A Saddam Stock Market (Cont.)
Jude Wanniski
September 30, 2002


An editor of a major newspaper e-mailed me late Friday to dispute my contention that the stock market decline fell almost 300 points because of Iraq. He pointed out that Teddy Kennedy had made a speech arguing against a pre-emptive strike, which, he said, should have made the market go UP. I e-mailed him back with a response that is just as good this morning as it was then: If you think of what happened between Thursday and Friday that might have caused the Wall Street selloff, consider the market learned that both the congressional resolution AND the UN resolution demanded by the White House lead to war with Iraq. The UN resolution supposedly has a hair trigger that will authorize force if the UN inspectors find suspicious chewing gum wrappers in Saddam`s bathroom. The congressional resolution triggers force if the UN refuses to pass a resolution that triggers force without 100% quantitative compliance. The NYTimes quotes a European diplomat as saying: "The Americans are really not interested in having the inspectors back in. This is not a resolution for inspections. It is a declaration of war.”

The continued market decline today reflects widespread reporting that Iraq has REJECTED the more stringent conditions embodied in this US/British “draft resolution” for the UN Security Council. The press corps in its own way is engaged in “pre-emptive attacks,” with the Sunday NYTimes leading the way. Last night in New York City, I had dinner with Iraq`s UN Ambassador, Mohammed Aldouri, and he told me his government has NOT rejected any resolution, as they have not even SEEN a resolution, nor has he or any permanent members of the UN who he knows. He does not know what is in the US/British "draft," and only assumes it has a hair-trigger provision. He said Baghdad merely warned it would not accept any resolution that did not respect its sovereignty, although it would permit complete and total access to any site the inspectors wish to visit including the presidential “palaces.” By this, I believe Iraq will not countenance Hans Blix showing up with armed troops, UN or otherwise. He also told me he believes it a forgone conclusion that Iraq would accept the IAEA protocols which would sustain an inspection regime even after the UN inspectors went in now and found nothing out of place. 

What we should now expect is that the meetings in Vienna this week, between the Iraqis and the UNMOVIC representatives led by Hans Blix, will attempt to work out a draft resolution which the UN Security Council will accept. As it will be at least as tough as the procedures followed by UNSCOM in 1998 and perhaps cover real or imagined loopholes as well, it would be very difficult for the Bush administration to insist that it is unacceptable without some hair trigger. There may be a race on Capitol Hill, with the White House insisting Congress give him what it wants before the debate over the UN resolution erupts in Vienna. As all this will be playing out with weeks to go before the mid-term elections, we can expect a lot of ferment in the debate as the pollsters come in every few hours noting changes in voter sentiment on Iraq. When it becomes clear Iraq will not only accept an inspection team with open arms, but also agree to more or less permanent inspections via on-the-ground sensors to supplement the satellite inspections, there should not be any way for the administration to resist. 

Of course, this would mean a defeat for the Pentagon and the GOP War Party, which is not really interested in inspecting Iraq for weapons of mass destruction, but wishes to control Iraq itself, as a permanent Middle East station in the American Empire. Scott Ritter, who is being treated in many quarters as a national traitor, continues to make iron-clad assurances that if the Blix inspection regime goes in with the kind of modalities the Iraqis say they can live with, there will be no chance Iraq could develop WMD of any kind -- nuclear, chemical or biological. It is now conceded by the Pentagon, because it has no choice, that Iraq has no nuke capability. The stories that pop up in the papers from day to day about aluminum tubes being imported by Iraq or 35 pounds of uranium being exported from Turkey to Baghdad are transparently nonsensical to those whose judgement I rely upon with the necessary expertise. 

The Wall Street Journal editorial page continues to produce op-eds by experts who argue that only regime change can assure against Saddam acquiring chem/bio weapons. In 1998, remember, Defense Secretary William Cohen held up a plastic bag of sugar and said that if it were anthrax it could kill everyone in Washington, DC. According to Scott Ritter: “Many people were saying anthrax was being manufactured in Iraq’s palaces. The world almost went to war to get us into them. Once we got in, we tested for nuclear and chemical weapons, and never found anything. But the biologists were prevented from conducting any tests [by Dick Spertzel, their UNSCOM boss]. When the Iraqis confronted Dick Spertzel about this, he said he never expected biological weapons to be there, and hadn’t wanted to give them the benefit of a negative reading.” Spertzel’s op-ed urging war appeared on the Journal’s editpage last week.  You can skip it. 

It really is not clear that President Bush himself has been sold on the idea that regime change will be necessary, no matter whether or not inspectors find WMD. At my dinner with Ambassador Aldouri last night, he asked my opinion on this, and I said my best guess is that when the President weights the scales, the biggest weights on the side of war are those that persuade him that Saddam is evil. The biggest weight on that side of the scale is the President’s belief that in 1993, Saddam tried to kill former President Bush, then a private citizen on a visit to Kuwait City. He mentioned it in his UN speech and again last week at his Texas ranch. The story never made sense to me, although President Bill Clinton decided to bomb Iraq in retaliation within hours of receiving a report confirming it. Seymour Hersh, the investigative reporter, spent months on the story -- I assume on tips from his sources inside the intelligence agencies that it was a hoax. His November 1, 1993 New Yorker story, “A Case Not Closed,” decimates the story. I am grateful to the editors of the New Yorker for deciding to post the story on its website. It is long, but I recommend it, and have been urging my contacts in the Bush administration for several months to show it to the President. If that weight were taken off the scales, should Mr. Bush realize he has been snookered, it might open up the entire weight of “intelligence” that also persuaded him that Saddam “gassed his own people,” which he did not. 

The other critical story that has surfaced in light of the President’s UN indictment of Iraq was his contention that when Iraq occupied Kuwait in 1990, the army was poised to then invade Saudi Arabia. Photographs supposedly taken by Navy Intelligence that August were used to persuade the Saudis to join the coalition against Baghdad. The Saudi Embassy in Washington showed me the photos and made me a believer. Months later, a Florida newspaper ran photos of the region at that time taken by a Russian commercial satellite and examined by an America expert. It turned out there were no Iraqi troops on the Saudi border. The Christian Science Monitor has now brought that story back to life, quoting the reporter who broke the story at the time that “It was a pretty big fib.” It had to be a hoax. I discovered later that at the time Iraq was supposedly poised to attack, King Fahd was critical of Kuwait’s Emir and forgiving Baghdad its considerable war debt. Such is the nature of “strategic influence.” As dim as things may seem to Wall Street, our system is working in a way that I believe will upend the war plans and discourage those bears who are betting on war.