Iraq Is The Economy, Stupid

07/11/2008 05:12 am ET | Updated May 25, 2011

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.