Dow high, Bush low: Questions about the real cost of the Iraq war

Now, if the figures are anywhere near accurate, it is already truly depressing. To take this a step further -- has anyone analyzed these cost against some measurable benefit? Obviously Halliburton (NYSE: HAL) has benefited and the oil companies probably have benefited as well, so there have been economic gains. The entire military industrial complex has benefited, and jobs here and abroad have been created or supported. Can you identify 'good will' in an accounting of something that has generated so much 'ill will'?

This story is not meant to take sides in the current debate, but to extend the debate. The sound bites in the media are wholly inadequate. While the stock market has been on a good ride, increasing in value and reaching new highs almost daily, the president's popularity has been sinking to new lows. This is very unusual. From my perspective, and I have not been a Bush supporter, I think the president has done a very, very poor job of expressing himself and his ideas. He has also been hurt by two obvious factors that he steadfastly has refused to acknowledge.

First, this administration has been overtly arrogant, and second its arrogance has created a blind spot so wide that from the beginning it ignored the appearance of improprieties. It is more than ironic that Bush has been tied so closely to Enron, Halliburton, and Big Oil, so his credibility, after a dubious election result, had to be affected. Now, even when he might be right about some things, he finds waning support even among his own party faithfuls. All good will has been written off and charged against, not only in the accounting books but in history books too.

How does this affect the stock market in the long run? Is the stock market rise in value obscuring the fact that we are witnessing a war-time economy? Are equities rising simply because of all the deficit spending by the government and consumers alike? Is it real growth, or inflation? I was taught a simple economic principle: Over time the available goods and services must balance out with the amount of money in circulation. This implies that stocks (equities) would rise in value.

Here's a real humdinger of a question: Setting the political aside for the moment, Is there an offsetting economic benefit to the war? Given the military industrial complex that always sees a benefit, does the average Joe see any direct benefit or is the gain solely pushed up the food chain, redistributing wealth where it's not needed?

In addition to a proper accounting and cost benefit analysis, what about alternative uses of the hundreds of billions of dollars now being used for this war? Uses such as, perhaps, education? Training more engineers, doctors and nurses? That would have value; provide a dividend to all of us "shareholders." From another perspective, what is the value of fighting a war on foreign soil and not here? This has been put forward as one reason to make the substantial financial and human commitment and it is real.

A lot of questions here and I do not have the answers. I don't believe there ever is a real accounting of the cost of war in the sense that private enterprises are now held accountable. Perhaps that would be the best thing, hold the government to the same standards as private enterprise when it creates new legislation -- not going to happen!

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.