David Broder is a respected political analyst. I once had breakfast with him and I like him. I often think his columns are on the mark.
So I am sure he by now regrets his piece on Saturday in the Washington Post on how Obama can get the country out of the economic doldrums.
Broder says that there are two engines for recovery from a Depression or a deep recession. One is the market workings of the business cycle, which are mysterious. The other is war, or even, apparently, preparation for it. Since, he says, Obama cannot really affect the business cycle, his best option would be to prepare for conflict with Iran. He does not appear to envisage a war but seems to think just getting the country on a war footing would do the trick. I don’t understand the American fascination with war. We’ve been at war one way or another all my life. Is that normal? And nowadays the politicians have pulled off the trick of having us be at war and not even notice it. Almost nobody reading this could even tell me how many US troops died in Afghanistan last month, or even how many are there and which provinces exactly they are fighting in. Broder can only broach this absent-minded atrocity because we have all developed war dementia– it is off our minds, as the Latin indicates.
Broder is not correct that the president has no levers over the expansion of the economy. There are such things as Keynesian processes, and arguably if Obama had followed Paul Krugman’s advice and done a really big government intervention, we might be further ahead in the recovery. Of course, if Obama loses the House on Tuesday, he will face new restraints. But even Republicans want jobs in their districts, and Obama will not be helpless in that regard.
Since Broder is my elder and we both lived through the Vietnam era, I am puzzled as to why he thinks wars always are good for the economy. Last I knew, economic historians believe that Vietnam caused an inflationary spiral and so was bad for the economy. World War II could hardly have been worse for the British economy, and left the British so destitute that they welcomed decolonization as the end of a burden. Wars interact with the specific form of the economy and with demography to have their economic impact. I don’t think Broder’s generalization about war and economic expansion holds up to critical scrutiny.
I can think of a specific way in which even for Obama to whisper the words “war” and “Iran” in the same sentence would be very, very bad for the US economy. It would certainly cause oil prices to rise immediately. Petroleum is how Americans transport goods, and it goes into plastics and fertilizer. It is a non-trivial expense. We may pay $180 bn. for imported crude this year, and that does not count what we spend on our own US-produced petroleum, ethanol, etc. Any rumor of war in the Persian Gulf, where over 60% of the world’s proven oil reserves lie, would send the price skyrocketing on speculation. We could see a return to the $140 a barrel of 2008 (December 2010 futures were about $81 a barrel on Friday, which is a high price compared to the averages in 2009). An oil price spike caused a lot of economic malaise in the US in the 1970s, and it could help push us into a double dip deep recession. Anyone who would like to relive through October 2008, raise your hand.
So Broder’s suggestion would send us out on a tree limb and instruct us to saw it off close to the trunk.
A lot of people underestimate the size of Iran. It is roughly three times the size of Iraq. It is as big as Spain, France and Germany taken together. Its population, of some 73 mn., would make it the second most populous country in Europe if it were in that continent. Attacking it and occupying it would thus be three times harder than what we just went through in Iraq. And, Iranians are very nationalistic and mobilized, and would put up widespread and determined guerrilla resistance. There would be no equivalent of the pro-American Shiites of Iraq who were grateful to the foreign occupier for ridding them of the Sunni oppressor. Whatever they think of their government, some 90% of Iranians are Shiite Muslims. Moreover, that Iran is the largest Shiite country makes it an opinion leader for other Shiites in the region, a form of massive soft power that can be turned on the US.
In addition, Mr. Broder may have noticed that the NYT reported that Hamid Karzai of Afghanistan receives $2 million a year in influence peddling funds from Iran. It may also be worth pointing out that one of the few prosperous cities and provinces of Afghanistan is Herat, into which a lot of Iranian money comes. In short, I don’t think Afghanistan goes well if Iran decides to play spoiler. At the moment, Tehran is tacitly allied with the US in supporting the government of Hamid Karzai and some of his warlords, as the best alternative to Pakistani-dominated hyper-Sunni Taliban they are likely to get. But the US is already accusing Iran of stirring up Pashtuns against the US from time to time, just to encourage the departure of the American military. It could get way worse.
Some proportion of Pakistani Shiites would also mobilize to defend Iran from the US, putting US supply lines from Karachi to the Khyber Pass in further danger (there is a big Shiite community in Karachi). All we need right now would be to unite the hard line Sunnis and the hard line Shiites both against us at once.
Moreover, Iran showed its political importance in the region recently in convincing Muqtada al-Sadr at long last to back Nuri al-Maliki for prime minister of Iraq. It is not a done deal, but Muqtada does not like al-Maliki at all, and if Iran could persuade him, it shows real moxie. Moreover, whole divisions of the Iraqi military are infiltrated by former Shiite militiamen who think well of Iran. I was told that many Iraqi border guards on the Iranian border actually go east for rest and recreation; they are Shiites, some of whom resided in exile in Iran, and they feel comfortable there.
In short, Iraq does not go well, and the US cannot hope to get its troops out on the present timetable, if Iran decides to play spoiler.
I won’t go into Iranian assets in the Levant, such as Hizbullah and to some extent Hamas, or their influence in Bahrain, where the Shiite Wifaq Party just did very well in elections. Shiite-majority Bahrain is host to the US Fifth Fleet, which has a naval base near the capital of Manama. If Bahrain Shiites got very, very upset, I think that base would run into trouble.
And so on and so forth. The Iranians cannot actually close the Straits of Hormuz, which are 26 miles wide. But they do not have to. All they have to do is contribute to another oil spike (which benefits them in a way that cutting off oil does not), and make covert trouble and tie us down like a hapless Gulliver tied down by the Lilliputians.
I can’t think of anything that would be worse for the US economy, or for Obama’s prospects for a second term, than going to a war footing with Iran. And, my own experience is that if you go to a war footing with a country, you have to be prepared for things spinning out of control and into actual war. Since Americans go running to their congressmen demanding a repeal of the Bill of Rights every time there is a little pipe bomb somewhere, anything that might cause terrorism on US soil is deadly to our over 200 year old Republic. My guess is that a third war right about now, for the reasons outlined above, would just about finish us off as a nation.
I hope Mr. Broder will give this matter some more thought and come back with a future op-ed that contradicts his recent effort. We all make mistakes. What is bad is not to recognize it.
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