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The drums of war and the economy
It used to be that the drums of war would boost the economy. When that war would involve the Strait of Hormuz not so much.
Why? This:
“every $1 per barrel rise in oil decreases U.S. GDP by $100 billion per year and every 1 cent increase in gasoline decreases U.S. consumer disposable income by about $600 million per year.”
The rumors of an attack on Iran’s nuclear installations was enough.
10 Responses to “The drums of war and the economy”
The drums of war haven’t boosted the economy since WWII. That was the last time that America went to war. The post WWII conflicts saw the US Military go to war, especially the latest, The GWOT. Whether right or wrong is immaterial. I heard it said, in referrence to the GWOT, “America isn’t at war. America is at the mall.” This sentiment was seen on a white-board at an un-named Marine Installation. Sad as the statement is, I couldn’t agree more.
I think it’s good that “America is at the mall”. Means we are safe and at least some people have money.
Look we have lots of Navy and lots of Air Force. I think we can keep the straits open as much as we like. Might have to eliminate our old people to pay for it, but I think it’s doable.
I mean ask yourself Ron, what do you want, gas for your car or old people?
Allen, I think you are fooling yourself if you think the might of the US military can keep the Strait open. Big ships and airplanes aren’t really all that effective at stopping terrorist actions that would be used to sink a ship or two to block it. The attack would also result in sabotage of the oil infrastructure, also not something that can be stopped by conventional military forces. There would be more than adequate disruption to crash the world economy.
America at the mall only means that some people are buying (mostly) unnecessary stuff manufactured in China. Not exactly a harbinger of longterm optimism. As for the drumbeats of war? That is the sound of a dysfunctional species with delusions of military solutions.
Ron, I don’t know how I could possibly give a flip less.
The old are to be discarded and the young made into war pawns or sex toys. It is the way of the world. I reject the way of the world. At least with what little my rejection is worth.
Allen
I’m pretty much at the same place you are. I’m glad I’m old and doubly glad my children decided not to give me grand children.
Nice rejections, guys.
Hormuz: Think of all kinds of ways Iran could close the strait.
Now, what substitutes do we have for motor vehicle fuels that are petroleum (fossil) based? Are they as economical and practical?
Oh this is rank foolishness. Lookit, I could care less that Iran is a bat-crazy theocracic dictatorship with a semi-criminalized mafia economy. That’s their business. But a nuke-armed Iran is a threat, and if regional security and US national security required military action, I don’t think a few quarters of bad GDP figures and higher oil prices should dictate national security policy. The Iran regime is dangerous, in a way some punk regime like the Chavez regime is not.
Incidentally, I’ve been trying for years to get a visa, but they have a petty and ugly policy of “no Americans, no Brits, unless you’re Dr. David Duke giving a lecture about the evil Zionists.”
Iran is a threat to the Middle East. The theocrats want a Shiite empire from the Mediterranean to the Gulf, led by Iran, of course.
They have issued remarks before indicating the primacy of oil in geopolitics currently: They have said that in any war, any nation aiding Iran’s attacker(s) will have its oil facilities or installations attacked (and damaged or destroyed).
It’s no surprise for more reasons than one that Saudi Arabia is a geopolitical adversary of Iran.
Mark nails it…
and let us think about the economic implications of a nuclear Iran holding the entire ME hostage.