Oleagenous

Paul Krugman makes several good points about the failure of the Iraq war here. To do this, of course, he marshals skills that aren't exactly connected to the subject for which he was awarded his Ph.D., so I suppose the column will only be of interest to pierced-tongued protesters who hate America and so forth. But here are some key portions:

To understand what’s really happening in Iraq, follow the oil money, which already knows that the surge has failed....

il is pretty much the only thing Iraq has going for it. Two-thirds of Iraq’s G.D.P. and almost all its government revenue come from the oil sector. Without an agreed system for sharing oil revenues, there is no Iraq, just a collection of armed gangs fighting for control of resources.

Well, the legislation Mr. Bush promised never materialized, and on Wednesday attempts to arrive at a compromise oil law collapsed.

This was in some ways an insight the Bush administration got exactly right. Without some widely agreed upon method of distributing resources (a reconciliation, if you will) the people of Iraq would be left with little choice but to battle with each other over oil wealth. Oil is perhaps the key incentive warring factions have to stop fighting and take an interest in the stabilization of their country. That it wasn't enough says something important.

last week a Kurdish Web site announced that the provincial government had signed a production-sharing deal with the Hunt Oil Company of Dallas, and that seems to have been the last straw.

Now here’s the thing: Ray L. Hunt, the chief executive and president of Hunt Oil, is a close political ally of Mr. Bush. More than that, Mr. Hunt is a member of the President’s Foreign Intelligence Advisory Board, a key oversight body.

Some commentators have expressed surprise at the fact that a businessman with very close ties to the White House is undermining U.S. policy. But that isn’t all that surprising, given this administration’s history. Remember, Halliburton was still signing business deals with Iran years after Mr. Bush declared Iran a member of the “axis of evil.”

No, what’s interesting about this deal is the fact that Mr. Hunt, thanks to his policy position, is presumably as well-informed about the actual state of affairs in Iraq as anyone in the business world can be. By putting his money into a deal with the Kurds, despite Baghdad’s disapproval, he’s essentially betting that the Iraqi government — which hasn’t met a single one of the major benchmarks Mr. Bush laid out in January — won’t get its act together. Indeed, he’s effectively betting against the survival of Iraq as a nation in any meaningful sense of the term.

The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia. And I suspect that most people in the Bush administration — maybe even Mr. Bush himself — know this, too.

There's a bit of economics. And if that's the language you speak, then there's almost no other way to interpret what's happened.