Fight of the Living Dead

Japan's "lost decade" of the 1990s gave the world "zombie banks." A zombie bank is, in effect, bankrupt. It's made loans to companies that aren't going to be able to pay them back, and the total value of those bad loans exceeds its equity. Normally, a bank in that position has gone bust. Sometimes, when the government doesn't want to let the bank fail but also doesn't want to pay to bail it out, it simply agrees to pretend that the bank is still sound. A bank in that situation faces unusual incentives. The smart strategy is to just double down on bad bets and hope for the best. Writing about the European Central Bank, Berkeley economist Brad DeLong recently extended the concept to political elites with zombie reputations who double-down on past bad calls because to implement smart policy now would require embarrassing admissions of error.

It's a cute idea with broad applicability. For example, Brookings Institution fellow and noted hawk Michael O'Hanlon published an op-ed Monday critiquing the joint agreement between the American and Iraqi governments to end the U.S. troop deployment there. He wants to extend our presence there, and argues that an additional "$30-40 billion" in Iraq War spending would be "a small price to solidify the gains of what has already been a trillion dollar investment in one of the Middle East's most pivotal states."

The logic here is classic underwater thinking: Given that we've already wasted so much money in Iraq, why not waste even more? This kind of thinking, however, has already done far too much harm to our Iraq policy over the years. Like a zombie bank, we've been doubling down on the war for six or seven years already.

Imagine what would have happened if American troops, after pouring into Iraq and defeating Saddam Hussein's conventional forces, had discovered a stockpile of missiles and an advanced nuclear-weapons program. Bush, Cheney, Rumsfeld, etc., would have claimed vindication over their doubters; the many Democratic Party politicians who backed the war would have proclaimed victory; and any post-conflict problems would have had relatively little political salience. It's possible the Bush administration would have only kept a very light force in the area and just tried to sweep the whole thing under the rug as it did in Afghanistan.

Instead, of course, the alleged weapons of mass destruction program was proved not to have existed. That left the administration with the choice between admitting a terrifying error or doubling down on the idea of gunpoint democracy promotion. The sad reality is that nobody knew (or knows) how to conjure up a stable democracy under those circumstances, but the underwater reputations of the key policy-makers militated in favor of further involvement. And so a zombie war continued, even to the point of the Bush administration pushing the January 2007 "surge." The fact that after the surge was launched, violence in Iraq got worse and then later got better has been loudly proclaimed as an important victory by the Iraq War supporters even though they can't point to any concrete way this advanced the interests of any Americans.

One of the best things about the election of Barack Obama is that he, personally, is untainted by the wave of misjudgment that struck Washington in 2002 and 2003. Thus he is able to correctly see the American troop presence in Iraq for what it is -- a costly and pointless undertaking that came into being for bad reasons and was perpetuated for worse ones. Consequently, even as his administration has pursued a fairly hawkish policy in general, he's consistently -- and rightly -- sought to extricate us on decent terms as quickly as possible from the situation. A moment like today, where the Iraqi government is fairly stable and is telling us it doesn't want further "help" from the American military, is a great moment to finish the withdrawal. The only problem with it is that it won't grant hawks the luster of glory they crave -- the very concern that's driven our zombie war for far too long already.

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