Mark Thoma is one of the few commentators who has drawn attention to the non-sensical economic policy imposed on Iraq by the U.S. administration.
Common sense should have dictated that, after the destruction of its infrastructure and the dismantling of its (brutal but stable) government, Iraq didn't need to become a laboratory for neoliberal economics. It needed jobs and basics like electricity, water and sewage systems, and it needed them quickly.
And in response to a Washington Post article describing the failure of efforts to get Iraqi businesses to sell more to the U.S. market, Thoma writes:
Suppose Bush had engaged in a no holds barred attempt to get [American] firms to cooperate in this venture, used his bully pulpit at every opportunity to tell firms it's their patriotic duty and used all the usual slime machine tricks against those who don't cooperate. If he had gone all out and asked his business buddies to sacrifice for the cause (for once), told them that if young men can give their lives, can't you help as well, could that have made a difference? Or was it always hopeless? I've always thought we tried this much too late, so we'll never know for sure.
Why did we wait? The idea initially was that the free market would work its magic and somehow provide the jobs that were needed, so there was no need to protect former state-run enterprises -- those needed to be replaced in the name of efficiency. I wonder if adherence to that ideology rather than adopting a top-down planned approach that kept formerly state-run enterprises open and running (and opened more if needed) from the start would have changed the subsequent course of events. Forget efficiency, there was plenty of time ahead to worry about that, just put people to work doing something, anything. There was plenty that needed to be done.
Thoma is right of course. And it gives me pleasure to welcome him to the industrial policy sympathizers club...