Quite a Nice October
Jude Wanniski
October 31, 2002


It did not start out all that great, but from the 9th on, when the DJIA hit its low of 7286, October has been a nice month for Wall Street. Up 11%. This is entirely due to the progress made in slowing the momentum to war with Iraq. If you feel grateful to anyone, it should be to Baghdad, which shocked the Bush administration by telling the United Nations the weapons inspectors would be allowed back, unfettered, and could look anywhere they wished. President Bush addressed the nation the night of the 7th, but even then it seemed the danger had passed, as I wrote in my letter the next day: “Much of [the speech] was overblown hyperbole about the dangers posed by Baghdad -- but all of those dangers are speculations that can be dissolved in the first days of UN inspections. As far as I can tell, there were no ‘deal breakers’ demanded by the President that would prevent the UN Security Council from writing a new resolution fixing the conditions of the inspections.”

At the moment, it does appear fairly certain the Hans Blix team will be heading to Iraq soon after next week’s congressional elections here. There were a few “dealbreakers” mixed into the new draft resolution of the United States and Great Britain, at least as far as the French, Russians and Chinese were concerned. Blix made it clear publicly that it would be very difficult for his team of inspectors to take scientists and their families out of the country for interviews, and it seems this language will come out of the resolution before it comes to a vote. Secretary of State Colin Powell believes that will be late next week. There still must be language worked out that will enable Blix to come back to the Security Council with a report on Iraqi non-cooperation before it decides upon the use of force. 

There is of course now no question the United States will use force if there is a clear problem with Baghdad, one that can swing public opinion toward war, with or without the UN. France in particular is insisting that if there is such an issue, it should be one that is addressed by the Security Council to give Iraq a chance to respond. Remember, the old UNSCOM team was discredited when its leader, Richard Butler, complained of Iraqi non-cooperation when it was UNSCOM itself that provoked Iraq into balking at a second inspection of the Ba’ath Party headquarters in search of weapons of mass destruction. Because he had gone outside the agreed-upon modalities, Butler was supposed to have brought the issue to the Security Council and did not, instead telling the U.S. State Department of the alleged breach. The bombing campaign began two days later before the UN knew what was going on. This is why there has been so much haranguing over the exact wording of the new resolution, to make sure there is no similar loophole for war. The new UNMOVIC team headed by Blix has also been insulated from unsanctioned behavior by the inspectors now that they are recruited and paid by the UN, not by individual member nations. 

There of course remains the determination of the GOP War Party to disrupt the peace process. The outcome of the elections next Tuesday will be carefully read for support of war. So will the unfolding political situation in Israel, which could further inflame the region now that the Labor Party has withdrawn from the coalition with Sharon’s Likud Party. In the short term this may be bad for peaceful resolution of the Palestinian issue, but mid-term it may be necessary to cross this bridge. But do not expect November to be as nice as October.