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Mixed Signals

I'm sure everyone has heard about the Pentagon's decision to bar countries which opposed the war from reconstruction contracts in Iraq. Now, the Pentagon can award contracts however it wants, and 6 months ago I would have expected such a pronouncement. Now it seems very confusing, since all the signals the US has been sending this fall is that it wants international help in Iraq, even from Germany, even in small amounts, and even if only in the form of development aid and debt relief. The contracts could have been quietly directed to countries found suitable. Instead, Wolfowitz is flipping a very visible middle finger in the direction of Old Europe. It makes you wonder what Washington really wants.

It may even make you wonder if Washington itself knows what it wants, since Bush was on the phone the next day with France, Germany and Russia trying to talk debt relief. This makes a parliamentary cabinet look good in comparison, where ministers are politicians rather than policy experts. The politicians may be lacking in technical knowledge, but they do at least have basic communication and coordination skills that seem to be lacking in the 'experts' in Washington, even after 3 years in office.

Economically, such a boycott never makes sense. The boycotter, by accepting a second-best offer or worse, always suffers more than the boycottee (assuming that the agents are otherwise acting rationally, which is a huge leap of faith for government contracts, I admit). It's like me cutting off my nose to spite your face.

Besides, the amount of money involved is too small to influence future policy. Everything else being equal, how much business would Germany have obtained? Maybe tens of millions? In a 2 trillion dollar economy? That's not going to influence any politician, unless it's delivered in unmarked bills in black suitcase. But that's already been tried...

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