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The Bush administration will never win any prizes for it's understanding of how a successful economy works. This is bad news for Iraq, which is dependent on the economic thinking of those put in charge of Iraq by the Bush people. For any economy there can't be anything more important than good money. Steve Hanke explains how confused American monetary policy has been in Iraq, and what might be done to get things back on track -- if anyone in the government ever comes to realize how important such things are to the development of Iraq as a nation.

It's worth recalling how badly the Allies bungled in Germany in the years immediately after WWII -- until Ludwig Erhard outsmarted the Allies and removed a destructive scheme of price controls imposed by the economic illiterates in the occupying command. Magically, seemingly overnight, the German economy came back to life. Read short versions of the story here and here.