The Good, the Bad and the Ugly
Scott Taylor reports on his bad experiences with the security situation in Iraq, painting a pretty scary picture of the situation in Baghdad and points north.
But just to underline how ambiguous the situation is, note that even some wounded Iraqi war veterans are insisting that the US military and the Coalition Provisional Authority are accomplishing an enormous amount of good in Iraq that goes unreported. I am sure that is true, and to tell you the truth I am puzzled at what a bad job the US and the UK are doing in getting out the word. My own perception is that the CPA is tightly controlling the information that gets out to the US, for political reasons, and that procedure has the side effect of throwing a blanket over any real achievements. Another problem is the fixation on reciting statistics about numbers of schools painted, etc. Iraqis reply that the schools were functioning until just before the war last year, so getting them back up and running is not really a net gain (I’m sure the renovated ones are nicer, though there may still be problems with school supplies, and at least some of the renovation jobs have been shoddy). The point is that the US could not possibly have invaded Iraq to paint its schools. What else is going on? I follow this story obsessively, and I couldn’t tell you.
A lot of CPA people think that when, in mid-March, they can start spending some of the $18 billion the Congress voted for reconstruction, that will turn the situation around altogether. There will be a massive government-led jobs program at that point, they believe, and lots of construction that will spur investment, buying, and further employment. I have to say that it is ironic that Jerry Bremer went into Iraq determined to impose laissez faire on it, and now his great hope is to get the job done with a New Deal government jobs program instead.
This positive scenario is not impossible. But they should be careful about accidentally setting off an inflationary spiral (too much money chasing too few goods). And, as someone who has been observing the Middle East closely for over thirty years, I just have to remind everyone that the Islamic Revolution in Iran of 1978-79 occurred in the midst of a massive influx of petroleum money into that country. Iran’s annual income from oil went from a few hundred million in 1970 to like $30 or $40 billion in 1978. And yet Iranians grew angry with the shah and threw him out, despite the increased prosperity. Money isn’t everything, and, more importantly, it matters how exactly money circulates and to whom.