PERSPECTIVE ON IRAQ : Bart Simpson of Gulf Acts Up Again : Saddam is a monster of our own making; we have to decide whether our interests are strong enough to go it alone.

Once again the Iraqi chicken has come home to roost on an American President’s lap. There is a reason for this. Saddam Hussein is more than a neighborhood bully. He is our Bart Simpson: the clever little fellow who periodically embarrasses and outsmarts us, but whom we cannot totally disavow because he is partly our creation and useful to us.

Ronald Reagan fed weapons and intelligence information to Saddam during the Iran-Iraq War to prevent Tehran from winning. He did this even though Saddam had started the war with an aggression no less blatant than that against Kuwait in 1990. The difference was that, given the choice, we preferred the atheistic to the religious butcher, the general to the ayatollah.

The original problem was, of course, of our own making. In the 1970s, Richard Nixon and Henry Kissinger poured weapons into Iran to build it up as the linchpin of our interestsin the Middle East. The shah was to be our deputy sheriff or our “regional surrogate.”

This is why they looked the other way when the shah, needing to pay for his expensive new military toys, set off a dizzying price spiral that drove up the price of oil from a few dollars a barrel to more than $40 and set off a round of inflation throughout the industrialized world. It was worth it, they thought, if the shah would keep the lid on a volatile area.

It seems never to have occurred to them that the shah might be overthrown and replaced by someone less obliging. When that happened, Washington shifted its affections from Tehran to Baghdad.

Several years later, Saddam repaid us by invading Kuwait. This was not the scenario we had anticipated. He was supposed to direct his armies east, toward the fist-shaking Iranians, not south, toward the Kuwaitis, who just wanted to have fun.

Why did Saddam do it? Because he thought that the Americans would let him. Indeed, the signals he got from the U.S. ambassador in Baghdad, and even from George Bush, led him to believe that we would wink if he slapped down the greedy Kuwaitis and worked out a compromise. However, when he grabbed for the whole thing, he called into question the U.S. guarantee to neighboring Saudi Arabia and had to be stopped.

Pushing his army back across the border cost billions of dollars--most of which we persuaded others to pay. Yet something funny happened. Rather than destroying Saddam’s army so that it could not come back to Kuwait another day, or putting him in a maximum security cell, we deliberately let them both escape.

This strategy--mapped out by Bush, together with Defense Secretary Dick Cheney, Secretary of State James A. Baker III and Joint Chiefs Chairman Colin Powell--was ostensibly designed to prevent the creation of a “power vacuum” in the area. They wanted to give Saddam a bloody nose so that he would leave Kuwait, but keep him strong enough to “balance off” the menacing mullahs in Tehran.

Saddam Hussein knows that he can manipulate U.S. officials because they think that they need him. His army is intact not because we were softhearted, but because we wanted it to be used for other purposes. But Saddam has his own agenda: getting the economic sanctions lifted.

Kuwait is America’s Achilles’ heel. All Saddam has to do is to shift his troops around and the United States sends an army across the world to protect the Kuwaitis. Why? Because we fear that if Saddam grabs Kuwait and scares the Saudis he will try to raise the price of oil. It is unlikely that he would be able to do so, given abundant alternate sources. Further, the price of oil is now cheaper, inflation-adjusted, than it was 20 years ago when the first price hikes began. One can also ask how “cheap” Kuwaiti and Saudi oil is if it requires billions of dollars to protect weak and indolent regimes.

In Kuwait, U.S. policy-makers face a real dilemma. They are trying to protect a weak colony against a strong neighbor that they want to discipline but not seriously weaken. Saddam is bad, but the ayatollahs are worse. Logic would dictate that the United States ally itself with one of the major powers of the region to lessen the burden. Instead, we have taken on both in order to keep the oil kingdoms afloat. The result is that we are being diddled by Saddam Hussein, who can siphon off billions of our dollars every time he shifts his troops around.

There are three ways out of this self-imposed conundrum. One, if the oil-guzzling states of the industrialized world care about “cheap” Kuwaiti oil, let them pay the United States to do the dirty work, as they did in the Gulf War. Two, if our partner-competitors won’t pay their share, and if we really believe that Iranian-style fundamentalism is a menace to the world, we should work out a deal with Saddam over Kuwait and let him “police” the Persian Gulf for us. Three, if that smells too bad, we could balance off power against power: work out an accommodation with Tehran so that Saddam will have to worry too much about his eastern frontier to play games in the south.

Bill Clinton inherited a mess from his predecessors and he had little alternative, in the short run, than to make the response he did. But now he will have to go beyond a bankrupt policy of superpower policing of tinderboxes and disasters, whether in Kuwait, Korea or Haiti, and make a cool assessment of the interests of a nation that is very strong, but not rich enough to run a global fire brigade.