ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Monday, May 14, 2007

More Evidence that L. Paul Bremer Screwed the Pooch on Iraq

This article in the Washington Post provides further evidence that L. Paul Bremer totally f-ed up Iraq the day his boots hit the ground. Previous posts where Bremer's idiocy is discuss are here, here, and here.

Defense Skirts State in Reviving Iraqi Industry
By Rajiv Chandrasekaran
Washington Post Staff Writer
Monday, May 14, 2007; A01

Paul Brinkley, a deputy undersecretary of defense, has been called a Stalinist by U.S. diplomats in Iraq. One has accused him of helping insurgents build better bombs. The State Department has even taken the unusual step of enlisting the CIA to dispute the validity of Brinkley's work.

His transgression? To begin reopening dozens of government-owned factories in Iraq.

Brinkley and his colleagues at the Pentagon believe that rehabilitating shuttered, state-run enterprises could reduce violence by employing tens of thousands of Iraqis. Officials at State counter that the initiative is antithetical to free-market reforms the United States should promote in Iraq.

The bureaucratic knife fight over the best way to revive Iraq's moribund economy illustrates how the two principal players in the reconstruction of Iraq -- the departments of Defense and State -- remain at odds over basic economic and political measures. The bickering has hamstrung initiatives to promote stability four years after Saddam Hussein's fall.

Under pressure from Congress to demonstrate progress on the ground, the military often favors immediate solutions aimed at quelling violence. That has prompted objections from some at State who question the long-term consequences of that expeditious approach.
[...]
Disagreements among Americans about how to deal with Iraq's government-run businesses began shortly after U.S. forces arrived in Baghdad in April 2003. The first U.S. adviser to Iraq's Ministry of Industry and Minerals, retired ambassador Timothy Carney, wanted to reopen many of the country's 192 state-owned factories, which, according to the World Bank, employed more than 500,000 people before the war.

But the U.S. occupation administrator, L. Paul Bremer, deemed that to be bad economic policy. Many factories had produced substandard goods before the war and had since been looted. Fixing them would cost hundreds of millions of dollars. Bremer wanted private investors to buy the factories, even as workers continued to be paid to stave off hardship.

But the hoped-for private investors never arrived. Factories remained shuttered, and the Iraqi government whittled down the payroll subsidies. Some former workers found new jobs. Others, U.S. military officials believe, joined the insurgency.

Sorry, but free market forces are not going to just jump-start post-war; I don't recall us sitting back in post-war Germany and Japan and hoping that people would invest in the economy and start up their own business. Did some enterprising German start up a brick piling operation?

No, free markets require stability and the rule of law and Iraq had neither. What Iraq required in 2003 was to re-open the factories, employ the Iraqi men so they're too wiped out to spend their evenings making IEDs, and to provide security.

Once security was established, then you can introduce the rule of law and move to a free market economy. Had Bremer re-opened the factories and provided security in the early days of post-war Iraq, we would just now be seeing the free market forces emerge.

Oh, and did I mention that anyone who wears combat boots with a suit is clearly insane and should be shot.

Your Co-Conspirator,
ARC: St Wendeler

Comments (2)
Jason said...

That kind of thinking gives a bad name to free market proponents everywhere. Free markets aren't free, they take a lot of time and work. To think they're going to magically appear in Iraq shortly after a major war is probably the same kind of thinking that alienates most of the world's population to the phrase "free markets" and "capitalism."

Protectionists and the usual anti-capitalists now have another prime example of a "market failure" to point to when in fact this is a classic government failure.

Monterey John said...

Yeh, the boots are worse than brown shoes with a blue suit :)