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This Is the Iraq Recession

Think Progress reminds us that before the Iraq War, economists were predicting that a prolonged occupation could lead to a recession here at home and around the world. Witness:

"A war against Iraq could cost the United States hundreds of billions of dollars, play havoc with an already depressed domestic economy and tip the world into recession because of the adverse effect on oil prices, inflation and interest rates, an academic study [by William Nordhaus, Sterling professor of economics at Yale University] has warned." [Independent, 11/16/02]

"If war with Iraq drags on longer than the few weeks or months most are predicting, corporate revenues will be flat for the coming year and will put the U.S. economy at risk of recession, according to a poll of chief financial officers." [CBS MarketWatch, 3/20/03]

"If the conflict wears on or, worse, spreads, the economic consequences become very serious. Late last year, George Perry at the Brookings Institution ran some simulations and found that after taking into account a reasonable use of oil reserves, a cut in world oil production of just 6.5 percent a year would send the United States and the world into recession." [Robert Shapiro, former undersecretary of commerce in the Clinton administration, 10/2/02]

And lo and behold...

Comments

What are you talking about? The economy is strong, the surge has fixed all the failed policies in Iraq, all is well.

Posted by: capt on 01/23/08 at 11:18 AM Respond

The overproduction of houses due to cheap credit was not exactly related to Iraq.

There are actually three things going on right now. Expensive oil is one - deficit spending is two, both related to Iraq.

But three is the housing bubble and the subsequent credit/banking issue based on securitization. They are all leading to recession, and all products of a laissez faire capitalist economy. That, I think, is why they are panicked, because there is a 'multiplicity' of causes.

Posted by: elydog on 01/23/08 at 1:11 PM Respond

Response from the Bush administration "I don't think anyone could have foreseen these effects."

Posted by: DaveD on 01/24/08 at 4:57 AM Respond

Sorry, but this is the Bush Depression(soon) and that covers all of the above names.

Thank you,
Edith

Posted by: didler on 01/25/08 at 8:13 AM Respond

I know Democrats think everything is the fault of Republicans, but the Greenspan years covered Bill Clinton. The deregulation of the banking industry was done by Bill Clinton. This war was initially cheered (and some are still cheering) by the Democrats. The tax cuts were championed by the Democrats. Etc.

War, deficits, tax cuts for the rich, giving Wall Street what they want? Bipartisan.

Bipartisanship? Priceless!

Posted by: Elydog on 01/25/08 at 11:36 AM Respond

Pushing the issues on to the democrats is not completely accurate because although the democrats may have agreed on the war it was suggested by a republican and the current recession is also caused by a republican. The war on terror was caused by a republican and the republican nominee wants to continue the war in Iraq. The republicans have their own fair share of blame in this economic problem.

Posted by: ju on 03/18/08 at 2:57 AM Respond