Wednesday, 19 September 2007

Greenspan on war and oil

One sentence from Alan Greenspan's forthcoming book has the chatterati all aflutter: ""I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil." He clarified what he meant by that in a Saturday interview with Bob Woodward:
In the interview, he clarified that sentence in his 531-page book, 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 said he had backed Hussein's ouster, either through war or covert action. "I wasn't arguing for war per se," he said. But "to take [Hussein] out, in my judgment, it was something important for the West to do and essential, but I never saw Plan B" -- an alternative to war.
As Bill Visconti points out at SOLO, if Greenspan's motive was to protect the oil supplies of the world, it's a pity that in all his eighteen years as chairmen of the Fed he didn't once attack the environmental and taxation restrictions on American oil production. Given that, as George Reisman points out, "Middle Eastern terrorism rests on a foundation of financial support in the form of revenues derived from the sale of oil by the members of the OPEC cartel," then if he hadn't gone to Washington and "gone native," then freeing up domestic production should have been a serious security issue about which Greenspan might have been expected to raise some concerns. As Reisman explains, the issue is central to the security issue, and one about which some environmentalists might want to do some hard thinking:
Every barrel of oil that the environmentalists have succeeded in getting the U.S. government not to allow to be produced, every ton of coal that they have prevented from being mined, every atomic power plant whose construction they have stopped, has served to make oil scarcer and more expensive and subsequently to enrich OPEC and increase the funds available for the support of terrorism...

Today, after thousands of needless deaths and major destruction of property of symbolic as well as economic value, the supporters of environmentalism are among those who must make a choice. Which do they value more: indulging their exaggerated fear of oil spills on beaches and their boundless desire for nature untouched by man, or the lives and property of innocent victims of terrorism and, as now seems likely, the lives of hundreds and possibly thousands of young servicemen and women and the potentially enormous economic costs of a war?

True enough, decades of policies serving to enrich the supporters of terrorism have made it impossible for a policy of freedom for energy production in the United States all by itself to now strip the terrorists of financial support. But it would certainly very substantially help in reducing such support. And it would show up in lives and property saved. The environmentalists must choose.
UPDATE: Greenspan talks to 60 Minutes about his life story, and about the importance of taking out Saddam. [Hat tip Julian D.]


  1. I’ve never understood why the Bush administration has been shy about oil supply being a major motivation for war in the Middle East. All wars should have an economic component. Indeed if you waged war purely for economic reasons and eschewed motivations such as face saving and revenge or even humanitarian reasons things would proceed a lot more smoothly.

  2. Anglo, it's the power of emotion. Logic/rationale is a poor motivator by comparison.


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