The latest market travails and inability to stem job losses reminded me that one of the things that was so frustrating for me in the chaotic aftermath of the Iraq invasion was that it didn't have to be that way. A carefully thought out occupation and integration plan would have gone a long way towards producing the outcome that Mr. Bush had envisioned. The problem was that Secretary of Defense Rumsfeld saw the Iraq War as an opportunity to promote his agenda of transforming a long moribound military into a 21st Century fighting force. Transforming the military was and is a laudable goal. Focusing resources on light, rapidly deploying forces with a heavy reliance on emerging technologies was the logical next step after the end of the Cold War. Unfortunately, Mr. Rumsfeld's rigid adherence to transformative strategies left us with too few boots on the ground and too many ad-hoc decisions on the fly. We had attempted to get inside the enemy's decision cycle and instead had found them inside of ours and without the means to defeat them. It wasn't until we dispensed with "fighting the war with the Army you have" and replaced it with fighting with the Army you need to win (i.e. the surge) that the fortunes of the Iraqi people turned around. One might argue that this (long overdue) flexibility was the most transformational measure of all.
So how is the bungled Iraq war like our faltering economy? Simply, it is the most important task before us but agenda driven politicians are using it as an opportunity to transform government institutions in ways that might be laudable but are hardly stimulative. It is possible, even likely in a Keynesian world, that transformative measures can be stimulative. However, when they are used, at best, to re-create obsolete institutions or, at worst, to simply further a political agenda, without regard for job creation or economic stimulus they serve only to distract from those vital goals. The Democrats in Congress have larded up the Stimulation Package with so many of these "progressive" ideas that have been sitting on their desks for 20 years that the bill cannot possibly fulfill it's mandate: saving our economy. Ms. Pelosi, meet Mr. Rumsfeld. You have both hijacked worthy causes to promote your pet causes.