This is not a blog about whether the war was a good idea or not (for better or worse the choice has been made, and it is too soon for any historical analysis). Nor is it a blog about how the war should be fought – I do not have access to all the military information and I am not a soldier anyway.
My concern in this. Will the war get the blame for the coming economic downturn, thus diverting attention from the real cause?
For 30 years most newspapers, television and radio shows, economics textbooks and other such have blamed the failure of the Keynesian system in the 1970′s on the “Oil Shock”.
The fact that wage and price controls were introduced in the United States in 1971 and in Britain in 1972, whereas the ‘Oil Shock’ was in 1973 is overlooked. The idea that one can just pump up the money supply to hold down unemployment was clearly coming under strain (hence the effort to deal with the price rises, caused by the monetary growth, by direct controls), but then the “Oil Shock” came along to give the establishment an excuse for the failure of their system.
A similar thing could happen again. There is a vast credit bubble out there (in most Western nations) – the great majority of credit-money is not backed even by paper notes (let alone by anything else) and we are due for a big bust that will hit asset prices hard.
We have seen some of this already (with the decline in stock markets) – but there are a lot more problems to show up yet.
However, now the war has come – thus giving the establishment an excuse. “There is nothing basically wrong with the system, it was the war that messed things up”.
I know that it is cold to write about such things when people are dying – but it still has to be thought about.