American economists opposed to the Iraq war, Febuary 2003

Statement prepared by ECAAR

Clark Abt,  Daron Acemoglu,  Benjamin Alamar,  Abbas Alnasrawi,  Polly Allen,  Neil Alper,  Blair Alpert-Sandler,  Theodore W. Anderson,  Ali Arshad,  Kenneth J. Arrow,  John S. Atlee,  Asatar Bair,  Dean Baker,  Stephen E. Baldwin,  Pranab Bardhan,  Nancy S. Barrett,  Janis Barry,  Randall Bartlett,  Parantap Basu,  Rathin Basu,  Joan Bavaria,  Amanda Bayer,  Jess Benhabib,  Pierpaolo Benigno,  Barbara Bergmann,  Gunseli Berik,  Carole Biewener,  Cihan Bilginsoy,  Cyrus Bina,  Stanley W. Black,  Judith Blau,  Patrick Bolton,  Roger Even Bove,  Kenneth D. Boyer,  Elizabeth Brainerd,  Jurgen Brauer,  Andrew Brimmer,  David S. Brookshire,  Robert Buchele,  John P. Burkett,  Paul Burkholder,  Glen G. Cain,  Al Campbell,  Alfred B. Carlip,  Vivian Carlip,  David Cass,  Jens Christiansen,  Polly Cleveland,  Jim Cobbe,  Stephen P. Coelen,  Robert M. Coen,  Steve Cohn,  Laura D’Andrea Tyson,  Jane D’Arista,  James G. Devine,  Randall Dodd,  Peter Dorman,  Thomas A. Downes,  Lloyd J. Dumas,  Richard W. England,  Donald Farness,  Christian Fauliau,  Rashi Fein,  William D. Ferguson,  Ronald Findlay,  Dietrich Fischer,  Duncan K. Foley,  Ronald L. Friesen,  Byron Ganges,  Robert Scott Gassler,  James K. Galbraith,  John Kenneth Galbraith,  Ilhan Kubilav Geckil,  Helen Ginsburg,  David Gold,  Neva Goodwin,  Ilene Grabel,  Timothy W. Guinnane,  Robert Guttmann,  Bronwyn H. Hall,  John M. Halstead,  Alan Harper,  Jonathan M. Harris,  Tom Head,  Daryl Hellman,  Susan Helper,  Peter Hess,  Bert G. Hickman,  Thomas L. Hungerford,  Michael Intriligator,  Walter Isard,  Parul Jain,  Kenneth P. Jameson,  Rajani Kanth,  Richard F. Kaufman,  Lawrence R. Klein,  Richard Kohl,  Denise Eby Konan,  Kate Krause,  Mark Kuperberg,  John Kwoka,  Sumner La Croix,  Lester Lave,  Lori Leachman,  Donghoon Lee,  Sang-Hyop Lee, PingSun Leung,  Guido Lorenzoni,  Catherine Lynde,  Jay R. Mandle,  Stephen A. Marglin,  Roberto S. Mariano,  Judy Markland,  Ann Markusen,  David Martin,  John Tepper Marlin,  Andrew Mason,  Julie A. Matthaei,  Elaine McCrate,  Daniel McFadden,  Robert J. McIntyre,  Will Milberg,  Lawrence Mishel,  Fred Moseley,  Peter Mueser,  Lynne Murguia,  E. Wayne Nafziger,  Edward J. Nell,  Julie A. Nelson,  Teresa D. Nelson,  Douglass North,  Mark Obrinsky,  Mehmet Odekon,  Efe Ok,  Stephen O’Connell, Brendan O’Flaherty,  Spencer Pack,  Kichool Park,  Eva Paus,  Lynne Pepall,  Brian J. Peterson,  Luigi Pistaferri,  Robert Pollin,  Marshall Pomer,  Thomas Michael Power,  Frederic L. Pryor,  Debraj Ray, James E. Rauch,  Robert Reich,  Nola Reinhardt,  Kenneth A. Reinert,  Helene Rey,  Dan Richards,  Tom Riddell, S. Abu Turab Rizvi,  Robert Robertson,  Judith Robinson,  Frank Roosevelt,  Don Roper,  Sumner M. Rosen,  Arthur H. Rosenfeld,  David R. Ross,  Jeffrey D. Sachs,  Sidney Saltzman,  Max B. Sawicky,  Thomas Scheetz,  Robert J. Schwartz,  Michael Schwarz,  Willi Semmler,  Charles W. deSeve,  Edward Shaffer,  Anwar Shaikh,  William F. Sharpe,  Cheryl Smith,  J. W. Smith,  Robert M. Solow,  Dominick Salvatore,  Sally Weaver Sommer, Steve Spear,  Marcus Stanley,  Joseph E. Stiglitz,  Michael A. Stoller,  Paul Streeten,  Lance Taylor,  Scott R. Templeton,  Frank Thompson,  Charles Tontar,  Ann Velenchik,  Shapoor Vali,  Marjolein van der Veen,  Milledge W. Weathers,  Mark Weisbrot,  Dorrie Weiss,  Helmut Wendel,  Sarah E. West,  William D. White,  Gordon C. Winston,  Cecilia Ann Winters,  Ann D. Witte,  Justin Wolfers,  June Zaccone,  David J. Zimmerman, Carol Zytnik.

The Statement below was endorsed by the 203 US economists listed to the left, including 7 Nobel laureates, and it formed the basis of a Wall Street Journal ad run by Business Leaders for Sensible Priorities who added the names of 56 business leaders.

As American economists, we oppose unilateral initiatives for war against Iraq, which we see as unnecessary and detrimental to the security and the economy of the United States and the entire world community.

If war would serve to counter a clear threat to the country, the economic consequences would be secondary. But we question whether war would serve security and not increase the risk of future instability and terrorism. We see the immediate human tragedy and devastation of war as clear; and we see as well serious potential economic harm to our nation and to the world. 

Given the precarious state of our own economy, America requires the attention and focus of leadership and resources to address economic problems at home. Instead, leadership and resources are being diverted to an unnecessary and costly war.  As UN Chief Inspector Hans Blix points out, the objective of containment is being achieved now, by 250 inspectors at a cost of $80 million per year, in contrast to a force of some 150,000 soldiers and at least $100 billion for war.

No administration can credibly promise to solve all problems simultaneously, and as a result of our administration’s comparative neglect, the American economy suffers the following serious problems:

First, private business investment in the United States has not yet started to recover in most areas. Lack of new investment means lack of jobs. The prospect of war threatens America’s financial, energy and other markets. And the larger commitment of the administration to the military will impede, not advance, the recovery of the technology sector, by drawing resources away from civilian applications.

Second, there is a recent and troubling slowdown in consumer spending, which has been supporting the slow recovery. American households are highly indebted.  Only low interest rates, continuing demand in the housing sector, moderate oil prices and cheap imports have kept the consumer going. We fear that war may significantly drive up interest rates and oil prices. If indeed this is so, or if the ongoing decline in the dollar goes too far, the effect could be to unleash a major consumer retrenchment in the United States, overwhelming the added government military spending. 

Third, state and local government budgets continue to suffer. These budget shortfalls are translating into service cuts and tax increases. Either way, household budgets will take a serious hit. The war fever in Washington is blocking efforts for revenue sharing with the states, which is a major way the federal government could prevent a state and local calamity, and it is blocking adequate support efforts for homeland security. Nor can we hope, in such a climate, to address our continuing and larger problems of health care, education, unemployment, and poverty, all of which remain urgent concerns here at home.

During the 1990’s America enjoyed strong economic growth, strong financial markets and unprecedented job expansion.  We believe a contributor to that growth was the “peace dividend” following the end of the cold war. Unfortunately, in place of a “peace dividend,” today we are being offered a “war surcharge,” which will be further aggravated by the effect of a war on the price of oil, especially if it results in destabilizing Saudi Arabia. 

The current policy of sponsoring a new war in the Middle East plays “Russian roulette” with our economy.  Instead, our leaders should focus on restoring our economy and stimulating job growth.  The American people cannot afford to tolerate a mismanaged economy or a naïve underestimation of America’s economic perils.  We ask economists, business leaders and all Americans to join us in opposition to the decision to go to war and instead to support a return to a policy that pays adequate attention to the needs of our economy.  We do not believe that this war is necessary to the national security of the United States.  A sound economy is necessary to the security of the United States and to peaceful world economic development.

from 17 February 2003

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