Bush's speech

I spent last weekend interviewing game theorists, so while reading the transcript of President Bush's speech last night (I always find it easier on the digestive system to skip the televised address) my attention was drawn to the time inconsistency problem that lies at the heart of the "new" approach he announced.

The players of this game are the US and the Iraqi Shiite government (plus its Iranian backers). The strategies available to the US are "escalate" or "withdraw". The strategies for the Shiites (let's call them) are "accommodation" (with Sunnis) or "confrontation" (with Sunnis). We are stuck in an "escalate"-"confrontation" equilibrium, whereas we'd like to be in a "withdraw"-"accommodate" equilibrium. Bush says we will play "escalate" now, but if the Shiites start playing "accommodate" soon we'll rethink that strategy (i.e., think about playing "withdraw" instead). That's known as a trigger strategy: enforce the cooperating equilibrium by threatening punishment for noncooperation. The problem is, the threat is "time inconsistent": the Shiities know that if they continue to play "confrontation", when push comes to shove the US will not follow through on its threat. They know this because in the same speech in which he announced the trigger strategy, Bush made it clear that "victory" in Iraq was absolutely vital to US interests:

"Failure in Iraq would be a disaster for the United States... Radical Islamic extremists would grow... in strength and gain new recruits. They would be in a better position to topple moderate governments, create chaos in the region and use oil revenues to fund their ambitions. Iran would be emboldened in its pursuit of nuclear weapons. Our enemies would have a safe haven from which to plan and launch attacks on the American people. On Sept. 11, 2001, we saw what a refuge for extremists on the other side of the world could bring to the streets of our own cities. For the safety of our people, America must succeed in Iraq."

If you believe all that, then what are you going to do next year at this time when Iraq still finds itself on the verge of civil war? You're going to escalate again, not withdraw. And if the Shiites know that the US is going to remain in Iraq no matter what, what is their incentive to accommodate the Sunnis?

For escalation to succeed, it must be coupled with a commitment to withdraw, one way or the other, at a specified time. Making this commitment credible (time consistent) is tricky. If we had a president who did not believe in the statement in italics above, credibility might be easier to establish. Since we don't have such a president, we need to find a commitment device. One such device would be if the Democratic Congress were to authorize funding for the war through the end of 2007 and announce that beginning in 2008 funds would only be available for operations related to withdraw of troops. Now the time consistency issue falls on the heads of Congress, but Congress' threat to withdraw is much more credible than that of the Bush administration's. If the Bush administration were to announce that it acquiesced to Congress' plan, that would strengthen the credibility of the threat.

There's another game going on simultaneously, of course - between Congress and the Bush Administration. If Congress approves Bush's escalation, then what is Bush's incentive to pursue a diplomatic solution? But if Congress can credibly threaten to remove its support for our military involvement, the Bush Administration may have more incentive to pursue serious negotiations with Iran and Syria to find a regional solution to this mess.

So there you have it, again, my solution for the Iraq mess. Escalate now, promise to withdraw by the end of 2007, start serious negotiations with Iran, Syria, and the rest of the Middle East to settle the Iraqi problem without a large US presence.