2003, A Year without War Jude Wanniski January 2, 2003

There is no point at trying to forecast the economy and the financial markets a year in advance without first confronting the question of war with Iraq. For a while, it even seemed as if the U.S. might be conducting military operations on two fronts in the new year. Defense Secretary Donald Rumsfeld announced he had the muscle to take on Iraq and North Korea, which has been acting up. But as there is really less than meets the eye in concerns about NK becoming a nuclear power, the President says Pyongyang can be handled diplomatically, while he dispatches another 50,000 troops to the Gulf. He still says he hopes Iraq can be disarmed without a war, but the hawks who dominate his administration continue to behave as if he soon will pull the trigger even if the UN weapons inspectors report no signs of weapons of mass destruction. On Sunday, Paul Gigot, editor of the Wall Street Journal editorial page and among the most eager for war, warned that if Mr. Bush does not unleash the troops on Iraq, “he will be a one-term President.” 

The exact opposite is more likely, I think, with the national electorate breathing a great sigh of relief that the President forced Saddam to disarm simply with the threat of force. If he can make any kind of headway at all against the stubborn economy and dismal stock market, he would go on to easily win a second term. None of the batch of Democratic contenders for their party's 2004 nomination have come close to finding a weakness in the Bush White House to exploit, let alone a fresh idea of any kind on how to deal with the troubled world. There are major weaknesses in the Bush economic program that is emerging, but the Democrats either do not see them, or they are uneasy making much of an issue out of them because they can’t produce an alternative. The NYTimes says the Democrats are thinking of starting a new “think tank” that will think up new ideas for the party, an unusual admission of intellectual bankruptcy. In its lead editorial on 2003 this morning, the Times chiefly recommends that Washington press Israel to dismantle the settlements on the West Bank and Gaza, seeing no other way to a viable Palestine and the two-state solution. I agree, but it will take the full energies of Secretary of State Colin Powell to address those issues, after he has dealt with the prospective war with Iraq and nuke kind-of-crisis in North Korea.

The rosy scenario for Iraq, towards which I continue to lean, is that the elaborate process of weapons inspections that has been set up to administer UNSCR #1441 is sufficient to carry diplomacy through to the spring. This practically means the fervor for war -- already dramatically dissipated according to the public-opinion polls as Saddam allows the inspectors to look under his bed and into his bathrooms -- will be left to the most fervent hawks. When President Bush committed himself to submit to the UN process, he did withhold the right to act unilaterally if he did not like the UN’s decision. But that presumed the inspectors would come up with a smoking gun and would still refuse to back the use of force to oust Saddam. Inspectors are now telling the reporters who are following them around Iraq that so far they have found “zilch,” and are beginning to suspect there are no weapons programs underway that would cause anyone to get excited. Part of the Pentagon pressure to send more and more troops, carriers and equipment to the Gulf is to make the argument that as long as they are mobilized they might as well strike – that it would be too expensive to demobilize and mobilize again next fall when a smoking gun is found. Forgotten here is that Mr. Bush did make a deal with the Senate Democrats in order to get from them the tough resolution he wanted before addressing the UN. He agreed to come back to the Senate if he felt he had to take unilateral action without the support of the UN. These checks and balances remain in play.

There will be positive news next week when the International Atomic Energy Commission meets to discuss its findings in Iraq (and the situation in North Korea), for a report Tuesday to the UN. By all accounts and expectations, it will give Iraq a satisfactory report card. The Hans Blix inspection team on chemical/biological WMD are not scheduled to report until Jan. 27, but there may be an interim report at mid-month, which will clear up some of the concerns raised earlier by Blix, providing further support for continued inspections and diplomatic efforts, with no need for force. 

The major media continue to report that North Korea was caught red-handed with a nuclear weapons program and admitted it has been trying to build more nukes than the two bombs the Bush administration says it already has. If you look closely, though, you will find North Korea almost certainly does not have any nukes. And it never said its uranium-enrichment program was designed to make weapons. It has been to provide it with the fuel to run the light-water reactors promised them by the 1994 deal with the United States. The reason Secretary of State Colin Powell could announce “no crisis” is because he knows the United States had known about the North Korean program for two years before it blew the whistle last summer. It did so as an excuse to shut off the fuel oil going into North Korea to provide electricity while the new reactors were being built. It looks like the kind of bungling that occurs when State and Defense are totally at odds on policy.

There will be a “crisis” if Pyongyang does not change its mind and allow the inspectors of the International Atomic Energy Agency (IAEA) back to make sure there is no funny business with the plutonium kicking around from the reactors that were mothballed in 1994, which Pyongyang now says it will open to provide the electricity it has been patiently waiting for all these years. When the Clinton administration made the deal, I’m advised by GOP sources on Capitol Hill, it was broadly assumed the communist regime would collapse with the end of the Cold War and before we actually had to make good on those “free” light-water reactors.