A Saddam Stock Market Jude Wanniski September 19, 2002

If you want the stock market to go up, you should be rooting for Saddam Hussein, hoping he is smart enough to outwit the Pentagon in the chess game they are playing. If you wish to be rid of “the monster Saddam” at any price you had better be prepared for bigger losses on Wall Street than you might even imagine. The nice little rally Wednesday following the news that Baghdad will permit the UNMOVIC inspectors to come in and look anywhere they wish was the last thing President Bush’s warriors expected this week. They thought Saddam would fool around for another few weeks, hemming and hawing about access and arrangements, while they got a resolution out of the United Nations that would provide an excuse for the war they desperately seem to want. The meltdown on Wall Street began when Defense Secretary Donald Rumsfeld told Congress the weapons inspectors would not be able to disarm Iraq as Iraq would be able to get around them as they have in the past. When President Bush said Saddam is “not fooling anybody,” it became clearer than ever the White House is not interested in disarming Iraq. It wants a “regime change” that will install a puppet government in Baghdad, with a chosen imperial proconsul that controls the world oil market.

If the most powerful man in this unipolar world wants to do something badly enough, he will let nothing  stand in his way. Not Congress and certainly not the United Nations. What we don’t know at the moment is just how far the President is willing to go. At the moment, he is insisting that Congress give him unlimited war power before the United Nations Security Council crafts the kind of resolution that will provide a pretext for war. Rumsfeld insists they have all kinds of private assurances from various countries that once the fur starts flying, they will not only be at our side with weapons, but also with cash to help pay for it all. If everything works according to the best-case scenario presented, Rumsfeld thinks Saddam might even step down peacefully and go into exile, like a good fellow, to prevent needless loss of life all around. Note that Steve Forbes, who is as plugged in to the GOP War Party as any outsider, Wednesday morning told MSNBC’s “Squawk Box” that Saddam will be gone by the end of the year. He said that while the DJIA was up 100 points, before Rumsfeld’s testimony.

What Saddam has going for him is his willingness to allow unlimited access to places, officials, and to files and records. Iraq certainly is acting like a government that has nothing to hide. He also has on his side, so to speak, Secretary of State Colin Powell, who really wants to avoid a pre-emptive war and the tidal wave of terrorism it would surely produce. Where Rumsfeld is willing to prevaricate (“strategic influence”) in order to advance war, Powell probably is not. The public opinion polls are already shifting decisively against unilateral action, with CNN’s latest showing a 65-to-35 split against war. That could turn if the administration can show new “evidence” that Iraq has been seeking to reconstitute a nuclear weapons program. When Vice President Cheney announced that such “evidence” had come to light in the last 14 months, what he had in mind were those aluminum tubes that Iraq was trying to import -- tubing supposedly only good for gas centrifuges that could cook up enriched uranium. Alas, the administration is now embarrassed by a think-tank report that questions these conclusions. In the Washington Post today, it gets worse:

The report, from the Institute for Science and International Security also contends that the Bush administration is trying to quiet dissent among its own analysts over how to interpret the evidence. The report, a draft of which was obtained by The Washington Post, was authored by David Albright, a physicist who investigated Iraq`s nuclear weapons program following the 1991 Persian Gulf War as a member of the International Atomic Energy Agency`s inspection team. The institute, headquartered in Washington, is an independent group that studies nuclear and other security issues. The new report questions that conclusion on several grounds, most of them technical. It says the seized tubes were made of a kind of aluminum that is ill-suited for welding. Other specifications of the imported metal are at odds with what is known about Iraq`s previous attempts to build centrifuges. In fact, the report said, Iraq had largely abandoned aluminum for other materials, such as specialized steel and carbon fiber, in its centrifuges at the time its nuclear program was destroyed by allied bombers in the Gulf War.

If there were clear evidence that Iraq was still bent on badness, the United States might expect minimal negative fall-out from a campaign that would kill many thousands of Iraqi civilians and some “acceptable” number of US troops in Baghdad street-fighting. As the evidence dissolves, the risks increase of higher negative fallout, “the near certainty of creating legions of new terrorists who hate America,” as it is put semi-starkly in a NYTimes op-ed today. Putting it starkly all the way, we’d have to include Israel as a target of those legions of new terrorists filled with hatred. And Israel is right there in the middle of it all. The Israeli political establishment,which backs “regime change” in Baghdad, may wish to rethink the cost/benefit ratio. My weekly reading of the Jewish Forward suggests American Jews have been doing that already, to the point where I have been called by the editors to submit an op-ed on the subject.

It is still unclear to me just what is going on in the mind of our young President, although I do not believe he is prevaricating – as Rumsfeld clearly does under tough questioning. (He was really sweating last night when grilled by the mild-mannered Jim Lehrer on his NewsHour.) There are those who tell me Mr. Bush really does have in mind a “New World Order” of the kind Richard Perle and William Kristol dream about. But the former general manager of the Texas Rangers baseball team, I think, is more likely to want to squash the man who he has been told repeatedly tried to assassinate his father, soon after the elder Bush left the White House in 1993. There is not a shred of truth to this story, but the President clearly believes it. I know it sounds implausible, but I believe the President is ill-informed on a variety of issues related to the problems of the Middle East, and this is one of them. Granted, it is easy to be ill-informed with the American press corps being so casual in its reporting. In Time magazine’s September 16 special edition, “Are We Ready for WAR?,” the lead article reports the administration says Saddam “gassed 50,000 to 100,000 rebellious Kurds inside his own country.” Neither Time nor the administration have caught up with Human Rights Watch, which once believed that story, but has come to realize it is dopey, and now posits that Saddam had that number machine-gunned to death, their bodies then trucked somewhere south and buried in hidden mass graves, an idea even dopier. Newsweek’s Sept. 23 cover on “How We Helped Create Saddam,” is equally pathetic, reading like a college sophomore’s term paper.

I’m bombarded by critics with questions about the bill of particulars the White House has broadcast, about Saddam violating 16 different UN resolutions over the years. The editor of one of my favorite periodicals demanded that I respond to the 21-page White House  paper about these resolutions and Iraq’s “deceptiveness” during previous inspection periods. I can only point out that at the end of the seven years of inspections, the French, the Russians and the Chinese  voted in the Security Council that Iraq was in compliance. And Scott Ritter, who still calls Saddam “a monster,” agrees that Iraq was in qualitative compliance with the UN resolutions. I told my journalist friend the White House “paper” was the equivalent of e-mail “spam.” In the period from 1991-1997, Baghdad was issued the equivalent of speeding tickets or failure to yield, but in each case the issues were resolved through UNSCOM negotiations.

The indisputable fact is that President Bush #41, President Clinton #42, and President Bush #43 each issued statements in their time that the sanctions against Iraq would not be lifted NO MATTER WHAT IRAQ DID TO COMPLY! Before he died, Richard Nixon said the same thing. So did James Baker III and Madeleine Albright, when they were Secretaries of State. Charles William Maynes, head of the Eurasian Foundation and former editor of Foreign Affairs, makes this simple point in a letter to the NYTimes today. The American government has been acting in bad faith for the last 11 years and has been accusing Baghdad of being out of compliance. On the NewsHour last night Rumsfeld’s nose grew several inches while he denounced Iraq for shooting at American airplanes over the last five days!! He never mentioned that American aircraft under his direction were bombing Iraq at the time, killing more Iraqis in hopes, no doubt, of provoking Saddam into making new threats to justify a full-scale US attack.

It is a very dangerous time, as dangerous as it seemed in 1962 during the Cuban Missile Crisis, although back then it was the USSR and Nikita Khrushchev who were taking the risks that could lead to catastrophic war. Now it is the US government. In his testimony, Rumsfeld acknowledged there was no “smoking gun,” but then argued a smoking gun is one that has been fired, which is why we should shoot first. I still think we will not. The President is a Texan, after all, and we have been taught to believe that only the bad guys with the black hats go for their guns first. The good guys with the white hats win because they are quicker on the draw and better shots.