Iraq and Snow Jude Wanniski January 28, 2003

After watching the UN hearings Monday on the UNMOVIC and IAEA inspections, I see no reason to change my assessment that there will be no war with Iraq in the foreseeable future. Much of the beating Wall Street took yesterday was the result of sheer ignorance on the part of the journalists covering the UN on these highly technical issues involving "weapons of mass destruction." UNMOVIC`s Hans Blix seemed as tough as nails in arguing that Iraq is still not cooperating, but when you strip away the barking and look simply at the unresolved issues, it is clear these can all be dealt with by Iraq in the weeks ahead. Blix even implied that he already had assurances from Baghdad that several issues he barked about would be resolved. The issue of VX nerve gas was one in particular that Blix elevated to a prominence that led the Bloomberg United Nations reporter to a dispatch that pointed toward war, one that ran all afternoon. In fact, it is a dead horse, which will be easily disposed of. What is actually happening is that Blix has established his credibility as a tough cookie who will not be fooled by any Iraqi shenanigans, so that when he reports again that the issues he raised Monday were resolved, it will take out whatever steam is left in the war option. 

The best analyst on these Middle East matters that I have observed in recent years is Zbigniew Brzezinski, the National Security Advisor in the Carter administration. On the Jim Lehrer News Hour last night, Zbig presented what I think is a flawless analysis that points toward resolving these outstanding matters with Iraq with diplomacy. He did so in the context of praising President Bush to the skies in the way he has been developing the policy toward Iraq, with stick and carrot. It will not take much, for example, for Saddam to urge his scientists to agree to private interviews with UNMOVIC, and to tape record the interviews for themselves if they are concerned about being used. In his State of the Union address tonight, the President I think will try to leave the impression that he is open to a peaceful solution, as I believe I know he knows that is what he is going to get. There are questions about "regime change" that will continue to be discussed, but I do not believe these will devil the global financial markets. There are continued reports being whispered out of Washington about last-minute proof that Saddam is up to no good, but he really is toothless at this point. It is a fair bet that Wall Street hit bottom yesterday and will now inch back up.

Yesterday and today, I ran on our website, a "test" to determine whether responders are "hawks" or "doves." Of course I am a dove, absolutely persuaded that Iraq is no threat to the United States or its neighbors. If you wish to check out your own predilections, please run through the exercise, and where you have any questions on my "answers," raise them with me. I`ll not publish these client exchanges.  

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If you had a chance to watch the Senate Finance hearings on the President`s nomination of John Snow to be Treasury Secretary, you must be as pleased as I am on how masterful he is in these surroundings compared to Paul O`Neill. On issues of tax policy, Snow may turn out to be the most supply-side Treasury Secretary since Andrew Mellon in the 1920s, as he does seem to grasp the fiscal dynamics far more than any of Ronald Reagan`s Treasury Secretaries and far, far more than Nick Brady, who was the hapless finance chief for former President Bush. It really shows that Snow was a serious member of the Kemp Tax Commission and, because he has run a Fortune 500 company with that education under his belt, that he knows his supply-side theory and practice flawlessly. Once he gets rolling, Snow may not leave much on the table for Democratic critics of the President`s growth plan.