GREENSPAN'S BOOK BASHES BUSH AND REPUBLICANS

Greenspan is now fudging on his earlier accusation that we went into Iraq for oil. But there is no doubt that we hoped to grab the oil.


July 19, 2003


Cheney's Oil Maps
Can the Real Reason for War be This Crass?
By MANO SINGHAM

Now that the official case for attacking Iraq made by the US and British governments has started to unravel, the question of the real reason for unleashing this death and destruction has become a hot topic of conversation again.

During the run-up to the invasion on Iraq, while speaking at teach-ins and other forums and taking part in other anti-war activities, I was somewhat skeptical of those who argued that the war was simply about getting hold of Iraqi oil for American oil companies. I cringed a little at the slogans and placards that said "No blood for oil!" , "No war for oil!", etc., and disagreed with those that the attack was due to a simple quid pro quo between the administration and its oil company cronies. While I found the administration's case for war to be unbelievable, the 'war for oil' thesis seemed to me to be a far too simplistic approach to global politics.

I fancied my self to be a much more sophisticated geo-strategic analyst. Of course, the fact that Iraq had the world's second largest reserves could not be coincidental and definitely played a role in the war plans. But I thought it more likely that broader geopolitical concerns were more dominant, such as showing the world that the US had the power to enforce its will anywhere, and to establish a long-term and secure strategic base in the middle east from which to ensure dominance of the region. To the extent that oil played a role, I thought that purpose of the war was not mainly to divert Iraqi oil revenues to US companies but instead to ensure control over the oil flow to the rest of the world so that economic rivals such as Europe and Japan, whose economies were dependent on middle east oil, would be forced to be subservient to US global interests and pressure.

The thought that the war was actually about making money for individuals and corporations in the short term did not seem to me to be credible. That was too petty and crass.

That was why I was stunned to read the press release put out by the public interest group Judicial Watch on July 17, 2003. This organization, along with the Sierra Club, had argued that both the membership of the Energy Task Force chaired by Vice-President Cheney and the proceedings of its meetings should be made public and had sought the information under the Freedom of Information Act (FOIA) since April 19, 2001. The Vice President had vigorously opposed this opening up of its activities and so a lawsuit was filed. On March 5, 2002 the US District Judge ordered the government to produce the documents, which was finally done by the Commerce Department just recently.

The Judicial Watch press release states that these released documents "contain a map of Iraqi oilfields, pipelines, refineries and terminals, as well as 2 charts detailing Iraqi oil and gas projects, and "Foreign Suitors for Iraqi Oilfield Contracts." The documents, which are dated March 2001, are available on the Internet at: www.JudicialWatch.org."

The press release continues: "The Saudi Arabian and United Arab Emirates (UAE) documents likewise feature a map of each country's oilfields, pipelines, refineries and tanker terminals. There are supporting charts with details of the major oil and gas development projects in each country that provide information on the projects, costs, capacity, oil company and status or completion date."

This foreign policy involvement is a somewhat surprising turn of events. The original FOIA case was initiated (before 9/11 and before the ratcheting up of the attack on Iraq) because of more domestic concerns, specifically suspicions that the membership of the Energy Task Force may have included people such as Ken Lay of Enron Corporation who may have been in a position to exercise undue influence over government energy policy at the expense of the public interest.

Now, other news items come to my mind, all pointing in the direction of Cheney. Although generally keeping a low profile in his frequent stays at his hideout, Cheney has been one of the most adamant proponents of attacking Iraq and hyping its threat. He has made some of the most authoritative statements that Iraq already had weapons of mass destruction, saying things like "Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction." (August 26, 2002) and "And we believe he has, in fact, reconstituted nuclear weapons." (March 16, 2003), the latter statement made just three days before the invasion.

It is also Cheney who reportedly had the most involvement in the fraud involving Iraqi uranium purchase from Niger, reportedly initiating the sending of Ambassador Wilson to that country to investigate. It is also Cheney who is reportedly the driving force behind the President's foreign policy and serves as his main strategist and mentor.

So perhaps my friends in the antiwar movement were right all along. Perhaps we have reached such a nadir that foreign policy (and even wars) can be made, and people sent to certain death, for such crass reasons. Perhaps it is time to put the Vice-President under much closer scrutiny.

Mano Singham is a physicist and educator at Case Western Reserve University in Cleveland, Ohio. He can be reached at: [email protected]

It seems his protests are a little too late. If he had yelled loud and clear a few years ago, it might have done something.

That is correct. Greenspan is, all in all, a fraud. Throughout his private career, he was very poor at predicting interest rates. While Fed chief, he allowed rates to go too low, which led to the prime-rate meltdown we are now experiencing. Most important, he didn't blow the whistle on Bush's egregious tax cuts.

Greenspan's war advice to Bush re Oil
How did Greenspan know Bush's Iraq was was about oil? Because he advised Bush how to protect U.S. oil supply.---BBB

Monday, September 17, 2007
Greenspan: War about Oil
Juan Cole - Informed Comment - President of the Global Americana Institute

Alan Greenspan confirms that he urged the Bush administration to take out Saddam on grounds of petroleum security for the US, and says one official told him, 'unfortunately we can't talk about oil.'

Long-time readers know that I think restructuring the architecture of US energy security was among the major motives for the Iraq War. This thesis does not contradict the Mearsheimer-Walt theory that the Israel lobby and Israeli security formed a major impetus to the war, since US and Israeli interests in energy security overlap. It is just circumstantial, but I see a nexus in the American Enterprise Institute of Exxon-Mobil money and former officials and Neoconservative intellectuals, both with the ear of Dick Cheney.

See this fascinating piece on Greenspan.



^9/17/07: Sad Alan's Lament

By PAUL KRUGMAN

When President Bush first took office, it seemed unlikely that he would
succeed in getting his proposed tax cuts enacted. The questionable
nature of his installation in the White House seemed to leave him in a
weak political position, while the Senate was evenly balanced between
the parties. It was hard to see how a huge, controversial tax cut, which
delivered most of its benefits to a wealthy elite, could get through
Congress.

Then Alan Greenspan, the chairman of the Federal Reserve, testified
before the Senate Budget Committee.

Until then Mr. Greenspan had presented himself as the voice of fiscal
responsibility, warning the Clinton administration not to endanger its
hard-won budget surpluses. But now Republicans held the White House,
and the Greenspan who appeared before the Budget Committee was a very
different man.

Suddenly, his greatest concern -- the "emerging key fiscal policy need,"
he told Congress -- was to avert the threat that the federal government
might actually pay off all its debt. To avoid this awful outcome, he
advocated tax cuts. And the floodgates were opened.

As it turns out, Mr. Greenspan's fears that the federal government would
quickly pay off its debt were, shall we say, exaggerated. And Mr.
Greenspan has just published a book in which he castigates the Bush
administration for its fiscal irresponsibility.

Well, I'm sorry, but that criticism comes six years late and a trillion
dollars short.

Mr. Greenspan now says that he didn't mean to give the Bush tax cuts a
green light, and that he was surprised at the political reaction to his
remarks. There were, indeed, rumors at the time -- which Mr. Greenspan
now says were true -- that the Fed chairman was upset about the response
to his initial statement.

But the fact is that if Mr. Greenspan wasn't intending to lend crucial
support to the Bush tax cuts, he had ample opportunity to set the record
straight when it could have made a difference.

His first big chance to clarify himself came a few weeks after that
initial testimony, when he appeared before the Senate Committee on
Banking, Housing and Urban Affairs.

Here's what I wrote following that appearance: "Mr. Greenspan's
performance yesterday, in his first official testimony since he let the
genie out of the bottle, was a profile in cowardice. Again and again he
was offered the opportunity to say something that would help rein in
runaway tax-cutting; each time he evaded the question, often replying by
reading from his own previous testimony. He declared once again that he
was speaking only for himself, thus granting himself leeway to pronounce
on subjects far afield of his role as Federal Reserve chairman. But when
pressed on the crucial question of whether the huge tax cuts that now
seem inevitable are too large, he said it was inappropriate for him to
comment on particular proposals."

"In short, Mr. Greenspan defined the rules of the game in a way that
allows him to intervene as he likes in the political debate, but to
retreat behind the veil of his office whenever anyone tries to hold him
accountable for the results of those interventions."

I received an irate phone call from Mr. Greenspan after that article, in
which he demanded to know what he had said that was wrong. In his book,
he claims that Robert Rubin, the former Treasury secretary, was stumped
by that question. That's hard to believe, because I certainly wasn't:
Mr. Greenspan's argument for tax cuts was contorted and in places
self-contradictory, not to mention based on budget projections that
everyone knew, even then, were wildly overoptimistic.

If anyone had doubts about Mr. Greenspan's determination not to
inconvenience the Bush administration, those doubts were resolved two
years later, when the administration proposed another round of tax cuts,
even though the budget was now deep in deficit. And guess what? The
former high priest of fiscal responsibility did not object.

And in 2004 he expressed support for making the Bush tax cuts permanent
-- remember, these are the tax cuts he now says he didn't endorse -- and
argued that the budget should be balanced with cuts in entitlement
spending, including Social Security benefits, instead. Of course, back
in 2001 he specifically assured Congress that cutting taxes would not
threaten Social Security.

In retrospect, Mr. Greenspan's moral collapse in 2001 was a portent. It
foreshadowed the way many people in the foreign policy community would
put their critical faculties on hold and support the invasion of Iraq,
despite ample evidence that it was a really bad idea.

And like enthusiastic war supporters who have started describing
themselves as war critics now that the Iraq venture has gone wrong, Mr.
Greenspan has started portraying himself as a critic of administration
fiscal irresponsibility now that President Bush has become deeply
unpopular and Democrats control Congress.
-------------------------------------------------------------

http://www.latimes.com/entertainment/la-et-book17sep17,1,507143.story?ctrack=3&cset=true

The lies of Alan Greenspan
The lies of Alan Greenspan
William Greider
Tuesday, September 18, 2007
San Francisco Examiner

Alan Greenspan has come back from the tomb of history to correct the record. He did not make any mistakes in his 18-year tenure as Federal Reserve chairman. He did not endorse the regressive Bush tax cuts of 2001 that pumped up the federal deficits and aggravated inequalities. He did not cause the housing bubble that is now in collapse. He did not ignore the stock market bubble that subsequently melted away and cost investors $6 trillion. He did not say the Iraq war is "largely about oil."

Check the record. These are all lies.

Greenspan's testimony endorsing the Bush tax cuts was extremely influential but now he wants to run away from it. In the instance of Iraq, Greenspan is actually correcting his own memoir, "The Age of Turbulence," which just came out. Last weekend, newspapers reported provocative snippets from the book, including this: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Wow, talk about your "inconvenient truth." Greenspan was blithely acknowledging what official Washington has always denied and the news media faithfully ignored. "Blood for oil." No, no, no, that's not what he meant, Greenspan corrected in a follow-up interview (with Bob Woodward in the Sept. 17 Washington Post). He was only saying that "taking out Saddam was essential" for "oil security" and the global economy.

Are you confused? Welcome to the world of slippery truth that Greenspan has always lived in. He was the Maestro, as Woodward's loving portrait dubbed him. Wall Street loved the chairman best because the traders and bankers knew he was always on their side and would come to their rescue. The major news media treated him like an Old Testament prophet. Whatever the chairman said was carved on stone tablets, even when it didn't make any sense, as it often didn't.

Some of us, who followed his tracks more closely, were not so kind. Harry Reid, now the Democratic Senate leader, said Greenspan was "one of the biggest political hacks in Washington." Amen. I called him "the one-eyed chairman" who could always spot reasons to stomp on the real economy of work and production, but was utterly blind to the destructive chaos in the financial system. No matter. The adoration of him was nearly universal.

Until now. The economic consequences of his rule are accumulating, and even the dullest financial reporters are stumbling on crumbs of truth about Greenspan's legendary reign. It sowed profound and dangerous imbalances in the U.S. economy. That's what happens when government power tips the balance in favor of capital over labor, favoring super-rich over middle class and poor, then holds it there for nearly a generation.

Things get out of whack and now the country is paying enormously. A pity reporters and politicians didn't have the nerve to ask these questions when Greenspan was in power.

He retired only a year ago, but is already trying to revise the history - to explain away blunders that are now a financial crisis facing his successor; to rearrange the facts in exculpatory ways; to deny his right-wing ideological bias and his raw partisanship in behalf of the Bush Republicans.

The man is shrewd. He can see the conservative era he celebrated and helped to impose upon the American economy is in utter ruin. He is trying to get some distance from it before the blood splashes all over his reputation. Of course, he also came back to cash in - an $8 million advance for a book that is sure to be a huge bestseller.

I don't want to be unkind, but Greenspan could have avoided all the embarrassing questions if his book was posthumous. I haven't read it yet. I have a hunch I am not going to like it.

http://www.latimes.com

Greenspan: Ouster Of Hussein Crucial For Oil Security
Greenspan: Ouster Of Hussein Crucial For Oil Security
By Bob Woodward
Washington Post Staff Writer
Monday, September 17, 2007; A03

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, who was the country's top voice on monetary policy at the time Bush decided to go to war in Iraq, has refrained from extensive public comment on it until now, but he made the striking comment in a new memoir out today that "the Iraq War is largely about oil." 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.

Greenspan's reference in "The Age of Turbulence: Adventures in a New World" to what he calls the "politically inconvenient" fact that the war was "largely about oil" was first reported by The Washington Post on Saturday and has proved controversial.

Defense Secretary Robert M. Gates took issue with Greenspan on ABC's "This Week" yesterday. "I wasn't here for the decision-making process that initiated it, that started the war," Gates said. But, he added, "I know the same allegation was made about the Gulf War in 1991, and I just don't believe it's true."

Critics of the administration have often argued that while Bush cited Hussein's pursuit of weapons of mass destruction and despotic rule as reasons for the invasion, he was also motivated by a desire to gain access to Iraq's vast oil reserves. Publicly, little evidence has emerged to support that view, although a top-secret National Security Presidential Directive, titled "Iraq: Goals, Objectives and Strategy" and signed by Bush in August 2002 -- seven months before the invasion -- listed as one of many objectives "to minimize disruption in international oil markets."

Though Greenspan's book is largely silent about Iraq, it is sharply critical of Bush and fellow Republicans on other matters, denouncing in particular what Greenspan calls the president's lack of fiscal discipline and the "dysfunctional government" he has presided over. In the interview, Greenspan said he had previously told Bush and Cheney of his critique. "They're not surprised by my conclusions," he said.

As for Iraq, Greenspan said that at the time of the invasion, he believed, like Bush, that Iraq had weapons of mass destruction "because Saddam was acting so guiltily trying to protect something." While he was "reasonably sure he did not have an atomic weapon," he added, "my view was that if we do nothing, eventually he would gain control of a weapon."

His main support for Hussein's ouster, though, was economically motivated. "If Saddam Hussein had been head of Iraq and there was no oil under those sands," Greenspan said, "our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day" passing through.

Greenspan said disruption of even 3 to 4 million barrels a day could translate into oil prices as high as $120 a barrel -- far above even the recent highs of $80 set last week -- and the loss of anything more would mean "chaos" to the global economy.

Given that, "I'm saying taking Saddam out was essential," he said. But he 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."
-----------------------------------------------

Evelyn Duffy contributed to this report.

Verdict: Greenspan lifts the lid
Verdict: Greenspan lifts the lid
By Rupert Cornwell
Published: 18 September 2007
Independent UK

Bush, the dotcom bubble and sub-prime lending, the former Federal Reserve chairman reveals all

An economic cycle of sorts will be completed today. It began in the wake of the US terror attacks of 11 September 2001, when America's central bank under Alan Greenspan began to lower interest rates to prevent a financial collapse. And, unless almost every forecaster is mistaken, it will end this afternoon when the Federal Reserve policy-makers, under Mr Greenspan's successor Ben Bernanke, announce the first cut in its key short-term interest rate in more than four years - a response to the threat of a new financial collapse triggered by the easy money of the Greenspan era.

From a literary viewpoint, the timing could not be better. Yesterday Mr Greenspan's long-awaited autobiography, The Age Of Turbulence: Adventures In A New World, hit book stores. The 513-page tome is part autobiography, part self-justification and part economic testament. The first half offers an account of his 18 years at the head of the world's most powerful central bank. The second amounts to the thoughts of Chairman Alan about how the global economy was transformed in the final quarter of the 20th century, and the huge new adjustments that will be needed in the early decades of the 21st.

The headlines have been made by Mr Greenspan's unflattering comments about the economic policies of George W Bush and Dick Cheney - his old colleague from the Ford administration. Yet the deeper message of the book is how the mightiest presidents have little sway over economic and financial events, and that the influence of even a Fed chairman regularly voted the second-most powerful person in the country is not much greater. Up to a point, it is a story of government. Far more, however, The Age Of Turbulence is a history of what Harold Macmillan referred to simply as "events, dear boy, events" - from Black Monday six weeks after he was confirmed as Fed chairman in 1987, to financial crises in Mexico, Asia and Russia and the Long Term Capital Management debacle of 1998, to the trauma of 9/11 and now the US sub-prime mortgage crisis.

The narrative unfolds against the roaring bull market of most of the 1990s, itself fuelled by an information and communications revolution that seemed to have made obsolete both the business cycle and the laws of economic gravity. Then came the dotcom bust, followed in turn by a period in which - thanks to globalisation, a vast pool of cheap labour and excess supply - deflation became a greater concern for the Fed than the bank's traditional demon of inflation.

As always with Mr Greenspan, the trick is to read between the lines. The book - dry, at times droll and, above all, written in clear and finite sentences - makes vastly more enjoyable reading than the impenetrable Fedspeak with which he used to mystify the markets. Naturally, it does not explicitly tell the full story. But, occasionally, another Greenspan is discernible, this one almost puckish and secretly relishing the veneration in which he was held, a supremely political figure who professes amazement at the dastardly deeds of the politicians he knew so well.

Mr Greenspan the author plainly loves this public image. He claims to have issued no fewer than five convoluted marriage proposals to his future wife Andrea Mitchell, a correspondent for NBC News. Alas, he notes, "she missed a couple." On a belated honeymoon in Venice, he interrupts a romantic stroll to ask her, "What is the value-added produced in this city?"

Equally incongruous was the scene on 31 December 1999, when the couple slipped away early from a Millennium party thrown by Bill Clinton at the White House to return to the Fed's war room to see if the Y2K bug was causing global computer meltdown. He writes: "I felt out of place in a black tie; most everyone else had on a red T-shirt emblazoned with an eagle and the words 'Federal Reserve Board' and Y2K."

The anecdotes, however, cannot obscure a deeper suspicion about the Greenspan era. To modify the traditional description of a central bank's job, he was far better at lacing the punch bowl with alcohol than at removing the punch bowl as the party got going. His handling of crises, from Black Monday to the sovereign debt defaults of the late 1990s and 9/1l, was deft and sure. His error was an excess of generosity. If he worried about market bubbles, he did precious little to prevent them bursting.

His October 1996 speech warning of "irrational exuberance" in the markets launched a catchphrase of the boom years but created no more than a one-day blip on Wall Street. Similar was his failure to oppose more forthrightly the massive Bush tax cuts of 2001 and 2003 which, in hindsight, he now criticises.

In yesterday's New York Times, under the headline 'Sad Alan's Lament," the columnist Paul Krugman made the case against Mr Greenspan, accusing him of "moral collapse" on the tax cut issue. If he objected back then, Mr Krugman asked, why on earth did he not say so?

The second half of the book provides a partial answer. There, Mr Greenspan sets out his philosophy of libertarian capitalism and peers into the future. The US economy will grow by 75 per cent over the next 25 years, he guesses. But, by 2030, as the impact of outsourcing and cheap labour start to dry up and deficits swell with the retirement of the baby boomers, inflation and interest rates will have doubled. Meanwhile, as the global markets merge into one seamless, speed-of-light whole, the power of governments and regulators will become even less. "We have no sensible choice other than to let markets work," he says. "Market failure is the rare exception and its consequences can be assuaged by a flexible economic and financial system."

In short, even Fed chairmen are fatalists at heart.

Key moments from Greenspan's chequered career

On Black Monday [when the Wall Street exchange plunged by 508 points, or 22 per cent] on 19 October 1987: "To the senior people on the phone with me that night, the urgency and gravity of the situation was apparent. Even if the markets got no worse, the system would be reeling for weeks. Not all of our younger people understood the seriousness of the crisis, however. As we discussed what public statement the Fed should make, one of them suggested, 'Maybe we are overreacting. Why not wait a few days and see what happens?'."

On his fraught relationship with President George H W Bush, who wanted the Fed to cut rates rates faster during the 1990/1991 recession: "I was saddened years later when I discovered that President Bush blamed me for his loss [to Bill Clinton in November 1992]. His bitterness surprised me. I did not feel the same way about him. His loss reminded me of how voters in Britain had ousted Winston Churchill immediately after World War II."

On the collapse in 1998 of the Long Term Capital Management hedge fund: "Even after the smoke cleared, no one knew how highly leveraged LCTM was when things started to go wrong. The best estimates were that it had invested $35 for every $1 it actually owned. Practically overnight, its stunned founders watched the nearly $5bn (£2.5bn) in capital they had built up drain away."

On cutting the Fed's key short- term interest rate to 1 per cent [a 45-year low] in summer 2003: "At the late June meeting of the FOMC [the Fed's policy-setting committee], deflation was Topic A. We agreed on the reduction, despite our consensus that the economy probably did not need another rate cut. But we wanted to shut down the possibility of corrosive deflation. We were willing to chance that by cutting rates, we might foster a bubble."

On the current sub-prime mortgage crisis in the US, for which Mr Greenspan's cheap money policy has been widely blamed: " I was aware then [in 2003] that the loosening of credit terms for sub-prime borrowers increased financial risk, and that subsidised home ownership initiatives distort market outcomes. But I believed then, as now, that the benefits of broadened home ownership are worth the risk."

Lantos, and most of the rest of congress, did not vote for the war. They voted to give Bush power to invade should he find that conditions made this necessary. There is a big difference.

What is wrong with this country that we put incompetent people in positions of great power. This is certainly the situation relative to Greenspan.