This is ridiculous. Because some diplomats in Iraq see reopening of factories as "Stalinist," they oppose and are actively impeding steps that might help to reduce the horrific violence in Iraq. I am going to count to ten while you read this:
Defense Skirts State in Reviving Iraqi Industry, by Rajiv Chandrasekaran, Washington Post: 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. ...
"There has been a surprising degree of venom and hostility" between the departments, said a senior U.S. government official involved in Iraq policy.
The dispute between State and Brinkley has become so pitched that he has effectively stopped working with the U.S. Embassy and is setting up his office elsewhere in Baghdad's fortified Green Zone. ...
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.
In the early months of the occupation, the State Department wanted to resuscitate the state-owned enterprises; the Pentagon's civilian leadership, dominated by neoconservatives, rejected the idea of supporting government-run industry. By last year, the positions had been reversed. Military commanders began arguing to restart the factories... Because State was now running the show in the Green Zone, its opposition carried the day.
Then Brinkley arrived in Baghdad. ... Brinkley's initial mission last summer was to simplify Defense Department contracting to give Iraqi firms a better chance of providing goods and services to the U.S. military. While he was in Iraq , ...[he visited] a bus and truck factory south of Baghdad that had a modern assembly line, talented managers and skilled employees. All but 75 of 10,000 employees had been laid off because the Iraqi government ... was no longer buying the vehicles. Many furloughed workers had joined the insurgency, the factory manager told Brinkley.
"It was clear that the approach we as the United States government had taken toward state-owned enterprises was a mistake," Brinkley said. "We were pretty direct and vocal about it."
The U.S. Agency for International Development estimates that nearly half of Iraqis are unemployed or work fewer than 15 hours a week, but those figures do not include hundreds of thousands who once worked for state-owned enterprises and continue to collect about 40 percent of their original salaries. If they are counted, Brinkley believes, the true figure for unemployed and underemployed Iraqis may approach 70 percent. ...
After touring more than 50 facilities, Brinkley's team deemed about 20 worthy of repair, including factories that made car parts, textiles, leather goods, fertilizer and hand-woven rugs.
But when Brinkley ... revealed his plans to officials at the embassy in Baghdad last fall, they bristled. ... Brinkley said embassy staffers called him a Stalinist bent on restoring a command economy. Another told him that if he rehabilitated factories, Iraqis "are going to use those machines to make more complicated weapons to kill our troops with." ...
Embassy officials warned Brinkley that if he opened factories in Sunni areas first, he risked angering Shiites. Moreover, the electricity needed by production lines would mean less for residences. Would people really be happier, embassy officials asked, if they had jobs but less power at home?
The embassy's in-house think tank, the Joint Strategic Planning and Assessment Office, also joined the fray, issuing an internal memorandum declaring that "trying to give these enterprises a new lease on life will make Iraqis poorer without reducing the violence." The memo, written by an economist from the Rand Corp. working on contract for the embassy, added that "resuscitating state-owned enterprises is a bad idea."
State asked the CIA to assess the link between employment and attacks on U.S. forces in Iraq, two U.S. government officials said. The CIA's subsequent regression analysis found no statistically significant tie between the two phenomena, the officials said. The CIA also told State that the vast majority of insurgents questioned by U.S. interrogators in Iraq claimed to be employed, one official said.
Brinkley ... countered with an analysis from the military's Joint Warfare Analysis Center, which asserted that a slight increase in job satisfaction among Iraqis led to as much as a 30 percent decline in attacks on coalition forces...
Embassy opposition was not Brinkley's only problem. His plan to have Iraq's Finance Ministry pay for repairs at the factories ran counter to Bremer's edict, issued in 2004, that prevents the Iraqi Central Bank from funding state-owned enterprises. Brinkley arranged for two Iraqi banks to provide $5.6 million in loans to six factories, and he plans to announce a second round of loans totaling about $20 million.
The White House was enthused enough about Brinkley's initiative to ask Congress earlier this year for $100 million to underwrite his efforts. Congressional appropriators scaled that back to $50 million, but Brinkley believes even the lower amount would still put about 100,000 Iraqis back to work. ...
Despite persistent violence and the slow pace of reconciliation among Iraqi leaders, Brinkley said, he continues to believe the United States can help stabilize Iraq. ... As his profile has risen in Washington, his critics in Baghdad have become less strident. But, he added, he still does not "have people from the embassy jumping onboard to help."
There are people dying by the scores daily and some stupid ideological battle between government agencies is getting in the way of attempts to do something that might, just might, help by putting Iraqis back to work. Slap whatever feel-good, right-wing radio appropriate name you want on it, "Operation Seeds of Capitalism," whatever, put the propaganda people on it, but this idiocy needs to stop. Right now Iraq needs stability and if this can help, then set free-market principles aside and do what's needed to help get Iraqis working again.
Where's the leadership? Somebody - the president comes to mind - needs to step in here, quit wasting our time, our money, and most of all quit wasting lives, and make a call one way or the other. Stop the stupid bickering among government agencies, get rid of anyone who won't cooperate or isn't capable, and get everyone united and moving in a common direction. That's what leaders do.
How many Iraqis could have been hired with the money wasted by the CIA to run some stupid regression with data that can't possibly be reliable to produce results that nobody is going to believe anyway, or with the money used to hire the Rand economists to write a memo so that one government agency can fight with another. We can't even measure employment here reliably, so how did the do it in a war zone with few formal labor markets that nobody travels to? Phone surveys?
How about this. Instead of the president going on vacation all those times since the war started, or instead of going on any more, how about working a day or two more, getting briefed on this problem and making a call so that everyone can work toward a common goal. That's not too much to ask when people are giving their lives in this effort. But if that's too much for the president to handle, then at least give someone else the authority to make a final call. But to continue bickering over these ideological issues for years is inexcusable. And it wasn't all ideological, some was financial. "Fixing them would cost hundreds of millions of dollars." Yeah, but how much did it cost not to fix them?
Open the factories and support the farms as needed. It if takes government subsidies, there are worse things in the world to worry about. That won't provide enough employment, so hire the rest of the unemployed to do something, anything, let half dig holes, then hire the other half to fill them back up, do public works, anything at all, but get the Iraqis employed to the extent possible. It may not work to stop the violence, it probably won't work at this late date, but it's still worth a try.
If that's too Keynesian or Stalinist for the president, if he insists on free-market principles, then he should get everyone united behind that. Yesterday would not have been too late. But I hope he remembers this. The free market approach may work in the long-run, and if the country ever gets stabilized, I hope we can move Iraq steadily in that direction over time. But reminiscent of Keynes' admonition "In the long-run we're all dead," we can't wait any longer. We need to do something now.
I don't mean for any of this to be construed as a reason for staying in Iraq any longer than absolutely necessary, we need to leave as soon as we possibly can and our obligation to help the Iraqis is independent of that decision. But no matter what the majority of us want, it looks like we're going to be in Iraq for as long as the president remains in office and doing what we can to help the Iraqis to rebuild and reopen farms and factories to provide employment and produce essential goods is one way to make the best of time we have left.