In Box

Blood or Treasure?

For a president, the real cost of war is dollars, not deaths.

Whatever their domestic achievements, the legacies of American wartime leaders are largely defined by their wars -- think Lyndon Johnson and Vietnam or George W. Bush and Iraq. While U.S. presidents tend to enjoy a patriotic bump at war's outset, long, costly military engagements nearly always drag down their popularity over time.

The more interesting question, according to economist Benny Geys of Berlin's Social Science Research Center, is what, exactly, it is about war that tends to make Americans turn against their presidents. Public-opinion researchers have traditionally used combat deaths to measure the amount of "pain" a war inflicts on society, but this doesn't quite fit: The unpopularity of the Iraq War during the Bush administration matched -- and at some points even exceeded -- opposition to the Vietnam War, despite the fact that more than 58,000 U.S. troops were killed in Vietnam versus fewer than 5,000 to date in Iraq.

For this reason, Geys views treasure -- not blood -- as the more relevant indicator. In the case of the Korean War, Geys shows that defense costs alone accounted for a nearly 5-point dip in Harry Truman's popularity.

The effect is lower, though still statistically significant, in later conflicts, which Geys argues could be a result of the declining cost of war relative to the size of the U.S. economy. In 1952, the Korean War accounted for 4.2 percent of U.S. GDP. In 2008, the most costly year of the Iraq War, it was just 1 percent of GDP.

Geys doesn't consider one important but difficult-to-quantify factor: whether the public thinks a war is worth fighting. For example, approval ratings for Franklin D. Roosevelt remained high throughout World War II, despite enormous human and financial costs, because it was almost universally seen as a necessary sacrifice.

The relative expenditure of treasure and blood is much lower today -- perhaps one reason why the United States is approaching nearly a decade of continuous war in Afghanistan. But if Barack Obama's poll numbers continue to drop, he might realize that there's only so long the public will support a war -- even at a discount.

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Epiphanies from George Papandreou

The scion of a socialist political dynasty, son of one prime minister and grandson of another, George Papandreou has also inherited the unwelcome task of bringing Greece's sinking economy back from the depths of the Aegean. Here, he explains how Greeks are more stoic than you think, that Europe isn't the problem -- and why markets are not gods.

Our country was not well run. There was a lack of transparency; there was a lot of money that was lost, wasted, through huge bureaucracy, a clientelistic system, patronage, and then of course, graft.

There was a period of almost terror, being terrorized by the markets every day, being told by the Greek and international press and all kinds of gurus on the economy that you will lose your money, you will lose your euro, you will lose your savings, there will be catastrophe.

My experience is actually a Greek experience. Living abroad, diaspora, exile, as a refugee; going through dictatorships, jails, persecution -- these are things which pretty much every Greek family has had some relative go through. And one thing you hear in Greece is, "Yes, this is a crisis, but we have come through difficult times before. Let's huddle together and work it out."

Markets are fallible, and we should not worship them as gods. We have to see how to put them to best use to help our economies and our societies. You can get a psychology in the markets that is not rational, and that can become a mob psychology, which can go in a positive direction, creating bubbles, or in a negative direction, creating catastrophes.

On the one hand, we have huge capabilities and means to deal with crises, but on the other hand, the problems, because they're global, interconnected, and interdependent, make people feel disempowered. And that sense of disempowerment is going to create more insecurity and more mistrust in the political institutions we have -- and that could range from apathy to violence, from fundamentalism to populism.

We need more Europe, not less. We have to move down a path of more coordination, deepening our integration. Otherwise, we face the prospect of moving back to more nationalistic, more self-centered policies. And that, I think, would be very sad after what we've been able to achieve in Europe over these last decades.

Illustration by Joe Ciardiello for FP