Scott Horton Interviews Donald Losman

Scott Horton, October 22, 2009

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Donald Losman, professor of economics at the Industrial College of the Armed Forces, discusses the secondary role OPEC played in 1970s U.S. economic problems, U.S. government intervention in oil prices that encouraged poor consumer choices in the broader economy, the numerous real costs not included in a barrel of oil and why military coercion is not needed to spur international trade.

MP3 here. (28:13)

Donald Losman is a professor of economics at the Industrial College of the Armed Forces, National Defense University, Washington, D.C. He is the author of a 2001 policy analysis for the CATO Institute, “Economic Security: A National Security Folly?

Losman began teaching at the Industrial College of the Armed Forces (ICAF) in 1982 and also holds a diploma from ICAF. He has worked in senior professional military education since 1978, having taught at the U.S. Army War College and the National War College as well. Earlier, he was a civilian academic for 14 years. Dr. Losman holds a PhD in international economics from the University of Florida, with a minor in international politics. He has also served as a consultant to the Small Business Administration and the World Bank; he has worked in the Pentagon and for an economic consulting corporation. Dr. Losman is the author of four books, over 60 scholarly articles, and op-ed pieces in all our nation’s leading newspapers as well as in overseas publications. He has regional expertise in the Middle East and is recognized as an authority on economic sanctions. He also has expertise in defense industrial base issues and the electronics industries.

The views expressed are the author’s and do not represent the views of the National¬† Defense University or the Department of Defense.

4 Responses to “Donald Losman”

  1. The Arab States imposed the oil embargo because of U.S. resupplying of Israel during the 1973 war – it was a very clear cause and effect reaction. Not, as Losman claims, as a "convenient excuse" to jack prices up. This is just another "blame the Arabs" excuse for lousy U.S. policy on everything from energy to the Middle East.

  2. TP toilet paper

  3. You are certainly correct that U.S. energy policy was lousy–that was the main point of my essay. OPEC was in Vienna, ready to raise prices once again, when the October, 1973 war broke out. You are correct that the embargo was indeed a result of the war, while the price increases–the really disruptive action–would have occurred anyway. Arab oil suppliers embargoed only two nations, Netherlands and the U.S. The embargo itself was not a big problem for the U.S.–it just re-arranged where we got our oil. The price shock was negative for all oil-consuming states. My point is that the Arab oil suppliers along with others were going to hike prices anyway. Both the embargo, which had almost no effect, and the price hikes, which had great effect, were then touted as actions to support victimized Arab states and pride against Israeli/U.S. aggression. In short, the price hikes were coming and had little to do with the October War. But it became convenient for the Arab oil producers to wrap their actions in the flag of Pan-Arabism, anti-Israelism, etc. ACTUALLY, THIS REPLY WAS TO PRS 10.

  4. To Mr.Taylor, I have some serious doubts as to your conspiratorial depiction. The Nixon administration was forced off the gold-dollar tie, a process that began well before it took office, having both current account deficits and inflation over a prolonged period. Our dollar liabilities to the world were greater than our gold holdings,forcing us todrop the gold tie completely. This was involuntary, but inevitable. Our banking system was the only one capable of re-cycling in the magnitude of OPEC's surplus inflows of dollars over what they profligately could spend. Again, the unlinking of the dollar to gold did not emanate from greedy Wall Street financial types, but from foolish economic policies which the U.S. pursued. Seeing that writing on the wall, the U.S. administration was no doubt pleased and expected that the petrodollars returned here. It is hard for me to believe that it was Nixon's plan to transfer enormous amounts of wealth to Arab oil producers, mainly from U.S. pockets, but also from all other oil consumers. this gave the oil producers political as well as economic leverage. while 'tricky Dick' did not mind using his own leverage, he abhored being the victim of leverage.

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