"Stay Behind" strategies in Iraq

[Tim May]

On Thursday, April 10, 2003, at 08:04 PM, Major Variola (ret) wrote:
>
> Ok, the Iraqis will work in the 7-11s which serve the yankees.
> Some Iraqis will do better.  They will inspire others.  They will
> also be used by psyops to argue for "the american dream" for
> Iraqis.  And although exploited by psyops, I think all humans
> want to improve their circumstance.

You're arguing for what you would like to see, whereas what I'm talking 
about is that there is unlikely to be any surge in employment in this 
hand-out nation.

Some small number of additional workers will be hired as some 
refineries and other facilities are expanded, repaired, etc. Perhaps 
even a few 7-11 franchise stores will open, employing perhaps 50 Iraqis.

There simply is no prospect that significantly more than the small 
fraction of Iraqis who now service the oil industry will be employed. 
Doubling oil production, which is essentially impossible, would only 
double a small number...or not quite double, as newer facilities will 
be even more automated.

Meanwhile, most of the nation's 20,000,000 will continue to rely on 
handouts.

I said that no major ghetto/slum area, whether Calcutta or 
South-Central LA or Baghdad has ever, in memory, gone to nearly full 
employment. I'm a libertarian, not a do-gooder: I realize that more and 
more people are simply useless eaters. The useless eaters in Baghdad, 
Basra, etc. will

> Yes, the US could keep the Iraqis poor.  But its not in the USG
> interest.  The USG wants MTV in every Arab home. (Albeit this will 
> piss off the Islamo Fundies, but they're
> already majorly pissed.)

You're showing your statist/idealist roots. It's not a matter of "the 
US could keep the Iraqis poor." No more so than the U.S. is keeping the 
South-Central LA negroes poor, or the Calcutta natives poor.

Markets clear. As I said, even doubling the oil production in Iraq 
would have minimal effects on overall employment. This is an economic 
fact.

I suppose the U.S. could order Iraqi National Oil to hire tens of 
thousands of people to polish the pipes, wipe down the derricks, spoon 
up the spilled oil, and other make-work jobs. Still a drop in the 
bucket.

Basically, Iraq went through a standard Turd World birth boom, doubling 
its population and then doubling it again in just a couple of 
generations. Look at the statistics on how many Iraqis are under 15.

They dispersed handouts to the breeders, who now number 20 million, 
crowded into several major cities and a dozen smaller cities.


>
> >Refineries are built by the Bechtels and Parsons and their European 
> and
> >Japanese counterparts. Most are nearly fully-automated. Again, a
> >comparatively tiny number of locals will be hired.
>
> Even if true (I'm not fully clued to the oil biz, I'd be
> surprised if any readers here were)

Don't extrapolate from your own ignorance to others. I've seen several 
coal- and oil-fired power plants (in Virginia and California), and I 
drive past the Gaviota, CA refinery (where offshore oil platforms 
deliver to the site) and can see how few people work there. (It's about 
30 miles west of Santa Barbara, on an isolated stretch of ranchlands.)

Modern refineries cannot afford to have people running around with 
wrenches and screwdrivers, tweaking and reading gauges. The plants 
either run with few people or they are doomed.

Finally, for now, a friend of mine for the past 28 years is the son of 
a former Chevron head of research and development (at the Bay Area 
refineries...also lightly staffed). This V.P., Dr. John Scott, told me 
many years ago just how few people it takes to run the crackers and 
distillation towers.

As for working oil wells, I've flown over vast oil fields in west 
Texas, and have driven past many oil derricks in California (in several 
regions). Unmanned. Small maintenance crews are all that are needed.

It's good for Iraq that they have oil. Having oil is always better than 
not having oil. But any notion that any expansion of the oil business 
is going to magically employ millions of Iraqis who are not now 
employed is silly. Do the math.


> the US imposed 'interim' govt will tax this to
> fund things (like jobs, or even sinecures) that win favor. Why?  
> Because the govt worries more about Iraqi/Arab backlash more
> than Halliburton's profits.   For a while, anyway.

Silliness. Prices are set by markets. No one is claiming that 
Halliburton will get the bulk of the oil profits. But Halliburton will 
not do its thing (drilling services, extinguishing fires, etc.) except 
at prices they find acceptable.

You seem to have some kind of fantasy going on about Iraq's oil economy 
somehow giving jobs to millions of Iraqis who have no skills, no work 
experience. Optimism has blinded you. Do the math.

>
> And I am dubious of the "fully automated" claims, frankly, though
> that is also an empirical matter, perhaps researchable by
> studying oil ops in the region.

I've told you I've seen the Gaviota plant, and know from Dr. Scott just 
how few workers are inside refineries and pumping stations. It has to 
be this way.


>  If you liquidate the towelhead kings
> of the region, you might find a lot of distributable wealth
> (I'm not a socialist, neither am I an admirer of monarchy.)
> which the US conquerers would distribute.  A great way
> to curry favor with the populace.  Libertarian ideals don't
> prescribe a way to distribute land-based wealth in the region,
> though I'd love to be corrected.
>

"Redistributing the oil wealth" will not do anything except lead to a 
further doubling and tripling of the population.  The moral hazard of  
handing out free stuff is itself enough to derail real markets.

--Tim May