Iraq Is The Economy, Stupid

John McCain has been arguing lately that we are closing in on "victory" in Iraq. It's sometimes hard to understand what "victory" means, especially when we watch Iraq's leader physically embrace Iran's Ahmadinejad, while Ahmadinejad calls for American troops to leave Iraq. Our "victory" is Iran's new best friend. Our "victory" is Al Queda on the rise in Afghanistan.

In any event, the possibility of this "victory" has columnists asking if Barack Obama has "an Iraq problem," because McCain will claim we're winning. In fact, Obama seems to have at least two very strong responses. First, of course, he can challenge this definition of "victory" in a way that makes McCain seem like the naive one, led down the path laid by Chalabi and Iran to create a new Shiite ally for Iran. Second, he can remind us that Iraq is the economy, stupid.

Our political narrative chronically separates the issues of war and finance. Every day, pollsters ask voters to rank issues, separating "the Iraq war" from "the economy," as if they have nothing to do with each other. In fact, they have everything to do with each other, and Democratic candidates in particular would be wise to address the fact that America's financing of our trillion dollar adventure of choice in Iraq has helped put us in the financial mess we're in.

We often hear about the cost of wars "in blood and treasure." We've rightly spent a lot of time talking about this war's cost in blood -- our young men and women killed and the tens of thousands more who have come home without limbs and with profound brain injuries. But throughout history (until now) sitting kings and queens and presidents have had to confront the cost of war not only in blood, but in treasure, and have had to do so while they still sat. European royals taxed their subjects and plundered colonies in order to fund their wars. While Americans fought the British for our independence, some of our best minds, including Adams, Jefferson and Franklin, were dispatched to France and Holland to lobby for cash. In World War II, real Americans sacrificed real creature comforts to support our troops in Europe and the Pacific.

But George Bush has chosen to fight this war as if it has nothing to do with the economy. Back in business school, they taught us that an "economy" was a system in which people decide how to allocate scarce resources to create commodities that people require. A successful economy efficiently takes the resources at its disposal and creates things that people need, and other people want to buy, fostering wealth and an enhanced quality of life for everyone. When the quality of life in an economy improves, more people want to live there, and the value of the land on which that economy sits goes up.

But look what we've done over the last few years. We've taken more than a trillion dollars -- a trillion dollars -- and have chosen not to invest it in the creation of what we need, like roads and bridges, the rebuilding of a great city destroyed, the treatment and cure of disease, food, schools, teachers, and port security. No, we took that trillion dollars and we have nothing to show for it. We built bombs and bombers to bring "shock and awe" to Saddam Hussein, forcing one man into a hole, while dispersing his army with their ordnance in hand. We gave billions of dollars in no-bid contracts to the Administration's friends to then rebuild what we blew up, to little effect. And instead of financing this effort the old-fashioned way of shared sacrifice (we have no colonies to plunder), we've borrowed and sold pieces of ourselves, our corporations, our banks and our real estate to foreign governments, companies and individuals. A trillion dollars borrowed, but not used to create things to improve our quality of life. Instead, we've left it to others to build many of those things so that we can buy them, often by borrowing more money from those others while we pay the costs of "the war on terror." And into the future, our economy faces the drag of paying the interest and principal on massive debt.

While the debt piles up, the costs of our continued policing of Iraq is nearly $10 billion per month. So far, our national debate has shed little light on the proportion of these costs. To the contrary, the Republican candidates, including Senator McCain, tell us that our economic woes would be cured if we could just rein in "pork barrel spending." He talks about a $3 million program to study DNA in monkeys, or a multi-million dollar bridge to nowhere (built at the behest of a well connected Republican Congressman from Alaska).

In fact, his point is a tiny one lost in the big picture. If you assume we're spending about $300 million a day in Iraq, that $3 million dollar program he talks about represents about 20 minutes of our commitment to the surge. But the truth regarding how out of proportion the costs of this war are becomes even clearer when you look at our spending on things that should really matter to us. How about the $4 billion proposed in this year's energy bill representing our entire Federal government commitment to alternative energy to end our dependence on foreign oil? About two weeks in Iraq. The cost of mere weeks of the Surge would outstrip our Federal commitment to education, to the building of adequate classrooms, and teacher pay. About two months of the Surge would have honored the forgotten commitment to rebuild the Gulf Coast, and restore the Louisiana wetlands in a manner that would protect against future storms. And the trillion dollars we've wasted? Think of what it could have done to secure our ports from terrorists, and improve our transportation and infrastructure and healthcare, thereby increasing our human efficiencies and adding to the value of the assets that make up America. Instead, we have nothing, but the hope that what comes out of Iraq might be better than Saddam, and not a hotbed of radicalism or ally of Iran that simply did not exist before our misguided adventure. Shock and awe indeed.

Senator McCain's emphasis on bipartisan "pork barrel" spending ignores, if you'll pardon the pun, the giant elephant in the room. Respectfully, it confirms his admission that he really doesn't know all that much about economics. In the fall debates, Senator McCain will likely crow for "victory." Senator Obama can challenge what "victory" means, and he can make it clear that the cost of this "victory" was wildly out of proportion to its supposed benefit.

Comments

[charon]

The Iraq War is a plague visited on America for its sin of pride. It's the hidden cost of American SUV-lust.

[orangepetal]

America can't leave Iraq and America can't afford to stay in Iraq. The next President will have to deal with this reality wheather it is Mc Bama or Mc Bush.

[waynesmyer]

No! No! Alan, Iraq is a very stupid economy! your beloved and truly "vice" War Profitnator, F-Y Cheney
CHENY IS MY NAME AND MONEY IS MY GAME

[jeanrenoir]

Iraq certainly IS the economy, stupid. But not nearly as much as the bombing of Iran by Israel or its puppet Bush would be, since bombing would bring us double or triple the current price of gas and heating oil, would totally tank the stock market, and would through us into a worldwide depression. We need to do all we can as protesters and voters to let both Israel and the Bush administration know that American voters will not tolerate the bombing of Iran and the subsequent destruction of our economy.

[Herrington]

You raise an exceptional point that has completely been left on the cutting room floor by the MSM. What ever we call victory in Iraq, we are losing in Afghanistan and have lost to Iran. It underscores the common perception that the MSM has its lips firmly attached to the buttocks of the Republican party. It is well past the hickey stage now.

You make and excellent point about how the Iraq war costs could have been allocated to benefit Americans rather than a handful of American corporations, however you miss the essential effect of the war on the economy. That trillion dollars was borrowed and thus has lowered the net value of the country in our global account. That is why our currency is falling. And that is the shared sacrifice, inflation, inflation in oil, food and crucial commodities. And no one asked you. They did not raise taxes. They raised inflation.

So yes, Iraq is a component of the economy, a very heavy drain on the economy.

[kjdwyer]

I wouldn't say he missed your point entirely. Here's an excerpt from Fein's assessment:

"And instead of financing this effort the old-fashioned way of shared sacrifice (we have no colonies to plunder), we've borrowed and sold pieces of ourselves, our corporations, our banks and our real estate to foreign governments, companies and individuals. A trillion dollars borrowed, but not used to create things to improve our quality of life"

You're right, though, that he doesn't then make the point that this reckless borrowing is affecting our global standing economically, but I think at the very least it's implied.

It is critically important, however, to emphasize your point about how this money is borrowed. There are no funds to repay it as that would require a dreaded tax initiative which this president is loath to do. So what does he do? He borrows the money and saddles the next (how many?) administrations with the debt, recklessly lowering taxes and spending us into penury in the process.

What I love about Fein is his insistance on "doing the math." Read his article about the Oil Companies for another such example. Brilliant stuff.

You're now officially my favorite writer on this website Alan, keep it up.

[FullChat]

Since W took office, the National Debt has increased from $5t to $10t. That's what has killed the dollar and is raising gas prices (If the dollar had held even against the Euro, oil would be about $80 a barrel and gas $2.50 a gallon.

Yes, the Iraq war has doubled your gas price!!

[RS]

And remember when News Corporation CEO Rupert Murdoch predicted a quick and easy victory in Iraq and a huge supply of cheap gas? We all know how that turned out.

[darker]

Bush-Cheney's mission accomplished was to enrich their NANNY STATE FOR THE RICH and corporate welfare queens by shoveling YOUR tax money out of the USTreasury and OUT OF YOUR POCKET--using ANY EXCUSE AT ALL.
Enjoy!

[shystar]

Great analysis on the War and it's direct relationship to the struggling economy and the future of the country.

Yet we have not seen this picture in the media MSNBC keeps harpping on whether Mrs. Clinton should be choosen as VP or are too infactuated with McCain, Fox and company are more useless in disseminating unbias information and the Print media have failed also with the exception of Bob Hubert who did write a similar critical analysis.

This country will in the future be bankrupt because of this WAR IN IRAQ which have embolden IRAN and lets not forget Afganistan which is quitely slipping into a failed state and that to is hardly even being reported.

[Alan Fein - Huffpost Blogger]

thanks shystar! tell msnbc how you feel!

[Stirner]

Good article! Say, am I wrong or didn't Ron Paul link the war and the economy some time ago? Remember him?

[Stirner]

Good article! Say, didn't Ron Paul link the economy and the war some time ago? Remember him?

[Mojane]

I've been waiting in vain for the Big Press to point out the obvious. That's all I ask. I don't expect them to go into depth as you (thank you) have. That would truly be a stretch. But just to make the connection and make it consistently might bring it all home to the oblivious in oblivion world.

[wldnswmmr]

This is a great piece of analysis, Mr. Fein and I can only say it's dismaying that such clarity rarely makes its way into media comment. You have pointed out the gist of the Bush lunacy. On one, marginal project, that may or not have much of an impact on America's future, Bush has bet the whole national farm. What, ultimately, is the point of Iraq? Since the official rationales went by the boards long ago, the national media, looking for a hook, decided it would become a game. Is the violence more or less in Iraq? That's the whole emphasis now - we decide who's "winning" on the issue of Iraq by who can better guess whether violence will be greater or lesser depending on whether we stay this course or that. Congress allowed itself to be sucked into the same stupid analysis, and now many Democrats can't say anything because the perception is that violence is down so Bush is "winning."
Whereas, all along your point was the only rational point. It distorts and destroys our economy, or fiscal well-being, because we can't afford to waste all this money on one nation-building fiasco. In his really irresponsible grasp of priorities, Bush may have delivered a hugely damaging blow to America's solvency for decades to come.

[Alan Fein - Huffpost Blogger]

thank you wldnswmmr! It was good to get this one off my chest!

[texanna]

Great article. Former Texas Governor Ann Richards used to say that one of the reasons W was able to defeat her in his first run at the Governorship was that you could wake him up anytime of the night and ask him what time it was and he would say "We've got to teach our kids to read!". The deplorable state of the state of Texas' educational system at the time being much on everyone's mind. Of course, it didn't improve under W's reign, but our kids sure know how to take those tests. Anyway, the point is, there is only one issue this election cycle and it's the Economy Stupid. And EVERYTHING is related to that issue. Every day, every hour, Sen. Obama should be talking about how much things cost in terms of the war until the general populace finally gets it. Maybe then he wouldn't have to do all of these fancy footsteps in dancing around towards that elusive centrist position, he just keep going straight ahead on from the primaries to the WH with an ever larger group following behind.

[CanisLatrans]

A most excellent article, and points made that desperately need to see the light of day.

War IS economy, and vice-versa.

[PATina]

Here's a link to a site that has a running counter on the amount of money spent in Iraq. It's amazing (in a ridiculous sense) to see how fast these numbers change.

http://www.nationalpriorities.org/costofwar_home

[SEQUOIABISON]

Brilliant and very accurate observations, most of the pollsters seem to be Republican and they absurdly phrase the questions in a ridiculous manner as if there is a difference between the war and the down turn in the economy. Thanks for saying it so succinctly.

[Chillinout]

Great article! This points out something that a lot of us have known for a long time. I have also wondered why the pundits try and separate the two.