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
