A Deliberate Debacle
By PAUL KRUGMAN

James Baker sets off to negotiate Iraqi debt forgiveness with our estranged allies. And at that very moment the deputy secretary of defense releases a "Determination and Findings" on reconstruction contracts that not only excludes those allies from bidding, but does so with highly offensive language. What's going on?

Maybe I'm giving Paul Wolfowitz too much credit, but I don't think this was mere incompetence. I think the administration's hard–liners are deliberately sabotaging reconciliation.

Surely this wasn't just about reserving contracts for administration cronies. Yes, Halliburton is profiteering in Iraq – will apologists finally concede the point, now that a Pentagon audit finds overcharging? And reports suggest a scandal in Bechtel's vaunted school–repair program.

But I've always found claims that profiteering was the motive for the Iraq war – as opposed to a fringe benefit – as implausible as claims that the war was about fighting terrorism. There are deeper motives here.

Mr. Wolfowitz's official rationale for the contract policy is astonishingly cynical: "Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts" – future efforts? – and "should encourage the continued cooperation of coalition members." Translation: we can bribe other nations to send troops.

But I doubt whether even Mr. Wolfowitz believes that. The last year, from the failure to get U.N. approval for the war to the retreat over the steel tariff, has been one long lesson in the limits of U.S. economic leverage. Mr. Wolfowitz knows as well as the rest of us that allies who could really provide useful help won't be swayed by a few lucrative contracts.

If the contracts don't provide useful leverage, however, why torpedo a potential reconciliation between America and its allies? Perhaps because Mr. Wolfowitz's faction doesn't want such a reconciliation.