For all the hot air in Washington this week from Republicans denouncing the historic deal the United States and five world powers reached with Iran, keep in mind that gasoline may soon fall back to $2 a gallon.
That is just one of many economic benefits to America, Europe and the Middle East we can anticipate because the smart use of economic sanctions and diplomacy produced a peaceful solution to the confrontation over Iran’s nuclear program. Since 2006 the U.N. has granted authority to its members to thwart Tehran’s development of nuclear bombs and the missiles to deliver them. Throughout we have had political donors such as American casino mogul and pro-Israel hawk Sheldon Adelson, foreign leaders such as Israeli Prime Minister Benjamin Netanyahu and a host of Republicans on Capitol Hill openly state or suggest that the best way to deal with Tehran was war.
War is not just an ugly business, it’s bad for economies. Its costs are often carried by those born long after conflict ends. The peak year of personnel spending — on pensions, medical care and other costs for veterans — for World War II was 1993. At that time more than half of Americans were 33 or younger, born at least 15 years after the Nazis were defeated and the Japanese surrendered. The bills for that most necessary of wars will continue to come in for decades because of survivor benefits and interest on the debt taken on, but never repaid.
Opponents of the deal include those who think war and threats of war are better options than negotiation and who talk in terms of an idealized world, rather than the actual options in front of us. If we had a universal draft — that is, one without exceptions for the politically connected — we would learn very quickly just how much popular support exists for bellicose policy and those who advocate for war.
One of the silliest arguments made by opponents of the nuclear deal is that by further tightening economic sanctions we could have forced Iran to its knees, giving up every pound of uranium. Tell that to Cuba, still sovereign after more than a half century of American sanctions. Applied smartly, economic sanctions can bring the recalcitrant to the bargaining table, provided they see a path to relief without humiliation. That is just what Secretary of State John F. Kerry and other Western negotiators did.
As for the costs of war, compare the economic effects from how we dealt with Iraq, the bill for which could grow to more than $6 trillion. Five years before the U.S. invaded Iraq based on phony claims, the price of oil was about $25 a barrel (about $36 in today’s dollars). More significantly, the futures markets indicated this price was likely to persist for more than a decade. Instead, the price of oil peaked at more than $140 a barrel as market manipulators took advantage of the effects of war on access to oil.
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