The Bush and Blair press conference

On May 25, 2006, Bush and British Prime Minister Tony Blair held a prime time press conference at the White House. While they presented much to discuss, I will in this post focus on part of Bush's closing remarks concerning Iraq.

The final question to both men was "Could I ask both of you which missteps and mistakes of your own you most regret?"

George gave a two-part answer, the first part of which was as follows:

Sounds like kind of a familiar refrain here -- saying "bring it on," kind of tough talk, you know, that sent the wrong signal to people. I learned some lessons about expressing myself maybe in a little more sophisticated manner -- you know, "wanted dead or alive," that kind of talk. I think in certain parts of the world it was misinterpreted, and so I learned from that.

I heard various media types saying how this sort of thing was something new from ol' George. Well, on this point this was not new. As discussed in Bush almost admits a mistake, Bush made almost identical comments back on January 13, 2005, although at that time he did not call saying "dead or alive" a "regret." My, I guess he has become a changed man. Then again, maybe not. His claim that his "tough talk" was misinterpreted is just a big steaming pile of crap. How was it supposed to be interpreted? Notice that on May 25, 2006, he made no effort to explain the actual meanings he intended to convey. However, on January 13, 2005, he did offer such an explanation, namely that

"Sometimes, words have consequences you don’t intend them to mean,” Bush said Thursday. "'Bring ’em on' is the classic example, when I was really trying to rally the troops and make it clear to them that I fully understood, you know, what a great job they were doing."

I said it on January 19, 2005, and I'll say it again: bullshit.

Back in January 2005 Bush also addressed the "dead or alive" comment thusly:

Well, it was just an expression that came out. I didn’t rehearse it.’

“I don’t know if you’d call it a regret, but it certainly is a lesson that a president must be mindful of, that the words that you sometimes say. ... I speak plainly sometimes, but you’ve got to be mindful of the consequences of the words.

(emphasis added). So you see that Bush's confession on May 25, 2006, was nothing new. He simply repeated some of what he said almost a year and a half earlier. My opinion of this repeat performance is the same as the one expressed in the last paragraph of Bush almost admits a mistake. Bush's statements were bullshit then, and they are bullshit now.

The day following the press conference I heard David Brooks explain Bush's comments as a sign that the gap between what the Bush administration says in private and in public has narrowed. Brooks opined that in private the Bush administration has always been a bunch of realists while in public they have made all these ridiculously positive statements. Brooks said that this approach made administration officials seem brain dead, but that in fact they have always discussed the Iraq situation in realistic terms.

I want some of what Brooks is smoking. Perhaps Bush administration officials have not been brain dead, but they have without a doubt been arrogant, delusional, and stupid beyond comprehension. Just go to the Cosmic Wheel Index and then to the "Iraq" heading for a veritable plethora of examples of that arrogance, delusion, and stupidity.

Clifford Antone: Austin icon and patron saint of the Blues

I just went to the Kinky Friedman site and discovered that Clifford Antone died two days ago. If you are a Blues fan (and I'm talking music here), you likely know who Clifford Antone was. If you don't know who he was, here's some info. Antone was the founder and longtime owner of one of the greatest Blues clubs to ever exist--Antone's. Antone's opened in Austin in 1975, and since then every major and up and coming Blues player has played there (a partial list is here). Clifford Antone passionately loved the Blues, the musicians, and the Austin scene, and it is impossible to overstate how much he did for all.

I lived in Austin when Stevie Ray Vaughn died. That tragedy cast a pall over the entire city. I still remember how I felt when I heard that news, and tonight I have that feeling again. Shortly after Vaughn's death, a statue of SVR was commissioned and placed on the south bank of Town Lake. Cutter Brandenburg, at one time Vaughn's road manager, at a memorial last night said, "I don't know anybody else in this industry who reached out to so many artists, young or old. There should be a statue of Clifford right next to Stevie." And he's right.

Antone twice went to prison on marijuana-related charges, but as another article in the Austin American-Statesman concluded,

In the hearts of local fans, Antone's musical accomplishments far overshadow his criminal record. He has helped make Austin what it is today: a live music mecca where the young learn from the old and those who move on continue to live in what they've left behind.

Singer Delbert McClinton summed up Antone in a statement he released Tuesday. "He loved the music so much," McClinton recalled. "Like nobody else I've ever known."

If you follow any of the links to the Austin paper, read all the other other articles listed to learn more about Antone.

As a Blues fan, a Texan, and a former resident of Austin, I say "thank you" to Clifford Antone. You will be missed.

An example of DHS SOP being a systemic feature of the Bush administration

First, let's review some of my observations of the Bush administration Standard Operating Procedure from the previous post.

• Any criticism or bad news is not tolerated.
  
• Those sorts of things could make the administration look bad, and that above all else will not be tolerated.
• In the Bush administration, dedication to service, dedication to the public good, and loyalty to the public rank far behind loyalty to the administration.
• As a result, the objective of the Bush administration is NOT to effectively govern, NOT to serve the American people, but rather to stay in power and bullshit everyone.
• Running the government is nothing more than one big marketing and PR project--or, more to the point, one perpetual piece of propaganda.

On May 18, 2006, Harper's Magazine posted an article by Ken Silverstein entitled "Fairy Tales" which gives just a few of the many other examples of the above observations manifesting throughout the Bush administration.

A number of current and former intelligence officials have told me that the administration's war on internal dissent has crippled the CIA's ability to provide realistic assessments from Iraq. “The system of reporting is shut down,” said one person familiar with the situation. “You can't write anything honest, only fairy tales.”

The New York Times and others have reported that in 2003, the CIA station chief in Baghdad authored several special field reports that offered extremely negative assessments of the situation on the ground in Iraq—assessments that later proved to be accurate. The field reports, known as “Aardwolfs,” were angrily rejected by the White House. Their author—who I'm told was a highly regarded agency veteran named Gerry Meyer—was soon pushed out of the CIA, in part because his reporting angered the See No Evil crowd within the Bush administration. “He was a good guy,” one recently retired CIA official said of Meyer, “well-wired in Baghdad, and he wrote a good report. But any time this administration gets bad news, they say the critics are assholes and defeatists, and off we go down the same path with more pressure on the accelerator.”

In 2004 Meyer was replaced with a new CIA station chief in Baghdad, who that year filed six Aardwolfs, which, sources told me, were collectively as pessimistic about the situation in Iraq as the ones sent by his predecessor. The station chief finished his assignment in December 2004; he was not fired, but according to one source is now “a pariah within the system.” Three other former intelligence officials gave me virtually identical accounts, with one saying the ex–station chief was “treated like shit” and “farmed out.” (I was given the former station chief's name and current position, but I am not publishing the information because he is still employed by the CIA.)

Thus, while freedom may be on the march, it is trying to grind truth under its heel. This is very much like Clark Kent Ervin's story about how, after he filed a series of reports that were very critical of DHS, Tom Ridge asked if Ervin was his (Ridge's) Inspector General. In other words, screw the truth. Screw trying to find and correct problems. And if you insist on trying to do a good job and do what is needed to truly serve the public interest, you will be silenced.

In the comments to the previous post, I agreed with that putting a high priority on image is typically common in politicians, but added that "the Bush administration has taken it to an insane extreme and has tossed in a measure of delusion and vindictiveness." "Pettiness" should be added, and Silverstein described an action by Bush administration officials which showed pettiness and vindictiveness.

As has been the case with other people deemed to be insufficiently loyal, the White House went fishing for dirt on the two station chiefs, including information on their political affiliations. “I spent 30 years at the CIA,” said one former official, “and no one was ever interested in knowing whether I was a Republican or a Democrat. That changed with this administration. Now you have loyalty tests.”

Ah, yes...loyalty to the administration above all else...Fail the test and you will get crapped on. Pass the test--by filing only good, happy reports--and get rewarded:

In 2005, I'm told, the Baghdad station chief filed but a single Aardwolf. The report, which one person told me was widely derided within the CIA as “a joke,” asserted that the United States was winning the war despite all evidence to the contrary. It was garbage, but garbage that the Bush administration wanted to hear; at the end of his tour, that Station Chief was given a plum assignment. “This is a time of war,” said one former intelligence official. “Every day American kids are getting killed over there. We need steady, focused reporting [from Baghdad] but no one is willing to speak out since they know they'll get shot down.”

This is no way to run a government--especially when this is how things are done across the board. And yet this is how the Bush administration handles all aspects of governance.

In keeping with the title of Silverstein's article, I will close with a quick fairy tale. Once upon a time there was a boy named George who became a decider (but not a leader), and he decided that no one in the land could say anything but happy things, even if they were lies, and now we are all hosed.

DHS reflects the entire Bush administration SOP of giving primacy to politics and image.

In DHS is a big, unnecessary mess I quoted interviews with Clark Kent Ervin, the first Inspector General of DHS. In his interview on May 2, 2006, on "Fresh Air," Ervin was asked the following question:

What was the reaction that you got from Tom Ridge, who was the head of Homeland Security when you were the Inspector General, from Ridge and from other leaders in the Department each time you issued a report of problems that you and your team found?

In response, Ervin gave two examples of what he described as the general answer to the question, which was

Time and again–there was never a counter example–the reaction from Secretary Ridge and the rest of his leadership team was either that the problems we were pointing to did not exist, or that we were exaggerating things and making a mountain out of a molehill, or that the problem at issue had already been solved and our reports and recommendations were old news.

See, folks, this is the Bush administration's approach with everything--any criticism or bad news is not tolerated. Those sorts of things could make the administration look bad, and that above all else will not be tolerated. As a result, the objective of the Bush administration is NOT to effectively govern, NOT to serve the American people, but rather to stay in power and bullshit everyone.

Ervin's first example of the DHS SOP was a conversation he had with then Secretary Tom Ridge:

To give you one example, we issued a number of reports about laxity in visa processes–border security matters–and I recall very vividly Secretary Ridge at one point summoning me into his office to complain about that report and asking whether I was his Inspector General and questioning why I was issuing these damning reports. My response to that was that I was not his Inspector General. Instead I was the American people’s Inspector General, and I was issuing these reports because I had an obligation to the Congress and, most importantly, to the American people to apprise them of these vulnerabilities and gaps so that they could be aware of the danger they’re in and so aware of that danger they could put the appropriate pressure on the administration, the Department to do what was necessary to close these security gaps.

(italics reflect Ervin's inflection). This illustrates how in the Bush administration, dedication to service, dedication to the public good, and loyalty to the public rank far behind loyalty to the administration.

And a proper showing of that loyalty requires that the image of the administration must be protected, as shown in Ervin's second example:

On another occasion when, for example, when we completed our work I alluded to earlier at airports, showing just how easy it was for guns and knives and explosives to be sneaked through the then federalized screener workforce, when I presented those results to the then head of TSA, Jim Loy, who subsequently became the Deputy Secretary of the Department, if for example the report said that there was a failure rate of 40% at a given airport, he stopped me midway through the presentation and said, “Clark, why are you focusing on failure rates? Why not talk about the pass rate at that airport, as a pass rate of 60%?” My response was “Jim, because it doesn’t matter if screeners were able to detect these deadly weapons 6 times out of 10 if they were unable to do so 4 times out of 10. Four times out of ten is four times too many in the age of terror.” So, rather than making bad results better, he was focused on making bad results sound better. And that was emblematic of what I found time and again in the Department of Homeland Security during my tenure.

(emphasis added). The Bush administration, led by people such as Karl Rove, governs as if it is in one continuous election campaign. Running the government is nothing more than one big marketing and PR project--or, more to the point, one perpetual piece of propaganda. Regardless of what label is used, the fact remains that the Bush administration--through its actions--continues to show that it cares not about addressing the good of the American people. One would think that at least in the protection of the homeland things would be different.

NHL Conference Finals

Game 1 of the Western Conference finals is just under way, and it should be a damn good one. Both Anaheim and Edmonton are playing great hockey right now. Some of my favorite players in the league are are both teams--Ryan Smyth and Michael Peca for Edmonton and Todd Marchant, Teemu Selanne, and Scott Niedermayer for Anaheim. And in a bit of irony, Marchant was a longtime Oiler.

It's a tough call, but I'm picking the Oilers to win the series. I think the Ducks have a bit more skill and talent, but the Oilers are slightly bigger and more physical (and Pronger is really playing well), they have the more experienced goalie, and I think the intangibles are in their favor.

Keep your eye on Ducks rookie winger Dustin Penner. This guy is 6'4", 240 pounds, and has great vision and sweet hands.

The Eastern Conference finals will also be a great matchup with Carolina and Buffalo. Like Anaheim, Carolina seems to have slightly more talent and skill, but Buffalo is playing at such a high and consistent level, and I'm picking Buffalo.

If it's an Edmonton-Buffalo final, I don't know who I will be cheering for. It would be great for Buffalo and Lindy Ruff to win the Cup. And BTW, the winning goal in 1999 was reviewed and it was legal under the rule which had been put in place--had the old "in the crease" rule still been in effect, the goal clearly would have been disallowed, but that was not the rule in place. Sabres fans can take joy in the fact that their team is still playing while the Stars played like crap in the first round for the third season in a row. Back to an Edmonton-Buffalo final...I would like to see the Sabres win the cup, but I have liked Edmonton for about the last eight seasons, and I think it would be a great thing for the game of hockey for a Canadian franchise to win the Cup. And in another bit of irony, Peca--now on the Oilers--was the captain of the Sabres when they were last in the Cup finals in 1999.

So, if it's Edmonton and Buffalo, I just want to see a seven-game series of great hockey. If it's Anaheim-Buffalo, I'm cheering for Buffalo. If Carolina makes the finals, I'm cheering for the Western Conference team.

Man, I love playoff hockey!

DHS is a big, unnecessary mess.

On May 9, I posted some excerpts from previous posts and comments addressing my views on the Department of Homeland Security. I asked readers to remember the basic themes presented therein. For the purposes of this post, here are some of those themes:

• DHS is ill defined and no one knows what it does.
• The Homeland Security Act’s main feature was NOT the creation of DHS but a massive reorganization of the federal bureacracy.
• As a result of the Homeland Security Act and creation of DHS, the federal bureaucracy is a big mess which has yet to be sorted out.
• This creation/reorganization resulted in further confusion and red tape and inefficiency and thus hurt efforts in the war on terror.

Affirmation of these themes has come from Clark Kent Ervin, who was the first Inspector General of DHS. According to the DHS website,

Congress enacted the Inspector General Act of 1978, as amended, to ensure integrity and efficiency in government. The Homeland Security Act of 2002, as amended, established an Office of Inspector General in the Department of Homeland Security (Department). The Inspector General is appointed by the President and subject to Senate confirmation.

The Inspector General is responsible for conducting and supervising audits, investigations, and inspections relating to the programs and operations of the Department. The OIG is to examine, evaluate and, where necessary, critique these operations and activities, recommending ways for the Department to carry out its responsibilities in the most effective, efficient, and economical manner possible.

Ervin served in this post from January 2003 through early December 2004. Ervin had strong ties to Bush going back to Bush's days as Texas Governor, when Ervin served as Assistant Secretary of State of Texas and Deputy Attorney General.

During his tenure as DHS Inspector General, Ervin issuing highly critical reports. Gee, I wonder if those had anything to do with his losing the job? When Ervin left office, he was speaking out about the problems at DHS, and now he has published a book, Open Target: Where America is Vulnerable to Attack, which details what he saw as the problems at DHS.

Ervin has been making lots of media appearances lately, and I am going to cite comments from two interviews. On May 2, 2006, Ervin appeared on "Fresh Air," and on May 9, 2006, he was the guest on KERA's "The Talk Show."

Ervin--who, as Inspector General, was in the best position to know--made statements that confirm my opinions. Here are some highlights from "The Talk Show":

[P]art of the problem here is that in our country, rather than solving problems, we have a tendency to create new organizations, to reorganize government in some way, or to slap a new name and logo on existing organizations. That’s exactly what happened with the Department of Homeland Security. That’s exactly what’s happened with the intelligence community, and I’m afraid to say that the Homeland is not secure as a result of either of these reorganizations.

*******

The point I was making is that as you know, in the Homeland Security law, the Department of Homeland Security was supposed to be the central repository for all information from across the intelligence community concerning threats against the homeland. It was also supposed to take the lead on consolidating the dozen different terrorist watch lists before 9-11. The former job, though, was given to the CIA-led National Counterterrorism Center shortly after the Department of Homeland Security was created, and the latter task was given to the FBI, so the two agencies who were responsible for countering 9-11 beforehand, the FBI and the CIA, remain in charge of these critical homeland security tasks all these many years later, and the Homeland Security Department is on the outside looking in. So, as I say, the next time there are indications of a terrorist attack, chances are the department of Homeland Security will be the last agency in government to know about it.

*******

I agree that creating the Department was bungled from the beginning, and that it is clear in retrospect now that creating the Department did not make the homeland safer and, as you say, Katrina was the proof of that. If we were not prepared for something like that, a natural disaster which was not just foreseeable but foreseen, then how prepared could we possibly be for a terror attack when of course there’s almost never any warning or any specific warning of a terror attack before it actually happens?

On "Fresh Air" Ervin was asked about the Senate proposal to dissolve FEMA (which is part of DHS) and create a new agency in its place, and his answer revealed other problems with DHS:

Well, I think it’s another example of what Washington always does when there is a significant political problem, and that is it proposes changes to the organization chart as opposed to actually solving the underlying problem. I don’t think that creating a new agency with a new name will in and of itself make the problems of FEMA go away. The problem of FEMA, in a nutshell, is that it has been underfunded, like the rest of the Department, it has lacked expert leadership, like the rest of the Department, and it has a culture that has not welcomed outside scrutiny and criticism such that there would be concentration on solving the problems that there are. And if there were a new organization, with a new name, and, again, the same budget and the same leadership and the same culture you’d have exactly the same result the next time there’s a catastrophe, whether it’s a man-made catastrophe or a natural one.

(emphasis added). Ervin also gave some specific explanations of why DHS has not made us safer. He told of a test conducted by DHS at airports which resulted in weapons been smuggling on airplanes--after the screening process--40% of the time. He also exposed the truth about a program DHS claims has been a success:

In the port security area–and this is important because every expert agrees that the likeliest way for a terrorist to sneak a weapon of mass destruction into this country would be through our seaports–we are inspecting only about 6% of the thousands of cargo ships that come into our ports every day, and to answer the charge that we’re not doing enough, the Department points to a program called the Container Security Initiative. Basically, the Department has an agreement with about 40 ports around the world now, representing about 70% of the cargo that comes from abroad to the United States, whereby we station our inspectors abroad and they work with foreign inspectors to ensure that those foreign inspectors inspect cargo that we deem to be high risk. The problems is that recent reports–one as recently as just a few weeks ago–point out that only about 17.5 % of the time, less than a fifth of the time, do these foreign countries with which we have these agreements actually inspect cargo that we have intelligence that leads us to believe may be high risk, may contain a weapon of mass destruction. And yet, the Department touts the Container Security Initiative as the antidote to the problem of a smuggled weapon of mass destruction.

As I will discuss in a subsequent post, Ervin saw that time and again, his efforts to improve performance at DHS--which was his job--were met with resistance and questions as to why he was being such a hard ass. On "Fresh Air," Ervin said that DHS was deceiving itself and the public into thinking that we are safer now. When asked why he thought that was being done, Ervin answered,

the people at the Department to this day and during the Ridge years were deceiving ourselves because I think they’re concerned about the political implications for the Department, for the administration, if the average American were to know just how vulnerable we remain.

(emphasis added). And that, folks describes almost everything the Bush administration has done and continues to do.

More on Rumskull, the retired generals, and the need for trust

In Rumskull defense #2: There has to be trust, I detailed five reasons why military officers could (and probably should) distrust Rumskull and the rest of the top civilian leadership at DoD. Well, add another reason to the list.

Kevin Drum has a post which describes this new reason. Please read Kevin's post. It discusses an article in the Wall Street Journal about retired Maj. Gen. John Batiste. The article and Kevin's post describe how Batiste had complaints about how the Iraq war was being being planned and conducted and how he voiced those complaints in-house--the way things were supposed to be done. And for that, he was publicly put on the spot by Rumskull, whereby Rumskull asked him a question in public about an issue on which Rumskull knew that Batitste held a view opposite of Rumskull's. What was so shitty about that was that Rumskull knew that, due to the protocol of keeping disagreements behind closed doors and within the chain of command, Batiste would not publicly voice his contrary opinion, so Batiste ended up, through not stating his true opinion, seeming to publicly agree with Rumskull, and then Rumskull was able to use such "agreement" as evidence that he was listening to his military commanders and gave them everything they asked for.

What an asshole.

Judge (make that "Former Judge") Michael Luttig sends a pretty strong message to George.

I was a bit late in seeing this news, but even if I had seen it in a more timely manner, I would have been surprised.

On July 2, 2005, I described Luttig as follows:

former clerk for Scalia (on D.C. Circuit Court of Appeals) and Chief Justice Burger, judge on 4th Circuit Court of Appeals since 1991.

That post was my effort at guessing who would take Sandra Day O'Connor's seat on the Supreme Court, and I ended up focusing on the possible nominees with the closest connections to Bush. Luttig was not in that group, so I wrote no more about him than the above excerpt. By the way, I did the same for John Roberts--so much for insightful analysis.

It is time to write more about Judge Luttig, in large part because he is no longer a judge. Luttig resigned his position on the 4th Circuit as of May 10, 2006. As a general observation, it is very rare for any federal judge to resign. There is something attractive about having a good-paying gig guaranteed to last for a lifetime, and very few people would give that up, especially at the age of 51. Any federal judge who resigns must have a strong reason for doing so.

It appears that Luttig did have a strong reason for voluntarily leaving the bench, and I don't think it was money, even though that was the reason publicly given by Luttig and some of his friends. Luttig is going to be a senior vice president and general counsel for Boeing. While Luttig's pay at Boeing has not been disclosed, chances are it will be substantially greater than his $171,800 salary as a judge. Luttig's friends said that "the financial lure of the Boeing job and the greater ability to pay for his children's college education...were key to his resignation." So, more money does seem a likely reason for Luttig's resignation, but probably not the real reason. I also do not think that Luttig resigned because he was passed over twice recently for the Supreme Court (the places now held by Roberts and Alito), although that was the reason given by the Bush administration in response to Luttig's December 2005 ruling in the Padilla case discussed below.

It is likely that the real reasons are that Luttig was basically stabbed in the back by the Bush administration and that the administration is manipulating the courts for purely political purposes. The 4th Circuit is the Court of Appeals which heard the case of Jose Padilla, the alleged American Al Qaeda who was planning to detonate a "dirty bomb." The opinion of the 4th Circuit upheld the Bush administration's arguments in a big way, and the author of the opinion was Luttig. In fact, up to that point, Luttig had ruled in favor of the Bush administration's positions on the war on terror every chance he had.

Before discussing those rulings, Luttig's background and reputation should be examined. As reported by the Wall Street Journal, Luttig seved in both the Reagan and Bush 41 administrations. Under Bush 41, Luttig became the head of the Justice Department's Office of Legal Counsel and was the administration's point man for the successful Supreme Court appointments of David Souter and Clarence Thomas. The WSJ describes Luttig as "part of a group of conservative activists eager to remake a judiciary they considered dominated by liberals." He was a significant part of that effort once he made it to the 4th Circuit in 1991, where he came to be known as "the most conservative judge on the most conservative federal appeals court."

Luttig also became one of the Bush administration's best judicial friends in the war on terror. According to this Washington Post article discussing Luttig's decision in the Padilla case in September of last year, "Luttig has issued strongly pro-government decisions in other terrorism cases since Sept. 11, including in the prosecution of convicted conspirator Zacarias Moussaoui." Another one of those decisions came in the case of U.S.-born Yaser Hamdi, who was captured in Afghanistan and ruled an enemy combatant by Luttig (per the WSJ).

And then came the Padilla case. Padilla was held for three and a half years without ever being formally charged with anything. The Bush administration claimed he was an "enemy combatant" that could be legally be held indefinitely in accordance with military law and the President's inherent powers. The matter was originally heard in New York, where the more liberal 2d Circuit Court of Appeals ruled that the detention was unlawful. The government appealed that decision to the Supremes, who ruled that the case should have been heard in South Carolina (and thus avoided making a ruling on whether the detention was lawful), meaning the case would not be reviewed by the 2d Circuit but rather by the very conservative 4th Circuit. The trial court in South Carolina also ruled that the detention was illegal, but then that decision was appealled to the 4th Circuit, and Luttig wrote the opinion which reversed the trial court and gave the Bush administration everything it could have hoped for by "declaring that the president's powers to detain those he considered enemy combatants apply anywhere in the world, including the U.S."

Luttig basically put his reputation on the line for the Bush administration, and then he got screwed. Two days before the government's brief to the Supremes was due, the Bush administration--fearing that it would lose--suddenly decided to charge Padilla with a lesser crime than what had been alleged in all prior court proceedings and have Padilla treated as any civilian. In other words, when faced with the possibility of losing, the Bush administration dropped ALL of the arguments it had made for over three years. Every reason given by the Bush administration as to why Padilla was a dangerous terrorist who deserved to be held indefinitely without any charges or any hearing was tossed away and disavowed.

Luttig, to put it mildly, was pissed. The government filed a routine request to have Padilla transferred to civilian custody, and instead of simply granting it, Luttig ordered everyone to file briefs on the issue. On December 21, 2005, Luttig issued his opinion, and it ripped the government a new one. There are many aspects of Luttig's opinion which should be discussed (and have been in other places, one of which is here), and I will do that in a subsequent post, but for now consider the following.

What we have here is a judge who believed in, supported, and bolstered the Bush administration's assertion of power in the war on terror, only to find out that the Bush administration basically views the judicial system as its plaything. To put the matter in terms utilized over and over by the administration and the GOP to counter any criticism, the Bush administration used the courts for political purposes. It politicized the judicial system. True conservatives and anyone who professes that courts are first and foremost supposed to uphold the Constitution would not condone what the Bush administration did. And indeed, Luttig told the administration that in clear terms.

Kevin Drum summed up Luttig's December opinion:

In other words, if the government's own actions make it clear that they consider the war on terror to be little more than a game designed to expand presidential power, how can they expect anyone else to take it seriously either?

It's a good question. No wonder Luttig was pissed. He was one of the ones who thought the Bush administration took this stuff seriously.

Luttig's resignation further highlights that Bush, his administration, and much of the GOP establishment are not true conservative, most of them are hypocrites (for blatantly using the judiciary for political purposes), and that they are almost exclusively interested in keeping power. Luttig's resignation seems to send a message to Bush that at least Luttig has seen through all the bullshit. I just hope more people start doing the same.

Bush's speech on immigration--a whole lot of nothing

The phrase that I kept hearing was "this period of transition," and my still unanswered question is "transition to what?" This speech and the plan to use the National Guard on the border are nothing more than trying to treat a symptom so that the problem doesn't look so bad. Immigration is a complex matter, and it requires a thoughtful policy that address some of the root issues (such as economic conditions in other countries--especially Mexico; costs to our federal, state, and local governments; the economic need of this country for immigration; cultural changes, etc.). Bush has yet to show that he has anything coming close to a policy of this nature, and putting troops on the border and talking about a "transition" doesn't even come close.

Kinky update: Looks like Kinky will be on the ballot!

Today was the deadline for the independent candidates for governor to turn in their signed petitions needed to get on the ballot in November. Just to recap the requirements under Texas law, a successful petition drive would require a minimum of 45,540 valid signatures, and in order to be valid, a signature must come from a registered voter who did not vote in any primary or runoff election.

As reported on the official Kinky Friedman for Governor website, today Kinky turned in 169, 574 signatures. Along with the signatures, the Friedman campaign gave the Texas Secretary of State (Roger Williams) a CD containing a database of all the signatures. You might be wondering what that's all about. Well, you see, as signatures were obtained, they were sent to Friedman campaign HQ every week. Campaign volunteers then took the time and effort to verify those signatures. Part of the reason for that work was so that the campaign would have an accurate idea of what work needed to be done and whether the minimum amount would be met. But there is more to the story...As the Kinkster said,

We have done far more than the laws of Texas require. In fact, we've done most of Mr. Williams' job for him. We used our time and our limited resources to work with his office rather than against it. That's good government in action. That's how my campaign operates, and that's how this state will operate when I'm in charge - not fighting one another but working together.

Now, you might be wondering what that's all about. Well, the answer lies in the actions of the other so-called independent candidate, Carole Keeton McClellan Rylander Strayhorn, or as I call her, Carole Keeton Crazylady. She used to be a Democrat. Then she lost a primary election and decided she was really a Republican. As a Republican, she was elected State Comptroller, but then she wanted to run for Governor, found out that she probably would lose a primary race with incumbent Rick Perry, and decided that she was an independent. Give me a freaking break.

But back to her actions in this campaign...In late March, Strayhorn filed a lawsuit against the State of Texas challenging how petition signatures would be verified. Instead of having each signature manually verified, Strayhorn wanted only a statistic sampling technique used. In other words, Strayhorn did not want each of her signatures checked, and she wanted to get around the law in Texas. At the time, the Friedman campaign responded as follows:

We’ve been studying the state’s election laws for the past year, and although the laws are restrictive, they will probably survive a legal challenge. We believe our time and resources are better spent complying with the law.

While we may be affected by the outcome of this litigation, her lawsuit does not affect what we’ve been doing for the last 13 months – building the kind of grassroots organization needed to change the Texas political landscape.

We wish Comptroller Strayhorn luck in her lawsuit.

As it turns out, she needed more than luck, as yesterday a federal judge ruled against her. So, while Strayhorn was trying to find a way around the law, Kinky--in spite of the fact he considered the law to be unfair to independent candidates--decided to follow it. And he also included a CD full of data designed to help the Secretary of State in verifying his signatures.

Strayhorn, on the other hand, made the Secretary of State do additional work. Kinky delivered 11 full boxes of signatures. Why am I mentioning this? Well, two days ago Strayhorn held a major media event in which she had on display 101 boxes of signatures. WOW! 101 boxes! That sure makes Kinky's 11 boxes look pitiful, huh? But the real deal on the thing is that, well, Strayhorn really had only 12 boxes. Here's the story from the Austin American-Statesman's blog, Postcards from the Lege:

“As our staff is beginning to consolidate and organize all of the petitions that Ms. Strayhorn turned in yesterday, we have consolidated her 101 boxes (of petitions) down to 12,” says Scott Haywood, communications director for the Secretary of State’s office.

Haywood is not sure what the agency will do with the leftover cartons (all 101 delivered Tuesday were slapped with Strayhorn bumper stickers). He made it clear that Strayhorn did not fill boxes to the brim.

“If she had not been so hungry for media attention, we would not have had to waste time consolidating her petitions into a more usable format. By trying to get a bigger play in the media, she has made the process more time-consuming for our office.”

Strayhorn’s campaign manager, Brad McClellan, harrumphed, noting that Secretary of State Roger Williams, an appointee of GOP Gov. Rick Perry, evidently hasn’t verified any of the more than 223,000 voter signatures that Strayhorn says she turned in.

McClellan, saying that the campaign would like any empty boxes back, said: “It’s another political attack. They want to play games with boxes instead of doing their job.”

McClellan said Strayhorn’s campaign organized the petitions in 101 sets. “Try organizing one box full or carrying one full,” McClellan said. “It’s a shame they waste time doing this cheap partisan attack.”

(emphasis added). For those of you new to Texas politics, Carole Keeton McClellan Rylander Strayhorn is the mother of Brad McClellan...and Scotty-Boy McClellan. I would call Brad McClellan a "cheap partisan hack," but that would be an insult to cheap partisan hacks. Instead, I will call Brad McClellan a weakling mama's boy--"I can't carry a full box of paper. It's too heavy." What a putz.

And here is the response from the Kinkster's campaign on Wednesday:

[T]he Kinkster will be delivering his signatures to the Secretary of State tomorrow. Yes indeed--there will be [ ] tightly packed, signature-filled boxes. And we'll be bringing the muscle to carry them.

Indeed.

Another explanation of supply and demand in the oil market

Anyone who has a case of tired head after reading Part 1 of a discussion about oil prices and profits: the oil market should read this post by Jim Caserta on the same topic. Jim's explanation is shorter (hard to believe, I know) and more concise than mine. I particularly like the following paragraph because it helps explain the "tight" market:

Oil and gas don't follow Econ101 supply and demand curves. There is a ceiling on supply both for raw oil and refining capacity. Demand is fairly inelastic - habits are hard to change, and it takes time to change the average fuel economy of America's and the world's automobiles. On supply, the price vs. supply curve is nearly vertical at the capacity limit, and any small shift in supply produces a large shift in price. Likewise, demand is a very shallow curve with a floor: it takes a big shift in price to make a little shift in demand.

Jim is correct that the oil market does not follow the most basic of supply and demand curves. Believe it or not, this does not contradict what I said in my previous post. The oil market is still a supply and demand market in a big way; however, there are myriad factors which affect those two basic components. Jim's post helps explain some of those factors. He also has several other posts about oil and gasoline that are worth a read. So even if you do not have tired head, check out Jim Caserta's blog.

Either David Frum is an idiot or he has a serious man-crush on Rumskull.

Thanks to Brad DeLong (look for "Remember: The Cossacks Work for the Czar!"), I read David Frum's review of Cobra II: The Inside Story of the Invasion and Occupation of Iraq. In that review, Frum creates a new defense of Rumskull. Frum says that Rumskull is not at all to blame for all the problems in Iraq. Instead, the fault all lies with Tommy Franks. Sometime soon I will go through Frum's review piece by piece and explain why his theory is complete crap, but for now I will keep things brief. I am not a big Franks fan, but I also feel that anyone who thinks that Franks did all the planning on his own without any direction from Rumskull is flat out wrong. As I have said since August of 2004, the official campaign planning doctrine applicable to the Iraq war held that the military commanders--and that would include Franks--were required to plan a campaign (which would include the post-conflict period) that would meet the objectives as determined by the President and the freakin' Secretary of Defense. As I have also said before, while Franks deserves some blame, the ultimate blame rests with Bush and Rumskull. I last raised these matters on April 24, 2006 and April 22, 2006. And if you want to read more (lots more), go to the Cosmic Wheel Index subheading of "Planning for the post-war period" under the "Iraq" topic heading.

Frum's campaign to smear Franks just to take the spotlight off Rumskull is desperate and pathetic.

Establishing the tone for upcoming posts about the Department of Homeland Security

Recently, a man named Clark Kent Ervin has been making all sorts of media appearances. Ervin was the former Inspector General for DHS, and he found that DHS was basically inept and ineffective. I am going to be writing about some of what Ervin has said and written in his book, Open Target: Where America is Vulnerable to Attack, but before that I want to reprint what I have already said about DHS. Just keep the basic themes in mind for future reference.

• The Kerik debacle
  Friday, December 17, 2004

Quick--just what does the Department of Homeland Security do? What does the DHS Secretary do? Just what did Tom Ridge do in the office? You see, folks, the Homeland Security Act's major effect was NOT the creation of the Department of Homeland Security. Instead, the primary, overarching effect of that legislation was a massive reorganization of the federal bureaucracy. This is really a subject for a series of posts, so I will not go into detail now. Here's the bottom line for me: DHS is not a clearly defined agency, so it can be molded into whatever, the President wants it to be. I think that DHS was always intended to be a bit of a smokescreen which could be used to cover any activity the President wanted to undertake. For instance, other agencies--such as the FBI and CIA could be doing one thing while public focus could be shifted to DHS, or vice versa.

• Example #1 of the Bush agenda: Alberto Gonzales
  Tuesday, May 31, 2005

As AG, he also ultimately controls the domestic efforts of the war on terror (thanks in large part to the Homeland Security Act), and he sets the policy and agenda for all federal criminal prosecution efforts.

• Bush's concept of using the military in disaster relief is part of a disturbing trend.
  Tuesday, September 27, 2005

This desire by Bush to put the military in charge of "extraordinary" and "catastrophic" events is just another step in the ongoing trend to centralize power in the federal government. First came the USA PATRIOT Act (check out Truth in acronyms). Next came the Homeland Security Act, which 1) created a new cabinet level agency that supposedly was to oversee all homeland security efforts in the country, and 2) so poorly defined just what DHS was supposed to do and made such a mess of the federal bureaucracy that it would be easy for DHS to do just about anything and either justify it or hide it.

• Comment from A tangent from the extended rant (a "rantgent" perhaps)
  Thursday, September 8, 2005

As for the Homeland Security Act, it is a huge piece of unnecessary legislation. Did there need to be better organization and coordination? Yes. Could it have been done in an easier way? Yes. As I have said before, the chief feature of the Act is NOT the creation of the Department of Homeland Security. The chief feature is the massive, wholesale reorganization of the federal bureaucracy. Read the Act sometime and you will see what I mean. The Act created a new cabinet-level department--which adds to the bureaucracy--and created so many new levels of bureaucratic chaos. This creation/reorganization resulted in further confusion and red tape and inefficiency and thus hurt efforts in the war on terror.

Here's an example. Prior to the Iraq war and passage of the Homeland Security Act, the Treasury Department had a task force called Operation Green Quest, whose purpose was to find and stop terrorist finances. Operation Green Quest was very effective--far more effective than any other federal effort--and was set to expand operations when the HSA was passed. To make a long story short, the HSA resulted in Operation Green Quest being shut down and all similar efforts being reserved to the FBI, which at the time was horribly ill-equipped and understaffed.

By the way, can you tell me just what it is that DHS does? Do you know just what the Secretary of Homeland Security is supposed to do? I am not trying to be flippant. I really do not know these answers.

The HSA produced changes in the bureaucracy that will take YEARS to sort out. It has been almost three years since its passage, and things aren't worked out yet (the recent FEMA situation is a good example). In my opinion, we did not have the luxury of wasting this kind of time in combating terrorism. Thus, while I agree that there was a "need," the means chosen to address that need was and is inefficient and unnecessary. There were other ways to go about this.

George W. Bush is still a linguistic master--just not a bilingual master.

You just can't make this stuff up, folks.

Yesterday, Bush nominated Air Force Gen. Michael Hayden to be the Director of the CIA (and I am definitely not in favor of that appointment), and here is what he said about Hayden:

He's the right man to lead the CIA at this critical moment in our nation's history.

On August 10, 2004, Bush announced the nomination of the just-resigned (which is to say "forced out") CIA Director Porter Goss, and here is what Bush said about Goss:

He's the right man to lead this important agency at this critical moment in our nation's history.

I guess George is trying to show he's an environmentalist now because he apparently really believes in recycling. Seriously--the man could not think of something new to say? That is plain sad.

And now we get to the second part of this post's title...

By now surely everyone knows that on April 28, 2006, Bush had the following exchange with a reporter:

Q: Mr. President, a cultural question for you. There is a version of the National Anthem in Spanish now. Do you believe it will hold the same value if sung in Spanish as in English?

THE PRESIDENT: No I don't, because I think the National Anthem ought to be sung in English. And I think people who want to be a citizen of this country ought to learn English, and they ought to learn to sing the National Anthem in English.

And by the way, I agree with Bush on this point. If I were going to move to a non-English-speaking country and seek to be a citizen of that country, I should learn to sing that county's national anthem in its native language. Then again, it might be a good idea to require all current American citizens to know the lyrics of the Anthem. But here comes the funny part...

On May 2, 2006, at a press briefing Scotty-Boy was asked the following:

Scott, I wonder -- on Friday, the President firmly said he believes the National Anthem should be sung in English. Kevin Phillips, the Republican analyst, wrote a book called American Dynasty, and in there he claims that during the President's 2000 campaign, he did sing the Star Spangled Banner in Spanish at some Hispanic festivals, various campaign events. Are you aware, do you recall that from the 2000 campaign?

And McClellan's answer was "No, I don't."

Two days later, Scotty-Boy's memory was not any better, but he said "It's absurd" to claim that Bush ever did sing the Anthem in Spanish because "The president can speak Spanish but not that well. He's not that good with his Spanish." Really? That is certainly not the image Bush put forward in his campaigns for Texas Governor and President. Indeed, a long time aide to Bush (going back to his first campaign for governor), Israel Hernandez, said in a June 3, 2002, New York Times article that Bush's Spanish, while not great was nonetheless good:

"It's conversational," said Mr. Hernandez, a deputy to Karl Rove, the president's chief political adviser. "He understands enough to respond back to people who ask him questions, and he could even read an article and understand it."

Also, Bush delivered the Cinco de Mayo radio message for 2001 in Spanish, and that was the first time any President had done a radio address in Spanish. The New York Times article also had several sources saying that Bush's Spanish was bad, but that is beside the point of this little discussion. The point is that Bush and his handlers have consistently portrayed the man as being able to speak Spanish in order to show his diversity. And now--all of a sudden--he is not capable of singing a song in Spanish because his Spanish is so bad.

So, in spite of what was represented before, we are now told that Bush cannot speak both languages. This is a further example that he is, however, highly proficient at speaking out of both sides of his mouth.

Part 1 of a discussion about oil prices and profits: the oil market

This is the first of a few posts discussing the price of oil (and gasoline) and the record profits being made by the major oil companies. Part 1 examines the world oil market generally and examines what the market is doing now.

Background

For anyone thinking that I am simply a left-loving liberal, I am about to blow your mind.

Let me tell you a little story to give you an idea of where these posts are going. 1980 was my first chance to vote in a Presidential election. To say that I was raised in a staunchly Democratic family is an extreme understatement. To say that I was not going to vote for Reagan is also an extreme understatement. However, as much as I admired the man on a personal level, there was no way I was voting for Carter. There were several general reasons for that, and there were two policy-specific reasons. One was the boycott of the 1980 Olympics. The other was the windfall profits tax (WPT) on oil companies. The WPT was a stupid idea then, and it is a stupid idea now.

I'll give some of you a moment to go back and make sure you read the foregoing correctly. And by the way, in 1980 I voted for Anderson. My independent streak goes way back and continues, as evidenced by my support for Kinky Friedman for Texas governor (a Kinky update is on the way, especially since he was here in The Falls last week).

I will admit I am not an expert on energy policy. However, I do know some things about it. My junior year in high school the national debate topic was energy policy, so I learned a lot about oil, gas, nuclear, coal, and alternative energy. While an undergrad at SMU, I had courses on energy policy. I grew up in Wichita Falls, Texas, which is oil country. I have friends that became petroleum engineers and one who is one of the largest independent natural gas producers in the country. I had to learn oil and gas law to pass the Texas bar, and I have done some oil and gas work in my law practice. In other words, I have been around and studied the oil and gas business in various ways, so while I am not an expert, I do have some knowledge.

The basics of supply and demand

What follows is only a basic discussion of some of the factors involved in the oil market. The primary things to keep in mind are 1) the oil market is really driven by the principles of supply and demand, and 2) we are talking about supply and demand on a global, not local, basis.

At this point, a rudimentary discussion of supply and demand is needed. For the moment, assume that supply of a given product is fixed. If demand for that product increases, the seller can raise the price because more people want the product, and some people will be willing to pay a higher price in order to keep from not having that product. If there is a decrease in demand, sellers will have to lower the price in order to make the product attractive and thus generate sales.

Now assume that the demand for that product remains steady, but the supply fluctuates. If the supply increases, prices will drop because some seller will be willing to lower the price in order to get the sale rather than have a product just sitting there unsold. If supply decreases, there will be the same amount of people wanting the product, but there will be less of the product. In that case, the seller can charge more for the product because people will be willing to pay a higher price to make sure they get the limited supply. In other words, demand is not just the need or desire for a given product. Demand also includes the price one is willing to pay for that product.

Price can be somewhat controlled through controlling the supply--if it is possible to increase or decrease supply. But when supply cannot be changed and demand increases, prices will go up. As discussed below, this is what has been happening in the oil market

The state of the oil market

Because I am no expert I decided to cite two people who are experts. Daniel Yergin (click on his picture) is one of the leading energy experts in the country. Matthew R. Simmons is the CEO of Simmons & Company International, which provides investment banking services for the energy industry.

Yergin testified before the House Committee on Energy and Commerce on May 4, 2006. He stated that the oil market was very "tight," meaning that supply and demand are closely balanced and a change, however slight, could have a great impact on price. He gave this statement about the status of the oil market today:

Although there is no actual supply shortage, the world oil market is very tight, owing not only to rising demand, but also to a “slow motion supply shock” -- what we have called an “aggregate disruption” in excess of two million barrels per day.

*******

Today, the balance between supply and demand in the world oil market is very tight.

Yergin also gave some reasons for the tightness of the market, and those will be discussed later.

In February of this year, Simmons wrote a column for World Oil Magazine. In it he stated that over the last ten years

Oil demand grew in virtually every region except the FSU (former Soviet Union). It grew so steadily in the US, that by late 2005, America's usage crossed 22 million bopd, an amount exceeding the entire world's oil use in the early 1960s. The US is the world's largest oil user by more than three times the second largest user (China, which replaced Japan as number two consumer several years ago).

As demand soared, new oil supplies became smaller. Many new finds were tiny satellite fields that could be tied back to under-utilized production facilities, because primary fields had declined.

(emphasis added). In other words, there has been little flexibility in terms of changing the amount of the supply and demand has been increasing. Higher prices have thus been inevitable.

Reasons for the tight market

Both Yergin and Simmons explained reasons for the tight oil market. As noted above, Yergin in part attributed the tightness to "'slow motion supply shock'--what we have called an 'aggregate disruption' in excess of two million barrels per day." He quantified this disruption in supply (meaning in effect a loss of supply available on the market) as follows:

But what has now become clear in 2006 is that we are experiencing a slow motion supply shock—an aggregate disruption that, at present, we would put at 2.2 million barrels per day.

* Nigeria 550,000 barrels per day (bd)
* Venezuela 400,000 bd
* Iraq 900,000 bd
* US Gulf 324,000 bd

According to Yergin, a significant portion of Nigeria's production has been disrupted by "an insurgency in Nigeria’s Delta region. Workers have been evacuated, and the local insurgents are threatening further attacks." And speaking of insurgencies, we all know about the one in Iraq. Production in the U.S. Gulf coast is off due to Katrina and Rita.

Although not included in the above list, Yergin also mentioned that "the ratcheting up of tensions over Iran’s nuclear program with a fear of a disruption of Iran’s 2.5 million barrels per day (mbd) of exports" was a big concern and that "in a market this tight, the risk of escalation is enough to send crude oil prices up."

Yergin also explained that a tight market that can be adversely affected by any kind of real or perceived problem.

A good part of Gulf of Mexico production is slated to soon start up again (as is hurricane season). In the meantime, other transitory interruptions elsewhere in the world can, at least for short periods, take additional oil off the market.

These disruptions have, with the strength of demand, resulted in a very tight oil market and one that is more vulnerable to any further problems. Market psychology—anticipation of risk—becomes more powerful, translating into a scarcity or risk premium. We currently estimate that premium at $10–$15 a barrel. At the present time, the most important contributors to the premium are the unrest in Nigeria, and uncertainty about what will happen there, and the ratcheting up of tension over Iran ’s nuclear progress and the fear that in one way or another, Iran ’s 2.5 mbd of exports may be disrupted, with additional collateral effects.

Simmons described other reasons for the tightness of supply:

The North Sea is in steep decline, and Mexico, China, Argentina, Oman, Syria, Egypt, Yemen and Colombia seem to be experiencing irreversible declines.

Non-conventional oil from Canada's oil sands and Venezuela's Orinoco region makes up about half of both producers' output. Non-conventional oil is now commercial, but it remains extremely energy-intensive to turn into usable form. Most new oil found globally is either heavy or sour, or both. What seems to have passed peak supply is light, sweet oil - the easiest oil to produce and the simplest to refine into light, finished product.

Stated differently, production is down in general in some areas, and in others, all the good and easy-to-get oil is gone, meaning that what is left takes more money to extract, and higher costs means higher price.

Simmons also explained that while the OPEC nations in the past were always able to increase production to help bring down prices when demand increased, their ability to do that ceased in 2005 because they were producing at maximum levels just to meet the demand. Not only that, but the future does not look all that promising in spite of the fact that OPEC nations are working to upgrade 12 existing producing fields, there are two problems: First, such work will not "add significant new supplies before 2009," and secondly,

all these "new" projects are complex oil fields that were found years ago and lacked the ingredients to be key producing fields. Some of these projects' performance risks are high enough that nobody should assume that they will happen on schedule, on budget or at projected output targets.

This shows that even in the OPEC nations (most of which are in the Middle East), the easy-to-get oil is largely gone. What this indicates is that worldwide, any significant amounts of additional oil will not reduce the price of oil because of the increased cost of extraction.

No one country or group can control the oil market, especially the U.S. and especially now.

The oil market is a worldwide market, and perhaps the only one that we, as ordinary citizens, are subject to in our daily lives. Given this global nature, the oil market is not capable of being controlled by any one country or portion of the market. At SMU, one of my political science teachers was Hank Jenkins-Smith. SMU was one of his first teaching gigs, and since then he got his Ph.D and is now a professor at Texas A&M's Bush School of Government and Public Service (yes, I see the irony for me). Anyway, Jenkins-Smith described the world oil market and attempts to control it in a way that stuck with me. He said to take a bathtub filled with water (or oil if you prefer), take a board that covers half the tub, and then press the board down onto the water. What happens? Does the overall level of the water get pushed down? No. Is it possible to control only a portion of the water with the board? No. No matter what you do, no portion of the water can be controlled with the board alone, and the level does not change. The point is that any country trying to control the oil market and oil prices is just as futile as trying to control water in a tub with a small board.

This is indeed how the world oil market works. It is supply and demand in a big way. Here's an example that is current. The price for a barrel of oil is over $70. And we used to think that $40 a barrel was outrageous. Seventy dollars is shocking, if not outrageous. If the United States was the only major consumer of oil, we would be in a position to affect the price--maybe. Assume for a moment that we could say to the oil producers around the world "We are not going to pay that price, and if you continue to charge that price, we will simply stop buying oil." If that was possible, the producers would eventually have to drop the price in order to generate demand.

However, the United States is not the only major consumer of oil. Europe in its entirety is a major consumer, but others countries really affecting the old supply and demand indices are India and China. Here are countries with HUGE populations that are trying to develop major economies through industrialization. Such economic growth requires vast amounts of raw materials and ENERGY. It takes energy to get the raw materials. It takes energy to get the raw materials to some place where they can be made into other materials. It takes energy to convert those raw into other materials. It takes energy to run the manufacturing facilities. It takes energy to then get the finished manufactured goods to market. China alone is creating a HUGE demand for energy, and the reality in today's world is that that energy is provided largely by oil.

That means if it was possible for us to significantly reduce our consumption of (and thus demand for) oil, China's demand would not decrease. Indeed, China's demand could increase, for their would be more oil available on the world market.

Here's part of what Yergin told the House Committee on Energy and Commerce about China's effect on the oil market:

The last decade has witnessed a substantial increase in the world’s demand for oil, primarily because of the dramatic economic growth in developing countries, in particular China and India. As late as 1993, China was self-sufficient in oil. Since then, its GDP has almost tripled and its demand for oil has more than doubled. Today, China imports 3 million barrels of oil per day, which accounts for almost half of its total consumption. China ’s share of the world oil market is about 8 percent, but its share of total growth in demand since 2000 has been 30 percent.

There is another reason why any significant drop in U.S. demand for oil would likely not change China's demand--foreign investment, and more specifically, U.S. investment. As stated, China has a HUGE population, which means that China is a HUGE potential market, which means that plenty of U.S. companies are drooling to invest in that market. As the market and China's economy develop, is China's demand for energy is going to decrease? The answer is "no." Why? because China will continue to develop what made its economy grow--manufacturing--and that means continued demand for oil as described above. And are U.S. companies going to stop investing in China? I pretty much doubt it.

Part of what this means is that the oil companies are not the only entities who could be blamed for high oil prices, but I am getting ahead of myself.

Part of what I am trying to establish is that when supply cannot be increased, the only way to control the price of oil is through reduction of demand. Another part of what I am trying to establish is that reducing demand is going to be very difficult--if possible at all--because China's demand is not going to decrease and very well may increase.

And now for more good news--the chances of the U.S. being able to affect the price of oil are slim. As Yergin testified,

In the 1970s we imported a third of our oil; today, it is on the order of 60 percent. Our oil imports are larger than the total oil consumption of any other country in the world. What this means is that we are highly integrated into the global marketplace—and are affected by what happens in the market.

In other words, our addiction to foreign oil will keep us from being able to affect a downward change in the price of oil.

Conclusion

Today's global oil market is such that any change in supply or demand will have a significant impact on the price of oil. Demand right now is very high, and that is not going to change. Supply cannot be increased enough to counter the high demand and thus bring down the price of oil. Moreover, it appears that supply will at best remain stagnant for a few years. Given that the global oil market is very much a supply and demand market, the facts indicate that high prices for oil are here to stay for at least a few years. The price could drop IF the situation with Iran is resolved peacefully, the insurgency in Nigeria ends, Iraq becomes stable, etc., but even if those things happen, I do not see the price of oil going back to the $30-40 range.

Thus, the price of oil will probably remain high, and that means the price of refined petroleum products will also remain high. And those factors mean the oil companies will still be making huge profits. In future posts, I will examine whether those profits are fair or whether the oil companies are ripping us off and should be stopped.

The monetary cost of the Iraq war

Overview

The monetary cost of the Iraq war just keeps getting higher and higher, and it looks like that trend will continue for several years. I have argued in many other posts that damn near all the problems we have faced in Iraq were either known or capable of being foreseen with a high degree of certainty, and the monetary costs come within that purview. This post will examine the Bush administration's cost estimates (and lack thereof) before the war, the current total costs, and an explanation why costs--which have greatly exceeded the Bush administration's estimates--were foreseeable before the war started. That discussion is far from complete, but it should be sufficient to convey the point that the Bush administration's pre-war projections (and later refusal to provide any estimates) were purposefully disingenuous.

Last Thursday's Washington Post had an article entitled "Projected Iraq War Costs Soar," but before discussing that article, let's take a small trip in the way-back machine...

What the Bush administration said--and refused to say--before the war

Some members of the Bush administration gave some estimates while others obstinately rufused to talk about costs.

• Rumskull and the Office of Management and Budget
  

On January 20, 2003, Rumskull was interviewed on ABC's "This Week." George Stephanopolous asked what Rumskull thought the monetary and human costs of the war would be.

Rumsfeld: Well, the lesser important is the cost in dollars. Human life is a treasure. The Office of Management and Budget estimated it would be something under 50 billion dollars.

Stephanopoulos: Outside estimates say up to 300 billion.

Rumsfeld: Baloney. How much of that would be paid by the United States, how much by other countries is an open question.

(emphasis added). This is rich. Rumskull gives a figure, but he does not take responsibility for it, instead noting that it came from OMB. In this way, Rumskull could shift blame if the estimate proved grossly wrong (which it was) and also "show" he was utilizing the work of others rather than influencing any process.

• Lawrence Lindsey
  

And speaking of what other people in government said, consider the case of Lawrence Lindsey. In September 2002, he was the Assistant to the President for Economic Policy and Director of the National Economic Council at the White House. He told the Wall Street Journal that the cost of the war would be between 100 and 200 billion dollars. By December, he was basically fired. He "resigned" about the same time as Treasury Secretary Paul O'Neill. As reported by the Pittsburgh Post Gazette, sources in the White House (anonymous, so make of that what you will)

said Bush decided to get rid of Lindsey after the economist told The Wall Street Journal in mid-September that a war with Iraq could cost as much as $200 billion, at a time when Bush was not confirming that he planned any such attack. "That made it clear Larry just didn't get it," one official said.

Shortly after it was announced, the director of OMB, Mitch Daniels, called Lindsey's projection "very, very high," and then Daniels announced the "under $50 billion" estimate. Of course, history has shown that it was more likely that Daniels was "very, very high."

• Unidentified White House aides

As reported in the Washington Post,

Until now, administration officials have provided only vague estimates of the cost of a war with Iraq. President Bush's aides have said the only benchmark they could offer was the cost of the 1991 Persian Gulf War, which was $61.1 billion excluding reconstruction costs, or $82.5 billion in current dollars.

(emphasis added). 82.5 billion ain't "under 50," now is it? Moreover, that price tag did not include any costs for reconstruction!

Another thing to consider about the cost of the first Gulf War is that the U.S. paid only about 10% of the total--a fact which is discussed further below.

• Department of Defense planners
  

Back to Rumskull...Any estimate of cost stated by the Bush administration had to come in under Lindsey's; otherwise the PR and sales job might get slowed down. So, Rumskull decided to throw out the "under $50 billion" figure. Just one of the problems faced by Rumskull--and Wolfowitless--was that about four weeks later, planners in the Pentagon estimated the cost would be $60-95 billion--and that did not cover the occupation/reconstruction phase.

• Wolfowitless
  

That estimate came out right before Wolfowitless testified before the House Budget Committee on February 27, 2003. In addition to oh so wrongly denigrating Eric Shinseki, Wolfowitless was equally dismissive of the estimate from his own agency and all other cost estimates as he refused to give even a ball park figure. When pressed by committee members for some idea of what a war would cost, Wolfowitless said, "Every time we go in a briefing on the war plan, it immediately goes down six different branches of what a scenario might look like. And if we costed every single one of them, we'd maybe give you a range between $10 billion and $100 billion and you'd say that's useless and you'd be right." He went on to say that "I think it's necessary to preserve some ambiguity of exactly where the numbers are," but he nevertheless “assured” the committee that the Pentagon would provide Congress with cost ranges at an “appropriate point,” but that “we're not in a position to do that right now.”

• Review
  

Let's review the Bush administration's cost estimates before the war. First there was an estimate of $100-200 billion in September 2002, which resulted in the firing of the person making that estimate. Then almost immediately came an estimate of under $50 billion, a figure repeated by Rumskull in late January 2003. Four weeks later, planners in DoD put the figure at $60-95 billion--which did not include any reconstruction/occupation costs. Immediately after that, Wolfowitz dismissed any and all estimates and said it was not possible to make any estimate.

The bill to date...and beyond

Now it is time to examine the Washington Post article cited at the start of this post. The lead paragraph almost says it all:

The cost of the war in Iraq will reach $320 billion after the expected passage next month of an emergency spending bill currently before the Senate, and that total is likely to more than double before the war ends, the Congressional Research Service estimated this week.

I could stop here, but where is the fun in that? Here's some more good news:

Once the war spending bill is passed, military and diplomatic costs will have reached $101.8 billion this fiscal year, up from $87.3 billion in 2005, $77.3 billion in 2004 and $51 billion in 2003, the year of the invasion, congressional analysts said. Even if a gradual troop withdrawal begins this year, war costs in Iraq and Afghanistan are likely to rise by an additional $371 billion during the phaseout, the report said, citing a Congressional Budget Office study.

Not exactly under $50 billion, huh?

Now I know what some of you are thinking...the CRS report is a mere estimate.

This is largely true, but that does not get the Bush administration off the hook. As explained in the Washington Post article, the only reason that CRS could not include precise numbers in its report is that the Bush administration has never revealed what money has been spent on the Iraq war/occupation/reconstruction.

Defense specialist Amy Belasco, the CRS study's author, stressed that the price tag is only an estimate because the Defense Department has declined to break out the cost of Iraqi operations from the larger $435 billion cost of what the administration has labeled the global war on terrorism. That larger cost applies to military, diplomatic and foreign aid operations in Iraq and Afghanistan, enhanced security efforts begun after the Sept. 11, 2001, attacks and related medical costs of the Department of Veterans Affairs.

"Although DOD has a financial system that tracks funds for each operation once they are obligated -- as pay or contractual costs -- DOD has not sent Congress the semiannual reports with cumulative and current obligations for [Iraq] and [Afghanistan], or estimates for the next year, or for the next five years that are required by statute," the CRS noted.

(emphasis added). Gosh, the Bush administration not following the law? I am oh so shocked! This instance is just a continuation of a pattern: before the war DoD refused to talk about costs for Iraq, and more than three years later, DoD is still refusing to talk about costs.

Now I know what some of you are thinking..There was no way to know before the war some of the circumstances which have driven up the costs.

To this I say "Bullshit." There are many reasons why the huge costs could have been foreseen, but for now I will discuss three.

• The number of troops
  

One of the biggest factors in cost was, still is, and will be the number of troops we have in Iraq. As I have discussed in detail, before the war then Army Chief of Staff Gen. Eric Shinseki testified that that several hundred thousand troops would be needed for the occupation and reconstruction of Iraq. As I requested in Rumskull defense #2: There has to be trust, go to the Cosmic Wheel Index and read the posts listed under the heading of "Shinseki, Eric" to read why Wolfowitless and the rest of the dumbass neocons were wrong. And when I say "wrong," I mean before the war started. Anybody who studied the history and facts on the ground before the war would have seen that Shinseki was likely right. More troops = more cost, so the Bush administration was keen on giving bullshit estimates of troops needed. For instance, after Shinseki's testimony, the Washington Post reported on March 1, 2003,

Planners on the Army staff, the Joint Staff and Rumsfeld's staff are assuming that, even if 200,000 or more troops are necessary to stabilize postwar Iraq, only a relatively small percentage would come from the United States. Rumsfeld noted this week that numerous allies have indicated that they would commit troops to help stabilize postwar Iraq.

The Joint Staff is estimating that the U.S. troop presence could be between 45,000 and 60,000 soldiers for up to two years, the rough equivalent of two to three Army divisions. While a commitment of this level would put an enormous strain on the Army, which has 10 active-duty divisions, it would be far less than what one Army staff member called Shinseki's "guesstimate."

(emphasis added). 45,000 to 60,000...yeah, right. In addition to all the reasons stated in the posts referenced above, read this post, which discusses the length of and problems along the vast Iraqi borders. Basically, I take the position that any moron--well, almost any moron--would realize that border control would be essential and that such mission would require more, not fewer, troops.

• Our allies would pay for most of the cost.
  

The emphasized portion of the first excerpted paragraph immediately above and RUmskull's "Baloney" comment on "This Week" reveal the second reason why it was apparent before the war that Shinseki was right. The Bush administration seemingly expected the rest of the world to pick up the tab. Stated differently, the Bush administration thought there would be a repeat of the first Gulf War.

As reported by the Chicago Tribune in a January 23, 2003, article entitled "Generous in '91, allies reluctant to finance war," the $61.1 billion cost of the first Gulf War was mostly paid by our allies, and, according to a 1992 Defense Department report, the U.S. paid $7 billion. Moreover, as reported by USA Today on January 15, 2003, our allies had largely agreed before the war to bear that cost. That certainly did not happen the second time around, and it was highly unlikely that anyone was going to pick up the tab like they did in 1991. One of the countries that contributed heavily to the 1991 war was Saudi Arabia. In addition to providing $16.8 billion in money, the Saudis provided--free of charge--the costs of housing and repatriating Kuwaiti refugees, fuel, transport and lodging to coalition forces, and a major environmental cleanup. That was in 1991. In 2003, the Saudi public strongly opposed the Iraq war long before it happened, meaning the Saudi government was not in any position to contribute significantly to it. The lack of just Saudi help the second time around obviously meant a significant increase in the cost to the U.S.

In further contrast to the first Gulf War, prior to the Iraq war, the Bush administration was not even trying to get financial commitments from allies before the war. The Chicago Tribune article cited above offered the following from Danielle Pletka of the very pro-Bush American Enterprise Institute:

"We are not out there asking [for money] in a serious way."

She said that among the allies, the urgency of defeating Hussein is not at the same high level as it was in 1991.

"We are not saving Kuwait's bacon this time," Pletka said. "And sometimes you have got to cough up the dough to meet the responsibility of being a world leader. This is one of those times."

Gee, I wonder if the fact that a vast majority of people in the world (including Pope John Paul II) was against the war had anything to do with the lack of pre-war requests? Of course Wolfowitless saw no problem with not securing financial commitments before the war. The AP reported that at the same hearing in which he criticized Shinseki and refused to give any estimate of costs, Wolfowitless was

asked about assistance from other nations. Wolfowitz said he expects a lot of contributions after the war, including from nations that oppose military action. "It will be easier after the fact instead of before the fact," he said.

Un-freaking-believable. Look at that from a simple common-sense perspective. If you are contemplating undertaking a highly dangerous and risky venture for which you really need financial investors, would you decide to go ahead without that financial backing and then try to get other people to give you money? To do so would be to take a huge gamble, and when the venture is a war, the stakes become even greater. Moreover, for our government to take that gamble with the Iraq war was and is particularly galling. Bush, Big Dick, Rumskull, Wolfowitless, etc. were "gambling with house money." In other words, they were gambling with your and my tax money--and the money of generations to come.

And how could anyone have had a reasonable expectation that other countries would decide to pour billions of dollars into Iraq to help us clean up the mess we caused? Given the utter arrogance and ham-fisted disdain with which the Bush administration treated the rest of the world in the run up to the war, it was patently unreasonable to think that the rest of the world was going to provide significant amounts of money or troops. Need examples? As reported by the New York Times, at the February 27, 2003, hearing Wolfowitless "said that nations that oppose war with Iraq would likely sign up to help rebuild it." Well, that seemed like a reasonable and plausible thing to say, but he just did not know when to shut the hell up:

''I would expect that even countries like France will have a strong interest in assisting Iraq in reconstruction,'' Mr. Wolfowitz said.

In the 1991 Persian Gulf War, many nations agreed in advance of hostilities to help pay for a conflict that eventually cost about $61 billion. Mr. Wolfowitz said that this time around the administration was dealing with ''countries that are quite frightened of their own shadows'' in assembling a coalition to force President Saddam Hussein to disarm.

Singling out in a scornful manner one of the few countries that had economic incentive and capability to provide significant amounts of money for the reconstruction was not a good way to get that country. French companies had business contracts and interests in Iraq, and getting the country back on its feet would be in the interest of those companies and France. But hey, let's start making "freedom fries" and insult a country that could help. Then again, the fact that almost all the significant contracts for reconstruction activities were given by the U.S. to U.S. companies would have eliminated those French economic incentives anyway--and that action largely eliminated the possibility of getting other countries to help "after the fact," but that is another story for another time. And is calling countries cowards an effective way to gain their cooperation in something for which one really needs it? Here's a clue: NO.

Need more examples? Another one is Bush's basic approach of "I don't believe there's many shades of gray in this war. You're either with us or against us; you're either evil or you're good." Granted, these statements addressed the war on terror, but remember that the Bush administration made the war on terror one of the reasons for going to war with Iraq. Thus, it is accurate to say that the Bush administration used this "all or nothing" approach in regard to the Iraq war. Again, that is no way to go about building a true coalition of countries that can provide meaningful assistance. Indeed, Bush used that approach in a speech about Iraq on February 13, 2003, at Naval Station Mayport in Florida. In that speech, Bush reiterated the "facts" that Saddam had all kinds of WMD and ties to terrorism which threatened the U.S., and then he turned his attention to the United Nations:

I'm optimistic that the U.N. Security Council will rise to its responsibilities, and this time ensure enforcement of what it told Saddam Hussein he must do. See, I believe when it's all said and done, free nations will not allow the United Nations to fade into history as an ineffective, irrelevant debating society. I'm optimistic that free nations will show backbone and courage in the face of true threats to peace and freedom.

The anything-but-subtle message was that any country that would not join the U.S. in the Iraq war had no courage or backbone. Again, this was no way to get other countries to provide significant amounts of money and/or troops to the cause. A March 3, 2003, L.A. Times article summarized the problems caused by this approach:

The leaders of France, Germany, Russia and China, all nations Bush hoped to count as allies in the confrontation with Iraq, have joined to resist the president's drive toward war, with complaints over what they see as American highhandedness.

*******

And a few senior Republicans, like Sen. Richard G. Lugar of Indiana, chairman of the Senate Foreign Relations Committee, and Sen. Charles Hagel of Nebraska, have warned that the Bush administration's take-no-prisoners style risks alienating allies it needs in the long run.

"In an era when allied cooperation is essential in the war against terrorism, we cannot afford to shrug off negative public opinion overseas as uninformed or irrelevant," Lugar said at a hearing last week. "The governments of most nations respond to public opinion, whether it is demonstrated in the voting booths or in the streets."

"The responsibility of leadership is to persuade, not to impugn the motives of those who disagree with you," Hagel said. The administration is "seen as bullying people. You can't do that to democracies. You can't do that to partners and allies. It just isn't going to work."

(emphasis added). Keep in mind that not hundreds, not thousands, but millions of people across Europe took to the streets to protest going to war. In Britain and Spain--our two biggest allies in this war--the populations were overwhelmingly opposed to the war.

And let us not forget about Rumskull's "old Europe" comments. As the L.A. Times article noted,

Even staunch allies such as prime ministers Tony Blair of Britain and Jose Maria Aznar of Spain have sent word to Bush that some U.S. bravado -- like Defense Secretary Donald H. Rumsfeld's dismissal of "Old Europe" -- has done more harm than good.

Thanks, Rumskull. What a jackass.

To sum up, we managed to piss off the countries that had the resources to provide meaningful amounts of troops and money. That happened before the war, and in light of that fact, any claim by anybody that the war and reconstruction would not cost the U.S much money because other countries would pay a lot of that bill was bullshit.

• Iraqi oil will pay for the reconstruction.
  

One of the things we were told repeatedly was that we would not have to spend much of our own money to rebuild Iraq because Iraqi oil would pay for almost everything. This steaming pile was presented in spite of the fact that, as reported by the AP on March 17, 2003 (sorry, but I can't find a working link for the article),

Despite Iraq's enormous oil reserves, experts say money from the sale of Iraqi crude wouldn't cover the costs of rebuilding the country's power plants, bridges and other vital infrastructure after a war with the United States.

Twelve years of U.N. economic sanctions have crippled Iraq's oil industry, and a postwar government would need several years and billions of dollars to restore production to 1990 levels.

And who were these experts? Well, some of them came from the James A. Baker III Institute for Public Policy. That's the James A. Baker who has been a top adviser to Presidents and Secretary of State under Bush 41. Together with the Council on Foreign Relations, the Baker Institute published a report in December 2002 entitled "Guiding Principles for U.S. Post-Conflict Policy in Iraq." Here are some of the highlights from the report's section on Iraqi oil:

Oil experts acknowledge that Iraq’s oil sector is being held together by “band-aids.” War, sanctions, and political manipulation have all seriously challenged Iraq’s highly skilled oil industrialists. Further damage could result either from Iraqi sabotage or a U.S. bombing campaign.

*******

Iraq will also face high technical hurdles to reaching production of 3.5 million bpd. Even without a war, Iraq’s infrastructure is likely to be damaged and billions of dollars will be required to rehabilitate it.

*******

After two major wars and a decade of sanctions, Iraq’s oil industry is in desperate need of repair and investment. Iraq’s current sustainable oil production capacity is no higher than 2.6 to 2.8 million bpd and could slip further if hostilities result in a sudden or prolonged cessation of oil production. Prior to Operation Desert Storm, Iraq’s capacity was about 3.5 million bpd.

There is little doubt that there is great potential to expand Iraq’s oil production and export capacity, but it will require massive investment.

*******

Iraq’s export infrastructure has been badly damaged in its two wars. A rapid increase in Iraqi oil exports will not be possible given the limitations of Iraq’s production and export facilities. Even under the most favorable circumstances in which no additional damage was done to existing facilities during a U.S.-coalition military campaign, it would take Iraq at least six months and possibly longer to expand oil production and export rates from current capacity levels. The Working Group believes it will take Iraq between eighteen months and three years to return to its pre-1990 production level of 3.5 million bpd. It will cost an estimated $5 billion to repair and restore previously used facilities, in addition to an estimated $3 billion in annual operating expenses. An estimated $20 billion will be needed to restore Iraq’s pre-1990 electricity capacity. Iraq has previously stated a desire to expand its oil production capacity to 6 million bpd. This is geologically possible but would take a number of years and tens of billions of dollars in investment.

So, before the war it was well known that Iraqi oil production was not going to pay for the reconstruction and that it would take years and "tens of billions of dollars" to get the Iraqi oil industry to the point of making serious money. And yet the Bush administration kept telling us that Iraqi oil would keep the U.S. from having to pay for the reconstruction.

Conclusion

The Iraq war has cost us over $300 billion, and could end up costing between $600 and $700 billion. The Bush administration either knew or damn well should have known that the costs to the U.S. would be this high, and yet--just like they did with WMD and Iraq's terrorism ties--they told us things that simply were not true, and they made up reasons why they could not tell us the truth. And to this day, they still cannot be truthful about the amount of money that has been spent on the Iraq war--even though the law requires such disclosure.

Typical.