And what of the Southwest? What happens to the economies of Texas, Oklahoma, Louisiana and the other oil-producing states should the United States become involved in an "all-out shooting war" in the Persian Gulf?
Not much, according to economists and securities analysts in the area.
For the Southwestern states to benefit significantly from a gulf war, the price of oil would have to rise substantially and U.S. oil producers would have to be convinced it was going to stay high for years, even decades, the analysts said.
War would lead to a further rise in prices, experts agreed, but not because of the laws of supply and demand. "I think it will [rise] on a very short-term basis because the traders on the exchange will push it up," said C. Marks Hinton Jr., a partner at Johnson, Rice & Co. in Houston.
"Oil prices are just a number to the guys on the commodities exchange," he said. Companies would have to be convinced of a long-term rise in prices before they would act, he said.
It typically takes three to five years from initial exploration to production, said Stephen McDonald, professor of economics at the University of Texas at Austin. More important, a successful oil well produces for 40, 50 or 60 years.
"There is still and I think still would be a good deal of skepticism about prices staying high," Mr. McDonald said. He said the recent price rise, from below $20 a barrel before the Iraqi invasion to just under $29 now (comments by President Bush Friday drove prices down more than $4 a barrel), "has not stimulated much drilling so far."
Michael Ferrantino, assistant economics professor at Southern Methodist University in Dallas, said, "You don't invest in [new rigs] based on some price fluctuations because of a war that might be over in a few weeks or months. That's not good business."
But what if Iraq somehow was able to destroy the Saudi oil fields and create a true worldwide oil shortage? The boost to the Southwestern economies would be much smaller than the decline the area suffered in the mid-1980s as oil prices dropped, analysts said.
That's because Texas and the other states learned their lesson the last time around and have diversified their economies.
In 1980, for instance, about 85 percent of Houston's economy was oil-related, Mr. Hinton said. Today that number is down to about 63 percent, he said. "You've had a major-league change.
"The fact that oil prices are up is nice," Mr. Hinton said, "but there's a lot of other factors involved."
In fact, according to Robert Reike, vice president of Rauscher, Pierce, Refsnes in Dallas, much of Texas actually is poised for an economic recovery now, more than most other areas of the country. Texas was hit by recession earlier than anywhere else, he pointed out, and the banks and thrifts that have survived are better capitalized than those in many other parts of the country.
As for the failed savings and loans, Mr. McDonald was skeptical that the Persian Gulf crisis would have any effect on them. "Unless it [higher prices] was believed to be sustained, the markets would not value the loans [at those thrifts] any higher," he said.