Confessions of an Economic Hit Man

Iraq was extremely important to us, much more important than was obvious on the surface. Contrary to common public opinion, Iraq is not simply about oil. It is also about water and geopolitics. Both the Tigris and Euphrates rivers flow through Iraq; thus, of all the countries in that part of the world, Iraq controls the most important sources of increasingly critical water resources. During the 1980s, the importance of water—politically as well as economically— was becoming obvious to those of us in the energy and engineering fields. In the rush toward privatization, many of the major companies that had set their sights on taking over the small independent power companies now looked toward privatizing water systems in Africa, Latin America, and the Middle East.

In addition to oil and water, Iraq is situated in a very strategic location. It borders Iran, Kuwait, Saudi Arabia, Jordan, Syria, and Turkey, and it has a coastline on the Persian Gulf. It is within easy missile-striking distance of both Israel and the former Soviet Union. Military strategists equate modern Iraq to the Hudson River valley during the French and Indian War and the American Revolution. In the eighteenth century, the French, British, and Americans knew that whoever controlled the Hudson River valley controlled the continent. Today, it is common knowledge that whoever controls Iraq holds the key to controlling the Middle East.

Above all else, Iraq presented a vast market for American technology and engineering expertise. The fact that it sits atop one of the world’s most extensive oil fields (by some estimates, even greater than Saudi Arabia’s) assured that it was in a position to finance huge infrastructure and industrialization programs. All the major players —engineering and construction companies; computer systems suppliers; aircraft, missile, and tank manufacturers; and pharmaceutical and chemical companies—were focused on Iraq.

However, by the late 1980s it was apparent that Saddam was not buying into the EHM scenario. This was a major frustration and a great embarrassment to the first Bush administration. Like Panama, Iraq contributed to George H. W. Bush’s wimp image. As Bush searched for a way out, Saddam played into his hands. In August 1990, he invaded the oil-rich sheikhdom of Kuwait. Bush responded with a denunciation of Saddam for violating international law, even though it had been less than a year since Bush himself had staged the illegal and unilateral invasion of Panama.

It was no surprise when the president finally ordered an all-out military attack. Five hundred thousand U.S. troops were sent in as part of an international force. During the early months of 1991, an aerial assault was launched against Iraqi military and civilian targets. It was followed by a one hundred–hour land assault that routed the outgunned and desperately inferior Iraqi army. Kuwait was safe. A true despot had been chastised, though not brought to justice. Bush’s popularity ratings soared to 90 percent among the American people.

I was in Boston attending meetings at the time of the Iraq invasion—one of the few occasions when I was actually asked to do something for SWEC. I vividly recall the enthusiasm that greeted Bush’s decision. Naturally, people throughout the Stone & Webster organization were excited, though not only because we had taken a stand against a murderous dictator. For them, a U.S. victory in Iraq offered possibilities for huge profits, promotions, and raises.

The excitement was not limited to those of us in businesses that would directly benefit from war. People across the nation seemed almost desperate to see our country reassert itself militarily. I believe there were many reasons for this attitude, including the philosophical change that occurred when Reagan defeated Carter, the Iranian hostages were released, and Reagan announced his intention to renegotiate the Panama Canal Treaty. Bush’s invasion of Panama stirred the already smoldering flames.

Beneath the patriotic rhetoric and the calls for action, however, I believe a much more subtle transformation was occurring in the way U.S. commercial interests—and therefore most of the people who worked for American corporations—viewed the world. The march toward global empire had become a reality in which much of the country participated. The dual ideas of globalization and privatization were making significant inroads into our psyches.