Scoring the Iran War

What did we gain from the Iran war and what was the cost (so far)? Why did we launch this war? What was our objective and have we achieved it?

From a NYTimes article and JD Vance speech the US budgetary cost of our illegal attack on Iran was about $150 billion. This year’s conflict cost five to six thousand lives. This does not include the economic cost to the world from oil shortages and food shortages expected from the shortage of fertilizer, etc. NYTimes – Iran war costs

In evaluating what we gained from the war it is hard to know whether to treat the negative outcome as a negative gain or an additional cost. Prior to this war the Straits of Hormuz were open and passage was free. While Iran seems to have agreed to reopen them, they have now clearly demonstrated the potential to close them or charge for passage as potential future choke points. While Iran may be giving up its financing of friends in the neighborhood (Hamas, Hezbollah, Syria, Yemen), and this would be an import gain, it has established its military strength to defend itself while the US has demonstrated its vulnerability.

More importantly, Iran is now judged by many to be more likely to build an atomic bomb. The Iran Deal (Joint Comprehensive Plan of Action -JCPOA) negotiated by the Obama administration, which insured that Iran would not do so for at least ten years, was overturned during the first Trump administration. Hopefully such assurances can be reestablished during the 60 day negotiations still ahead. Though such a bomb would violate Islamic doctrine, the need for such protection has been greatly increased by US/Israel aggressions. But the MOU agreed to this week provides no assurance that a new agreement would be any better than the one Trump killed in May 2018. The Washington Post’s careful analysis suggests that it is not promising that a new agreement will be any better than the old one:  Trump condemned Obama’s Iran deal-here’s how his own compares

In an interview at the opening of his Presidential Library in Chicago, former President Obama stated that: “it feels like we are back where we were before we started the war, except maybe a little worse off…”  The Hill-Obama on Trump Iran war Obama’s assessment was not including the costs of the war noted above.

US support of Israel has been very costly. Virtually the whole amaworld, other than the US, has condemned Israel’s behavior in recent years. The number of Palestinians killed by Israel in Gaza alone since the Oct 7, 2023, attack on Israel by Hamas that killed 1,200, is hard to estimate in part because so many remain buried under the rubble. As reported in an interesting effort to estimate deaths, over half of those killed were women and children, Ralph Nadar stated that: “The recent report by Francesca Albanese, the United Nations Special Rapporteur on the Occupied Palestinian Territories, referred to a consensus of 680,000 deathsFatalities by Israel-vast Gaza genocide-deliberately undercounted These deaths don’t include those in the West Bank, Lebanon, and Syria, which continue to this day despite a so-called cease fire.

More broadly the damage to America’s reputation because of our support of Israel’s bloody attacks of its Palestinian, Lebanon, and Syrian neighbors has been further increased by its illegal attacks on Iran. Our rapid decline continues.

According to Ian Bremmer: “The cease-fire does not mark the end of this chapter of conflict and regional division in the Middle East; it is instead driving a geopolitical realignment along new fault lines.

“More outcomes? A more polarized and fractured Middle East. Iran in a stronger strategic position. And American partners shaken by erratic and unpredictable conduct.

“The war has accelerated the collapse of the US-anchored order that held the Middle East together for decades. That arrangement kept oil flowing, rival powers out of the region, and Washington the broker of everything that mattered – from Iranian containment to the more recent Arab-Israeli normalization process. It was already fraying before the fighting started. The war broke it.”   Linkedin – What actually mattered

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Author: Warren Coats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My recent books are One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina; My Travels in the Former Soviet Union; My Travels to Afghanistan; My Travels to Jerusalem; and My Travels to Baghdad. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon. I live in National Landing Va 22202

One thought on “Scoring the Iran War”

  1. Dear Warren,

    I view your Iran war blog as an engaging blend of facts, interpretations, and contested claims rather than a purely factual assessment. That is not necessarily a criticism—many thoughtful essays fall into that category. However, at times your narrative reminds me of the literary tradition of magical realism made famous by Gabriel García Márquez, where reality and imagination coexist in fascinating ways.

    I often try to separate emotion from facts when evaluating major events, particularly wars. I ask myself the following questions:

    Had I been willing to use force against Iran to obtain a memorandum of understanding and bring the parties to the negotiating table? My answer is yes.

    Would I have chosen to do it at this particular moment? Probably not.

    Did we gain anything from this costly conflict? I believe we did. We now have an opportunity to build a new understanding with Iran’s leadership. Equally important, there may be an opportunity to impose greater discipline on Israel and encourage it to refrain from military actions beyond its borders, including in Lebanon and elsewhere.

    Having shared my own views, I must respectfully disagree with several of your assertions.

    First, the claim that the war cost $150 billion appears unsupported. Public statements from the Pentagon place the cost much closer to $25 billion, although the final figure will undoubtedly be debated for years.

    Second, the assertion that the war was “illegal” is more a legal and political argument than an established fact. I personally dislike any President taking military action without explicit Congressional authorization. Unfortunately, Presidents Clinton, Bush, Obama, Biden, and Trump have all relied, to varying degrees, on executive authority in military matters. Whether one agrees with the practice or not, that alone does not automatically render the action illegal.

    Third, your argument that Iran is now more likely to build a nuclear weapon strikes me as speculative and illogical. It is entirely possible that Iran already possesses capabilities far more advanced than publicly acknowledged. We simply do not know.

    Finally, the figure of 680,000 deaths in Gaza remains highly contested and, to my knowledge, has not been independently verified by the major international organizations that track conflict casualties. Only newspapers and single TV networks cite it.

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