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.
Broder is, of course, suggesting just that, but while everyone is reacting to the indecency or, like Dean Baker, pointing out that infrastructure spending has the same effect, no one seems to be focusing on the stupidity of the analogy. So here I go in handy list form:
1. We don't have a draft. This war would mainly be fought with the forces at hand with minimal impact on unemployment;
2. WW II required a massive build-up in our air force and navy. How many more carriers are we going to need if we go war with Iran? In other words, this war would do little to absorb excess capacity;
3. We had a tightly controlled economy during the war that created a build-up in consumer demand. How likely is it that a GOP Congress would go along with that?
4. Immediately after the war, we extended a huge and unprecedented social safety net for the returning forces. Any chance of that happening?
If you're going to suggest fighting a war for economic gain, at least try to pick one that would actually do. Otherwise, you're being evil and stupid.
"We had a tightly controlled economy during the war that created a build-up in consumer demand. How likely is it that a GOP Congress would go along with that?"ReplyDelete
All of defense spending fits into the category and there has been little evidence of any party in the current United States being against defense spending. Brad DeLong likes to point out that defense spending has been the US equivalent of Industrial Policy.
This is a partisan website but the relative spending levels are very informative:
I suspect a war with Iran would look more like Korea (the spending level for which we already have exceeded) then WWII.
Here is another way of saying what I was getting at above:ReplyDelete
"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."