Remember how Iraq was going to be a liberal democracy with a free market after the U.S. invasion? Well, the largest employer in that country by far is the Iraqi government, which employed 31 percent of the workforce in 2006 and is expected to employ 35 percent by the end of this year. Meanwhile, the private sector is in trouble, hampered by inflation resulting from a huge wage increase for government employees (some seeing their salaries double)–foreseen consequences that were, not surprisingly, ignored in favor of immediate electoral success. (Ain’t democracy grand?)Even the New York Times, which doesn’t seem to recognize the problem of government control of the money supply in the U.S. or other western countries, explains the problem of inflation in Iraq quite well:

For a short time, the raises were a windfall for a handful of privately owned businesses — like the gold shops and car dealerships that cater to the doctors, lawyers, engineers and teachers of the public sector.

“This is the best season I’ve ever had,” said Muhammed Aziz, 36, sitting behind the counter of his bustling gold shop in the Kadhimiya neighborhood.

But even government employees were wary. “When our salary was increased, it came along with rising prices in the market,” Tamathaer Hameed, 27, a professor of Arabic who was browsing for rings in Mr. Aziz’s gold shop, said of the last round of wage hikes. “It’s an economic circle.”

Is this what all you conservatives who supported Bush’s war had in mind?

One more thing: The Times also notes, almost as an aside, that much of the success of the troop surge is owed to the buying off of Sunnis with promises of government jobs and that those jobs have not materialized. How long until the Sunnis realize they’ve been hoodwinked and go back to fighting their occupiers?