How Iraq is Like Health Care or: Publius and Mark Lynch Beat Me to the Moral Hazard Punch
When I was talking to my brother earlier this week about Iraq, I described the central problem with our strategy as very similar to a big problem afflicting the health-care system. Namely that because people are not exposed to the costs of their care, they get too much of it. The consequences of being overtreated are very large, and are often ignored because, hey, medical treatment is good, right?
Much the same thing is happening in Iraq. Because al-Maliki knows that the US is essentially a backstop for him, he can do things like lackadaisically work on integrating Anbar Awakening fighters into the Iraqi Army, all the while being able to instantly snatch up some 10,000 Dawa and Badr militia members into the armed forces. Only with a credible threat of withdrawal, can we actually expose al-Malikia to the cost of his boneheaded actions (like say, staking the credibility of your government on its ability to defeat a well equipped, nationalist popular militia and then failing). Sounds like great material for an extensive blog post about Iraq, right? Looks like publius (and Mark Lynch) beat me to it, even though they use a different, but functionally equivalent, metaphor: the bail out of Bear Sterns. Anyway, read publius’ post, it’s quite good and makes the best type of argument for withdrawal out there. Here’s the juicy bit:
This explains why the Kagans’ “Iraq 4-Ever” strategy is actually worse than withdrawal. The Bush/Kagan strategy is simply to keep the maximum number of troops in Iraq as long as possible in the hopes a pony will appear. To maintain political support for the Pony Strategy, they need to peddle worse-case scenarios and paint pictures of genocide and all-out civil war.
I’ll fully concede that such events are possible – anyone who doesn’t is being dishonest. But my point is that our occupation makes them more likely, for the reasons explained above. Specifically, the longer and more indefinitely we stay, the greater the moral hazard we produce. As long as we stay indefinitely, parties will act more recklessly than they otherwise would. These actions, in turn, will have profound, unpredictable, and irreversible consequences.
As last week shows, however, there is actually some decent chance that withdrawal would force the parties to internalize the risks of their actions. When the risks are internalized, it’s more likely that solutions will appear. It’s not a great strategy, but it’s better than the alternatives.
