Commentary Magazine


Contentions

Well, Austan?

Barack Obama’s foreign policy and military advisors weren’t the only ones wrong about the prospects of the surge succeeding. So too was his economic advisor, economist Austan Goolsbee of the University of Chicago. On November 11, 2007, he published a column in the New York Times citing research by an MIT professor to conclude “that the bond market – which, historically, has often been an early indicator of the demise of a political system – was pessimistic about the Iraqi government’s chances for survival.” The evidence for this was the fact that Iraq’s dollar-denominated bonds were trading at a huge discount from their face value.

Goolsbee went on to praise “the prescience of financial markets.” Only in this case they haven’t turned out to be so prescient after all. The surge, as we know, has succeeded spectacularly. As a result the risk premium on Iraq’s bonds has fallen from nearly 7.0% in August 2007 to around 4.8% last month. Citigroup even released a research note in April which, according to Reuters, concluded that “Iraq is proving an oasis for investors battered by global financial turmoil” and that the “cost of insuring Iraq’s bonds against default has fallen so sharply that they now costs less to insure than Venezuelan debt.”

Not surprisingly there has not been a word about the improvement in outlook for Iraq’s bonds from Professor Goolsbee or the New York Times. Just one more reason why the analysis emanating from the Obama campaign and the MSM as regards to Iraq deserves to be devalued by the public. (Full disclosure: I’m a foreign policy adviser to Senator McCain, whose prescience has been fully vindicated by events in Iraq.)



Join the discussion…

Are you a subscriber? Log in to comment »

Not a subscriber? Join the discussion today, subscribe to Commentary »





Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.