August 11, 2003

Alan Murray Wonders Why We Are Ruled by These Liars

The Wall Street Journal's Alan Murray bangs his head against the wall at the Bush Administration which has "willfully deceived the public and Congress about the costs of the Iraqi war and its aftermath... [and] continue[s] to do so...":

WSJ.com - Political Capital: WASHINGTON -- The battalion of reporters investigating 16 words in President Bush's State of the Union address might want to dispatch a squad to look into the 15 words uttered by Deputy Defense Secretary Paul Wolfowitz March 27. In testimony about Iraq to the House Appropriations Committee, Mr. Wolfowitz said: "We're dealing with a country that can really finance its own reconstruction, and relatively soon." Really? Perhaps it depends on the meaning of the words "relatively soon." But if he was talking about the current decade, Mr. Wolfowitz's statement, echoed by others in the administration at the time, was then and is still simply untrue.

In an interview from Baghdad last week, L. Paul Bremer, the man now running Iraq, provided a more candid assessment. Over the next four or five years, he said, Iraqi oil revenue won't begin to cover the tab for repairing the nation's battered infrastructure. He put the bill at "probably well above $50 billion, $60 billion, maybe $100 billion. It's a lot of money." Let's hope Mr. Bremer doesn't meet the same fate as White House economic adviser Lawrence Lindsey, who lost his job after suggesting last year -- correctly, it turns out -- that the costs of war could reach $200 billion. In this administration, candor about costs is unforgivable.... I do think members of the administration have willfully deceived the public and Congress about the costs of the Iraqi war and its aftermath. And they continue to do so.

Posted by DeLong at August 11, 2003 07:41 AM | TrackBack

Comments

Back in February/March, we did a strategic assessment of the war, the impacts and costs (see abstract below). Our conclusions were somewhat startling.

We expected the occupation of Iraq to last up to a decade, and the total costs -- the War, the expense of rebuilding Iraq, and the replacement of expended equipment -- to be between $750B - $1T.

You can download the full report here
http://bigpicture.typepad.com/comments/nothiddendoc/PreWarEdition Mar.19.03.doc (Word Doc)

http://bigpicture.typepad.com/comments/nothiddenpdf/PreWarEdition Mar.19.pdf (PDF)

ABSTRACT:
A strategic assessment of the imminent War and its economic impact, based on “open source” materials. Several unexpected conclusions are reached: First, the explanations offerred by the nation’s leadership for military action is inadequate to explain the US commitment to any invasion. Second, by “reverse engineering” the strategic decision making process, we learn there may indeed be compelling reasons for invading and occupying Iraq.

These findings lead to the conclusion that any U.S. military presence in the Middle East is likely to be a large scale, continuing operation. The subsequent occupation of Iraq may last several years, and continue for a decade. The cost for this effort could scale up to one trillion dollars by 2011.

Lastly, we attempt to assess the impact the War will have on the equity and fixed income markets; We also apply those findings to specific market sectors and industries. Finally, we suggest how asset managers may wish to position their portfolios in the months and years ahead.

Posted by: Barry Ritholtz on August 11, 2003 09:19 AM

Gna gna gna Clinton also. Gna gna gna not tue. Gna gna gna Bush never told this. Gna gna gna do you think it's not a good Saddam has been disposed. Gna gna gna war on terra. Gna gna gna Democrats are partisan. Gna gna gna Paul Krugman and New York Times are liars. Gna gna gna power of pride...

Posted by: Jean-Philippe Stijns on August 11, 2003 09:21 AM

Back in February/March, we did a strategic assessment of the war, the impacts and costs (see abstract below). Our conclusions were somewhat startling.

We expected the occupation of Iraq to last up to a decade, and the total costs -- the War, the expense of rebuilding Iraq, and the replacement of expended equipment -- to be between $750B - $1T.

You can download the full report here
http://bigpicture.typepad.com/comments/nothiddendoc/PreWarEdition Mar.19.03.doc (Word Doc)

http://bigpicture.typepad.com/comments/nothiddenpdf/PreWarEdition Mar.19.pdf (PDF)

ABSTRACT:
A strategic assessment of the imminent War and its economic impact, based on “open source” materials. Several unexpected conclusions are reached: First, the explanations offerred by the nation’s leadership for military action is inadequate to explain the US commitment to any invasion. Second, by “reverse engineering” the strategic decision making process, we learn there may indeed be compelling reasons for invading and occupying Iraq.

These findings lead to the conclusion that any U.S. military presence in the Middle East is likely to be a large scale, continuing operation. The subsequent occupation of Iraq may last several years, and continue for a decade. The cost for this effort could scale up to one trillion dollars by 2011.

Lastly, we attempt to assess the impact the War will have on the equity and fixed income markets; We also apply those findings to specific market sectors and industries. Finally, we suggest how asset managers may wish to position their portfolios in the months and years ahead.

Posted by: Barry Ritholtz on August 11, 2003 09:24 AM

Which is worse? Did the administration know the testimony was not true but used it anyway? Or did the clueless administration not realize that Iraq could not pay for rebuilding itself. When this topic first came up last year, I did the calculations based on peak Iraqi oil production and estimated price of oil and quickly discovered that oil revenue alone would be inadequate.

I ran across an interesting story that using civilians was less expensive for the military- until they are needed in war zones. Apparently, the insurance for civilians employed by the military in Iraq is skyrocketing and is causing contractors to pull out. The administration is blaming these "unpredictable" costs for their inability to estimate costs.

Senator Lugar said months ago that a failure to discuss the costs of Iraq with the American people and Congress would be a political liability for the administration. This story will not go away because it is intertwined with the growing casualties in Iraq. Did inadequate planning and funding contribute to American casualties in Iraq?

Whatever happened to the "cakewalk"?

Posted by: bakho on August 11, 2003 09:32 AM

Such sadness.

Posted by: lise on August 11, 2003 02:41 PM

The administration pulled a fast one by separating the cost of the war with the cost of occupation and rebuilding. Whether this is a valid separation of costs is questionable. Failure to adequately rebuild Iraq defeats one of the purposes of fighting the war in the first place. In the administration's defense, costs of wars have traditionally only included the price up to ceases ion of major hostilities. For example, WW II war cost do not include the price of occupation and rebuilding of both Japan and Germany (France, Belgium, Netherlands, etc). These are listed as separate costs.

Posted by: James on August 12, 2003 12:08 PM
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