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On Sat, Feb 09, 2008 at 02:39:06PM -0800, William Chops Westfield wrote:
> 
> On Feb 9, 2008, at 12:29 PM, Peter Todd wrote:
> 
> > in the more recent Iraq war the economy lost tremendous amounts of  
> > value
> 
> Did it?  djia 2000 (peak, pre-bubble-pop): 11600  djia now: 12182
> 
> I'm not saying that wars are good things, but if you're going to make  
> blanket statements like "statistics over the period of the cold war  
> reveal an economic black hole", you've got to be a lot more careful  
> than people have been so far to define exactly what they mean.

You're right, but there's this big "hole" in the lead up to the iraq
war, thing grow a bit after, then stabilize, and take ages to start
growing again.

11600->12182 is only %5 growth, over 8 years, a very very small amount.
The djia *did* go from 7859 to 10627 over the year following the
outbreak of the war, on the other hand, the same amount was lost leading
to the war. Given that stock prices, in theory, should represent
expected returns I'd interpret that as the markets interpreting a lot of
risk leading up to the war, the war itself not going all that badly at
first, (with an expectation of oil prices, trade-deficit, etc. returning
to normal eventually) and then reality sinks in.

It's funny too, on the djia you'd be hard-pressed to figure out where
the internet bubble is exactly. Not so true on NASDAQ though... :)

> I recall a quote from somewhere that said something like "capitalism  
> has two stable states: warfare and welfare."  (an equally provocative  
> statement...)

Yup, I started looking into that stuff after having Naomi Klein's
Disaster Capitalism as part of my assigned reading in a class. Pretty
much that sort of sentiment. I can't say I agree with it though, at
least for the market as a whole, now war-profiteering on the other
hand... well, Haliburton stock's been doing just great. :)

(er, that's a joke, there's a lot I don't know there, like why it tanked
a few months after Sept 11)

- -- 
http://petertodd.org
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