Alan Greenspan and Blood for Oil

Ever since reviewers got their hands on advance copies of Alan Greenspan's latest book, The Age of Turbulence, one and only one line has been reprinted and reported on and discussed all over the world, in every country in the world: "I'm saddened that it is politically inconvenient to acknowledge what everyone knows -- the Iraq war is largely about oil." He spent last week backing away from the literal, obvious meaning of the line. His clarification is that he's not saying we invaded Iraq in order to seize and steal their oil, but that we invaded Iraq to keep Saddam Hussein from manipulating oil prices to our disadvantage, to keep his military from threatening oil shipments through the Straits of Hormuz. Whatever. The moment the sentence hit the web, fuzzy-headed liberals jumped for joy: look, a smart guy like Alan Greenspan agrees with us! Over at The Nation, in particular, they're literally all over it.

People, if I had any doubt left in my mind about the subject, which I don't? If I needed no other proof, the fact that Alan Greenspan says that we invaded Iraq because of oil is literally all the proof I need that oil had nothing to do with Iraq war. As every liberal on the planet, it feels like, and every anti-American, and every anti-capitalist, and every Islamist jumped up to cheer for the fact that Alan Greenspan agrees with their silly "blood for oil" conspiracy theory, I've been sitting here at home, scratching my head quizically, and asking myself, "Since when do any of these people agree with anything that Alan Greenspan says?"

Can any of you name even one single time that Alan Greenspan has ever been right?

His original claim to fame is that he "ended the recession." Now, first of all, you need no more proof that this doesn't make him a genius than this: he wasn't Reagan's first Federal Reserve chairman. During the time between when Paul Volcker stepped down and when the recession ended, Greenspan didn't actually change any of Paul Volcker's policies. He made literally no contribution of his own, favorable or unfavorable, to the perceived "success" of Reaganomics. Secondly, his theory about how he (not Reagan, not Volcker, not anybody else but him) saved us all from runaway stagflation was by raising interest rates so that businesses had to lay people off and break their unions. This, like everything else the man has ever said, sounds good in a dorm room at 3:00 am after having not slept the night before ... but it doesn't hold up. Basically this theory asks you to flatly ignore history, to pretend that the fact that it had been 10 years since the OPEC embargo had nothing to do with the US economy's recovery, that it had been 10 years since the US's humiliating defeat in Vietnam had nothing to do with the recovery of the US economy. Worse than that, this theory also requires you to ignore the fact that the "recovery" of the US economy was no such thing: poverty rates went up, not down, and stayed up until Clinton came along. Nor should Clinton, or any other right-wing Democrat, get credit for ignoring Alan Greenspan's advice; they tried to keep unemployment high, and thanks to the dot-com bubble, failed. And there's the last reminder that Alan Greenspan's "full employment leads to runaway inflation" theory is so much long-disproved science (at best): unemployment fell through the floor, wages went up for the first time in decades, and inflation not only didn't ignite, it fell.

(If you absolutely insist on ignoring historical fact and needing a theoretical justification for what's wrong with Greenspan's anti-worker theory of what's good for the economy, he never once has even tried to address the question of who, exactly, is supposed to buy things that the economy makes. How a man who left that big a gaping hole in his economic thinking, among others, acquired a reputation as some kind of super-genius I have no idea.)

And it's not as if the central thesis of his entire career being wrong was the only thing stupid the man ever said or did. He got the dot-com bubble wrong, insisting that it wasn't actually a bubble, then insisting that the bursting of the bubble wasn't going to hurt the broader economy. He got the real estate bubble wrong. He endorsed the Laffer Curve, lobbying Congress for every Republican tax cut, predicting confidently after each tax cut that government revenues would rise. After every government tax cut, revenues fell. He endorsed NAFTA and the WTO, predicting that they would both lead to more US jobs; the result was more lost US jobs. He endorsed the New Economy after that, saying that it was good because the high-skill high-pay jobs like computer programming would stay here in the US; those jobs started leaving for India, Russia, and elsewhere. Like most die-hard Randroids (and the man's credentials as a literal personal disciple of Ayn Rand are not in question, he was a member of her inner circle), the man really is a moron on the subject of how business actually works and how economics actually works. So if Alan Greenspan says that we went to war in Iraq because of oil, I'm inclined to assume that it had nothing whatsoever to do with oil, because the man has literally never been right about anything important in his entire life. If at this point Alan Greenspan assured me that it wasn't raining outside, I'd grab an umbrella out of reflex without even bothering to look out the window.

Let's face it. I don't need ad hominem attacks to prove that he's wrong about this, as important as they are to make and as much fun as they are on top of that. What Alan Greenspan can't answer, just like he can't answer any other questions put to him, is this. If all we cared about was access to Iraq's oil, or if that was even an important consideration for us, all we had to do was what the entire rest of the planet was asking us to do: formally end the Gulf War, end the sanctions. Sure, it would have meant screwing over the Kurds, but we've been screwing over the Kurds at least once a generation since 1917, and we've never had any grief come out of it. On the contrary, screwing over the Kurds would have made one of only real and important allies in that region, Turkey, ecstatically happy, since American-protected Kurdistan has been a reliable base for terrorist attacks against Turkey; why we're taking the Kurds' side against a NATO ally that's stood by us since the beginning of the Cold War, the only long-term stable democracy in the entire Islamic world, is a question that doesn't get asked nearly often enough. So why haven't we? He's got no answer. He's frankly too dumb to even think of the question.

For better commentary about the Greenspan book itself, see Tom Tomorrow, "This Modern World: The 'Evil Comedic Genius' of Alan Greenspan," 9/24/07.