War! What is it good for?

Absolutely, nothin!

Say it again.

Ah um. War!

What is it good for?

Absolutely nothin!

With all due respect to rock-and-roller Edwin Starr, who sang this eloquent anti-war jingle back in 1970, the war in the Persian Gulf could turn out to be good for auto salesmen, home builders, guys who pave roads and build bridges and, of course, defense contractors.

At least that's what Wall Street was concluding last week when numerous brokerage firms started pondering the financial pros and cons of battle.

While the benefits to companies that build weapons, electronic guidance systems, anti-missile missiles and body bags are obvious, Wall Street was playing with a lot of "what ifs" to determine the hidden beneficiaries.

Keep one thing in mind. Unlike a lot of us, Wall Street still believes this war is going to be a short one that either benefits the nation's economy or is economically neutral. The financial community still isn't admitting that the cost of this war could raise the federal budget deficit, which in turn would cause taxes and interest rates to jump, which would slow business conditions further.

Under this gloomier scenario, the war would eventually make consumers even less confident and reduce their spending. It would also further damage America's already fragile banking system. Then war would be, as Starr sings, good for "absolutely nothin."

But Wall Street is addicted to the silver lining. In the broadest macroeconomic sense, Wall Street believes that a relatively quick Middle East war will lower the price of oil. This will reduce the rate of inflation throughout the world and permit all nations to cut interest rates as a stimulus to the economy.

Lower rates would eventually restore consumer confidence (although the progress of the Middle East war hasn't done that yet) and pull a lot of industries out of their slumps.

The war and lower oil prices, said Robert Barbera, chief economist at the Shearson Lehman Brothers Inc. investment firm, "allows the Fed to redouble its efforts to make it safe to borrow." Barbera predicts that interest rates will decline sharply over the next few months, with the federal funds rate, a sensitive economic indicator used to signal the direction of interest rates, going to a low 5 percent and mortgage rates sinking to the 8.5 percent level.

If this happens, Barbera believes the housing industry could snap back by summer. And durable goods like refrigerators and washing machines could fly out of stores once consumers can get cheaper credit.

Over the longer term, companies that export goods -- especially paper products, chemicals, capital goods and metals -- could also get a nice bounce since foreign economies will likely recover faster than the U.S. economy.

Over at the Smith Barney, Harris, Upham & Co. investment firm, market analyst John Manley is predicting that the shares of "quality" airlines will rise if the price of oil stays low. Quality airlines, he said, include AMR Corp., UAL Corp. and Delta Air Lines Inc.

Arnold Kaufman, editor of Standard & Poor's Corp.'s financial newsletter, is a believer in housing and automobile stocks. He said both tend to recover early in business upturns. And if you are a disciple of the war-creates-lower-interest-rates theory, then that's exactly what you should be looking for.

And Michael Metz, a market analyst with the Oppenheimer & Co. securities firm, said that companies like Fluor Corp. and Ingersoll-Rand Co. -- which specialize in engineering, construction and the manufacture of machines -- could benefit when Iraq and Kuwait have to be rebuilt.

PaineWebber Inc., the investment firm, recently told its clients what "recovery" stocks to buy if it looks as if the war is going to be a "quickie." The first ones out of the gloom, said PaineWebber, would be International Business Machines Corp., AMP Corp. and National Semiconductor Corp. in the technology group; General Electric Co., Honeywell Inc., Deere & Co., Fluor and Caterpillar Inc. in the capital goods group; and Inland Steel Industries, Dow Chemical Co., 3M and International Paper Co. in basic industry.

But PaineWebber warned its clients to stick with companies, like the ones above, that react to global industrial cycles and not ones that rely on consumer spending patterns.

The brokerage firm also figures that there will be "concept" rallies that will occur in reaction to the lower price of oil. In addition to the airlines, trucking companies, chemical manufacturers and leisure industry firms could also benefit from a quick resolution of the war.

The lower interest rates that could develop after the Middle East war, these experts say, will also make today's yields look attractive. So many investment firms are telling clients to lock in current rates by buying long-maturity U.S. Treasury instruments.

While the war is going on, certain industries -- including some of the ones mentioned above -- could suffer greatly. Big banks that are already stumbling because of bad real estate loans could be mortally wounded if interest rates go up while the war is still in progress. Some banks might not be around to feel the benefits of peace and lower interest rates.

A lot could go wrong with Wall Street's idealized picture of the war. For one thing, the conflict could last longer than anyone is expecting. Even if the war is short, the Federal Reserve may not be able to cut interest rates unless other nations cooperate.

On top of that, even if every nation in the world does lower borrowing costs, there is nothing that says consumers or corporations will want to borrow money. In fact, the opposite could be the case. Strapped consumers and corporations -- seeing their earnings decline -- have been shunning new debt.

Maybe I should have started this column with the lyrics for "Eve of Destruction."

If the price of gasoline and heating oil doesn't stay down, you'll be hearing a lot of whining about how little Americans save.

The personal savings rate in this country rose to an admirable 5.2 percent in 1990. But since the price of oil rose last fall, savings have declined. In the September-to-November period -- the most recent figures available -- personal savings dipped to 3.8 percent.

The reason isn't complex. The recession is keeping salaries steady or lower. But the price of fuel is reducing the amount of that salary that can be saved.

James R. Solloway of Argus Research, an investment research firm, says that a drop in the savings rate that large usually means consumers went on a spending binge -- which would be good news for the economy.

But this kind of extra consumer spending helps only the oil producing nations.

John Crudele is a columnist for the New York Post.