number of other nations that they have invaded and bombed?
Perhaps it is the number of civilian citizens killed by an invading nation?
Number of nuclear weapons? Amount of money spent on the military? Degree of instability their military actions have caused? What is it?
Seems like he’s just saying it with no factual basis, since that helps him to beat the drums for war.
“I wonder what metric he uses to decide what nation is the greatest threat to the world in this century.”
Certainly not this one:
Military expenditures (% of GDP)
Saudi Arabia 10.00
Anyone have dates on the last time Iran/Persia/Parthia started a war of agression?
Any idea that we’re going to war with Iran (exempting the case where they actually use nukes first, of course) is simply a joke. The U.S. spent all its capital on Iraq and Afghanistan, not just with the rest of the world, but with its own citizens.
We are not going to war with anybody in the near future. There’s simply no support for it. And unfortunately, our enemies know that. A big thank you, as always, to Cheney and crew.
It does help the companies that make bullets, repair parts, uniforms and medical equipment. I don’t think those industries are unionized, though. There’s also an argument that at least some of the “war pay” the soldiers get would get spent in the US. It is, I believe, the logical conclusion of Keynesian economics. I believe that war with Iran would have at least as much stimulative effect as the actual stimulus bill did.
Of course, the concept that the US can fix any recession by declaring war doesn’t have a happy ending. There are a lot of good reasons to go to war, this isn’t one of them.
(For the record, I’m not a Keynesian; and I agree with Professor Taylor’s overall statement that wars don’t make for economic stimulus. Money borrowed to stimulate the economy must still be paid back, viz. Japan and the Lost Decade).
Like some of the incredibly boring and obsolete architecture languishing from a bygone era is what this school of thought represents. But since Mr. Broder’s old school has previously embraced ideas from the new school, such as internet revolutions to further their foreign policy interests, the same school Mr. Broder and his cohorts have relied in the modern era without at least a minimal gesture of respect would say it wasn’t war that pulled the U.S. out of depression under F.D.R. It was population management. By sending half a million Americans to their death and tens of millions overseas to fight in a war, jobs would open up. By putting government dollars in the hands of those soldiers, that money was returned to economy when they sent it back to their family. Women joined the workforce in droves for the first time during World War Two.
For years now the new school has been recommending just the very thing that brought the U.S. out of depression in the 1940s–population management. But it is not through war. It is through repatriation of willing slave descendants to Africa and the use of grant money to incentivize that return. Unemployment in the states goes down, some of that money returns when American businesses have new markets opened up for them in Africa. Prison state declines. Taxes goes down. Crime goes down. Wages go up. Budgets decrease. Racism recedes.
It is an idea that is two centuries old now, and the road America has no choice now except to drive down. Everything else has been a disaster, from the Civil War to the Great Society. Iran can wait, America’s cities and the South can’t.