Politics & Policy

Krugman’s Fantasy

The New York Times columnist gets the CPA wrong.

When I was in business school several years ago, my macroeconomics professor assigned one of Paul Krugman’s books for us to read; it was a collection of essays about President George W. Bush’s economic plan. Dutifully, my classmates and I read the book, researched Krugman’s position, and spent time analyzing his arguments. I was disappointed that in his June 29 article, “Who Lost Iraq?,” Krugman didn’t apply the same standards of honest research and analysis to me and my father, Michael Ledeen, that I had applied to him.

#ad#Criticizing what he claims are the failures of the Coalition Provisional Authority in Iraq (CPA), Krugman wrote:

If the occupiers often seemed oblivious to reality, one reason was that many jobs at the C.P.A. 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.”

Instead of trying to find out who my colleagues and I really are and what we did in Iraq, Krugman created a fantasy world in which unqualified people got great jobs because they were children of celebrated or powerful Washington insiders. (I won’t dwell on the fact that Krugman also quoted my father out of context; those interested can verify this for themselves.) Times readers are entitled to the real story, however. People were hired based on professional experience and abilities, not cronyism. The Pentagon had a website up for many months to recruit volunteers for both Iraq and Afghanistan. In my case, I have an MBA, spent a year in post-Communist Eastern Europe at a newly privatized publishing house, and have worked at an economic consulting firm and a venture-capital group.

No doubt, some at the CPA volunteered because of their political beliefs, but I don’t know of anyone who was hired because of them. Contrary to Krugman’s fantasy, several of my colleagues were staunchly antiwar and had voted for Gore, yet held positions of considerable responsibility within the provisional government. They believed that, regardless of the past decisions that got us to that point, they could make a contribution to helping the Iraqi people. I admire each and every one of them and am proud to have served with them.

I question Mr. Krugman’s implied premise that these were highly desirable jobs for which one needed political connections. He should try telling that to my friend and colleague Scott Erwin, who was ambushed several weeks ago returning from teaching a pro-democracy program he created at Baghdad University. Scott nearly died after having been shot multiple times. He is currently recovering from numerous surgeries and undergoing physical therapy.

The kind of political “reward” Krugman describes doesn’t put you in a flak jacket and a Kevlar helmet and expose you to roadside bombs or rocket attacks. Nor can I imagine any parent celebrating the arrival of his child in a war zone.

At no point did those of us in the trenches ever assume direct responsibility for running the Iraqi economy. That was the role of our senior leaders. One senior advisor was a high-ranking official from the Australian treasury. In January, the former deputy associate director for international affairs in the office of management and budget replaced him. He was in turn replaced by an official of the U.S. Treasury Department, who held the position until the transfer of sovereignty. These individuals spent decades of their lives in civil service, dating back through several presidential administrations. One can hardly attribute their being hired to political cronyism.

I was part of a team trying to repair an unbelievably broken system. This job was extraordinarily difficult, resulting in an average workday of 18 hours. Additionally, we moved in convoys to and from the Ministry of Finance in central Baghdad an average of six days a week. Although there were danger involved in crossing the city, if we didn’t go to the ministry, money didn’t get moved, budgets weren’t funded, Iraqis didn’t get paid, and all hell broke loose.

Mr. Krugman appears oblivious to the difficulties associated with rebuilding a formerly totalitarian state. Having worked in a rigid “command” bureaucracy–in which decisions were dictated from above, and deviation from the established ways of doing things was often severely punished–many Iraqis needed to learn to make decisions rather than waiting for orders. And the Baathist state had employed some unique methods: For example, some of my colleagues came across a payroll sheet from the ministry of education that detailed how one teacher was being paid 30 times what any other teacher received. Why? That teacher had been spying on all the others.

One of the greatest challenges we faced was the reluctance of Iraqis to disburse funds. Under the old regime, government employees were rewarded for withholding funds and punished–sometimes even executed–for spending money. This structure allowed regime loyalists to live in giant mansions surrounded by man-made lakes, while the average Iraqi suffered through summers without running water. These attitudes had to be immediately and drastically corrected.

Ask the Iraqis who got paid on time whether they were satisfied with our work. Ask the security-sector employees who received their hazardous-duty allowance (a bonus on top of their base salaries that resulted from the difficult security situation) about our competence. These are the opinions that matter. That we were able to pay the right people and on time–and that as a result Iraqi government workers did not demonstrate or riot during our tenure–meant we helped keep American marines and soldiers from being placed in additional danger. That is certainly something to be proud of.

The system is now up and running. Security personnel are paid, the budget is transparent, and Iraq is headed toward a modern banking structure.

Readers should also know that despite the difficult conditions, my colleagues frequently took the time to visit orphanages around Baghdad. They accompanied soldiers bringing candies, toys, and clothes–donated by generous Americans, including those so-called insiders scorned by Krugman–to needy children. I hope and believe some of these children will rise to prominence in a free Iraq, and will remember that Americans voluntarily came to lend a helping hand. This is no small matter in a country and region in which repression, mass murder, and abuse remain commonplace.

Krugman believes he is in a position to judge my work and that of my CPA colleagues though he knows nothing about us or our efforts. One of the great things about living in a free society is that people can say whatever they want–offensive or ignorant though they may be–without fear of violent reprisal. We get to listen to it all and then arrive at our own opinions. How lucky we are. May the people of Iraq experience this same freedom.

Simone Ledeen is a former Coalition Provisional Authority adviser to the Iraqi Ministry of Finance in Baghdad.

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