Give The Surge a Chance

Larry Kudlow points out that world markets are treating the President's new Iraq strategy more optimistically that the media, Democrats, and Senator Hagel, or as they're known in the blogosphere, the MSMDH.

But President Bush’s overhauled Iraq strategy, including a tougher line on Iran, is being viewed by investors as a plus for security in the Middle East. Two large aircraft carrier groups and 16,000 sailors have been positioned in the Persian Gulf. There also are indications that the U.S. will provide Patriot anti-missile defense systems to allies in the region. So, putting all this together, geopolitical risk premiums are actually declining — hence lower oil prices.

While pundits and politicians are saying the new Bush plan won’t work, market investors are voting with their money for a much more positive verdict. And after surveying the details of the new Iraq strategy, I’m casting my lot with the investors.

The U.S. military buildup — including the strengthened naval presence — not only will provide better security for Iraq’s democratically elected government, but also enhanced security for the entire region.
[...]
Think of it: Falling oil prices not only reflect lower war and political risk, but they are actually doing enormous damage to one of the Middle East’s top risk producers: Iran.

Political opposition by Democrats and Republicans to Bush’s new strategy may be hardening, but financial markets are pointing to a much more positive scenario. Might the president’s new plan actually work? World markets are saying give it a chance.

I agree.

Me too, Larry.

Freedom on the March Posted by John Kranz at January 15, 2007 2:45 PM