Thursday, January 31, 2008

The Iraq effect

By Libby

I meant to get this earlier. Krugman says the Iraq occupation isn't a cause of the economic meltdown and that it actually acts to prop the economy up. Technically, he's right. Certainly the CW that war is good for the economy has been true and some of the 'boom' on paper can be traced to military spending. Nonetheless, I think he's wrong on causation.

The trouble is this isn't a real war. It's an occupation and the money all went to the paper pushers at the top tier of wealth holders. With globalization and outsourcing, the spending didn't create jobs that benefited the working class as other wars did. It created Wall St wealth, pretend money, that I think in part fueled the housing boom.

As you know, I'm no wonk but fortunately, since I cleverly put off posting this for a couple of days, Shaun Mullen has assembled the bullet points that validate my theory. Put simply - a so-called war that doesn't create domestic jobs can create wealth, but it doesn't put money in the pockets of the working class. Furthermore, tax dollars being drained into foreign occupations robs Americans of much needed funds to improve our quality of life here, which has greatly diminished in the last seven years.

No comments: