Austerity + Syria + Bags of Cash for Karzai

There is a lot going on in today's newspaper. Krugman has a solid column, "The Story of Our Time," summing up where we are at with austerity orthodoxy:

O.K., I’ve just given you a story, but why should you believe it? There are, after all, people who insist that the real problem is on the economy’s supply side: that workers lack the skills they need, or that unemployment insurance has destroyed the incentive to work, or that the looming menace of universal health care is preventing hiring, or whatever. How do we know that they’re wrong? 

Well, I could go on at length on this topic, but just look at the predictions the two sides in this debate have made. People like me predicted right from the start that large budget deficits would have little effect on interest rates, that large-scale “money printing” by the Fed (not a good description of actual Fed policy, but never mind) wouldn’t be inflationary, that austerity policies would lead to terrible economic downturns. The other side jeered, insisting that interest rates would skyrocket and that austerity would actually lead to economic expansion. Ask bond traders, or the suffering populations of Spain, Portugal and so on, how it actually turned out. 

Is the story really that simple, and would it really be that easy to end the scourge of unemployment? Yes — but powerful people don’t want to believe it. Some of them have a visceral sense that suffering is good, that we must pay a price for past sins (even if the sinners then and the sufferers now are very different groups of people). Some of them see the crisis as an opportunity to dismantle the social safety net. And just about everyone in the policy elite takes cues from a wealthy minority that isn’t actually feeling much pain. 

What has happened now, however, is that the drive for austerity has lost its intellectual fig leaf, and stands exposed as the expression of prejudice, opportunism and class interest it always was. And maybe, just maybe, that sudden exposure will give us a chance to start doing something about the depression we’re in.

Republicans were on the Sunday morning talk shows calling for direct intervention in the Syrian civil war. Lindsey Graham wants the U.S. to arm the rebels and establish a no-fly zone. The problem there, based on a reading of yesterday's story by Ben Hubbard, "Islamist Rebels Create Dilemma on Syria Policy," is that we would be aiding and abetting al-Qaeda-affiliated groups like the Al-Nusra Front, a terrorist organization according to U.S. declaration. The gist of Hubbard's piece is that the only rebel fighting forces left in Syria are Islamist.

The must-read story today though, and one that illuminates the kind of kleptocracy to look forward to in a post-Assad Syria, is Matthew Rosenberg's frontpage story, "With Bags of Cash, C.I.A. Seeks Influence in Afghanistan," detailing the CIA-supplied payoffs that have been the heart and soul of the Karzai government from the very beginning. There are many incredible quotes in this piece, such as

“The biggest source of corruption in Afghanistan,” one American official said, “was the United States.”

Handing out cash has been standard procedure for the C.I.A. in Afghanistan since the start of the war. During the 2001 invasion, agency cash bought the services of numerous warlords, including Muhammad Qasim Fahim, the current first vice president. 

“We paid them to overthrow the Taliban,” the American official said.

At the end of 2002 and the beginning of 2003 Karzai successfully lobbied the U.S. to have the CIA payments routed through his National Security Council. At this point Iranians were also dropping off bags of cash at the presidential palace:

By late 2002, Mr. Karzai and his aides were pressing for the payments to be routed through the president’s office, allowing him to buy the warlords’ loyalty, a former adviser to Mr. Karzai said. 

Then, in December 2002, Iranians showed up at the palace in a sport utility vehicle packed with cash, the former adviser said. 

The C.I.A. began dropping off cash at the palace the following month, and the sums grew from there, Afghan officials said. 

Payments ordinarily range from hundreds of thousands to millions of dollars, the officials said, though none could provide exact figures. The money is used to cover a slew of off-the-books expenses, like paying off lawmakers or underwriting delicate diplomatic trips or informal negotiations. 

Much of it also still goes to keeping old warlords in line. One is Abdul Rashid Dostum, an ethnic Uzbek whose militia served as a C.I.A. proxy force in 2001. He receives nearly $100,000 a month from the palace, two Afghan officials said. Other officials said the amount was significantly lower.

Karzai's Afghanistan is one big racket. Home many Republicans do you think will be on the Sunday morning talk shows clamoring for a policy shift? Zero. Right. What does this say about how we govern? War is good business.