Thursday, March 10, 2011

Springing Forward to War?

Early Sunday morning (late Saturday night) most of us “Spring Forward” to Daylight Savings time, “losing” an hour of sleep but gaining additional daylight. A genesis for the twice-annual process of adjusting sleep patterns and disrupting businesses is the popular (if inaccurate) notion that harkens back to days of farming when having more daylight allowed the harvest to be reaped. In reality, commerce and transportation figured more prominently.

The idea of daylight saving was first conceived by Benjamin Franklin. Standard time in time zones was instituted in the U.S. and Canada by the railroads on November 18, 1883. Prior to that, time of day was a local matter, and most cities and towns used some form of local solar time, maintained by a well-known clock (on a church steeple, for example, or in a jeweler's window). Daylight Saving Time has been used in the U.S. and in many European countries since World War I. By 1966, some 100 million Americans were observing Daylight Saving Time based on their local laws and customs. Congress decided to step in and end the confusion, and to establish one pattern across the country. The Uniform Time Act of 1966 was signed on April 12, 1966, by President Lyndon Johnson, creating Daylight Saving Time.

Standardizing time zones may be one of the better government interventions! Futzing forward and backward (“saving”) every six months doesn’t make much sense. The time has long since passed to do away with this anachronism and let time stand still.

Where time is marching forward in a much more precarious way is in Libya. In the past several months the world has watched millions of Middle Eastern people challenge their situation and change their governments with relative ease and lack of bloodshed. It is still far too early in the “transformation” to see whether the changes in Egypt, Bahrain, Tunisia, etc. are cosmetic or will have any actual long-lasting impact.

In Libya the opposition/rebels/freedom-fighters have had a more difficult time than elsewhere in the region. Each country is unique and the reasons for the uprisings are not consistent. Forces loyal to Moammar Gadhafi have thus far thwarted the revolution and allowed the dictator to stay in power. (This could change at any time, however, and likely will).

Many politicians and pundits are promoting a number of proposals to intervene to push along the process: establish a no-fly zone, arm the rebels, etc. The Obama administration says it will not do anything unilaterally and will seek international support. Déjà vu.

The U.S. is currently engaged in two combat missions (Iraq and Afghanistan) where 5,924 Americans have died and 42,406 have been wounded so far. Hundreds of thousands of Iraqis and Afghans have also died and been wounded. The conflicts have cost in excess of $1.2 trillion dollars. There is no justification for these losses and less so if America/International community intervenes in another Middle Eastern country, Libya.

Is Gadhafi a bad guy? Yes. For 42 years the world has dealt with this bad guy – and many others like him in the region and around the world. The question that gets too little attention isn’t how to intervene but rather why should the U.S. (or the world for that matter) take sides?

“It’s the right thing to do.” “Humanitarian needs.” “The rebels are asking for our help.” “Stabilize the oil market.” All are true to one degree or another, but is that enough of a reason?

History – and even current events – are rife with examples where help is desperately needed in some region of the world and it isn't/wasn't provided by the U.S. and her allies. It is hard to say no – especially in the face of hardship, need and compelling television coverage.  Sometimes it's just hte right thing to do.

Certainly as a business person I recognize that the steady flow of oil is vital for the economy. 3% of the oil that the U.S. uses comes from Libya. Not that there ever is, but 3% is really not a significant amount of oil to justify the moral hazard of intervention – let alone the financial impact.

Just in pure economic terms it doesn’t make sense either. Libya produces 1.5 million barrels of oil a day – or 547,500,000 barrels per year. At a cost of $104 per barrel (3/9/11 rate) the exported oil to the U.S. amounts to $1.7 billion. Given the amount America would spend on the military machinery – it would actually be more cost effective to spend the $1.7 billion elsewhere – even double – for the oil than investing in another conflict in the Middle East that would also be a rallying cry for terrorists.

There will always be more places and people who want and need American help than can be provided. A third conflict in the Middle East beckons. Will we turn back the clock and say “no, sorry, not this time?”  I fear we will spring forward and become further entrenched in the Middle East.  Now that's something worth losing sleep over.

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