In U.S. Support of South Korea, an Economic Danger Looms

By Douglas A. McIntyre Published Apr 5, 6:18AM EDT

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The U.S. public needs to be careful what it wishes for. The great majority of Americans support the use of the U.S. military if South Korea is attacked by North Korea. Should America be pulled into the conflict, which could involve a countries beyond Korea’s borders, markets could easily be panicked and thrown into a tailspin, with the effects moving quickly into the broader economy.

New data from Gallup show:

If North Korea were to attack South Korea, as increasingly seems to be a possibility with the recent threats and actions of North Korean leaders, the majority of Americans (55%) say the United States should use its military forces to help defend the South, while 34% say the U.S. should not do so.

The United States has more than 28,000 military personnel in South Korea. The numbers in Japan and throughout the balance of the region are much larger. The U.S. naval base in Yokosuka, Japan, is American’s largest installation in Asia. And U.S. officials have sent new missile systems to Guam and the destroyer USS John S. McCain into the region. None of these things matter without U.S. popular support, which will make Washington’s decisions about the aggressive defense of South Korea easier.

A war on the Korean peninsula, even if only a “small” one, would roil equities and energy prices at the very least. A larger conflict would rattle the investment markets deeply, which in turn almost certainly would cause a sharp sell-off in equities. Fuel prices also would rise quickly as oil would trade higher. Crude has a tendency to rocket up when there is a global disaster, usually on supply worries. The amount of wealth created by the markets in the past year would be threatened, and with that, the larger economy.

Based on the risks, both militarily and to the economy, the public’s support of South Korea is all the more impressive. However, that impressive support may cost the United States more that the public can guess.

Methodology: Results are based on telephone interviews with 1,025 national adults, aged 18 and older, conducted April 2 to 3, 2013.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.