New York Times June 29, 2004
By PAUL KRUGMAN
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The formal occupation of Iraq came to an ignominious end
yesterday with a furtive ceremony, held two days early to
foil insurgent attacks, and a swift airborne exit for the
chief administrator. In reality, the occupation will
continue under another name, most likely until a hostile
Iraqi populace demands that we leave. But it's already worth
asking why things went so wrong.
The Iraq venture may have been doomed from the start -
but we'll never know for sure because the Bush
administration made such a mess of the occupation. Future
historians will view it as a case study of how not to run a
country.
Up to a point, the numbers in the Brookings Institution's
invaluable Iraq Index tell the tale. Figures on the
electricity supply and oil production show a pattern of
fitful recovery and frequent reversals; figures on insurgent
attacks and civilian casualties show a security situation
that got progressively worse, not better; public opinion
polls show an occupation that squandered the initial good
will.
What the figures don't describe is the toxic mix of
ideological obsession and cronyism that lie behind
that dismal performance.
The insurgency took root during the occupation's first
few months, when the Coalition Provisional Authority seemed
oddly disengaged from the problems of postwar anarchy. But
what was Paul Bremer III, the head of the C.P.A., focused
on? According to a Washington Post reporter who shared a
flight with him last June, "Bremer discussed the need to
privatize government-run factories with such fervor that his
voice cut through the din of the cargo hold."
Plans for privatization were eventually put on hold. But
as he prepared to leave Iraq, Mr.
Bremer listed reduced tax rates,
reduced tariffs and the liberalization of foreign-investment
laws as among his major accomplishments. Insurgents are
blowing up pipelines and police stations, geysers of sewage
are erupting from the streets, and the electricity is off
most of the time - but we've given Iraq the gift of
supply-side economics.
If the occupiers often seemed oblivious to reality, one
reason was that many jobs at the C.P.A. went to
people whose qualifications seemed to
lie mainly in their personal and
political connections - people like Simone Ledeen,
whose father, Michael Ledeen, a prominent
neoconservative, told a forum that
"the level of casualties is secondary" because "we are a
warlike people" and "we love war."
Still, given Mr. Bremer's economic focus, you might at
least have expected his top aide for private-sector
development to be an expert on privatization and
liberalization in such countries as Russia or
Argentina.
But the job initially went to Thomas Foley, a Connecticut
businessman and Republican fund-raiser with no obviously
relevant expertise. In March, Michael Fleischer, a New
Jersey businessman, took over. Yes, he's Ari Fleischer's
brother. Mr. Fleischer told The Chicago Tribune that part of
his job was educating Iraqi businessmen: "The only paradigm
they know is cronyism. We are teaching them that there is an
alternative system with built-in checks and built-in
review."
Checks and review? Yesterday a leading British charity,
Christian Aid, released a scathing report, "Fueling
Suspicion," on the use of Iraqi oil revenue. It points out
that the May 2003 U.N. resolution giving the C.P.A. the
right to spend that revenue required the creation of an
international oversight board, which would appoint an
auditor to ensure that the funds were spent to benefit the
Iraqi people.
Instead, the U.S. stalled, and the auditor didn't begin
work until April 2004. Even then, according to an
interim report, it faced "resistance from C.P.A. staff." And
now, with the audit still unpublished, the C.P.A. has been
dissolved.
Defenders of the administration will no doubt say that
Christian Aid and other critics have no proof that the
unaccounted-for billions were ill spent. But think of it
this way: given the Arab world's suspicion that we came to
steal Iraq's oil, the occupation authorities had every
incentive to expedite an independent audit that would clear
Halliburton and other U.S. corporations of charges that they
were profiteering at Iraq's expense. Unless, that is, the
charges are true.
Let's say the obvious. By making Iraq a playground for
right-wing economic theorists, an employment agency for
friends and family, and a source of lucrative contracts for
corporate donors, the administration did terrorist
recruiters a very big favor.
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