Nadine, here is the NRO view of the NYT anti-war campaign.
August 6, 2002, 9:00 a.m.
Howell Raines in Power
The Times wages war on an Iraq war.
By Benjamin Zycher
Stop me if you've heard this one, but the New York Times really, really, really believes that the inadvisability of a forced regime change in Baghdad is front-page above-the-fold News Fit to Print. And for so many reasons: The Europeans will stomp their feet. The Arab Street will throw more rocks. "Instability" will follow a removal from power of Saddam Hussein, romance novelist, nurturer of sons, killer of Kurds, Shiites, Jews, Americans. The House of Saud will find it more difficult to pursue their pro-U.S. war against terror and Islamic fascism. The Iranians and Iraqis will be forced into each other's arms. Hosni Mubarak will be unhappy. The Syrians will fail to leave Lebanon. The Peace Process will collapse. If Saddam is removed, the terrorists somehow will have won. Global warming/the ozone hole/AIDS/rain forest destruction/ extinction of the Arabian rat/subjugation of women/cancer/ad infinitum will be exacerbated.
O.K., I invented that last one. But in a fashion analogous to the late-night infomercials for Ginsu knives, the Times wants us to know that we would get a lot more (or less) for our money than we might expect. The latest Times report (Patrick E. Tyler and Richard W. Stevenson, "Profound Effect on U.S. Economy Seen in a War on Iraq," July 30, 2002) is about the hugely adverse effect that a military operation to depose Saddam would create for the U.S. economy. The U.S. "would have to pay most of the cost." We would "bear the brunt of any oil price shock." A recession might ensue. "Unless the economic outlook brightens, the government could well find itself spending heavily on the military even as the economy recovers falteringly from last year's recession," truly a magnificent analytic sentence combining tautology with factual error (real GDP declined only in the third quarter in 2001, and growth was positive for the year). The costs of such a war "would lead either to more red ink or to cutbacks in domestic programs." Military action might engender substantial adverse "psychological effects" on such parameters as retail sales and investment, according to "officials and experts."
Fear not: There is more. Those horrors "could present a complicated political problem for President Bush," in other circumstances not the sort of effect yielding sleepless nights for Times writers. Unlike the case in 1991, other nations will not pick up the tab this time. Our forces will have to be mobilized and reserves called up. The $80 billion (in 2002 dollars) cost of the Persian Gulf War provides a "rough benchmark" for the prospective cost of action to remove Saddam. Federal debt might rise and such goodies as Medicare drug coverage would become more difficult.
And so there we have Revelation from the Grey Lady deep thinkers: War is an unpleasant business that carries adverse effects.
That military actions are costly and disruptive is an eternal truth, notwithstanding the apparent view at the Times that they have discovered a new galaxy. The real question is whether the costs can be expected to yield some beneficial outcome of even greater importance. Consider for example the benefit of regime change in Iraq in terms of reduced support for terrorist activity. That this support is important is the upshot of a large body of circumstantial evidence; see, for example, Laurie Mylroie's Study of Revenge. A rough estimate of the cost of a terrorist war against the U.S. under various assumptions is $300 billion per year, even without considering the possible use of weapons of mass destruction, a number that dwarfs the one-time $80 billion "rough benchmark" cited by the Times. And $80 billion in any event is less than one percent of GDP and so is hardly "unaffordable." The Times simply ignores this direct benefit of regime change in Iraq, as well as the ancillary benefit in terms of reduced political viability of the theocracy in Iran, and thus for its support for terrorist activities directed at the U. S. The same can be said for the Syrian regime. Moreover, an effective counterterrorism effort directed at both terrorist groups and at state sponsors can be predicted to increase the demand for dollar-denominated assets, yielding a strengthening of the dollar and thus an increase in national wealth.
Regime change in Iraq will yield substantial downward pressure on international oil prices in both the short and long terms, for two reasons. First, the Iraqi-reserve potential is second only to that of Saudi Arabia in the Middle East, and regime change will facilitate investment in substantially enhanced production; this prospective increase in production capacity would drive prices down even in the short run because the use of oil is fungible over time. Moreover, again in the short run, Iraqi production would be increased were the sanctions regime removed along with Saddam Hussein. Second, the implicit Iraqi military threat to the Saudi and Kuwaiti oil fields combines with the larger implicit threat of war in the Middle East created by the presence of a Saddam Hussein in power, yielding permanently higher-perceived risks and other such market adjustments that can be predicted to drive oil prices up. It is possible as well that Saudi production is lower than otherwise would be the case as an implicit means of buying protection from the Iraqis in the form of support for oil prices higher than the Saudis otherwise would prefer. World production of crude oil is about 66 million barrels per day; under conservative assumptions, a long-term increase of only five percent can be expected to reduce prices from $25 per barrel to about $16-$18.
That oil prices are likely to increase sharply as war becomes imminent is obvious. But the Times's dire predictions of adverse economic consequences are not. The relationship between changes in oil prices and U.S. GDP growth is ambiguous, although low oil prices clearly are preferable to high ones. But even a complete cutoff of Persian Gulf oil (about 17.5 mbd) offset by, say, one-half from the Strategic Petroleum Reserve and other sources, would yield international oil prices of about $60 per barrel under conservative assumptions, about $5 higher (in real terms) than those observed in the early 1980s. U.S. GDP growth in 1983, with oil prices at $54 (in 2001 dollars), was 4.3 percent. Yes, increases in oil prices are recessionary, but the historical experience suggests that those effects would be moderate in the absence of a severe tightening of monetary policy. Yes, U.S. policy on use of the SPR oil is largely ad hoc, but that is a problem with a straightforward solution, to wit, the sale of call options so that the private sector can allocate the SPR oil over time.
The Times fears federal borrowing, unless the debt is used to finance domestic entitlements, but the use of debt is appropriate for military actions in the pursuit of more peaceful future conditions. Just as the Reagan military modernization can be viewed as a past investment in a reduced Soviet threat, pursuit of current and prospective efforts at countering terrorism and deterring state sponsors can be predicted to yield benefits accruing to both current and future generations. Just as the Reagan budget deficits were roughly efficient in this context (Benjamin Zycher, "Debt, Defense, and Reaganomics," National Review, December 14, 1992), debt is likely to be the efficient fiscal instrument with which to finance counterterrorism efforts in terms of allocating costs across beneficiaries over time.
None of this is rocket science, and it would be useful for a major newspaper to lay out the arguments and counterarguments in a neutral fashion. The Times instead has descended into wholesale front-page editorializing, perhaps easier and more fun than organizing and contrasting conflicting views in an informative way. But it has been quite a while since the provision of information was the Times's central objective.
Benjamin Zycher is a senior fellow at the Pacific Research Institute. |
