Hence the attack on Afghanistan and then, 18 months later, on Iraq. The "neocons" believed they had a perfect opportunity to demonstrate the sheer level of US military power and to increase control over the world's number one raw material, oil. This would weaken the bargaining power of the West European states, Japan and China, since they would be at least partially dependent on the US for their supplies. The assumption was that the wars would be won by little more than a display of US airpower at very little cost. This seemed a viable way for achieving shared goals to those who ran US-based corporations, and the Democrats in Congress voted for war.
It was a gamble and by the spring of 2004 it was clear that the gamble was going seriously wrong. The US had taken control of Kabul and Baghdad easily enough. But its forces on the ground were not able to prevent the growth of resistance in Iraq-and of growing Iranian influence there. Within another two years it also faced serious resistance from a resurgent Taliban in Afghanistan.
The turn to military Keynesianism seemed at first to be successful in economic terms. There was an unexpectedly quick recovery from the recession of 2001-2: "Official military expenditures for 2001- 2005 averaged 42 percent of gross non-residential private investment" and "oficial figures . . . excluded much that should be included in military spending" .51 All this provided markets, in the short term, for sections of US industry. But the high levels of military expenditure soon showed the same negative effects they had shown at the time of the Vietnam War and under the Reagan administrations. They increased economic demand without increasing overall international competitiveness and so caused ballooning trade as well as budget deficits. By 2006 the combination of escalating military costs and the risk of defeat in Iraq was worrying important sections of the ruling class. A 2006 report from the Iraq Study Group, headed by Republican Party heavyweight James Baker and Democratic Party heavyweight Lee Hamilton, bemoaned the loss of "blood and treasure" with an estimate of the costs to US capitalism of the Iraq venture of a massive £1,000 billion (equal to seven months output from the British economy).52
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