One hardly hears much about Iraq’s impact on the US Economy and Equity markets. Since tonight’s Presidential debate will focus on Foreign Affairs and National Security, a review of our past analyses on Iraq and its likely impact on the markets is past due. Iraq is the Wild Card: It impacts the cost of oil, America’s standing in the world. It has been undercutting the sense of stability that is necessary for global trade.
Three months ago I wrote: “The Neo-Conservatives hawks who pressed for the invasion of Iraq failed to create an adequate strategy for a post-war period. This created an opportunity for insurgents to cause havoc and mayhem; With the handover to the Iraqi Ruling Council a few days early, the planners have gotten one right for a change. The insurgents will be denied an opening to thwart sovereignty for Iraq.”
That marginally positive view turned out to be far too optimistic. As I wrote that in June, the CIA was reaching the exact opposite conclusion: conditions in Iraq were bad and deteriorating rapidly. Subsequent events have shown the CIA’s assessment was far more prescient than my own.
My original analysis of the invasion was based on the potentially positive domino effects. As we wrote in March 2003, it was never about WMD or Hussein as a ‘threat’ to the region; Rather, it was all about eliminating potential negatives: Saudi oil fields falling into the hands of Fundamentalists; Our securing Pakistani Nukes, and lastly, brokering a deal between the Israelis and Palestinians. I am chastened by how inaccurate those expectations were.
None of these goals have been accomplished. While the potential benefits of intervention in the Middle East were significant, the incompetent execution of the post-war period raised new problems. It has become a debacle. Further, I find it unconscionable that the basic military lessons of Viet Nam – give the Pentagon what its military planners ask for, and do not micro manage the war – were mostly ignored.
The first of three presidential Debates are tonight, and it will be about Foreign Affairs. Everyone expects Iraq and terrorism to be topic A. From the incumbent, I’d like to hear a frank assessment of what went wrong, why the best minds from the Pentagon and State Department were not listened to, and what will change if he wins a second term. From the challenger, I’d like to hear specifics as to how he can extricate us from this quagmire.
I do not expect much on either count . . .
Confessions of Repentant Hawk
One hardly hears much about Iraq
A big part of the problem is that Bush has tried to win the peace in Iraq on the cheap. From day one it has been obvious that it would take a multiple of the resources — men and money —
devoted to Ira to win the peace. The big question is why has Bush continued to ignore this.
I suspect that it is because if he was honest about what Iraq costs it would imperil his tax cuts. So that leaves the question, are the tax cuts more important to Bush than the war on terror?
” I’d like to hear a frank assessment of what went wrong”
I would think the first step here is for the President to admit to himself and the nation that something has gone wrong. I dont think that will happen; something tells me if Bush was a trader he would still be holding the CMRC he bought at $1000 and insisting that the company is “turning the corner”.
Debates are not a way honestly to lay out the issues for a thinking electorate, they are a stage-managed opportunity to reiterate the talking points. We can all already predict with near-certainty what each side will say — the only mystery is how the media will spin it.
Barry,
Your comments are welcomed as much for their intellectual honesty as for their insights. I hope we get a little of both from our presidential candidates this evening.
Although I was not a fan of this war from the beginning, this is not an I-told-you-so comment.
For one thing, I’m not sure I buy entirely the argument that the neo-cons should be blamed for not having an exit strategy.
I think they did.
And it was based on the bill of goods they bought from Chalabi. To wit, that a liberated Iraq would quickly embrace pluralistic democracy.
We could be in by March of ’03 and begin leaving by the fall of that year.
Instead, what we are seeing is the immense complexity, and concordant human tragedy, of trying to impose on another nation’s affairs.
Sure, we eliminated a despotic regime. In some ways, that was the easy part.
But I think we did so with this uniquely American perspective of the guys in the whte hats coming to clear the cattle-rustlers out of Dodge City.
Were the rest of the world’s problems so simple.
The geo-political dangers now are real, and not confined to Iraq.
For example, I’m willing to bet that Iran thinks it can proceed with a nuclear weapons program with virtual impunity, knowing that our military is stretched too thin to do anything about it.
North Korea may have drawn the same conclusion.
Even the rebels in Nigeria may see a unique opportunity to hijack that country’s oil fields and not fear U.S. intervention.
I did not buy the argument that the Iraqi invasion was first and foremost about oil.
But, unwittingly, it may have triggered a wider conflict over the same.
Barry,
I agree with all of your points.