Thu, Jul 01, 2004 - Page 9 News List

`A toxic mix of ideological obsession and greedy cronyism'

By Paul Krugman  /  NY TIMES NEWS SERVICE , NEW YORK

The formal occupation of Iraq came to an ignominious end on Monday 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 the US 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 greedy cronyism that lie behind that dismal performance.

The insurgency took root during the occupation's first few months, when the Coalition Provisional Authority (CPA) seemed oddly disengaged from the problems of postwar anarchy. But what was agency chief Paul Bremer focused on? According to a Washington Post reporter who shared a flight with him in June 2003, "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, Bremer listed among his major accomplishment reduced tax rates, reduced tariffs and the liberalization of foreign investment laws. 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 impoverished Iraq the gift of supply-side economics.

If the occupiers seemed oblivious to reality, one reason was that many jobs at Bremer's agency 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 Bremer's economic focus, you might at least have expected his top aide for private-sector development to be an expert on privatization or 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, New Jersey businessman Michael Fleischer, took over. Yes, he's White House spokesman Ari Fleischer's brother. 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? On Monday 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 UN resolution giving the CPA the right to spend that oil money 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.

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