A Breakdown in Foreign Intelligence Jude Wanniski September 23, 2002

Memo To: House and Senate Intelligence Committees
From: Jude Wanniski
Re: You Need Someone Like Me

I’m kidding, folks. You don’t have to put me on the payroll, but if you want a better understanding of why 9-11 occurred when there were so many smart people collecting information and so many tens of billions of dollars spent trying to put it together. The fact is, I am better informed than the Central Intelligence Agency and the Defense Intelligence Agency and the Federal Bureau of Investigation, all wrapped together. In fact, when you wrap them together, they are probably less informed than when they are on their own. I actually consider myself the best informed person in the world, not because I “know” as much stuff as the CIA, DIA and FBI. God forbid I should have all that junk in my head. But I have spent my life trying to learn a little bit of everything it might take to know "The Way the World Works", which coincidentally is the name of my 1978 book, which the editors of National Review named one of the 100 most influential books of the 20th century. Since that listing came out in early 2000, not one of you folks have contacted me, or had your staff contact me. I could have told you that 9-11 would happen. In fact I told the Chairman of the Senate Foreign Relations Committee two times in 1998, on this website, that the bad guys would be back to blow up the Twin Towers. The second time, I even mentioned Osama bin Laden might be doing it. I told Jesse Helms, the aforementioned chairman, what he had to do to prevent 9-11.

If you take the trouble to read my book, you will see that in 1977 I formally predicted the end of the Cold War, with the good guys winning because we had figured out why our economy was so weak and how easy it would be to make it stronger. I said Maggie Thatcher would win in the U.K., that Ronald Reagan would win in the U.S., with the help of Congressman Jack Kemp, and that when the Chinas and Koreas re-united, they would be capitalist, not Communist. Years ago, Robert Bartley of the Wall Street Journal wrote that Wanniski thinks you can stop an SS18 with a tax cut! Well, yes, that’s how I could predict we would win the Cold War. At the time I made my prediction, Henry Kissinger was publicly warning that the USSR might win, because it was not burdened by democracy. My Russian friends tell me that when Reagan cut tax rates in 1981 and interest rates went down and revenues went up even as the deficit climbed, they could not understand the magic. It broke their confidence in “socialism.” The fact that we could threaten them with Star Wars hurt, but that was not decisive. It was non-inflationary economic growth. Supply-side economics!

What you really need is a generalist to head the National Security Council. Condi Rice is a nice girl and she knows lots and lots about Russian history. But she knows very little about lots of things and absolutely nothing about some of the most important things. The Middle East, for example, and economics, for another. The way the government is set up now, a great many men and women who specialize in this or that are hired to collect information about their specialties and then throw their best stuff into a pot. If I were the head of the CIA, because I know just enough about everything to know what to NOT look for, I could help the President have peace and prosperity and Saddam Hussein eating out of his hand.

If you don’t believe me, you could check with Kenneth Dam, the Deputy Treasury Secretary. Back in 1986, he was chairman of an outside advisory group to the CIA. I’d known Ken when he was on the White House staff in the Nixon administration and he heard I’d just returned from two weeks in the Soviet Union, just looking around. He called and invited me to a CIA seminar at the Marriott Key Bridge hotel in DC that was spending a full day talking about the USSR. About 25 men and women who were Soviet specialists sat around four long table that were placed in a square. There were three PhD academic economists who were regular, paid consultants to the CIA. Each of them in turn presented long, boring presentations that showed how well the Soviet economy was doing. I was shocked when I asked how recent their statistics were and they confessed they had no recent reliable numbers, so they were working on “projections” from old numbers.

When Ken Dam got to me, I told them the economy was in a deep Depression, which I could see just by looking around for two weeks. The only sign of economic life I saw was in Baku, in Azerbaidzhan, where Moscow had to permit open farmer’s markets to prevent an Islamic uprising. I also told them the Soviet people were on the edge of giving up on the experiment. How did I know? I asked a third-string diplomat at the American Embassy if there was any way the people had to let off steam. He told me they could write letters to the editor of Pravda and Izvestia. I asked how they were running, and he told me that when he arrived a few years earlier, they were 60 to 40 in favor of the government, giving communism “a chance,” but they were now 50-50. I told the CIA seminar that this indicated we had already won the Cold War, as this number would continue to shift as older Russians, the old communists, died, and the population became younger and more frustrated with how little they had to show for all their hard work. That was the last time I was invited.

Now I can predict the future better than anyone I know, including stocks and bonds and commodity prices. This is what I have done for a living these last 25 years at Polyconomics. Indeed, at the very start of the Bush administration, I arranged to meet with Vice President Dick Cheney and with Treasury Secretary Paul O’Neill. I told them that our economy was in a monetary deflation, which could not be cured with tax cuts or interest rate cuts. I also told them I could tell them how to cure the problem, but they could not do it because I was the only person who knew why this was happening. You see, it really does not matter if you find exactly the right person to pull together all the information your best people at the intelligence agencies are collecting. The government DOES NOT WANT THAT PERSON around. The last thing the government wants is someone who can tell it how it can optimize policy. What’s left for it to do? Beat it, Wanniski. Hit the road!

What you folks can at least do is find yourselves some independent intellects who are wide-ranging in their experience and willing to examine information that may cut against the President’s political agenda or the perceived interest of his political party. There will always be people who would prefer half-truths or untruths coming to the President’s ear rather than have their own applecarts upset. Whenever a President of the most powerful nation in human history makes an honest decision based on dishonest information, there will be a price to pay. When the decision is a big one – like whether or not to go to war with Iraq – there will be hell to pay if the President’s assumptions are flawed, on purpose or because there is nobody in charge who knows how to put two and two together.

Here is how the late Sir Isaiah Berlin put it in his classic “The Hedgehog and the Fox”:

ZAquinas is praised by Maistre not for being a better mathematician than d’Alembert or Monge; Kutuzov’s virtue does not, according to Tolstoy, consist in his being a better, more scientific theorist of war than Pfuel or Paulucci. These great men are wiser, not more knowledgeable; it is not their deductive or inductive reasoning that makes them masters; their vision is “profounder,” they see something the others fail to see; they see the way the world goes, what goes with what and what never will be brought together; they see what can be and what cannot; how men live and to what ends, what they do and suffer, and how and why they act, and should act, thus and not otherwise. This “seeing” purveys, in a sense, no fresh information about the universe; it is an awareness of the interplay of the imponderable and the ponderable; of the “shape” of things in general or of a specific situation, or a particular character...