A ray of reality hits the Captain's Quarters as the hard right wing blogger opines that abandoning "Democracy" - or such that passes for it in the minds of people like Bush and Cheney - is abandoning the long term strategy in Iraq.

No, you oaf, Democracy was never the outcome for this debacle, neo-conservatism was the supply side economics of the Bush executive, the nonsense spewed to get people to eat the low mileage recycled dog food of a policy that a few people wanted to drop on the country.

Iraq was always headed for de facto partition, and it has always been headed for a reboot of the dictator software. There never was any Democracy coming. The ponyhawks are beginning to realize this. Too late of course, they realize that it is a disaster. Thank Tony for saying the obvious far too late.

Let's begin from the beginning. One cannot look at the invasion of Iraq in isolation. Instead, it must be seen as part of an interlocking series of policies which include the massive revenue reductions passed by George W. Bush. Iraq was the means to float the economy even as we were busy digging our way to China in federal budget deficit. This is why we had to invade Iraq on the cheap - there wasn't any more money to do it right. The entire background chatter of going in all Powellian was never in the cards, because there wasn't the money for it. Not in 1991, and not today.

In fact, Iraq is the brittle point that the entire generational policy of borrow and squander economics has been tripping over again and again. In Bush Sr's day, we could not overthrow Saddam because we were too far in hoc from all the Reagan-Bush deficit spending. Today we couldn't spend the money to do nation building in Iraq, because we were busy bailing out everyone who lost a ton of money in the stock market.

The goal was to have big tax breaks for big Bush donors. But how to generate economic activity, if the money we were supposed to be using for a stimulus package was, instead, being sunk into Klimt paintings? The obvious answer was a war. But it had to be a war that would generate both jobs and oil. Greedy eyes turned towards Iraq, and saw a place that could be a lot like Texas - no water, lots of oil.

The neo-conservatives were rather late on to this particular bus, but they were, as the old expression goes, useful idiots. By prattling about Democracy they made it look as if this was an argument between unreconstructed pale-conservative imperialism, and a kinder gentler imperialism. In fact, there was no debate in the end, since Democracy was the one thing that we did not work very hard to create. Instead, it was about created that unfrettered free market that people like Milton Freidman were so in love with. For all the paeans to the dead Nobel Memorial Prize winner, I can only say that the people writing them haven't spent enough time looking that the results of his anti-government crusade closely enough.

Democracy in Iraq, like the idea that we could "cut taxes, raise defense spending and balance the budget" was always an absurdity. Particularly since it involved the imposition of a rather vanilla flavored version of parliamentary Democracy which has no roots in Iraq. It isn't that the people in Iraq - one can't say "Iraqis" because there is no such thing at this point - can't engage in self-government, but they can't do so with the crushing weight of keeping the Bushconomy afloat.

Since both parts - invasion and revenue reduction - had to not only happen, but happen on schedule - this placed very tight limits on what kind of invasion and occupation we could have. Specifically it had to be one which did not involve most of the international community, one that did not involve large numbers of troops, and one that had most of the money for reconstruction siphoned off.

In short, it looks a lot like Ken Lay and Tom DeLay's version of Texas. The place where things like this happen.

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That Iraq and deficits were, always, part of the same policy. The war was the shot of cocaine that was mixed with the heroine of revenue reductions, allowing a wage deflationary-resource inflationary policy. I've been saying this for sometime, but it bears repeating: this is one coherent policy. The Bush team acted like the people who did a hostile take over of a corporation, they had a plan, they put that plan in place with dictatorial obsession, and the remainder of their tenure has been to ride it out, begging the investors for enough time. The HP-Compaq merger is a small deal compared to Bush's plan to slash the price of money for the wealthy, and make up for it by dramatically raising the price the US charges the rest of the world for the Pax Americana.

It hasn't worked, but it is an insane solution to a very real problem. A strong government with oil doesn't buy enough outside goods to make up for the inflationary rates at which we buy oil. To have rapid global economic growth means convincing OPEC to pump oil at the top end of their productive abilities, and convince the world to buy marginal barrels of oil that are hard to produce and do not have high productive return. It also means having a high risk premium built in for speculation, because a world awash in dollars as investment demand - which is what people who have everything buy.

The paradox of the bushconomy is that with both the United States and OPEC - effectively the world's two central banks - have had the pedal to the floor. This has produced, globally, extremely fast nominal GDP growth. Most of this growth had been concentrated in three areas: resources, offshoring and finance to control the instabilities and risks of resources and offshoring. The big beneficiaries then have been neo-mercantilist states, and the people who invest in them. The result has been an equalization of prices in places such as China's coastal region - one pays world prices for an apartment in Shanghai, or a meal in QingDao.

By itself this process is not objectionable, as people who were outside of the mechanized economy before are being brought into the mechanized economy now. And the mechanized economy is where it is at for standard of living. It is important to remember that there have been four waves of technological transformation in global economies: the wind/water wave, where materials science, mathematicized engineering and experimentation and the inventions they allow transform the agrarian system allowing a much larger urban population, but without generally improving the standard of agrarian living itself. This wave appeared first in the Islamic Caliphates and China, and to a lesser extent in India, but it is the European world that was able to ruthless exploit this wave, in no small part because it was able to reach the second wave first.

That wave can be called "dry combustion". The coal age. The first coal age invention appears relatively early - namely, gunpowder, which is, afterall charcol, saltpetre and sulphur melded together using water and drying. The coal age creates a spectacular increase in standards of living, more over it creates a standing military advantage for the nations that master it sufficient to easily subjugate and occupy - at least relative to the ordinary mortality rates of that time - at reasonable costs in blood and treasure.

With this wave, the European continent conquered the globe, and developed a culture which was capable of dealing with the internal contradictions. However, it has two intrinsic weaknesses. The first was that its menial labor had to be present on the spot. This is because two of its stables - the horse for medium sized transport and the moving of coal - required menial labor in large quanitities, to shovel coal, manure and move the small objects associated with horse and coal economies. The presence of the factotum - the person who carries things - extended into the personal lives of that time. Once upon a time, every gentleman had "a man" who carried things for him.

This created two tensions. First, the "agony of modernization", as the people at the bottom of the industrial heap suffered greatly, and were deprived of the autonomy of country life. They worked harder, and got less. Second, they were, literally, a stone's throw away from the people who had more, and through out the period, they would often throw those stones. While the ability of an industrialized military to put down such revolts remained true through most of the 19th century, it was often a very near thing. Stone throwing revolutions rocked Europe in 1789, 1830, 1840, 1871 - and in smaller actions.

In short, the coal age, while it created almost fantastical amounts of wealth, also created almost fantastical amounts of poverty in the same locations as the wealth. This friction was the heat that produced the flame of revolutionary marxism, as well as a series of populist movements. On the other side, agrarian societies with agarian aristocracies resisted the change from an autonomous control of land, to a more unstable control of money. The American South was only one of the examples, equally telling was the resistence of Russia to modernization.

I go over this background again because our own wave of industrialization is based on digitization. Digitization is far more influential in the spread of information than the actual control of production. Computers make cars more efficient, but they do not make something that generically replaces the car, the way the car replaced the horse. They can substitute for the car, as the telephone could substitute for the horse or the train, but only in specific circumstances. Cybersex just isn't the same thing as being there in the flesh.

Looking at the previous waves of communication revolution, one finds an interesting pattern - here we are looking at writing, literacy, the printing press, the telegraph, the telephone/recording and broadcast introductions. Communication, by itself, offers two forces at riptides with each other. On one hand the enable the centralization of power to a degree impossible before. Book keeping, record keeping, written orders and bureaucracy allow the commands of a few to be magnified tremendously, and allow accountability for their being carried out. They also, however, allow the creation of counter order.

Consider if you will the early 1500's. The technologies that had been created allowed a small number of people to have access to spices and other imported goods, but generally the standard of production had not changed, and would not change until the mill and ethnoculture later on, and that increased production would lead to more people, not better standards of living. But it allowed both the creation of more powerful states - now called nation-states - and the creation of international movements, including, most importantly, Protestantism. At the same time that Pope Leo is expanding the papacy and bringing in vast sums of money to expand Rome, Martin Luther is creating a counter order that would overthrow the century long hegemony of Rome.

Our own period is much in the same position - digital communications is allowing both globalization, and the creation of social counter-order capable of overthrowing the very global elites that it makes possible. What digitization does not do is dramatically increase production above trendline.

Which returns us to Iraq. The communications revolution that digital technology hath wrought is parallelled by a material science revolution. The two often go hand in hand because communication allows artifacts to be moved farther, and research to be shared more broadly. This increases the rate at which new materials with new properties are put into play. These have combined to create the US military advantage in invasions. Tanks with better armor, infantry with better armor, better range on attacks means that, in a battle field setting, the American military can kill before it can be killed. The ability to pick apart enemies at range, made the invasion relatively easy. Those who we could not kill, we bribed.

However, in an occupation setting, while communications are important, production is as important. This is why the occupation has been doomed almost from the start - the ability to create a top heavy military and top heavy society are not particularly useful in an attempt to Democratize. Instead, the natural configuration of a top heavy society is, a dictator. The natural configuration for a system which allows smaller national units to interface with the outside world is to have centrifugal forces tear the polity apart.

Thus the natural direction after invasion was the natural direction of the post Soviet period in general, with the USSR, Yugoslavia and the Congo as primary examples of the collapse of a dictatorship over a poly-national country. Insert a small, as required by finance, invasion style army, and there is no force powerful enough to stop these two natural tendencies. Particularly since US policy during the Cold Peace of 1991-2003 was to encourage rebellion against Saddam.

What would have counter-acted this centrifugal force would have been the ability to raise standards of living dramatically. This is precisely what the US could not do. The Iraqis already had access to the mechanized and electrified economy, and most of the medical benefits of the 20th century. The digital economy is very good at getting people to buy entertainment. But American entertainment is not of much use in Iraq, and it certainly isn't going to hold a candle to the national sport of Iraq, sectarian violence.

Let me put this back together more slowly:

1. Iraq was part of a coherent policy of dramatically reducing taxes on the very wealthy, and using war to bring in cheap oil and create jobs that would cover lack of stimulus from the tax package. We can see how the war was the economic stimulus by the speed at which the US economy began its rebound after the invasion.

2. The communications and materials revolution allows for both greater centralization of power, and greater counter-centralization. It does not dramatically improve standards of living over the previous wave of industrialization.

3. Thus the introduction of a light invasion force, without the ability to dramatically improve living standards, unleashed the counter-centralizing tendencies, allowing for the creation of multiple insurgencies and their growth into a civil war.

4. Democracy, even in the Texified form that was proposed, was never an option. The magic free market fundamentalism - essentially "take government away and everything goes incredibly well" - never stood a chance. It is superstitous nonsense to begin with, and implemented by low quality intellects to compound the problem.

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Now for the ugly conclusion. Consider that right now there is almost jubliation in the press over the return of people from the Bush the eldar administration - a failed one term adminstration which bollixed Iraq and the break up of the USSR, failed to deal with the transition away from high octane Reagan deficits, and allowed the largest banking collapse since the Great Depression in the collapse of the S&L scandal. And the Bush the young make these people look good.

There is no money for a "heavy footprint" occupation. The best that can be done is scrounging up between 20K and 40K additional troops and throwing them at Baghdad to suppress the rebellion there temporarily, and allow the military pork to flow for a couple of more years before withdrawal and tax increases are put back into place. Basically, those who have looted the US Treasury want to make a clean get away with the money.

To do this they are going to have to accept the creation of a strong man in Iraq, and allow him to pump the oil, with no questions asked.

It is obvious, almost to the point of agony, to point out that the same people who cheered us into war are still our commentators and pundits, that the same lack of awareness of basic economic, political and military facts which led people to believe that there would be flowers and kisses in the occupation are still the dominant voices in our national media. It is also obvious to the point of agony that having rushed behind Bush fils' get rich quick scheme, they are now hoping that the Bush family fixer will be able to help them keep that which they have ill gotten.

And people wonder why the economy doesn't feel very good, and wages are going nowhere. Perhaps because the American elites are committed to making sure that all the wrong things have been tried before the right one is even considered.

What is also on display is the infantilization of elites. Bush and Blair both blame nefarious forces for the defeat:

Mr Blair said: "It has, but you see, what I say to people is, 'why is it difficult in Iraq?' It's not difficult because of some accident in planning, it's difficult because there's a deliberate strategy - al-Qaida with Sunni insurgents on one hand, Iranian-backed elements with Shia militias on the other - to create a situation in which the will of the majority for peace is displaced by the will of the minority for war."

Read that again. Realize how mind numbling stupid it is. Planning is supposed to take into account reasonable difficulties. To say that it is not a failure of planning to fail to take into account the inevitable creation of resistence to invasion, occupation and looting of a country, is beyond imbecilic. And it is imbeciles all the way down the depth chart - because each level was 200% behind the plan and would not allow any dissent or questions to get in the way of what was a monsterously stupid plan to do monsterously criminal things.

What exactly is Blair complaining about? That forces in Iraq are displacing the majority will for peace with the minority will for war? That is precisely what he and Bush did - used deception and deliberate planning to thwart the will of the majority for peace, and imposed the minority desire for war. In short, he is complaining that others are doing as he has done, and as Bush is continuing to do. The word hypocrisy only applies to people who are sufficiently self-aware to understand that they hold two incompatible views. Blair, clearly, does not have the level of self-awareness to be a hypocrite then, and falls somewhere farther down the evolutionary ladder than a dog, because even a dog knows when it is defecating in the wrong place.

Democracy is founded on the rule of law. It seems hard for people to grasp that an illegal invasion for unethical purposes justified by immoral behavior will not lead to the basic rule of law required for Democracy. Let me spell this out: gross failures to respect the law and the facts on the ground do not lead to Democracy, which is, above all, an attempt to apply the rule of law flexibly to the facts on the ground.