War With Iraq - Bush Gains An Unlikely Supporter

March 18, 2003

IN THIS ISSUE:

1.  Bill Clinton Supports The War On Iraq.
      (His Own Editorial Appears Below.)

2.  What If Saddam Decides To Leave?

3.  Saddam’s Despicable War Plans.

Introduction

President Bush spoke to the nation last night and told us what we already knew: we are going to war with Iraq.  His supporters praised; his detractors criticized.  What else is new?  The war should begin very shortly.

In my E-Letter of March 4, I made clear my support for the US/UK war on Iraq.   But rather than making the case FOR war, I wrote about the likely consequences of NOT going to war.  As I expected, we got a much higher than usual number of responses to that E-Letter.  The large majority of the responses were positive and similarly supportive of the war.  But there were those who were critical, both of me and President Bush.  Some were hysterical, including several who compared Bush to Hitler, and some (as always) who predict the Iraq war will lead to the end of the world.

The large majority of my negative responses seem to always harken back to Bill Clinton and how “wonderful” things were when he was president, and how Bush is to blame for the sluggish economy (and all of the world’s other woes).  For the benefit of the “Clinton Lovers” in our crowd, let’s look at what he said about the Iraq war today.

Bill Clinton On The War With Iraq

THE GUARDIAN

March 18, 2003
 
QUOTE, from Bill Clinton:  “ Last October, when I spoke at the Labour conference in Blackpool, I supported the efforts of President Bush and Prime Minister Blair to renew efforts to eliminate Saddam Hussein’s weapons of mass destruction, and to try to accomplish this through the UN.

In November, the UN security council adopted unanimously resolution 1441, giving Saddam a ‘final opportunity’ to disarm, after 12 years of defying UN resolutions requiring him to do so. The resolution made it clear that continued sanctions were not sufficient and that continued defiance would lead to serious consequences.

The credit for 1441 belongs in large measure to Blair [no credit to Bush, of course], who saw it as a chance to disarm Saddam in a way that strengthened the UN and preserved the Atlantic alliance. Unfortunately, the consensus behind 1441 has unraveled. Saddam has destroyed some missiles but beyond that he has done only what he thinks is necessary to keep the UN divided on the use of force. The really important issues relating to chemical and biological weapons remain unresolved.

In the face of the foot dragging, hawks in America have been pushing for an immediate attack on Iraq. Some of them want regime change for reasons other than disarmament, and, therefore, they have discredited the inspection process from the beginning; they did not want it to succeed. Because military action probably will require only a few days, they believe the world community will quickly unite on rebuilding Iraq as soon as Saddam is deposed.

On the other side, France, Germany and Russia are adamantly opposed to the use of force or imposing any ultimatum on Saddam as long as the inspectors are working. They believe that, at least as long as the inspectors are there, Iraq will not use or give away its chemical and biological stocks, and therefore, no matter how unhelpful Saddam is, he does not pose a threat sufficient to justify invasion. After 150,000 US forces were deployed to the Gulf, they concluded the US was not willing to give inspections a chance anyway.

The problem with their position is that only the threat of force from the US and the UK got inspectors back into Iraq in the first place. Without a credible threat of force, Saddam will not disarm. 

Once again, Blair stepped into the breach, with a last-ditch proposal to restore unity to the UN and disarm Saddam without military action. He secured US support for a new UN resolution that would require Saddam to meet deadlines, within a reasonable time, in four important areas, including accounting for his biological and chemical weapons and allowing Iraqi scientists to leave the country for interviews. Under the proposed resolution, failure to comply with this deadline would justify the use of force to depose Saddam.

Russia and France opposed this resolution and said they would veto it, because inspections are proceeding, weapons are being destroyed and there is therefore no need for a force ultimatum. Essentially they have decided Iraq presents no threat even if it never disarms, at least as long as inspectors are there.

The veto threat did not help the diplomacy. It's too bad, because if a majority of the security council had adopted the Blair approach, Saddam would have had no room for further evasion and he still might have disarmed without invasion and bloodshed. Now, it appears that force will be used to disarm and depose him.

As Blair has said, in war there will be civilian as well as military casualties. There is, too, as both Britain and America agree, some risk of Saddam using or transferring his weapons to terrorists. There is as well the possibility that more angry young Muslims can be recruited to terrorism. But if we leave Iraq with chemical and biological weapons, after 12 years of defiance, there is a considerable risk that one day these weapons will fall into the wrong hands and put many more lives at risk than will be lost in overthrowing Saddam. 

I wish that Russia and France had supported Blair’s resolution. Then, Hans Blix and his inspectors would have been given more time and support for their work. But that's not where we are. Blair is in a position not of his own making, because Iraq and other nations were unwilling to follow the logic of 1441.

In the post-cold war world, America and Britain have been in tough positions before: in 1998, when others wanted to lift sanctions on Iraq and we said no; in 1999 when we went into Kosovo to stop ethnic cleansing. In each case, there were voices of dissent. But the British-American partnership and the progress of the world were preserved. Now in another difficult spot, Blair [Bush???] will have to do what he believes to be right. I trust him to do that and hope the British people will too.”  END QUOTE.  [Emphasis added, GH]

Just To Be “On The Record”

Say what you will about Bill Clinton, he is a very clever politician, even now.  Unlike presidents before him, he has not kept a low profile since he left the White House.  He has been very vocal on many issues, and has openly criticized President Bush on numerous occasions.  Yet now he (finally) comesout in support of the war.  But not without the usual Bill Clinton “spin.”

While he does state that he supports the war, he gives virtually all the credit to Tony Blair.  Surprising?  No, not at all.  Does he give his support for the war in one of the US mainstream media outlets?   No, of course not (at least not as of this writing).  He gave his editorial to a British newspaper, The Guardian.  Most Americans will NOT see it (that’s why I reprinted it here, for my clients and readers).

Just as Hillary Clinton did two weeks ago, when she endorsed the war, Bill Clinton wants to be on the record as supporting what could be a spectacularly successful effort, and one that could change the face of the Middle East for decades to come.

Just as Hillary did, Bill left himself plenty of room to criticize should the war go badly.  He makes it clear that he (just like Hillary) wishes the inspections could go on longer.  What will be interesting to see is if the war doesn’t go well, then who will Clinton criticize?  Tony Blair?  No, it will be all Bush’s doing if it doesn’t go well.   Count on it!

What If Saddam & Sons Leave?

In President Bush’s speech last night, he gave Saddam and his sons 48 hours to leave Iraq.  That would be roughly 8:15p.m. EST tomorrow.  If that does not happen, Bush said we would attack at “a time of our choosing.”   While Iraq publicly denounced Bush’s ultimatum, I wonder if the President’s choice of words could be a problem.  What if Saddam and his two treacherous sons decide to fly out of Baghdad tomorrow?  That would leave Bush and Blair in a very difficult position.

The United States has three interests in Iraq. Two of them are well known: destruction of weapons of mass destruction and regime change. The third interest, which has not been widely publicized, is using Iraq as a base from which to redefine the Middle East.  This third objective is the most critical one for the Bush administration.  All of these objectives require that US troops must enter and occupy Iraq for some period of time.

If Saddam and his sons leave, it does NOT mean they won’t return; it does NOT mean they would relinquish control; and it would very likely NOT accomplish regime change in Iraq.  Saddam would most likely put his top henchmen at the helm and continue to control them from a remote location.  In any event, if Saddam and his sons leave, it would mean that the US/UK have lost most of the justification for an invasion.

This raises the obvious question:  Is the Bush administration willing to accept the exile of Saddam and his sons, or are they confident that Saddam absolutely will not leave?  Surely, the President and his advisors did not raise this possibility unless they were certain of the outcome.  In any event, the media is starting to buzz about this possibility.

Saddam may not leave because he fears the US will hunt him down anywhere he goes, and that he will ultimately be killed or sentenced to life in prison by an international court.  Maybe this is what Bush is counting on.  Or, if he does leave, there is speculation that he would resign at the last minute and hand over control to his son, Qusay.  This would not be acceptable and explains why President Bush specifically referred to Saddam and his sons.

Maybe Bush and Blair intend to attack in any event, but if Saddam leaves, that will definitely cause problems for Bush and Blair.  It will be interesting to see what happens in the hours just ahead.

Saddam’s War Plans

Today’s issue of New York Post Online contains a disturbing article written by Amir Taheri, a Middle East expert, about Saddam’s war plans.  Taheri believes Saddam’s plan is to stampede hundreds of thousand Iraqi refugees toward the coalition troops in the south to slow our forces down.  He also believes that Saddam will murder tens of thousands (or more) of his own people and blame it on our forces, hoping to result in a new UN resolution to stop the war.  According to Taheri,

“Saddam hopes that his tactics will slow the coalition advance towards Baghdad for several weeks during which his European friends could go to the U.N. Security Council and ask for an immediate ceasefire followed by negotiations under Security Council auspices.”

If this doesn’t work, Taheri believes, as do other military sources, that the big battle will be fought in Baghdad.  His sources report that Saddam has 200,000 Republican Guard troops in place, along with an estimated 4,000 French and Soviet-built tanks, over 3,000 anti-aircraft guns and various powerful machine-guns.

Saddam reportedly told his commanders on Sunday, “The world is on our side. We can win this war as we won the last one. We shall see how many Iraqis the aggressors are prepared to kill.”

Stocks – Maybe A Bottom

The stock markets rallied strongly on Monday with the Dow Jones closing above 8,100 for the first time in over a month.  The S&P 500 closed at 869, the highest level since early January.  As I have suggested in recent weeks, I think the markets will rally if the war goes well. 

While I suspect most readers of this E-Letter are not into following stock charts or technical analysis, there is one point along this line I would like to make.  The stock markets bottomed last week at almost the exact same spot as they bottomed last October and last August.  Assuming this rally continues, we have made what is known as a “triple-bottom.”   This is a strong technical signal.  If the war goes well, and the market rallies as I expect, you will hear lots of market commentators refer to this.

One other important point:  if the triple-bottom lows reached last week (apprx. 7,500 in the Dow and 790 in the S&P 500) are broken through on the downside, this will be a similarly bearish development on a technical basis.  

If the war goes well, consumer confidence should improve and if so, the economy should expand at least modestly in the remainder of the year.  How far stocks could rally is anyone’s guess, but don’t under-estimate the markets and the economy should the war be won quickly and decisively.

Pray For Our Troops & The Iraqi People

My prayers go out to all the men and women in the armed forces and especially those in the Middle East.  I also pray that Saddam Hussein will not (or won’t be allowed to) kill his own people as suggested above.   Whether you support the war, or are against it, whether you like George Bush or not, we can all pray for our troops and our leaders.

Wishing you well,

Gary D. Halbert

SPECIAL ARTICLES

Saddam’s despicable war plans by Amir Taheri.

Saddam’s crimes you may not have heard of.

 


Read Gary’s blog and join the conversation at garydhalbert.com.


Forecasts & Trends E-Letter is published by ProFutures, Inc. Gary D. Halbert is the president and CEO of ProFutures, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, ProFutures, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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