To make the appropriate comparison, we need to assign business roles to each of the players involved with Iraq:
1. The U.S. government would be the manufacturer.
2. The U.S. people would be the manufacturer's stockholders.
3. The Iraqi government would be the retailer.
4. The Iraqi people would be the consumers.
5. The Iraqi resistance forces would be the retailer's competition.
The manufacturer has set up the retailer in order to push the manufacturer's product (in the case of Iraq, that would be democracy). Since the retailer is basically a start-up operation, they rely on the manufacturer for seed capital (in the case of Iraq, that would be security/defense).
Unfortunately, the retailer is bleeding money due to the competition, in addition to the negative perception of it by the consumers, who dislike the relationship it has with the manufacturer.
Throw in increasingly unhappy stockholders, who are becoming frustrated by the manufacturer's losses in the endeavor.
“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” - Warren Buffett
Obviously, the manufacturer needs to try a different approach here. While the manufacturer could just pull up stakes and cut their losses, that would leave the market here to their competition, which would then leave them vulnerable in other markets.
The most obvious solution would be to expand the retailer's line of products, so the association with our manufacturer would be limited. Unfortunately, other manufacturers (i.e. the U.N., France, Germany, China, Russia, etc.) want no part of it. Even though there are other manufacturers selling goods at our retailer (i.e. England, Japan, Australia, etc.), those manufacturers are too small in comparison to our manufacturer.
At this point, most manufacturers would turn to a marketing campaign (i.e. propaganda) to improve their image with the consumers. Unfortunately, this particular market has limited advertising options. In addition, the amount of time an advertising campaign would take to be effective is far in excess of the stockholder's patience.
“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.” - Warren Buffett
How can our manufacturer make the stockholders see the need for patience? While our manufacturer has attempted this, it has only had limited success. It seems the stock analysts (i.e. the U.S. media) are firmly against the endeavor, urging stockholders to "sell". (The great irony here is that the stock analysts originally urged the stockholders to "buy" based on this endeavor.)
At this point, the retailer needs to cut its prices to make itself more attractive to consumers. Unfortunately, the manufacturer set up the retailer as a franchisee, but the manufacturer neglected to give itself much control over the franchisee, in an attempt to get the consumers to overlook the connections between the two entities.
"Your premium brand had better be delivering something special, or it's not going to get the business." - Warren Buffett
Our manufacturer knows the brand (i.e. democracy) works, but the consumers do not have that perception. In business, consumer perception is everything.
At some point, our manufacturer is going to have to take a leap of faith and quit funding the retailer, forcing the retailer to get its own business in order. As long as the retailer can count on our manufacturer for funding, it has no incentive for efficiency, or profit.
Here is where it gets tricky. What if the retailer decides to sell the competition's product? Then all our manufacturer's work and investment will be for naught. On the bright side, under the franchise agreement, our manufacturer could close down the retailer, but that would get ugly and not improve the consumer's perception of our product.
Iraq is the business equivalent of a catch-22. All our manufacturer can do is take the long-term approach, hoping the retailer can become profitable with the consumers before the patience of the stockholders runs out. If our manufacturer has a controlling percentage of its outstanding shares, it can afford the long-term view, even though their stock price (i.e. opinion polling) will take a hit. If our manufacturer does NOT have a controlling percentage, it will likely pull out and cut its losses, sacrificing consumer perception for stockholder favor.
In truth, our manufacturer is doing what it has to do. The only ones with an option are the stockholders. We will find out in November what they decide.
“The first rule is not to lose. The second rule is not to forget the first rule.” - Warren Buffett