"The Iraq War is Largely about Oil"

Alan Greenspan explains his comment about oil and the Iraq war:

Greenspan Says Hussein's Removal Was 'Essential', by Bob Woodward, Washington Post: Alan Greenspan, the former Federal Reserve chairman, said in an interview that the removal of Saddam Hussein had been "essential" to secure world oil supplies, a point he emphasized to the White House in private conversations before the 2003 invasion of Iraq.

Greenspan ... made the striking comment in a new memoir out today that "the Iraq War is largely about oil." In the interview, he clarified..., saying that while securing global oil supplies was "not the administration's motive," he had presented the White House with the case for why removing Hussein was important for the global economy.

"I was not saying that that's the administration's motive," Greenspan said in an interview Saturday, "I'm just saying that if somebody asked me, 'Are we fortunate in taking out Saddam?' I would say it was essential."

He said that in his discussions with President Bush and Vice President Cheney, "I have never heard them basically say, 'We've got to protect the oil supplies of the world,' but that would have been my motive." Greenspan said that he made his economic argument to White House officials and that one lower-level official, whom he declined to identify, told him, "Well, unfortunately, we can't talk about oil." Asked if he had made his point to Cheney specifically, Greenspan said yes, then added, "I talked to everybody about that." ...

Greenspan ... added that he was not implying that the war was an oil grab. "No, no, no," he said. Getting rid of Hussein achieved the purpose of "making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will."

One more person telling the administration what they wanted to hear prior to the war.

If I had questions about monetary policy, Ben Bernanke is one of the first people I would want to consult. Few, if any people are more knowledgeable about both the theory and evidence, and his recent experience enhances his understanding of how the Fed interacts with financial markets.

But if I want to know about oil markets, how removing a dictator in the Middle East will impact the region's stability, and so on, Ben Bernanke is not the first person I would think of to talk to. He might not even be in the top ten or twenty.

Greenspan was telling members of the administration what they wanted to hear, and I'm sure they used his worries about oil markets to buttress their case for going to war. But I hope Greenspan also encouraged the administration to consult with others who have more expertise on these issues than he has. I'm not sure exactly what or who Greenspan relied upon to draw his conclusions, so perhaps he consulted the experts himself, and given the cherry picking of "facts" that went on perhaps it wouldn't have mattered much in any case, but when war is involved you hope that the best and the brightest are part of the discussion.

Comments

[Bruce Wilder]

If I wanted to consult an expert on world and Persian Gulf oil markets, and how they would be impacted by the removal of Saddam Hussein, I would consult . . .

Richard Bruce Cheney.

Greenspan was telling Administration what it wanted to hear, alright, and, now, he's telling us what the Administration wants us to hear.

At some point, and I think it was yesterday at the latest, American need to wake up to the fact that neither Bush nor Cheney were the least bit interested in American interests in Iraq. The cost/benefit analysis was one, where the costs are paid by the grunts and the taxpayers, and the benefits are reaped by the mega-rich, the oil companies, and the Saudis.

Iraq was not "a mistake" made by people, who were incapable of anticipating the consequences. It was opportunism, by people, who did not see themselves paying the consequences, but, who did expect to reap the benefits for themselves and their friends and allies.

It is a telling point that Halliburton, the company Cheney headed, which enjoy no-bid contracts worth tens of billions of dollars, has moved its headquarters to Dubai. It is a telling point that Cheney dutifully rushes to Saudi Arabia to reassure the King. And, it is telling that all the propaganda about foreign influence on the insurgency points at Iran, even while all the data points to Saudi Arabia.

Economy of explanation -- Occam's razor -- requires that we, at least, consider the possibility that the outcome achieved in Iraq has some relation to the intended result.

Maybe, Bush/Cheney/Rumsfeld, et alia, always wanted permanent U.S. military bases in Iraq, and needed an Iraqi government weak enough to want the U.S to stay. Maybe Bush et alia wanted to prevent the full resumption of Iraqi oil production, to drive up prices, to generate profit for the U.S. oil companies, and to protect the Saudis from the consequences of their declining output.

In any context, for Greenspan to be advising Cheney on the need to be "making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will" appears to be superfluous. But, the ruthless manner in which "we", at the bidding of Cheney et alia, may be banking Iraqi oil, is hidden or denied in Greenspan's telling. But, perhaps not in Greenspan's understanding.

[Chris]

At the time Greenspan did not opine at all on the reasons for invading Iraq, other than presumably accepting the administration's lies. Now he claims in retrospect that the cause was oil. But as Mearsheimer and Walt remind us, if we were concerned about access to oil, we would be supporting the Palestinians and not tacitly encouraging Israel to grind them down and we would not have invaded Iraq. People don't seem to recall the countless visits made to the White House for one on one's with Bush by Sharon in the run up to the war. It was pretty obvious that Israel was crucial and central to the decision to go to war. So one is forced to the conclusion that the war was started for Israel's sake; that is what the Neocons wanted and the militaristic warmongers (Rummie & Co.) allied to them were just happy to have a war to test their weapons, pretty much any war would do. Greenspan like most of the chastened Neocons can't admit the real cause for the war of course and so they now trot out the phony "it was oil" explanation.

[Chris]

In 1990 Iraq was producing 3.5 million bbl of oil per day. Now it is thought that the highest sustainable production would be 2.8-2.9 million bbl with export possibilities of 2.3-2.5 million bbl. But in 2006 Iraq only exported 1.5 million bbl. So one would be hard put to explain the invasion of Iraq as the result of the wish to get more Iraqi oil. Certainly the people who pushed for the invasion were not so stupid as to think destroying a government and a nation's infrastructure would result in more oil exports. No, oil was not the reason. The reasons were other.

[gordon]

Now that it's legitimate to compare Iraq and Vietnam, I wonder whether "...when war is involved you hope that the best and the brightest are part of the discussion" is intentional mockery or what?

And, Chris, I don't see any contradiction between oil and Israeli influence as causes of the war. If the Israeli Govt. wants to see all its Arab neighbours reduced to picuresque, illiterate camel-drivers, so do the oil companies. Saudi Arabia was just like that once, back in the good old days.

[Bruce Wilder]

chris: "in 2006 Iraq only exported 1.5 million bbl. So one would be hard put to explain the invasion of Iraq as the result of the wish to get more Iraqi oil. Certainly the people who pushed for the invasion were not so stupid as to think destroying a government and a nation's infrastructure would result in more oil exports. No, oil was not the reason."

Frankly, chris, I think you need to give this a bit more of a think.

Oil was the reason. But, additional production, in the near-term, was not the objective. Quite the opposite.

As the U.N. sanctions regime was breaking down, the Russians and the French were well-positioned to help the Iraqis resume full-scale oil production, which would have depressed prices and the profits of oil producers. The invasion of Iraq was aimed at delaying that resumption, and ensuring that, when the resumption occurred, it was "with the help" of British and American oil companies. The Halliburtons, Exxon/Mobil, the Carlyle Group and Dubai and the Saudi princes have done very nicely out of the Iraq War, thank you very much. You bet it is about oil.

[hari]

I've always believed it was Iraqi oil which interested GWB/Cheney and the neocons. However, when Sharon succeeded in getting GWB to declare Arafat "persona-non-grata" to the WH, Sharon was made a "peace-maker" by GWB!

E Abrahm (NSC) was given strategic responsibility for tackling Palestinian question. And, by the way, he's a member of AIPAC. Condi made him responsible for mideast strategy! [The guy was involved in Iran-Contra weapons smuggling investigation by Congress].

That's all we need to know about the goings-on at the time in the Oval Office. Rest is history ....

Greenspan is only stating the obvious and making it a bit more certain - from a global economic perspective.

[anne]

There we have the insane cost-benefit University of Chicago analysis of in which war and occupation of Iraq was supposed to be both costless and infinitely beneficial of terms of Middle East dominance extended to a Federal Reserve energy analysis. This is why getting the costs of Iraq right is so important, and why we shoul not tolerate the continual under-reporting of costs.

What we have from the Chicago and Fed war-guys, was a $2 trillion dollar cost-benefit analysis mistake; a monumtental economic mistake beyond the moral tragedy.

[anne]

http://www.whitehouse.gov/news/releases/2002/08/print/20020826.html

August 26, 2002

Remarks by the Vice President to the Veterans of Foreign Wars 103rd National Convention

The Iraqi regime has in fact been very busy enhancing its capabilities in the field of chemical and biological agents. And they continue to pursue the nuclear program they began so many years ago. These are not weapons for the purpose of defending Iraq; these are offensive weapons for the purpose of inflicting death on a massive scale, developed so that Saddam can hold the threat over the head of anyone he chooses, in his own region or beyond.

On the nuclear question, many of you will recall that Saddam's nuclear ambitions suffered a severe setback in 1981 when the Israelis bombed the Osirak reactor. They suffered another major blow in Desert Storm and its aftermath.

But we now know that Saddam has resumed his efforts to acquire nuclear weapons. Among other sources, we've gotten this from the firsthand testimony of defectors -- including Saddam's own son-in-law, who was subsequently murdered at Saddam's direction. Many of us are convinced that Saddam will acquire nuclear weapons fairly soon.

Just how soon, we cannot really gauge. Intelligence is an uncertain business, even in the best of circumstances. This is especially the case when you are dealing with a totalitarian regime that has made a science out of deceiving the international community. Let me give you just one example of what I mean. Prior to the Gulf War, America's top intelligence analysts would come to my office in the Defense Department and tell me that Saddam Hussein was at least five or perhaps even 10 years away from having a nuclear weapon. After the war we learned that he had been much closer than that, perhaps within a year of acquiring such a weapon.

Saddam also devised an elaborate program to conceal his active efforts to build chemical and biological weapons. And one must keep in mind the history of U.N. inspection teams in Iraq. Even as they were conducting the most intrusive system of arms control in history, the inspectors missed a great deal. Before being barred from the country, the inspectors found and destroyed thousands of chemical weapons, and hundreds of tons of mustard gas and other nerve agents.

Yet Saddam Hussein had sought to frustrate and deceive them at every turn, and was often successful in doing so. I'll cite one instance. During the spring of 1995, the inspectors were actually on the verge of declaring that Saddam's programs to develop chemical weapons and longer-range ballistic missiles had been fully accounted for and shut down. Then Saddam's son-in-law suddenly defected and began sharing information. Within days the inspectors were led to an Iraqi chicken farm. Hidden there were boxes of documents and lots of evidence regarding Iraq's most secret weapons programs. That should serve as a reminder to all that we often learned more as the result of defections than we learned from the inspection regime itself.

To the dismay of the inspectors, they in time discovered that Saddam had kept them largely in the dark about the extent of his program to mass produce VX, one of the deadliest chemicals known to man. And far from having shut down Iraq's prohibited missile programs, the inspectors found that Saddam had continued to test such missiles, almost literally under the noses of the U.N. inspectors.

Against that background, a person would be right to question any suggestion that we should just get inspectors back into Iraq, and then our worries will be over. Saddam has perfected the game of cheat and retreat, and is very skilled in the art of denial and deception. A return of inspectors would provide no assurance whatsoever of his compliance with U.N. resolutions. On the contrary, there is a great danger that it would provide false comfort that Saddam was somehow "back in his box."

Meanwhile, he would continue to plot. Nothing in the last dozen years has stopped him -- not his agreements; not the discoveries of the inspectors; not the revelations by defectors; not criticism or ostracism by the international community; and not four days of bombings by the U.S. in 1998. What he wants is time and more time to husband his resources, to invest in his ongoing chemical and biological weapons programs, and to gain possession of nuclear arms.

Should all his ambitions be realized, the implications would be enormous for the Middle East, for the United States, and for the peace of the world. The whole range of weapons of mass destruction then would rest in the hands of a dictator who has already shown his willingness to use such weapons, and has done so, both in his war with Iran and against his own people. Armed with an arsenal of these weapons of terror, and seated atop ten percent of the world's oil reserves, Saddam Hussein could then be expected to seek domination of the entire Middle East, take control of a great portion of the world's energy supplies, directly threaten America's friends throughout the region, and subject the United States or any other nation to nuclear blackmail.

Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction. There is no doubt he is amassing them to use against our friends, against our allies, and against us. And there is no doubt that his aggressive regional ambitions will lead him into future confrontations with his neighbors -- confrontations that will involve both the weapons he has today, and the ones he will continue to develop with his oil wealth....

[jim casey]

and yet - the american public went to the polls and re-elected these criminals....

[Ken]

I am wholly certain that during the Energy Task Force meetings, while Oil Energy execs were reviewing Foreign contracts and Iraqi Oil fields, the topic of discussion was the Liberty of the Iraqi people.

[Bruce Wilder]

jim casey: "and yet - the american public went to the polls and re-elected these criminals...."

Yesterday, I watched a few minutes of Meet the Press, where John Kerry and John McCain met Tim Russert. McCain insisted that things were going swimmingly in Iraq, but the Defeatocrats, with their withdrawal plans, were threatening the achievements of our brave lads with their plans for defeat.

And, John Kerry, who I voted for, proved once again what a total turkey he is.

The American People re-elected the worst President in living memory, and those of us, who, at least, opposed him, somehow managed to nominate a fool as the alternative.

It is really difficult to be optimistic about the future of a country, where liars and fools so dominate the political discourse.

[Uncle Jeffy]

Chris:

"In 1990 Iraq was producing 3.5 million bbl of oil per day. Now it is thought that the highest sustainable production would be 2.8-2.9 million bbl with export possibilities of 2.3-2.5 million bbl. But in 2006 Iraq only exported 1.5 million bbl. So one would be hard put to explain the invasion of Iraq as the result of the wish to get more Iraqi oil. Certainly the people who pushed for the invasion were not so stupid as to think destroying a government and a nation's infrastructure would result in more oil exports. No, oil was not the reason. The reasons were other."

If you understand the theory of monopoly (or collusive oligopoly), ask yourself how a monopolist manages to raise prices and profits. It ain't by creating more of the product.

Of course, if you don't understand monopoly, maybe you could borrow Easy Al's treatise - you know, the one he invited his future wife to read in his apartment after their first date...

[Romath]

Iraq is considered to have the largest untapped oil reserves around, and Hussein was supposedly trying to convert oil payments basis from dollars to Euros. Iraq is also a central point geo-politically and geo-militarily for U.S. control of access to oil in Europe and Asia (recall the background of WWII). The first is a short-term justification and the latter a strategic. And, recall, that Iraq was seen as a starting point. Thus, from the standpoint of U.S. capitalist and imperialist interests Greenspan was spot on. Whatever a low-level staff member might have said, it's hardly unlikely that this didn't play a major role in Cheney's, if not Bush's, thinking leading then and now. And, if you think about it, it's the underlying reason why the Democrats supported the invasion and are having such a hard time breaking from it.

[Jim Harrison]

Whether Iraqi oil was a rational motive for invading Iraq is a separate question from whether it was in fact the motive for invading Iraq.

[save_the_rustbelt]

Greenspan's back pedaling on the oil issue, at least in the media reports I've seen, is nearly incoherent.

Suddenly Uncle Al is tongue tied.

He sounds like a teenager trying to explain why there are empty beer bottles in his car.

Bruce W. - what you said on Kerry and etc., yeah

[Jrossi]

I'm no expert on the subject, but I have read that expertise is domain-specific. I have also read that overconfidence is pervasive, particularly among males. A guy knows a little (or a lot) about something and pretty soon he thinks he knows about everything.

[BJ Feng]

I was afraid this would happen and it has. Greenspan implied that one of the top factors for invading Iraq was oil SECURITY. That is much different than an invasion to get Iraq's oil, or acquire Iraq's oil. The difference is that we still have to pay for Iraq's oil, and at $70+ a barrel, Iraqis are getting a fair deal.

Secondly, as Dr. Thoma pointed out in his commentary, Greenspan advised the Bush administration to invade because he felt that a disruption to the oil supply would be disastrous for the world economy. Unless Greenspan can be considered part of the Bush cabal, then that's further evidence that the president did not lie, and did not deceive the nation willingly to go into war. Bush had to consider all the factors and the advice of all of his underlings. That even Greenspan, a trusted, highly respected, non-partisan (at least considered to be) was advocating war should put things into perspective. Yes, the buck stops with Bush and he has taken full responsibility for the outcome of the war, but it's interesting how little fire Greenspan has drawn for his role.

"...he had presented the White House with the case for why removing Hussein was important for the global economy."

[kthomas]

BJ, this must seem like history all over again.

In China, before and during Communist rule, when the Emperor died, his crappy policies where never blamed on him. Instead, advisers were rounded up, given nice public kangaroo trials, and dealt with accordingly (e.g. Gang of Three).

Normally, I disagree with you. Unfortunately, I consider our current President a stark raving moron. Therefore, I don;t hold him quite as accountable as I normally would. Who knows? Next thing you know, we'll start being told the Bush has been on heavy meds since 2001. There's no end to their BS.

[Bruce Wilder]

BJ Feng: ". . . oil security. That is much different than an invasion to get Iraq's oil, or acquire Iraq's oil. The difference is that we still have to pay for Iraq's oil, and at $70+ a barrel, Iraqis are getting a fair deal."

I am pretty sure that having your country completely demolished and at least 70,000 people killed does not constitute "a fair deal" for anything.

The U.S. conquest of Iraq has been about oil and money, but not about benefitting the U.S. So, the absence of concrete benefits to the U.S. -- cheap gasoline, for example -- should not be taken as absolution, just as an indication that you are looking in the wrong place. Look under a rock, if you want to find a Cheney or similar creatures.

[Lee A. Arnold]

"at least 70,000 people killed"

At least four surveys by three different teams of professionals, including the Johns Hopkins study in Lancet (which still stands, despite the amateur attempts to discredit it,) as well as new British polling study, all put the number of Iraqi deaths at somewhere between 750,000 and 1.2 million.

The "Iraq Body Count" is the lowball outlier.

The entire story can be followed through all its technical details by perusing the voluminous discussions under various postings at Tim Lambert's excellent blog, Deltoid:

http://scienceblogs.com/deltoid/

[elvis]

"I'm just saying that if somebody asked me, 'Are we fortunate in taking out Saddam?' I would say it was essential."[for the global economy]
The incompetence of this astounding--comming from one of the biggest movers and shakers.

We all know [recent history has painfully reminded us] that Saddam was a brute because he was holding a fractured country together [a country cobbled together by the brits].

Perhaps the real fear was Saddam looking to Russia, China and others to develop Iraqi oil. Maybe moving away from the dollar was also frightening. very very frightening!

At least he has said the "O" word. The world is going to be very interesting for the next few decades!

[Blissex]

«Maybe Bush et alia wanted to prevent the full resumption of Iraqi oil production, to drive up prices, to generate profit for the U.S. oil companies, and to protect the Saudis from the consequences of their declining output.»

That would have helped :-)

«As the U.N. sanctions regime was breaking down, the Russians and the French were well-positioned to help the Iraqis resume full-scale oil production, which would have depressed prices and the profits of oil producers.»

But ironically the oil supply squeeze main beneficiaries have been Russian oil companies. And the Russian economy is entirely fueled by oil, and according to someone who was probably in the know, it was a period of low oil prices that fatally weakened the USSR:

http://WWW.AEI.org/publications/pubID.25991/pub_detail.asp

«The invasion of Iraq was aimed at delaying that resumption, and ensuring that, when the resumption occurred, it was "with the help" of British and American oil companies.»

Well, I would go as far as saying "one of the aims", and perhaps a secondary aim. Sure, the fortunes of UK and USA oil companies were part of the rationale coalition of interests that supported the war -- the Republican leadership surely do not bite the hands that feed them, but while big business is their main constituency, it is is not the only one.

«The Halliburtons, Exxon/Mobil, the Carlyle Group and Dubai and the Saudi princes have done very nicely out of the Iraq War, thank you very much.»

Surely, but the Russians even more so...

[anne]

Thinking about Alan Greenspan running unbidden through Washington shilling for war in Iraq to protect against the thoroughly insane idea of Iraq taking control of our oil, I really have to wonder about the intellect of the guy. The more I think, the more disgusted and disillusioned I am. Am I supposed to respect such a person for any reason, after knowing this?