The costs of tangling with Iraq

The United States may decide that attacking Iraq is in its best interests from a geopolitical standpoint, but the economy in America and in other countries where oil is important stands to suffer, at least in the short run.
"I think the greatest sort of unrecognized risk to markets and to economies right now is the likelihood of an upward spike" in oil prices in the event of a U.S. attack against Iraq, said Marvin Zonis, a business professor at the University of Chicago and head of Marvin Zonis Associates Inc., a political risk consultancy.
As if to illustrate his point, oil prices in New York shot up 4 percent Tuesday after rumors, quickly denied by the Pentagon, that small numbers of U.S. forces were active in Iraq.
That America is considering military action to dislodge Saddam Hussein, whom it accuses of supporting terrorism, is not exactly a surprise. Over the weekend, Defense Secretary Donald Rumsfeld indicated that to avoid an attack, Iraq would have to accept extensive weapons inspections, a concept that has been troublesome for Saddam in the past.