Iraq - A Strategic Blunder?

[Fuchs]

Iraq didn't look like a serious problem to me ever after Desert Storm, and even in late '90 I considered it to be little more than a nuisance.

It takes a quite distorted view on what's serious and what not to rate such a distant, largely disarmed state as a serious problem while the own economy is turning to illusions and losing substance.

It was also obvious by basic statistics that the PRC deserved much more attention already in the early 2000's than the whole ME.

A proper reaction would have reduced the oil addiction to a ME-oil-independent level and a focus on increasing the industrial output instead of outsourcing it (alternatively, reducing consumption to a sustainable level).
Great power gaming in Eastern Europe, Central Asia, Mid East and Far East did not offer any solution for the real national domestic problems. They were at best opium for the people, helping the government in an election or two.

I'm quite sure that historians in 50 years will call the 2000's a lost decade for the whole West (Europe had its parallel follies) and won't find much if any good policy. I'm also quite sure that they won't be amazed by some disruption grand strategy or whatever Ken thinks about.

[Ken White]

I'm quite sure that historians in 50 years will call the 2000's a lost decade for the whole West (Europe had its parallel follies) and won't find much if any good policy.

Not on that, I agree with that...

I'm also quite sure that they won't be amazed by some disruption grand strategy or whatever Ken thinks about.

That. You're wrong about that. I'll be long gone but you can send down a note with the apology for your error...

[Dayuhan]

It takes a quite distorted view on what's serious and what not to rate such a distant, largely disarmed state as a serious problem while the own economy is turning to illusions and losing substance.

9/11 distorted lots of views; that's what it was meant to do, and it succeeded. As I've said before, I wasn't in favor of the Iraq operation; it was justified but it wasn't smart. However, assuming that if it hadn't happened the US could, or far more remotely would, have managed some sort of burst of economic enlightenment is beyond far fetched. Certainly the Iraq war ran parallel to a run of bad economic policy, but there's lettle meaningful evidence to suggest a causative link. Economic policy was no better in the relatively peaceful 90s.

I do suspect that if 9/11 hadn't happened, the Bush administration's handlling of the 2000/2001 recession might have been much better, and much trouble down the line might have been prevented. That, however, is pure conjecture.

Again, on both the economic and foreign policy levels the Bush administration was defined by the need to deal with problems that the Clinton administration had declined to manage. These problems were poorly managed in both cases, but there was in either event little opportunity for major reforms in the reactive mode that was imposed by prior neglect.

It was also obvious by basic statistics that the PRC deserved much more attention already in the early 2000's than the whole ME.

China's emergence received plenty of attention, but it's not something that required action on the part of the US or anyone else. Again, assuming that relations with China would have been managed better if the ME had not been an issue is conjecture. What would you have done with respect to China that was not done?

A proper reaction would have reduced the oil addiction to a ME-oil-independent level and a focus on increasing the industrial output instead of outsourcing it (alternatively, reducing consumption to a sustainable level).

And how would you propose to do that? You ascribe to government powers that government does not have.

First the notion of being independent of "ME oil" is a farce. Everyone who depends on oil depends on ME oil, whether or not they actually import any. Oil is globally priced and the removal of any major ME producer imposes the same price penalty on all consumers.

The US is about as likely to become independent of ME oil as Europe is to become independent of Russian gas. For the forseeable future we simply have to accept and manage the reality that our energy supplies are controlled by powers that are unreliable and potentially hostile. I'd actually rather depend on the Saudis than on the Russians, who seem more inclined to manipulate energy supplies for political gain.

Oil dependence was deeply entrenched by the extended glut, and as long as oil remained cheap any action taken by government to reduce dependence was going to be insignificant, short of imposing a massive tax on energy, which no American administration will do as long as democracy is in place. In the last few years we've entered what appears likely to be an extended period of high oil prices, which opens a real opportunity to reduce dependence. The oil-dependent powers of the world may or may not make use of that opportunity.

American manufacturing has been hampered by half a century of a seriously overvalued dollar, which imposed a massive disincentive to any American entrepreneur or corporation entering a line of business that required it to export or to compete with imports. That reality has shaped the US economy to a degree that will require decades to reverse. Again, as long as the dollar was overvalued any policy government adopted to promote manufacturing was equivalent to spitting into a typhoon. That problem has now been alleviated to some extent, though ideally the dollar would fall more. Again, that opens an opportunity, but it's an opportunity that didn't exist for most of the 00s.

Certainly the last decade has seen an abundance of bad decisions in both economic and foreign policy, but claiming a causative relationship between the latter and the former is conjecture, I suspect with a bit of wishful thinking mixed in. An absence of foreign entanglement is no assurance of good economic policy, as we saw in the 90s.

I'm quite sure that historians in 50 years will call the 2000's a lost decade for the whole West (Europe had its parallel follies) and won't find much if any good policy.

I suspect that historians in 50 years will see the 2000s as a desperately needed wake-up call to the West, on a variety of levels. How the West responds to that call is still being defined. Easy to say the response has been unimpressive (not just from the US), but we were very deep in our rut and it's still the early going.

[Fuchs]

I disagree on several points.

...the usual disagreement about justification of OIF.

PRC's economic growth: An active economic policy could have changed a lot. Much of the U.S. trade balance deficit is from trade with the PRC. Such simple things as increasing the savings rate and discouraging private debt would have reduced the imbalance and slowed down China's economic growth a lot. The West could also at least have talked about whether to prohibit the export of investment goods to China.
There were hundreds of policy options.

A government has the power to break the oil addiction. Imagine the effect of a gasoline tax of European proportions beginning in 2000, for example. U.S. cars would consume about 10-25% less fuel on average now.
Other sectors would have had similar fuel savings.

The global pricing of crude oil is a farce. Much of the oil trade is not on the market, but arranged in long-term treaties or simply transferred inside of multinational corporations. The oil price from the TV news is merely applicable to the oil that's still being traded freely.
So yes, it's possible to become independent from both ME oil and the global crude oil market price.
CTL is also competitive, it's been competitive since the oil price exceeded about 50 USD/barrel.

Certainly the last decade has seen an abundance of bad decisions in both economic and foreign policy, but claiming a causative relationship between the latter and the former is conjecture, I suspect with a bit of wishful thinking mixed in. An absence of foreign entanglement is no assurance of good economic policy, as we saw in the 90s.

I didn't mean to assert such a mechanism. Nevertheless, a country has a limited attention span and cannot cope with many great projects at once. There's little hope for domestic reforms of grand scale as long as much of the attention span is being wasted on (inflated) external threats.



Besides; I don't share the attitude that Iraq was a problem that had to be dealt with and was wrongly not dealt with by Clinton.
Post-'96 Iraq was no problem at all. There was merely a crazy illusion of a problem. This illusion was based on irrational behaviour (asking another power to prove the non-existence of non-existing items) and crazy scaremongering.
The only real issue was the question how the Kurds could be protected against Saddam's revenge, especially considering Turkey's stance. A guaranteed autonomy for the Kurds, reinforced with a UNSC threat of renewed sanctions might have worked.

[Ken White]

Besides; I don't share the attitude that Iraq was a problem that had to be dealt with and was wrongly not dealt with by Clinton.
Post-'96 Iraq was no problem at all. There was merely a crazy illusion of a problem. This illusion was based on irrational behaviour (asking another power to prove the non-existence of non-existing items) and crazy scaremongering...

that Iraq was a 'problem.' Most seem to realize it was not a threat but was posed as one for some reason or other, the discussion is over what was the 'other.'. US domestic politics were a large part of that. As they are for the reason there is no healthy, sensible petroleum tax in the US.

While Iraq was not a problem -- it was really a target of opportunity -- the Clinton Administration's failures in responding to provocations from the ME and those of Carter, Reagan and Bush 41 before that all added their own synergies to why we are where we are.

The only real issue was the question how the Kurds could be protected against Saddam's revenge, especially considering Turkey's stance. A guaranteed autonomy for the Kurds, reinforced with a UNSC threat of renewed sanctions might have worked.

That and Southern Watch which had problems of its own and which impacted Saudi Arabia. I doubt the UNSC would've acted -- China, France and Russia would all have been opposed.

[Fuchs]

While Iraq was not a problem -- it was really a target of opportunity -- the Clinton Administration's failures in responding to provocations from the ME and those of Carter, Reagan and Bush 41 before that all added their own synergies to why we are where we are.

Strange. Why didn't you add Reagan, who ran away from Lebanon in response to a few car bombs, yielding to the threat of 'terrorists'?
It would be funny to see how republicans would think about that if someone convinced them for a day that Reagan was a democrat while he made the decision to run away.

[Ken White]

Read your own quote of my comment, he's in the list for the very reason you cite...

Selective attention -- or neglect -- on your part to make a point?

Just FYI, I'm not a Republican -- or a Democrat; I despise both parties for their fostering of incompetence and their venality and corruption.

[Fuchs]

Dunno, but I won't ask a psychologist.

[Dayuhan]

PRC's economic growth: An active economic policy could have changed a lot. Much of the U.S. trade balance deficit is from trade with the PRC. Such simple things as increasing the savings rate and discouraging private debt would have reduced the imbalance and slowed down China's economic growth a lot. The West could also at least have talked about whether to prohibit the export of investment goods to China.

Why would you want to slow down China's growth? And why in any vestigially sane world would you want to prohibit the export of investment goods to China? Even if the US government had the capacity to compel citizens to save (it doesn't), I can't see how that would have had any impact on US trade with hina. Certainly the US could have used higher interest rates to discourage borrowing, but that goes back to the mismanagement of the 2000/2001 recession, which is intimately tied to the economic and political impact of 9/11.

A government has the power to break the oil addiction. Imagine the effect of a gasoline tax of European proportions beginning in 2000, for example. U.S. cars would consume about 10-25% less fuel on average now.

The US government doesn't have that power. Maybe in theory it does, but in practice it does not. For better or for worse the US remains a democracy, and the citizenry wouldn't stand for it. Reform isn't just about leadership, needs some followership as well.

Oil consumption patterns worldwide are inextricably linked to the incentive to consume created by the oil glut and consequent low prices that prevalied from 1985-2005. High prices will change that, but it will take time. Trying to oppose an overwhelming macroeconomic incentive with policy is generally pretty futile.

The global pricing of crude oil is a farce. Much of the oil trade is not on the market, but arranged in long-term treaties or simply transferred inside of multinational corporations. The oil price from the TV news is merely applicable to the oil that's still being traded freely.
So yes, it's possible to become independent from both ME oil and the global crude oil market price.

Unrealistic, I fear. I don't think there's a supplier on the planet that would commit to supply oil to the US at significantly below market price. Certainly the Saudis, Venezuelans, and Nigerians won't, and I very much doubt that the Canadians would.

CTL is also competitive, it's been competitive since the oil price exceeded about 50 USD/barrel.

Lots of alternatives are competitive if prices stay high. It will take at least a decade of high prices for those alternatives to draw the needed investment and develop into meaningful contributors... and when they do, it will be a response to high prices, not to government policy.

Besides; I don't share the attitude that Iraq was a problem that had to be dealt with and was wrongly not dealt with by Clinton.
Post-'96 Iraq was no problem at all. There was merely a crazy illusion of a problem. This illusion was based on irrational behaviour (asking another power to prove the non-existence of non-existing items) and crazy scaremongering.
The only real issue was the question how the Kurds could be protected against Saddam's revenge, especially considering Turkey's stance. A guaranteed autonomy for the Kurds, reinforced with a UNSC threat of renewed sanctions might have worked.

Lots of things might have worked. Nothing will work if it's not tried, and nothing was tried. The problem was simply allowed to fester. Of course it was only an irritant, but an irritant that isn't dealt with ultimately provides an incentive to overaction.

It was actually rather complicated. Realistically, no alternative that left Saddam in power would have been suitable or acceptable. Saddam's side deals with France and Russia had the UNSC effectively bottled. The status quo was almost universally perceived as unacceptable.

The Clinton administration made no attempt at all to resolve the festering sore that the Iraq situation had become. They made no attempt beyond a few cursory high tech drive-by shootings to deal with the clearly emerging problem of AQ. They sat by and watched while an enormous equity bubble blew beyond all reasonable proportions, with a devastating impact on the S economy. These situations might not have been completely solved, but some attempt might have been made to manage them. None was. All the chickens came home to roost on poor George's lap, and while the Bushies managed those problems badly, we'd do well to recall how and when those problems cane to be.