[Marxism] Iraq war: quagmire for corporations?

Louis Proyect lnp3 at panix.com
Sat Nov 5 09:24:13 MST 2005


Counterpunch, November 5 / 6, 2005
The Unfolding Economic Nightmare
Will Big Business Turn on Bush?

By MARK ENGLER

(clip)

Is the problem just one of perception, or have the wages of war cut into 
business profits? In June 2004, USA Today reporter James Cox wrote about 
how financially ailing companies are pointing to the war as the culprit:

"Hundreds of companies blame the Iraq war for poor financial results in 
2003, many warning that continued U.S. military involvement there could 
harm this year's performance. In recent regulatory filings at the 
Securities and Exchange Commission (SEC), airlines, home builders, 
broadcasters, mortgage providers, mutual funds and others directly blame 
the war for lower revenues and profits last year."

Among those complaining, Hewlett-Packard claimed that the occupation of 
Iraq has created uncertainty and hurt its stock price; meanwhile, media 
companies Hearst-Argyle Television, Sinclair Broadcast Group, and Journal 
Communications bemoaned the number of TV and radio ads pre-empted by war news.

While fingering the war might be just a convenient excuse for some 
underperforming executives, the level of grumbling is noteworthy, as are 
the comments of outspoken fund managers profiled by Cox:

"'The war in Iraq created a quagmire for corporations,' David J. Galvan, a 
portfolio manager for Wayne Hummer Income Fund, says in his letter to 
shareholders.

"Vintage Mutual Funds concludes that 'the price of these commitments (in 
Iraq and Afghanistan) may be more than the American public had expected or 
is willing to tolerate'

"In an SEC filing, Domenic Colasacco, manager of the Boston Balanced Fund, 
calls the ongoing U.S. occupation 'sad and increasingly risky.'"

Of course, we know that reconstruction companies are posting profits. Sales 
of gas masks and armored Humvees are also up. But such war-supported 
companies are a small minority. On the other hand, the diverse businesses 
in the tourism industry have taken a huge blow. Delta Air Lines, JetBlue, 
Orbitz, Priceline.com, Morton's steakhouses, Fairmont Hotels & Resorts, and 
Host Marriott, to name just a few, have blamed disappointing returns on the 
war. Travel industry leaders have warned:

"The US is losing billions of dollars as international tourists are 
deterred from visiting the US because of a tarnished image overseas and 
more bureaucratic visa policies... 'It's an economic imperative to address 
these problems,' said Roger Dow, chief executive of the Travel Industry 
Association of America, tourism's main trade body... Mr. Dow stressed that 
tourism contributed to a positive perception of the US... 'If we don't 
address these issues in tourism, the long-term impact for American brands 
Coca-Cola, General Motors, McDonald's could be very damaging.'"

  full: http://www.counterpunch.com/engler11052005.html





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