Iraq oil deal

What’s particularly revealing is the cause of the breakdown [on 12 September of attempts arrive at a compromise Iraqi oil law]. Last month the provincial government in Kurdistan, defying the central government, passed its own oil law; last week a Kurdish Web site announced that the provincial government had signed a production-sharing deal with the Hunt Oil Company of Dallas, and that seems to have been the last straw.

Now here’s the thing: Ray L. Hunt, the chief executive and president of Hunt Oil, is a close political ally of Mr. Bush. More than that, Mr. Hunt is a member of the President’s Foreign Intelligence Advisory Board, a key oversight body.

...Mr. 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. 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 Mr. Bush laid out in January ­ won’t get its act together. Indeed, he’s effectively betting against the survival of Iraq as a nation in any meaningful sense of the term.

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

-- from Paul Krugman: A Surge, and Then a Stab (14 Sep).

I'm not quite convinced by this for a reason I can't put my finger on at present.