Krugman: Bush backer banks on Iraq's failure
Nick Juliano
Published: Friday September 14, 2007

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A Texas oil company whose CEO is a longtime confidant of President Bush with access to the most closely held US intelligence has entered into an agreement to explore for oil in Iraq's semi-autonomous Kurdistan region.

The agreement shows that Dallas-based Hunt Oil Co. and its chief executive Ray L. Hunt are "effectively betting against the survival of Iraq as a nation," argues New York Times columnist Paul Krugman.

Hunt raised about $100,000 for Bush during the president's 2000 campaign, and he serves on the President's Foreign Intelligence Advisory Board, which gives him access to some of the most exclusive data collected by US spy agencies.

"What's interesting about this deal is the fact that 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," Krugman observers. "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 Bush laid out in January -- won't get it's act together."

Condemnation of the deal between Hunt Oil and the Kurdish provisional government was swiftly condemned by Iraq's oil minister Hussain al Shahristani, who declared the deal illegal days after it was announced, despite the Kurds' entreaties to share revenues.

Since Bush announced his surge strategy in January, Iraq has failed to achieve any of the benchmarks for political progress toward reconciliation -- a fact that was conveniently omitted from the president's prime-time address Thursday. Indeed, just days after the Hunt-Kurdistan agreement came reports that negotiations over an oil-revenue sharing law -- seen as the primary key to allowing Iraq to reconcile -- have apparently collapsed.

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

Oil is Iraq's primary resource, accounting for two-thirds of its GDP and nearly all of the government's revenue. The Bush-backer-backed fractionalization of the country's oil revenue gives little hope the country can recover from the quagmire and civil war it finds itself in following the US invasion and five-year occupation.

"Oil is perhaps the key incentive warring factions have to stop fighting and take an interest in the stabilization of their country," says blogger Brian Beutler, a former Raw Story reporter. "That it wasn't enough says something important."