Stimulate the economy
A critical look at Andrew McKillop's first two paragraphs (OGJ, Apr. 19, 2004, p. 18) suggests that his counterintuitive notion is more likely just plain wrong. He notes that US oil and gas prices increased over 200% from 1998 to 2003, and that the US economy was growing at over 7% in late 2003, leading him to the conclusion: High oil and gas prices stimulate the economy.
His selective use of data leads him to that wrong conclusion. First, oil prices were recovering from a modern day low set in 1998 caused by an unexpected meltdown in the SE Asian economy coinciding with a sudden spurt in Iraqi oil production and a too-high quota set by OPEC. So the price increase was really just a bounce back to "normal," not a stimulus to the world's economies. And it occurred between 1998 and 2000; oil prices did not exceed the 2000 average until December 2003.
Second, although the US economy grew by over 7% in the third quarter of 2003, that was the US economy bouncing out of a recession in 2001, a recession caused in part by the jump in oil prices in 2000. In fact, the highest annual average growth rate in the US economy in recent years was 4.7%, in 1998, the year of record low oil prices. The lowest growth rate, less than 1%, was the recession year of 2001 following a big jump in oil prices. Indeed, every US recession since 1970 has coincided with, or immediately followed, jumps in oil prices. It is simply not correct to believe that high oil prices stimulate a robust US economy.
Arlie M. Skov
Santa Barbara, Calif.
Another perspective
In OGJ, Apr. 26, 2004, p. 10, Alfred Cavallo's letter gives a completely negative view of the war in Iraq. He states that we have killed hundreds of Iraqis in the insurrection at Fallujah and Najaf and asks the question: are all of those we killed terrorists? Does he have information that they were not? In war there are always some innocent civilians killed or wounded on both sides of the conflict. I'm sure Iraq is no different.
In conducting a war there are always many changes made in tactics as the circumstances change. A cursory look at any conflict will reveal that Iraq is not an anomaly.
It is useful to list the successes in Iraq:
- Over 4.5 million people have clean drinking water for the first time ever.
- Over 400,000 kids have up-to-date immunizations.
- Over 1,500 schools have been renovated and ridden of the weapons that were stored there so education can occur.
- The port of Umm Qasr was renovated so grain can be off-loaded from ships faster.
- School attendance is up 80% from levels before the war.
- The country now receives two times the electrical power it did before the war; 400,000 people have telephones for the first time ever.
- Girls are allowed to attend school for the first time ever.
Oil is being exported in numbers of barrels that rivals pre-war levels—thanks in great extent to the brave workers of that much-maligned company, Halliburton.
And the list goes on and on. Someone somewhere was doing some unbelievable planning for the post war problems. Despite what Mr. Cavallo says, it is not a failed policy and OGJ need not apologize to anyone.
Wayne Blankenship, Jr.
Kenner, La.
