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The Three Trillion Dollar War by Joseph Stiglitz and Linda Bilmes, review by Mike Small
The Three Trillion Dollar War by Joseph Stiglitz and Linda Bilmes , review by Mike Small
The true costs of the war in Iraq to the US economy alone will exceed three trillion dollars according to a new book by Nobel Laureate author Joseph Stiglitz and ex Clinton financial adviser, Linda Bilmes. Stiglitz has none of the sweep of Naomi Klein, the ardour of John Pilger or the flourish of Galloway. This is the cold facts laid out on the slab like any one of the 4000 American troops killed in the war. Stiglitz and Bilmes state with refreshing simplicity: 'By now it is clear that the US invasion of Iraq was a terrible mistake.'
This is a book about privatisation and profiteering as much as it is the ravages of war. Stiglitz and Bilmes quote the Washington Post's Rajiv Chandrasekaran interviewing Republican Thomas Foley in 2003. Foley had been appointed to head private sector development in Iraq. He boasted that he would privatise all of Iraq's state owned enterprises inside of one calendar month. When informed that this was against international law he replied: 'I don’t care about any of that stuff... I don’t give a shit about international law. I made a commitment to the President that I'd privatise Iraq's businesses.'
Of course if you've discarded the Geneva Convention then what's a little fiscal regulation? A 'no brainer' as Dick Cheney would say.
A powerful point made again and again by Stiglitz and Bilmes is that the military incompetence was matched by, and interplayed with economic mismanagement on an astonishing scale. This manifest itself in three key ways:
1) Committed to preserving tax cuts for the rich, the Bush administrations refusal to raise taxes to pay for spiralling costs, insisting instead on finance through deficit spending.
2) The use of private mercaneries. Blackwater Security got a $27 million no bid contract to protect Paul Bremer III (the administrator of the Coalition Provisional Authority) in 2003. This expanded to $100 million in a year. By 2007 it held a $1.2 billion contract for Iraq. This is boom-time. This is disaster capitalism. In 2007 private security guards earned $1222 a day whilst an army sergeant might take home between $140 - $190. Not surprising then that, when their tour of duty had ended many would sign up with private companies. It's a neat symmetry with what's happening in our own NHS.
3) But it is the interplay of military and economic failure that drove the huge cost of the war, and human suffering up and up. As private investment predictably failed to flow in the midst of such huge upheaval and destruction, infrastructure was never resurrected. Iraq never recovered from the impact if its liberators. As ordinary Iraqis failed to see any material benefit from the US presence - in fact their country had been destroyed - moral fell, and in the unbearable heat - tempers rose. Aside from the cultural, ethnic and religious clash, the call of the insurgents operated in a context of demonstratable failure by the Americans to display basic levels of competence.
Private investors would do little else but buy at bottom dollar and then strip the assets of Iraq, rather than do business amidst such human carnage.
The use of private contractors opened the door to profiteering, corruption and lack of accountability. The army continued to lose its best soldiers to private companies who could pay $1000 a day more. In awar with no moral focus, mired in legal and ethical ambiguity, and opposed by a majority at home, no 'national endeavour' bound personnel to a cause, however bellicose a pose the politicians sounded. But, if this was a sick neocon fantasy it was good news for some. Halliburton’s stock rose by 229% since the war begun. Raytheon's by 117%. Lockheed Martin by 105% and General Dynamics by 134%.
Initial cost projections, were, predictably wildly inaccurate. In 2002 Larry Lindsey, Bush's economic advisor and head of the National Economic Council, suggested that the costs might reach $200 billion. Donald Rumsfeld dismissed this estimate as 'baloney'. Paul Wolfovitz claimed that post-war reconstruction would pay for itself through increased oil revenues. This was now it seems, another macabre neoliberal fantasy.
So what was the cost to the UK? Stiglitz and Bilmes argue that 'The budgetary cost to the United Kingdom of the wars in Iraq and Afghanistan through to 2010 will exceed £20 billion. It's sum worth remembering the next time your told your school needs a PFI as the investment just isn't there for state education.
Before the war, as Chancellor, Gordon Brown set aside £1 billion for the war. By late 2007 the UK had spent £7 billion in Iraq and Afghanistan. Stiglitz and Bilmes note that: 'The British system is particularly opaque: funds from the Special Reserve are 'drawn down' by the MOD when required, by arrangement with the Treasury. Without specific approval by Parliament.'
In order to properly account for the costs, Stiglitz and Bilmes are acute on the myth of the coalition of the willing. According to the White House there were 49 countries ('the allies' as they were referred to invoke World War 2). Yet as Stiglitz and Bilmes point out opposition was so strong in many of the countries that their involvement contributed to unseating the governments of Italy, Spain, Poland, Australia. They fail to point out that it ended Blair's career and will probably lose the Republicans the Presidency. By 2007 the USA was providing 94% of troops with 18 or more countries having withdrawn. The authors write with admirable restraint that 'there seems to have been some disengenousness in the statistics describing the coalition of the willing.' They note that of the 49 only 4 actually supplied troops in any numbers, and that Tonga's 45 troops and Iceland's 2 have now been withdrawn. Moldova's troop numbers have been 'drawn down', to use the technical term from a peak of 24 to a more manageable 11.
This was an invasion driven by the same economic principles that have been inflicted on Britain and America for the last two decades. An ideological mantra of 'privatise' 'outsource' and 'cut costs' coupled with a belief in minimal accountability and regulation led to soaring costs and catastrophic lack of direction or co-ordination. Arguably I (very arguably) plausible tactics for a call centre service economy, but hopelessly implausible for a reconstructive effort.
Our part in this fiasco, and Gordon Brown's approval of it, are a disgraceful shame. As Stiglitz and Bilmes point out, the 'true costs will be paid by generations to come'.
It's clear also that Brown's bumbling indecision is not a recent phenomenon as he struggles to cope with the new role he's finally inherited. He is, in the language of the apologists and neo-Camelotian New Labour dreamers, 'an Atlantacist'. He could have taken decisive action against Blair at strategic times over the past decade. He could have resigned with Robin Cook, with Bomber Short or any others that would have saved this country and further, crucially undermined Americas rampage. He didn’t and remains wedded to the neo-liberal agenda outlined precisely here.
© Mike Small 10 May 2008
The true costs of the war in Iraq to the US economy alone will exceed three trillion dollars according to a new book by Nobel Laureate author Joseph Stiglitz and ex Clinton financial adviser, Linda Bilmes. Stiglitz has none of the sweep of Naomi Klein, the ardour of John Pilger or the flourish of Galloway. This is the cold facts laid out on the slab like any one of the 4000 American troops killed in the war. Stiglitz and Bilmes state with refreshing simplicity: 'By now it is clear that the US invasion of Iraq was a terrible mistake.'
This is a book about privatisation and profiteering as much as it is the ravages of war. Stiglitz and Bilmes quote the Washington Post's Rajiv Chandrasekaran interviewing Republican Thomas Foley in 2003. Foley had been appointed to head private sector development in Iraq. He boasted that he would privatise all of Iraq's state owned enterprises inside of one calendar month. When informed that this was against international law he replied: 'I don’t care about any of that stuff... I don’t give a shit about international law. I made a commitment to the President that I'd privatise Iraq's businesses.'
Of course if you've discarded the Geneva Convention then what's a little fiscal regulation? A 'no brainer' as Dick Cheney would say.
A powerful point made again and again by Stiglitz and Bilmes is that the military incompetence was matched by, and interplayed with economic mismanagement on an astonishing scale. This manifest itself in three key ways:
1) Committed to preserving tax cuts for the rich, the Bush administrations refusal to raise taxes to pay for spiralling costs, insisting instead on finance through deficit spending.
2) The use of private mercaneries. Blackwater Security got a $27 million no bid contract to protect Paul Bremer III (the administrator of the Coalition Provisional Authority) in 2003. This expanded to $100 million in a year. By 2007 it held a $1.2 billion contract for Iraq. This is boom-time. This is disaster capitalism. In 2007 private security guards earned $1222 a day whilst an army sergeant might take home between $140 - $190. Not surprising then that, when their tour of duty had ended many would sign up with private companies. It's a neat symmetry with what's happening in our own NHS.
3) But it is the interplay of military and economic failure that drove the huge cost of the war, and human suffering up and up. As private investment predictably failed to flow in the midst of such huge upheaval and destruction, infrastructure was never resurrected. Iraq never recovered from the impact if its liberators. As ordinary Iraqis failed to see any material benefit from the US presence - in fact their country had been destroyed - moral fell, and in the unbearable heat - tempers rose. Aside from the cultural, ethnic and religious clash, the call of the insurgents operated in a context of demonstratable failure by the Americans to display basic levels of competence.
Private investors would do little else but buy at bottom dollar and then strip the assets of Iraq, rather than do business amidst such human carnage.
The use of private contractors opened the door to profiteering, corruption and lack of accountability. The army continued to lose its best soldiers to private companies who could pay $1000 a day more. In awar with no moral focus, mired in legal and ethical ambiguity, and opposed by a majority at home, no 'national endeavour' bound personnel to a cause, however bellicose a pose the politicians sounded. But, if this was a sick neocon fantasy it was good news for some. Halliburton’s stock rose by 229% since the war begun. Raytheon's by 117%. Lockheed Martin by 105% and General Dynamics by 134%.
Initial cost projections, were, predictably wildly inaccurate. In 2002 Larry Lindsey, Bush's economic advisor and head of the National Economic Council, suggested that the costs might reach $200 billion. Donald Rumsfeld dismissed this estimate as 'baloney'. Paul Wolfovitz claimed that post-war reconstruction would pay for itself through increased oil revenues. This was now it seems, another macabre neoliberal fantasy.
So what was the cost to the UK? Stiglitz and Bilmes argue that 'The budgetary cost to the United Kingdom of the wars in Iraq and Afghanistan through to 2010 will exceed £20 billion. It's sum worth remembering the next time your told your school needs a PFI as the investment just isn't there for state education.
Before the war, as Chancellor, Gordon Brown set aside £1 billion for the war. By late 2007 the UK had spent £7 billion in Iraq and Afghanistan. Stiglitz and Bilmes note that: 'The British system is particularly opaque: funds from the Special Reserve are 'drawn down' by the MOD when required, by arrangement with the Treasury. Without specific approval by Parliament.'
In order to properly account for the costs, Stiglitz and Bilmes are acute on the myth of the coalition of the willing. According to the White House there were 49 countries ('the allies' as they were referred to invoke World War 2). Yet as Stiglitz and Bilmes point out opposition was so strong in many of the countries that their involvement contributed to unseating the governments of Italy, Spain, Poland, Australia. They fail to point out that it ended Blair's career and will probably lose the Republicans the Presidency. By 2007 the USA was providing 94% of troops with 18 or more countries having withdrawn. The authors write with admirable restraint that 'there seems to have been some disengenousness in the statistics describing the coalition of the willing.' They note that of the 49 only 4 actually supplied troops in any numbers, and that Tonga's 45 troops and Iceland's 2 have now been withdrawn. Moldova's troop numbers have been 'drawn down', to use the technical term from a peak of 24 to a more manageable 11.
This was an invasion driven by the same economic principles that have been inflicted on Britain and America for the last two decades. An ideological mantra of 'privatise' 'outsource' and 'cut costs' coupled with a belief in minimal accountability and regulation led to soaring costs and catastrophic lack of direction or co-ordination. Arguably I (very arguably) plausible tactics for a call centre service economy, but hopelessly implausible for a reconstructive effort.
Our part in this fiasco, and Gordon Brown's approval of it, are a disgraceful shame. As Stiglitz and Bilmes point out, the 'true costs will be paid by generations to come'.
It's clear also that Brown's bumbling indecision is not a recent phenomenon as he struggles to cope with the new role he's finally inherited. He is, in the language of the apologists and neo-Camelotian New Labour dreamers, 'an Atlantacist'. He could have taken decisive action against Blair at strategic times over the past decade. He could have resigned with Robin Cook, with Bomber Short or any others that would have saved this country and further, crucially undermined Americas rampage. He didn’t and remains wedded to the neo-liberal agenda outlined precisely here.
© Mike Small 10 May 2008
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