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Muhammad Sahimi Headshot

Wish To Be Poor and Unemployed? Support Military Attacks on Iran

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The price of gasoline has gone through the roof. The housing market has collapsed, with so many people losing their homes. The official unemployment rate is 5.5% -- with the true rate being closer to 8%. The price of food stuff has increased dramatically. For all practical purposes the economy is in recession. There seems to be no end to the Iraq and Afghanistan wars. Citizens' surveillance has kept increasing, with 1 million people being on the terrorist watch list. Can things get any worse? You bet. All you have to do is considering what would happen if the U.S. and/or Israel attack Iran.

Much has already been said about the consequences of military attacks on Iran, but the discussions have been mostly about the attacks' implications for the security of Israel and the price of oil. The consequences of military attacks on Iran will, however, be much deeper and more catastrophic than what the mainstream media would have us believe.

As Secretary of Defense Robert M. Gates said recently, "if we attack Iran, our grandchildren will have to fight the jihadists here at home." But, whereas the implications of a war with Iran for the national security of the US would be much worse than those of the Iraq war, little has been said about the implications for our economic security here at home.

Since many Americans assume incorrectly that Iran and Iraq are very similar, before describing the economic implications of attacking Iran, let us first briefly consider the differences between the two nations, and recall the catastrophic consequences of the invasion and occupation of Iraq.

Every Iraqi leader, from the leftist General Abdulkarim Qassem who overthrew the monarchy in 1958 and founded the Republic of Iraq, to Saddam Hussein, always advocated Pan Arabism, rather than Iraqi nationalism. Even when Iraqi forces were fighting with Iran in the 1980s, Saddam Hussein always presented himself as a defender of the Arabs, not Iraq. Add to this the historical, ethnic, and religious friction between the Shi'ites, Sunnis, and the Kurds. The result has manifested itself in the fact that Iraqi nationalism has always been relatively weak. But, with over 4100 dead U.S. soldiers and tens of thousands wounded, we know only too well what Iraq's weak nationalism can do.

But, if Iran is attacked by the U.S. and/or Israel, its response will make the Iraq war look like child's play. Why? Because Iran is very different from Iraq. As I stated in a 2006 op-ed that I co-wrote with the 2003 Nobel Peace Laureate Shirin Ebadi, Iranian nationalism, which has its roots in Iran's 4000 years of proud written history and many glorious contributions to humanity, is extremely strong.

Couple this nationalism to the Shi'ites 1300 years old tradition of martyrdom in defense of their homeland and religion. Add to it the belief of many commanders of Iran's Revolutionary Guards (Iran's elite military) that they should have been killed in the Iran/Iraq war and, therefore, have lived at least 20 years more than their "natural" life. That means that they will fearlessly fight back, if Iran is attacked. The result is a powerful and volatile mixture of proud nationalism and religion which, should Iran be attacked by the U.S. and/or Israel, will engulf the entire region in fire.

Now, recall that before Iraq's invasion, we were told that after the overthrow of Saddam Hussein's regime, the price of oil would tumble to historic lows, because Iraq will leave the OPEC and drown the world in its oil. Iraq has yet to reach its pre-war oil production, and the oil price has gone up from $35/barrel at the time of invasion to $130/barrel. Paul Wolfowitz told us that war will cost only $50 billion, but the last time that I checked we had spent nearly $600 billion, and counting.

The overseas military spending, and the huge budget deficit that it has caused, have contributed to the falling value of dollar which, in turn, has been an important contributing factor to the price of oil rising to $130/barrel. As Algeria's energy Minister, Chakib Khelil, said, "each time the dollar falls 1 percent, the price of oil rises $4."
But, compared with the economic consequences of a possible war with Iran, those of the Iraq war would seem very mild. What would they be? To begin with, let me mention that the National Security Network, a group of national security pundits, estimates that Bush's threats against Iran is responsible for up to $40/barrel that we pay for oil. That is, we are already paying close to 30% more for oil just because of Bush's verbal threats. But, the economic consequences of actual attacks on Iran will be much worse.

Suppose that Iran will simply stop exporting the 2.7 million barrels of oil that it provides the market with every day. OPEC has declared that it would not be able to make up for the loss of Iran's oil. In particular, our "hope" Saudi Arabia is already pumping oil at close to its maximum capacity. Based on the past experience, as well as a model that I have developed for the fluctuations in the price of oil, even if Iran does not take any other action, the loss of its oil should result in nearly doubling the price of oil, at least in the short term, meaning that it would be in the neighborhood of $250/barrel. David Wyss, an economist for Standard & Poor's in New York, estimated in an article in the Business Week, that the Gross Domestic Product of the U.S. will be cut roughly in half, while unemployment will increase by about 9%.

But, stopping its oil export would be Iran's mildest reaction to a military attack. Most objective experts believe that Iran would respond much more strongly. Iran has threatened repeatedly that, if attacked, it will close the Strait of Hormuz, through which 20% of the all the oil in the world passes every day. If Iran does close the Strait and manages to sustain it, then, all models of oil price, including mine, indicate that the oil price will be in the range $500-520.

Wyss estimates that, in the event of closure of the Strait of Hormuz, the GDP of the US will suffer a 120% decline over a two-year period, while unemployment will rise by about 50% over the same period, meaning the official unemployment will be close to 7%, whereas the true unemployment rate will probably be above 12%. The price of oil will go up by a factor of roughly 4, meaning it will rise to about $500/barrel. Gasoline will be in the range $15-20/gallon.

That is still not the worst injury that Iran could inflict upon the world. Iran could easily attack the oil fields in Saudi Arabia, Kuwait, United Arab Emirate, and Oman in the Persian Gulf area. All are well within range of Iran's missiles. Iraqi Shi'ites, long allies of Iran and living mostly in the southern parts of the country, will most likely attack Iraq's oil reservoirs in that area, as well as the supply lines for the U.S. forces that run from Kuwait through southern Iraq.

But even that would not be all. Hezbollah, the powerful Lebanese Shi'ite group, could attack Israel. 10% of the Saudi Arabia population is Shi'ite, living mostly in the eastern part of the country where the oil fields are. 45% of Kuwait's population, and 70% of population of Bahrain -- which houses the headquarters for the U.S. 5th fleet -- are also Shi'ite. Note that the attacks will not even have to inflict severe damage to anything. The panic that they would cause in the world would be, as acknowledged by most experts, more than sufficient to cause the collapse of the world economy.

Even worse scenarios are still possible. Iran could do all of the above, and we should not expect anything less. Military attacks on Iran will be totally unjustified because, despite all the propaganda, the fact is that Iran is no threat to any nation. The International Atomic Energy Agency has certified time and again that there is no evidence that Iran has a nuclear weapon program. Under such circumstances, even the United Nations Charter recognizes the right of a nation under attack for using every resource and means available to it for defending itself.

Much has been said about the "threats" that Iran supposedly poses against Israel's existence. But if Iran had any intention for attacking Israel, it could do so without any nuclear weapon, and do it now. Iran is widely believed to have chemical weapons. It probably developed them as a reaction to Iraq's attacks on Iran by chemical weapons during the 1980s, which the West did not condemn until after the first Persian Gulf War in 1991. So, if Iran really wanted to attack Israel, could it not provide Hezbollah with a few chemical warheads, and do it now? If Iran is really after destroying Israel, how is it that its Jewish population -- the largest in the Middle East outside Israel -- lives in peace and tranquility and without any discrimination, side by side with its Muslim compatriots, and has done so for over 3000 years?

Yes, Iran has a demagogue President in Mahmoud Ahmadinejad, who is a master of uttering inconsequential rhetoric. But, he does not make the final decisions regarding Iran's national security and foreign policy. In addition, judging based on his economic performance, Ahmadinejad promises to be a transient phenomenon who will disappear from the pages of time next year, when Iran will hold its presidential elections. Yes, Iran's government grossly violates the basic human rights of its citizens, including political and social rights. But, those are internal affairs of Iranians, which we should not meddle in.

So, next time when you hear about possible attacks on Iran, pause for a moment and think about their consequences, if for no reason other than the pocket issues: Attacks on Iran will put many of us out on street, unemployed, and hungry. Should we not care about our own well-being, instead of supporting the warmongering of the neocons, their allies, and their vested interest in starting another unjustified war in the Middle East?