Hesitation on Syrian Strike Threatens Economic Recovery
NEW YORK (TheStreet) -- President Obama's vacillation on Syria -- first delaying military action and then booting the decision to Congress -- poses grave threats to U.S. prosperity.
Imminent military action, especially in the Middle East, instigates fears of shortages and panic in oil markets. Two years ago, oil prices jumped to more than $110 in anticipation of the U.S. action in Libya but then subsided when the worst did not happen to oil supplies.
With mounting evidence that Syria used chemical weapons, oil prices again jumped, and a prolonged debate in Congress could push gasoline above $4.00 per gallon. That would dent Detroit's resurgent auto sales, shelve investment decisions across manufacturing and weigh on already flagging new home sales.
Should Congress approve military force, Iran could attack Israel or cut back on oil production, permanently pushing up prices. However, once U.S. strikes begin, if those consequences don't materialize, oil prices should fall back.The president exacerbated near term fears by first vacillating after Syrian President Assad crossed his red line, and then asking Congress to vote the week of Sept. 9. Had Obama acted quickly on his own authority, or at least called Congress back into session immediately, the period of uncertainty would have been cut from at least a month to one week. Extended uncertainty can wreak havoc on investment and consumer spending, and potentially tank the economy. The president faces formidable opposition among Congressional liberals and the Tea Party who don't grasp what is at stake for U.S. security and economic interests. Since Roosevelt, the United States has carefully promoted a system of international law that prohibits aggression, protects human rights, and promotes freer markets for international trade and investment. The Chemical Weapons Convention, which 188 nations signed, clearly prohibits Assad's egregious conduct. Sadly, British Parliament has abdicated its responsibilities by voting against UK military action, and the Germans and Japanese are hardly supportive. Russia and China, who abide only by international rules that suit their convenience, have blocked action at the Security Council. Among nations with significant military power, or at least the financial resources to back it, America, France and perhaps a few others stand alone.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV