Posted by
Reeson on Tuesday, January 16, 2007 9:57:24 AM
This is a different take, from the economic standpoint, on President Bush's new strategy for the war in Iraq. Excerpts from the
Washington Times:
By Lawrence Kudlow
Amidst all the pessimism about the U.S. strategy-shift in Iraq, world financial markets seem to be voting for President Bush and his plan -- not against. On the days immediately preceding the president's speech, as its contents leaked out, oil prices were plunging and stock prices rising. And right after the speech, when the contents of the Iraq plan were clear, guess what? Oil prices continued to fall, and share prices hit record highs.
...President Bush's overhauled Iraq strategy, including a tougher line on Iran, is viewed by investors as a plus for Middle East security. Two large aircraft carrier groups and 16,000 sailors have been positioned in the Persian Gulf. There also are indications the U.S. will provide Patriot anti-missile defense systems to allies in the region. So, putting all this together, geopolitical risk premiums are declining -- hence lower oil prices.
While pundits and politicians say the new Bush plan won't work, market investors are voting with their money for a much more positive verdict. And after surveying the details of the new Iraq strategy, I'm casting my lot with the investors.
Political opposition by Democrats and Republicans to Mr. Bush's new strategy may be hardening, but financial markets point to a much more positive scenario. Might the president's new plan actually work? World markets are saying give it a chance. I agree.
Lawrence Kudlow is host of CNBC's "Kudlow & Company" and is a nationally syndicated columnist.