One of the very best indicators of the future health and wealth of the nation is the stock market. In recent days — as President Bush has readied the nation for the forcible removal of Saddam Hussein — U.S. and global stock markets have again confounded the naysaying media with dramatic rallies.
The market message is unmistakable: ridding the world of the Stalinesque dictator in Iraq is a huge plus. Terrorism will be reduced, weapons of mass murder will be limited, people will be safer around the world, human rights and democracy will be unleashed in the Middle East, and the fragile outlook for world prosperity will be improved. These are all positives on Wall Street.
The uncertainty tax on world growth will be lowered, too, as will the energy tax from temporarily spiking oil prices. Both have crippled world financial bourses and created a huge wall of worry for investors and consumers. But the markets know this tax will soon be repealed.
They also know the American public is squarely behind the war. A recent Fox News poll finds 71% of Americans now support the use of U.S. forces to disarm Iraq. Rather than diplomatic delay, respondents polled clearly for immediate action. If the war in Iraq costs each taxpayer about $300, 69% of those surveyed say it is worth it.
That al Qaeda terrorists are being caught left and right — in Pakistan, no less — is another key development behind the surge in stock market confidence.
The Singapore Straits Times reported the recent arrest of Yassir al-Jaziri. He’s described as one of the top seven al Qaeda members and the “business brains” of the terrorist network. The U.S.-educated Moroccan was a key player in al Qaeda communications, logistics, and business operations.
Meanwhile, the Washington Post reported that Khalid Shaikh Mohammed, the big-daddy al Qaeda operative captured a fortnight ago, provided “a mother lode” of information, including “hundreds of leads” on the terrorist group’s bankers, members, and targets. Rep. Porter J. Goss (R., Fla.), chairman of the House intelligence committee and a former CIA officer, said in the Post, “I believe the tide has turned in terms of al Qaeda . . . we’re at the top of the hill.”
In fact, U.S. intelligence believes we are close to dismantling the al Qaeda leadership. While there is still the risk of another attack, al Qaeda would have great difficulty executing another 9/11. The capture of a Yemeni cleric in Brooklyn represents a great fundraising setback for the terrorist network. And authorities now have nearly a dozen names of suspected terrorist cells living in the U.S. — you can bet the cell members will soon be incarcerated.
It’s not a coincidence that the dramatic capture of numerous al Qaeda bigs has occurred during the U.S. military buildup in the Persian Gulf. The U.S. willingness to employ overwhelming force — including 250,000 troops — as a means of removing Saddam Hussein and transforming Iraq speaks volumes about the seriousness of American intentions in the region. Such a policy of strength affects the hearts and minds of our enemies as well as our friends. In Pakistan, as just one example, officials and local villagers are now starting to cooperate in a significant way in the hunt for the al Qaedas.
Here’s another surprise that will help stoke the renewed fires on Wall Street. Saudi Arabia has charted a massive 30 million barrel allocation of oil to its tanker fleet for delivery to the U.S. in the next few weeks, according to analyst Fred Leuffer. As with everything else Saudi, there’s a double game. The one-time oil infusion will help the U.S. economy by bringing barrel prices down into the low $20s. It will also aid Saudi revenues that have suffered from high barrel prices and decreased demand. At least the Saudis didn’t cut off or reduce oil supplies — as was the case in the 1970s.
When it comes to disarming and removing Saddam Hussein, President Bush has made it very clear that he means business. Financial markets now understand that the president’s forceful actions will before long create a much better business environment at home and around the world.
Remember Machiavelli’s dictum: It is better to be feared than loved. Love will come later, when the Iraqi people are liberated. But fear, through substantial force, must come first. Wall Street fully approves of this turn of events.
— Mr. Kudlow is CEO of Kudlow & Co.