Anything for a Buck

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When it comes to Wall Street scandals, the widely held assumption is that accountants, stock traders, investment bankers, CEOs, and CFOs will do anything for a buck. If a broker recommended a stock that sunk in price, the courts and media are ready to assume a financial scam. He was cheating his own clients to line his pockets!

If a stock was sold before bad news was announced, the assumption is that insider information was employed. If an audit report seems to bury the bad news, the assumption is that the CEO and CFO conspired to cook the books to enrich themselves. Hey, money makes the capitalist world go round!

But might these have been mistakes stemming from lack of knowledge of the future? Perhaps all decisions at any point in time seemed to be the best ones but only later turned out to be wrong? Never. To say that is to reveal a crazy pro-business bias and fail to understand that making money (not ethics or customer service or whatever else) is all these people care about. So we are told.

In general, then, when reporting and adjudicating matters that pertain to business, the widely held assumption is that these people will do anything for a buck, whether lie, cheat, or steal. The burden of proof that wrongdoing does not exist falls entirely on the capitalist or stock dealer. Reasonable people are free to see money grubbing as the secret and sole motivation behind every action. Who would be so naïve as to think otherwise?

Ah, but when it comes to foreign policy — even that of a presidential administration sitting on an oil fortune and heading a global crude empire — matters are entirely different. To think that Bush’s plans for Iraq are driven by the desire to control Iraq’s oil supplies is seen as unseemly, unsavory, base, and contrary to every norm of proper opinion holding. Woe to anyone who would suggest that something other than national interest is the driving force!

Thus does Nicholas Kristof of the New York Times tell us that he is against war but even more against a certain line of argument against war. “One can disagree with the calls for war, as I do,” he says, “but liberals discredit themselves when they claim that the only reasons Mr. Bush could be planning an invasion are finishing Daddy’s work, helping his oil buddies, or diverting voters from corporate scandals.”

Liberals are discrediting themselves by saying what is true? How could this be? Because “If we’re to convince Americans of the perils of invasion, it’ll be by citing arguments rather than epithets.” But this is a false choice. To cite the real reasons for Bush’s war, and provide reasons why you think that the administration is lying, is to provide an argument, and that argument is that things are not always as they seem. With government, who is naïve enough to think otherwise?

With all the unrespectable, non-serious claims that the Iraq war is really about spilling blood for oil, the New York Times examined the issue of the oil motive at great length in its Sunday edition, and concluded the following: “No serious expert believes the charge made by Mr. Hussein that Washington’s one real goal is to seize his oil.”

How does one define a “serious expert"? In the case of Iraq, it means a person who does not believe that the war is all about oil. If you conclude that it is, you are de-listed from the ranks of serious experts.

In fact, this is generally true in public life: disagree fundamentally with the state and you are no longer considered a serious expert on anything. People in public life work their entire careers to make sure this does not happen, which is another way of saying that they work to stay within the bounds of opinions set by the ruling regime.

And yet the New York Times story goes on to point out that Iraq has five times more proven reserves of oil than the United States and the second largest supply of any country in the world (Saudi Arabia is number one). The story by Serge Schmemann grants that:

“112 billion barrels of proven reserves is also something nobody can overlook. So even if it’s not only about oil, or even mainly about oil, Iraq’s ‘ability to generate oil’ is always somewhere on the table, even if not in so many words. “

We might also say that bank robbers just like being mischievous, though the fact that banks have money is always somewhere on the table. In the same way, a rapist is just a violent guy, though sex is also somewhere on the table. Muggers are motivated by a general desire to harass, though getting people’s purses, watches, and wallets is always somewhere on the table.

Going beyond mere assertion, the Times explains why oil cannot be considered the primary motivation. To bring about a regime change to grab the oil is a gamble of enormous proportions because Iraq’s oil industry is in a “deplorable state,” the country needs to be rebuilt, and — this will shock you — there is “uncertainty over the future.” That’s it. That’s the whole argument, which we will now examine.

Uncertainty is a universal feature of the world, and it doesn’t somehow prevent risk taking. As for rebuilding the country, the Bush administration has already said that US taxpayers would be on the hook for these expenses (though the US would also try to rope Nato in). The contracts for rebuilding will go, inevitably, to the likes of Schlumberg Ltd. and Halliburton Corp. (Cheney, former CEO). At the very least, their investments will be guaranteed, a fact which seriously diminishes the extent to which the expense of rebuilding reduces the intensity of the oil motive.

In the story, Youssef M. Ibrahim of the Council on Foreign Relations does raise one interesting point. He says that there are risks to bringing all the Iraqi oil on the market because if one opens all valves, the price of oil could plummet, which could dramatically reduce profits. We know that Cheney thinks it should be a matter of policy that oil never fall below a certain price floor. One can imagine that this prospect could prove a mitigating factor. And yet, if prices can be kept above $20 and demand increases, and Bush-connected companies are doing the selling, there are still plenty of profits to be had even if the oil price plummets.

More forthright is a side bar included in the Times article that concerns untapped oil reserves.

“Some analysts speculate that Iraq’s reserves may be closer to 200 billion barrels. Others put the number close to 300 billion…. Deeper and more western prospecting has yet to be done.”

There’s more to add:

“Even the known reserves, however, have yet to be fully developed. There are [as] many [as] 17 ‘giant’ fields in Iraq — an oil-industry designation indicating reserves in excess of one billion barrels. Throw in a few ‘super-giants’ and a couple dozen ‘large’ fields and the potential is clear, regardless of who controls the country.”

Can you imagine that some people might think that getting control of the oil is the primary motivation? Yet people who suggest such a thing are to be dismissed as cranks. In fact, it is far clearer that greed and profiteering are behind US foreign policy than the Wall Street scandals (notice that US foreign policy is never called a scandal).

At least in the private markets, greed must be channeled to public service in order to be realized. And regardless of what government regulators say, stock analysts face no incentive to deliberately cause their clients to experience losses. That’s because we are dealing with private money and freedom of choice, which builds in a kind of accountability. Both profits and losses are privatized.

But where is the accountability in US foreign policy? The decision makers have hundreds of billions of other people’s money at their disposal and all the potential gains are their own. In other words, the expenses are socialized and the profits are privatized — a perfect prescription for a scandal of immense proportions. As for the people who are killed, they are no one’s asset.

When it comes to foreign policy, it should be clear that the Bush administration will do anything for a buck.

Llewellyn H. Rockwell, Jr. [send him mail] is president of the Ludwig von Mises Institute in Auburn, Alabama, and editor of LewRockwell.com.

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