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Thursday, September 02, 2004

Political Sophistry: Part One

This could fill up one of NASA's hard drives, but I must start before I'll ever finish.

Part One: The False Isolation of Issues Versus False Causation

Paradox and irony being two governing principles of my universe, I will try to show how politicians and their 'strategists' diametrically abuse logic. It is generally accepted that jobs, economics, and terrorism are distinct issues. Politicians will change the subject from terrorist to the economy as if they are discrete. How often have you heard a talking head suggest that President Bush discusses terrorism to avoid discussing the economy? In my case, every day it seems.

Consider the direct links between terrorism and the economy:
1. After September 11, 2001, when the NYSE reopened, the stock market took a series of dramatic drops. Despite the calls for 'patriotic stock buying' panic overwhelmed the markets.
2. Consider the pipelines in Iraq. Whenever there is a terrorist strike on an oil pipeline, the resulting increase in the price of oil has caused a dip in the stock market.
3. Terrorism in Saudi Arabia. To the extent terrorism suggests instability in the House of Saud oil prices rise, again resulting a dip in the stock market.

I could show this graphically, but I'd suggest you spend a week watching CNBC. This is discussed in detail on financial channels. Politics being interjected causes a logical disconnect.

4. Jobs were lost as a result of the 9/11/01 attacks. Not just jobs in the World Trade Center, but a million jobs were suddenly lost in the entire nation.
5. Consumer confidence is directly related to terrorism. Even the recent threats to financial centers not involving actual attacks hurt consumer confidence, sent shivers through the stock market, and required a huge investment in additional security.
6. Security costs have gone up. The Transportation Safety Authority was created suddenly to deal with just one aspect of the additional security needed to attempt to come to grips with the increased threat of terrorism. The overall effect is much greater than the creation of one (abeit enormous) federal bureaucracy. Private firms, citizens, power plants, water plants, police, and fire have all had to invest additional resources in fighting terrorism.

This stimulates some industries of course. Security jobs have been created.

The opposite is also true. Tell me how President Bush caused jobs to be lost? Tell me how President Clinton caused jobs to be gained? Let's face it, Clinton took credit for the bubble. Bush inherited a recession.

The economy is cyclical, stupid.

What you'll find, if you study economics, is that the president has very little effect on job creation. Terrorism has a much greater effect on both job destruction, and job creation.

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