Posts filed under “War/Defense”
It’s been a while since I paid over $3.00/gallon for gas, but had that pleasure once again very recently, as prices have been creeping slowly ever upward. As the gas flowed, I thought back to a piece I’d written elsewhere some time ago (April ’06, to be exact) lamenting the fact that those who had gotten it wrong on just about everything else had gotten it wrong on oil, too. So, as oil holds over $80/barrel and gas inches higher, here’s another look in the time machine at what the Very Serious People were saying almost eight years ago (emphasis mine):
“…markets clearly expect lower prices. On the eve of hostilities, oil was selling for about $37 per barrel. At this price, Americans would be paying $270 billion per year for oil. But once it became clear that Iraq’s liberation was at hand, the price quickly dropped to about $28 per barrel, cutting our annual oil bill by $70 billion. With full Iraqi production, the price might drop to $20 per barrel or less, giving us the equivalent of an annual tax cut of about $120 billion per year. And this is a tax cut the entire world benefits from.”
“Under a free market, oil prices would probably fall to between $8 and $12 per barrel over the next 10 years — down dramatically from today’s price of about $25 per barrel. [...] A major decrease in petroleum prices would boost U.S. and global economic activity. Home heating oil prices would drop by at least a third. Gasoline prices would drop to less than $1 a gallon. As a result, people and business in the United States and throughout the world would spend far less for fuel. From an economic perspective, the United States and many nations around the world would clearly win.”
“An unencumbered flow of Iraqi oil would be likely to provide a more constant supply of oil to the global market, which would dampen price fluctuations, ensuring stable oil prices in the world market in a price range lower than the current $25 to $30 a barrel. Eventually, this will be a win–win game: Iraq will emerge with a more viable oil industry, while the world will benefit from a more stable and abundant oil supply.”
The Wall St. Journal (link no longer available):
“Of course, the largest benefit–a more stable Mideast–is huge but unquantifiable. A second plus, lower oil prices, is somewhat more measurable. The premium on 11.5 million barrels imported every day by the U.S. is a transfer from us to producing countries. Postwar, with Iraqi production back in the pipeline and calmer markets, oil prices will fall even further. If they drop to an average in the low $20s, the U.S. economy will get a boost of $55 billion to $60 billion a year.”
There were numerous other forecasts in the $18 – $28/barrel range. Of course, the Very Serious People continue to hold sway in our national discourse on a host of issues (austerity now now now!). I’m not sure exactly why, but they do. It’s important to keep an accurate historical record — a chronology — of who said what, and when. Not that anyone’s ever called to task, but so the record is clear.
There seems to be an increasing amount of rhetoric about government spending — how much of it there is, whether or not it’s affordable, the extent to which Obama is bankrupting the nation, that government spending is “crowding out” what the private sector might spend, etc., etc. So, does it wash? Most readers will have…Read More
In the The Fiscal Times, Bruce Bartlett takes a well deserved swipe at the neocon deficit hawks who refuse to even consider cutting anything in the department: “Establishment conservatives love to talk about the need to cut government spending, but they always seem to find an excuse whenever there is a serious effort to actually…Read More
I mentioned this morning that Jeff Hirsch is the anti-Prechter — forecasting a wild $38K Dow in 2025. (Discussed this AM here, with Jeff’s full piece here) Jeff and I are in the same secular bear market camp; However, he argues that the current secular Bear market will end ~18 years after the last secular…Read More
Each year, I try to avoid writing anything about 9/11. But I had some issues to work through this year, and I find jotting a few notes down helps me. My personal experience on 9/11 was secondhand. I was in the LI office of the firm where I was Market Strategist. Our HQ and trading…Read More
On the other hand, he dragged Britain into George W. Bush’s ruinous war of choice in Iraq. Sold to the public — in both GB and the US — on false pretenses, it cost both nations a fortune in blood and treasure.
I am tempted to read his book, A Journey: My Political Life, if for no other reason than to find out why. Not that I expect honesty in any politician’s memoirs, but I am especially curious about this conundrum.
I am less than enthralled with Blair’sdiscussions on the financial crisis — at first glance, they seem to be hackneyed clichés. For the most part, he makes bad excuses. But worse, he doesn’t seem to understand what happened, didn’t see it coming, and is utterly lacking in economic insight.
All the usual excuses — “no one saw it coming, but it was not a failure of free markets” — are classic political after the fact excuse making. Expecting economic insight from any politician is like asking a prostitute for her insight into love: You are bound to be disappointed.
As to the war, consider this excerpt from the WSJ:
What is the nature of the threat? It does not derive from something we have done; there was no sense in which the West sought a confrontation. This is essential to the argument. The attacks of Sept. 11 came to most of our citizens as a shock that was utterly unforeseen. Countries like America and Britain were not singling out Muslims for unfair treatment; and insofar as Muslims were caught up in generalized racism towards those of a different race or color, such attitudes were on the way out, not the way in.
The extremism we fear is a strain within Islam. It is wholly contrary to the proper teaching of Islam, but it can’t be denied that its practitioners act with reference to their religion. I feel we too often shy away from this assertion, as if it stigmatizes all Muslims. But if it is true—and it is—it has to be faced, not just because it is true, but because otherwise we don’t analyze the problem or attain the solution properly. If it is a strain within Islam, the answer lies, in part at the very least, also within Islam. The eradication of that strain can be affected by what we outside Islam do; but it can only be actually eliminated by those within Islam.
Here is where the root of the problem lies. The extremists are small in number, but their narrative—which sees Islam as the victim of a scornful West externally, and an insufficiently religious leadership internally—has a far bigger hold. Indeed, such is the hold that much of the current political leadership feels impelled to go along with this narrative for fear of losing support.
This is a situation with practical consequences. Iraq and Afghanistan are seen as the West’s battles. With a few notable distinctions, this is not perceived as a struggle for the heart and soul of Islam. Yet the outcome is surely vastly determinative of such a struggle.
I have my criticisms of Israel and my ideas of to how to make progress. But leave aside for a moment the details of the peace process. As I started to spend more time in Palestine, I was surprised to find it is often easier to raise money for the “resistance” than to fund the patient but essential process of Palestinian state-building. Israel can and should do more to push forward the necessary changes on the ground—the West Bank and Gaza—that can underpin the peace process. However, it is also true that if the Palestinian cause gave up violence emphatically and without ambiguity, there would be a peace agreement within the year. Not enough voices in the Muslim world are asking them to.
It is America today that leads the challenge to Iran and its nuclear ambitions. But let us be frank: Iran is a far more immediate threat to its Arab neighbors than it is to America. It is of course a threat to us, too, but this is partly because of what a nuclear-armed Iran would mean for the Middle East, rather than as a direct threat.
The problem is this: Defeating the visible and terrifying manifestations of religious extremism is not enough. Indeed I would go further: This extremism won’t be defeated simply by focusing on the extremists alone. It is the narrative that has to be assailed. It has to be avowed, acknowledged; then taken on, inside and outside Islam. It should not be respected. It should be confronted, disagreed with, argued against on grounds of politics, security and religion.
Our people say, “How long are you seriously saying we should hold out?” If, in the 1950s, when faced with the threat of revolutionary Communism, I had asked you how long you expected us to fight it, you would have answered: As long as the threat exists. If I had said it may be for decades, you would have raised an eyebrow, as if to say: Well, if the threat remains for decades, what choice have we? In other words, you would have seen this as a clearly defined threat to our security that left us no alternative but to take it on and beat it. Of course, there were those who said “Better red than dead,” but that was surely one of the least appealing slogans to the human spirit ever devised, and only a minority bought it. Most people realized the threat was real and had to be confronted, however long it took.
The difficulty with this present battle lies in defining what “it” is. After Sept. 11 the phrase “the war on terror” was used. People distrusted this, partly for its directness, partly because it seemed too limited. So we dropped it. Yet if what we are fighting is not a war, what is it?”
The “Publisher’s comments” are after the jump:
David R. Kotok Chairman and Chief Investment Officer Mid-August Bullets August 22, 2010 > Middle East geopolitics raise the fear quotient. The Obama administration’s response to Middle East tension remains a mixed message. Israel faces another “flotilla” plus the Iranian nuke threat. For Prime Minister Netanyahu, this is a two-front geopolitical war that can threaten…Read More
Debka via UBS’ s Andy Lees (in London) by way of Art Cashin in NY: Geopolitics – Debka file reports that the announcement that Russia is set to activate Iran’s first nuclear power station by loading the fuel on August 21st has caused a major flap in Israel as it is reported that Russia has…Read More