You just have to admire the way the neo-con propganda site The Washington Free Beacon has spun a recent report from the Bipartisan Policy Centre. The National Iranian American Council has a good overview of the evident mendacity of Free Beacon here. Important to note the byline that Free Beacon uses – REPORT: Nuclear Iran would ‘double’ oil prices, cost millions of U.S. jobs
In his piece, Free Beacon ‘journalist’ Adam Kredo states…
Oil prices “could double,” increasing the U.S. price of gasoline by up to $2.75, if Iran is permitted to obtain a nuclear weapon, according to a new economic analysis by a bipartisan team of current and former government officials.
However when one looks at the relevant paragraph Kredo fashioned this claim out of, we see that it states…
For example, in the case of significant instability in Saudi Arabia or a Saudi-Iran nuclear exchange, oil prices could double; gasoline prices could increase by more than 70 percent, adding $2.75 at the pump; GDP could plummet by as much as 8 percent in the first year, or $1.2 trillion, sending the nation into a severe recession; inflation could skyrocket to almost 5 percent; and unemployment could increase by almost 4 percent, translating into more than five million more people out of work.
I think it’s fair to say that that is a rather key part of the sentence which Kredo has decided to omit.
He goes on to quote Democratic Sen. Charles Robb thus…
“Inaction also poses economic risks,” former Democratic Sen. Charles Robb (Va.) told a group of reporters Wednesday during a discussion about the report. “Heightened expectation … and instability triggered by the consequences of a nuclear Iran would cause the price of oil to go much higher and remain high … significantly impacting the US economy.”
However, as the presser is available online it is worth quoting Senator Robb at length…
In the public debate during the last year or so a recurring concern has been the economic risks posed by the available means for preventing a nuclear Iran. Whether through tough sanctions or military action. Economic risks are a legitimate concern but eco…, but inaction also poses economic risks. The purpose of the paper we’re releasing today is an attempt to illustrate some of the economic costs that would emanate from the impact of a nuclear Iran. We don’t suggest that these will be the only costs the US would bear by any means. There would be a myriad of consequences, direct and indirect, only some of which can be foreseen or quantified. We concluded simply, that heightened expectation of instability and supply disruptions triggered by the prospect of…, the consequences of a nuclear iran would cause the price of oil to go much higher and remain high for a sustained duration of time significantly impacting the US economy.
So the Senator first admits that preventing aIran from gaining a nuclear weapon poses economic risks. He also admits that this report is just their conclusion. You will also notice that Kredo has a strange way of editing quotes, making mid-sentences appear as if they are the beginning of a sentence.
The report in question bases it magic 8-ball analysis around 5 possible consequences of a nuclear Iran. These 5 predictions are – domestic instability in Saudi Arabia, Saudi facilities being destroyed, sanctions against Iran lapsing, Iran-Saudi nuclear exchange and finally an Iran-Israel nuclear exchange. So you can see that the report is based upon rather shaky predictions, the most likely of which the report states to be domestic instability in Saudi which they peg at a probability of 40%. Interestingly and obviously not reported by Kredo is the report’s conclusion with regard to the sanctions lapsing scenario, it states –
Were this scenario to occur, our model suggests the price of oil would actually fall by about 20 percent from the current baseline. Although this could have positive economic effects, because we consider it likely that Saudi Arabia might scale back its own production in the event of this scenario, we did not calculate its economic impact.
So there you have it, Iran is to blame for the actions of Saudi Arabia as well. What that little nugget inadvertently admits, is that any kind of tough posture toward Iran, the current sanctions or a possible military option (which this report no doubt seeks to scare-monger for) has negative economic consequences, as Senator Robb admitted above.
Finally the report in question concludes with a Caveat paragraph (page 43), part of which reads…
Attempts at prediction and quantification of future events are fraught with perils and ought be approached with humility. Thus, we undertook this study not to yield an authoritative description of what will happen the day after Iran becomes a nuclear power, but to provide an account of what might happen that could lay the foundation for discussion among reasonable people. For this reason, our effort has been guided throughout by the twin principles of simplicity and peer review. First, rather than develop highly complex and technical models of how energy markets function or of what drives the U.S. economy, we have opted throughout to make simplifying assumptions. This might sacrifice predictive accuracy, but we decided it more important to demonstrate intelligibly general trends and linkages to policy experts and the general public alike than to build quantitative models worthy of Wall Street
With that in mind, it should come as no surprise that Free Beacon enjoyed this report. Bless their little hearts.