Surging downward

Alan Greenspan has a new book out today, and as is often the case with new books small excerpts are leaking out as agents and publishers attempt to build up demand for copies. However, even by such standards the one-liner making the round over the weekend seemed explosive:

"I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Coming from a source such as Greenspan, this remark could be taken as particularly telling about the administration's real reasons for invading Iraq. Usually the people making such comments are left-wing, anti-war, anti-administration bloggers such as ... well ... myself. Or Liza.

Suffice to say, Greenspan doesn't fit the template.

Having thought about this some, however, and recognizing I have not read the book yet, I find it unlikely Greenspan is claiming the primary reason we invaded Iraq was oil, but rather that the reason we care about the region at oil is the oil reserves there, and Saddam was seen as a destabilizing force in an area we cared about. It's a small, but important distinction - had Saddam existed in, say, central Africa, he may still have been a destabilizing force but we likely wouldn't have invaded his nation, simply because there is nothing there we care about as much as we care about middle-Eastern oil.

Update: Greenspan seems to support this take in a Wall Street Journal interview available here.

Regardless of our rationale for the initial invasion, however, the supposed rationale behind the escalation this year took another body blow over the weekend when the faction of Shiite cleric Moqtada al-Sadr announced Saturday it would withdraw its support for Iraqi prime minister Nouri al-Maliki. Considering the Sadr faction had a significant hand in al-Maliki's being able to establish a parliamentary majority in the first place, this is another real body blow to the ability of the Iraqi government to continue to rule at all, much less effectively, at least as it is currently constituted.

The underlying purposes for sending more troops to Iraq was supposed to be to provide the government there "breathing space" to make some hard, but necessary, decisions regarding the future of the country. Instead, the government continues to spiral into chaos. I'm sure the administration will see that simply as further justification to keep troops there - if things are going well we need to keep troops there because things are going well, if things are going poorly we need to keep troops there because things are going poorly. Staying in Iraq is a tautology.

Meanwhile, there is an interesting new research paper (hat tip to Freakonomics) analyzing the data from the Iraq surge from an economist's stand point. The entire paper is worth a read, and the author concludes the signs are mixed, with casualty data (both civilian and military) pointing to the surge making some progress, but other data pointing toward a deteriorating situation.

However, the most interesting point, and most telling, is the author's analysis of the Iraqi bond markets - he determines that since the surge began, confidence in the ability of the Iraqi government to repay bonds it sells has fallen by 40%. Given the generally well-established track record of financial markets in predicting the future, this is pretty damning.

Combine it with the news last week that Hunt Oil Co., who's CEO Ray Hunt is on the President's Foreign Intelligence Advisory Board, has struck a deal with the Kurdistan National Assembly to explore and drill in the Kurdish region, without the Iraqi government being included in the negotiations or contract, and it becomes increasingly clear which way the smart money is betting - against the administration.

Given the respective track records, that certainly seems the way to go.