Michael Lotus addendum to my blog on Iraqi oil


Chicago lawyer and blogger Michael Lotus (on www.chicagoboyz.net and anglosphere.com/weblog/), in response to my most recent posting on creating some variant of the Alaska Permanent Fund in Iraq, has made the following excellent points:

"When Alexander Hamilton nationalized the war debt, and issued new bonds from the new federal government, he created a vast class of bondholders who had a personal, financial stake in the survival and success of a strong central government with the power to collect taxes and pay off those bonds. He saw it every bit as much as a force for national unity as a it was a financial maneuuever.

"Similarly, the oil fund will create a very strong interest in an ongoing Iraqi government which can keep those checks coming, and, ingeniously, it will make this interest strongest in the Sunni areas that don't have oil, and will get no money at all if the current arrangement dissolves into, say, three regional governments. The Sunnis will suddenly have a stake in the new Iraqi state that they did not have. That should have strong political implications. Also, once this system is in place, everybody will have an interest in keeping it going so they continue to get their '"oil check,'" which won't happen if the current government goes away for some reason."