For me, this plays out the themes that have dminated this administration: competence v. ideology.
Students familiar with the Bush Administration and our occupation of Iraq will recall (a) that the Administration began with a deep distrust of the State Department career staff, and determined to install "ideologically compatible" staff in Iraq, and (b) the administration firmly believed that creating a neo-con economic state in the early stages of Iraq reconstruction was critical. Indeed, the plan was for Bremmer to complete the major decisions on economic and social matters that would cement an economy devoid of state control or state influence before installation of an Iraqi government. Privatization of industry was viewed as a top priority, both to infuse capital into the bankrupt Iraq and to ensure that a class fo staekholder dedicated to privatization and maintaining a complete barrier to state industry and state regulation took root quickly.
Only one problem, the privatization of Iraq failed to produce the desired economic growth. In fact, unable to effectively privatize, while at the same time prohibitted by the Americans from returning to a state-run economy, the Iraqi economy has stagnated.
Flash forward to the present. On the military side, the Bush Administration has reached a point of desperation. So much so that it has actively recruited on the basis of competence rather than ideology and has sought to remove the political limitations it had previously imposed on the military. And, as part of this desperation, has now given the military much greater freedom to take action to achieve stability. There is a recognition that counter-insurgency must include an integrated economic development and social stability program; that the military cannot be limited to the tactics of the moment and setting up security checkpoints.
So Paul Brinkley, a deputy undersecretary of defense, has decided that the Administration's goals of privatization and creating a model neo-con economy are subordinate to getting people working now and rebuilding economic stability. So back come the state-run factories, the government subsidies, and all the bad old state things the Administration's ideologically pure and competence free State Department enclave in Iraq had spent four years eliminating. Unsurprpsingly, they are pissed and are trying to preserve their neo-con state free economy -- even if the damned economy doesn't actually work! But, God DamnIt, it's an ideologically pure, state free economy! Without a Republican Congress, the Administration has no hope of creating such a state free economy in the U.S., which of course makes the neo-cons in Iraq even more determined to hold on to what they have.
It will be interesting to see if the Administration finally favors competence over ideology. A year ago, the administration would simply hae removed Brinkley. Now, it needs results, and can be fairly confident it won't get them by following its ideology over competence playbook. It can also be pretty sure that if it overrules its current set of Defense Departament and military appointments, that it will be just about impossible to get highly competent people to replace them. Still, this Administration continues to show a remarkable resistance to learning from experience. We'll see.