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Marketplace Features
This special report includes in-depth features about real people as well as practical advice for listeners thinking about how to prepare their own lives for the domestic effects of war. With special segments on oil, consumerism, the threat of retaliation, media coverage and government spending, the program examines assumptions about the economics of war and America's sense of economic security.
Listen to program segments:
Oil Trip |
Oil Prices |
Is War Good For The Economy? |
Paying for the War |
House Hunting |
Wartime Wisdom |
War Coverage |
Economic Terrorism |
Winners & Losers
"Oil Trip" by Amy Scott
One of the most supply-sensitive commodities in this war is also one of America's most valued: oil. The mere threat of war is causing price fluctuations, and a conflict could greatly affect gas and heating costs. Marketplace's Amy Scott "hitches a ride" with the driver of a gasoline tanker truck as he makes rounds through cities in North Carolina. At filling station stops, customers voice how helpless they feel about having to pay high gas prices. The driver has heard this before, but he has his own cross to bear: his son has been called to the Middle East in the Air Force.Related Media:
Read from Amy Scott's Reporter's Notebook
Relevant Web sites and Resources:
http://www.qualityoilnc.com/tank.html: The trucking company Amy rode with: Reliable Tank Line in Greensboro, NC
http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp: Department of Energy site with latest gasoline and diesel prices
http://www.gaspricewatch.com/: Consumer Advocacy Site for Gas Prices
http://www.gasbuddy.com/: Gas Buddy Organization, Inc. (portal for local gas price info.)
http://www.truckline.com/: American Trucking Associations Web site
"Oil Prices," with Amy Meyers Jaffe, energy specialist at Rice University
Oil prices are a key part of this story. So, how much of an impact could the conflict have on the price of crude? For this, we talk to Amy Meyers Jaffe from Rice University. Jaffe says that if the market perceives the campaign against Iraq is protracted and not entirely successful -- and if our strategic oil stocks are being depleted, along with less quantities of oil being offered from OPEC countries -- the oil market will have to worry about longer-term balance. But, she says, we're not likely returning to the rationing of '73. The biggest thing to worry about in the short term? Price-gouging by individual gas stations.
Related Media:
Relevant Web sites and Resources:
http://www.fe.doe.gov/program_reserves.html: Info. on the U.S. Department of Energy's Petroleum Reserves
http://www.platts.com/oilreserves/index.shtml: Platts OPEC Guide (meetings, member states, production output, etc.)
http://money.cnn.com/2003/02/25/news/economy/abraham.reut/: "U.S. ready to tap oil reserves" on CNNMoney
http://www.mepc.org/public_asp/main/main.asp: Middle East Policy Council, analyzing issues affecting U.S. policy in the Middle East
http://www.eia.doe.gov/security/contingency.html: Energy Information Administration statistics: "Oil Market Disruptions & Vulnerability"
"Is War Really Good For The Economy?"
There's a common belief, stemming from WWII, that war is actually good for the economy in the long run -- lowering unemployment, stimulating industry and sparking investment. But is this really true? Well, the story is less rosy than that painted by many history books. Robert Higgs, senior fellow with the Independent Institute, Lew Rockwell of the Ludwig von Mises Institute and John Steele Gordon, columnist for "American Heritage Magazine," give their thoughts on the matter. Conclusion? Since employment was low and production was booming, many have made the mistake leap that the economy was prosperous -- but everything that normally is determined by market supply and demand came under the control of government war planners…
Related Media:
Relevant Web sites and Resources:
http://www.independent.org/tii/news/030206Higgs.html: "War Prosperity: The Fallacy that Won't Die" by Robert Higgs
http://www.lewrockwell.com/: Web site of Lew Rockwell, president of the Ludwig von Mises Institute
http://www.livestation.com/content/de/history/ww2/world_war_2_index.htm: World War II history
http://www.stern.nyu.edu/globalmacro/cur_policy/us.html: Info. and links on the modern U.S. economy
"Paying for the War,"
with Michael O’Hanlon, military budget analyst at The Brookings Institute
War…but at what cost? How will we pay for it? And, how long will we be paying for it? Michael O'Hanlon of The Brookings Institute, one of the leading authorities on tallying the costs of military action and the ripple effects associated with it, talks about the history of how much wars cost and how the price of this new conflict relates to the that of World War II. Also, he delves into how the unease consumers and investors are feeling is affecting the markets as well as the negative effects the potential war could cause in the economy.
Related Media:
Relevant Web sites and Resources:
http://www.washingtonpost.com/wp-dyn/articles/A3517-2003Feb26.html: Bush Wants Up to $95 Billion to Cover Cost of War
http://www.brook.edu/fp/research/projects/iraq/war.htm: The Brooking Institute's Iraq Crisis Resources
Marketplace Audio: Feb. 26 MPP newscast segment: "Guns or Butter"
"House Hunting" by Stephen Henn
Here's where the uncertainty factor is already being felt…Housing sales have been the
leg propping up the otherwise dismal economy for the last 2 years, but as the threat of war approaches, some shopping for a new home may be having second thoughts -- and for good reason. Housing prices, especially outside of Washington, DC, where this report takes place, have been at the upper end of affordability. This story begins at the office of a realtor, who arranges to show a home to potential buyers. We meet the potential buyers and follow them back to their apartment where we eavesdrop on their concerns. And, as we learn, concerns can be real and imagined.
Relevant Web sites and Resources:
http://money.cnn.com/2003/02/11/pf/yourhome/hotmarkets/index.htm: Top 10 housing markets
http://www.realtor.com/Basics/Buy/Looking/Hunting.asp?poe=realtor: House-hunting Tips on Realtor.com
Marketplace Audio: Henn's Feb. 27 newscast segment on down housing market
"Wartime Wisdom," with Chris Farrell, co-host of Minnesota Public Radio’s “Sound Money”
How does the average American get his/her affairs in order? Of course, since everyone's financial situation differs, it's difficult to answer the question "How will I be affected?" So, what's the main risk to investors? That the economy goes into recession and you lose your job. In case you find yourself in this situation, Farrell says, make sure you have emergency savings, keep your credit card debt under control and invest in money market mutual funds -- buy into a broad index of funds. The longer the potential war goes on, the more you have to worry about losing your job, Farrell says, so shore up your finances and look to the speculative market.
Related Media:
Relevant Web sites and Resources:
http://www.bernstein.com/perfstrat/monthlies/ts_030205_pu01.htm: Four Simple Points to Deal with Today's Market
Marketplace Audio: Feb. 20 MPP clip: Bob Moon "War Portfolio:" what to do to your portfolio when war breaks out
"War Coverage" by Kelly McEvers
This may be the most predicted and seemingly pre-ordained war in modern history -- and for that reason, cable and network news organizations are spending huge sums of money to outdo each other's efforts. Who will have the best war graphic or theme music? Some news divisions are spending nearly 10% of the entire news budget on the war with Iraq. But in '91, when the Gulf War broke out, this competition didn't really exist: one 24-hour news channel, CNN, covered the first to last SCUD. Since then, CNN has been fighting a different domestic battle…with the other cable and network news outfits that have cropped up to fight for market share. And, everyone from FOX to MSNBC has been rallying news troops to put on the best show in your living room. How will this shape America's perceptions of the conflict?
Related Media:
Relevant Web sites and Resources:
http://www.nielsenmedia.com/: Nielsen Media Research - News Division
http://fpc.state.gov/17209.htm: Department of Defense Media Support Plan
http://www.poynter.org/: Poynter Online (media info., articles, links)
"Economic Terrorism" by Sarah Gardner
Many Americans fear retaliation by Iraq or its proxies. This is not surprising, as Saddam Hussein has vowed to strike at America's economic infrastructure. So, where are we vulnerable? In the months leading up to the potential war, farmers, harbors and airports have increased security to prevent a devastating attack on their industries. At the Port of Los Angeles, the new delay in shipments is due to terrorism screening, and the increased costs are passed along to wholesalers and retailers. Fears about terrorism in public commercial areas may even change the shopping habits of consumers, leading to a slowdown in sales. But it is the end consumer who is paying more for goods because of all the security measures -- and yet, feeling less secure because of the persistent threat.
Related Media:
Relevant Web sites and Resources:
http://www.fda.gov/oc/opacom/hottopics/bioterrorism.html: The FDA's bioterrorism homepage
http://www.customs.gov/xp/cgov/home.xml: U.S. Customs page (useful links, such as the "Cargo Security Initiative")
http://www.whitehouse.gov/deptofhomeland/ : Homeland Security Office
"Winners & Losers,"
with Dallas stockbroker and Marketplace contributor David Johnson
With all the uncertainty related to the conflict affecting everything from how secure we feel in our communities to the how secure we feel about our investments, it's not surprising that the economy is a bit stalled as of late. As stockbroker David Johnson says, "You don't have to wait for the flashpoint to see the economic effects. As he notes, $50 billion in possible investment has been forfeited and the markets will remain relatively frozen until we "get over this war." Johnson says a successful conclusion to the war situation -- something that follows the pattern of the last Gulf War, which was short and mainly played out on CNN -- will pave the way for an economic turnaround. But if there are any hitches along the way, he says "all bets are off."Related Media:
Relevant Web sites and Resources:
http://www.kiplinger.com/columns/value/archive/2003/va0211.htm: "In the Shadow of War" on Kiplinger.com
