Waiting for Good News, or Bad News Jude Wanniski August 6, 2002

After some false starts, we have identified the trigger for Wednesday`s market rally that continues into today. It was not easy because we did not learn until this morning that President Bush was reported saying at 2:27 pm that "I will be patient and consult with US Congress and allies before making a final decision on Iraq...." And that "I will explore all options and all tools at my disposal: diplomacy, international pressure, perhaps the military. But it`s important for my fellow citizens to know that as we see threats evolving we will deal with them. We must deal with them." The Financial Times and Xinhua (China) news agencies carried the remarks, which were spoken at roughly the same time Vice President Cheney was saber-rattling in his Commonwealth Club speech in San Francisco... saying that it will not be enough for Saddam to merely allow the return of weapons inspectors.

Because of the blustering, from Washington and Baghdad, it is difficult to sort out how this story is developing, but after discussions with the Iraqi United Nations mission and people in Washington who are sizing up the political and legal constraints, my best guess is that Hans Blix, the chief UN weapons inspector, will soon be on his way to Baghdad with no "pre-conditions," that he will spend 60 days determining if the sites destroyed in the past had been reconstituted and to clear up the other 5% of the issues that were still pending in 1998 when the Clinton administration decided to yank the UN inspectors out so it could begin its bombing campaign.

If we are to believe Scott Ritter, who was on the UNSCOMN inspection team that left in 1998, the new team will find nothing awry and report back to the U.N. Security Council to that effect. For the U.S. to ignore the UN Security Council and start moving ground troops and bombers back to Iraq is almost impossible to imagine. Negotiations would then proceed on a regular inspections regime and a schedule for lifting the U.N. econonomic sanctions. The Bush White House would of course credit its hard line with having brought about this desirable "diplomatic result." Let us hope so.