Krugman's Back -- Who's Sordid Now?

Krugman returns after a vacation to plug his book of essays.

t's official: the administration that once scorned nation-building now says that it's engaged in a modern version of the Marshall Plan. But Iraq isn't postwar Europe, and George W. Bush definitely isn't Harry Truman. Indeed, while Truman led this country in what Churchill called the "most unsordid act in history," the stories about Iraqi reconstruction keep getting more sordid. And the sordidness isn't, as some would have you believe, a minor blemish on an otherwise noble enterprise.

Cronyism is an important factor in our Iraqi debacle. It's not just that reconstruction is much more expensive than it should be. The really important thing is that cronyism is warping policy: by treating contracts as prizes to be handed to their friends, administration officials are delaying Iraq's recovery, with potentially catastrophic consequences.

It's rarely mentioned nowadays, but at the time of the Marshall Plan, Americans were very concerned about profiteering in the name of patriotism. To get Congressional approval, Truman had to provide assurances that the plan would not become a boondoggle. Funds were administered by an agency independent of the White House, and Marshall promised that priorities would be determined by Europeans, not Americans.

Fortunately, Truman's assurances were credible. Although he is now honored for his postwar leadership, Truman initially rose to prominence as a fierce crusader against war profiteering, which he considered treason.

Iraq's reconstruction, by contrast, remains firmly under White House control. And this is an administration of, by and for crony capitalists; to match this White House's blithe lack of concern about conflicts of interest, you have to go back to the Harding administration.

There's a moral here: optimists who expect the administration to get its Iraq policy on track are kidding themselves. Think about it: the cost of the occupation is exploding, and military experts warn that our army is dangerously overcommitted. Yet officials are still allowing Iraqi reconstruction to languish, and the disaffection of the Iraqi public to grow, while they steer choice contracts to their friends. What makes you think they will ever change their ways?