February 6, 2008: Al Qaeda went to war over Iraq, and lost. While the terrorists are trying to put a brave face on it, the defeat has hurt recruiting and fund raising. The number of foreign volunteers entering via Syria or Saudi Arabia are way down. Not just because borders are harder to cross, but because fewer young men are willing to cross them to die in Iraq. Less cash is coming in from wealthy Islamic conservatives. These fellows are very much put off by the widespread slaughter of civilians. Al Qaeda and its pro-Saddam Iraqi Sunni Arab allies never seem to learn. A recent suicide bombing of a pet market, used two mentally retarded women to wear the bombs, which were then detonated remotely. Apparently the two women did not understand what they were taking part in. This proved to be a PR disaster for al Qaeda. Using women for such attacks is considered, well, unmanly. Using the mentally ill is not seen as proper behavior for a Holy Warrior either.

Al Qaeda has largely been pushed out of the cities. This means it's harder to hide, and harder to raise money. Al Qaeda has financed itself partly via criminal activities (kidnapping, extortion, black market, theft, whatever). There are fewer such opportunities out in the countryside, and the bad guys are easier to find. Strangers stand out more easily. That brings smart bombs, which have been used more frequently, with devastating effect, since the terrorists fled to the countryside.

Many of the Iraqi al Qaeda operatives have been showing up in Pakistan. This has always been a refuge for Islamic terrorists. The Taliban in Afghanistan got all the attention in the 1990s because the Islamic radicals ran the entire country. But these fanatics never lost their control of the Pushtun tribal areas along the Pakistani-Afghan border. With Iraq lost, the war on terror is moving to the Pakistani side of this Pushtun terrorist sanctuary.

Meanwhile, Iraq faces continued unrest because of religious, political and ethnic disputes. The government has agreed to let former members of Saddam's Baath party take government jobs again. These people are mostly Sunni Arabs with administrative or technical skills. The country needs them, but getting these jobs back makes the Sunni Arabs believe that they are back on the road to eventually staging another coup and establishing themselves as the rightful rulers of the country. This is not lost on the Kurds and Shia Arabs who comprise over 80 percent of the population.

One thing the more skilled Sunni Arab administrators won't solve is the pervasive corruption. U.S. troops who deal with Iraqis a lot, complain about this culture of lying and stealing. The Iraqis take it for granted, but Americans never get used to it, and get frustrated trying to convince the Iraqis that the corruption is a major reason why nothing seems to work in Iraq. Meanwhile, Iraqis still believe the Americans have some magical powers that will make everything better (especially keeping the electricity on, and the getting the garbage picked up.) Saddam fostered a culture of dependence, which is a standard tool for dictators. It's proving difficult to get many Iraqis to step up and take care of themselves.

The major problem in Iraq continues to be the corruption and lack of civic spirit, rather than terrorism. Even the Iraqis recognize the need to crack down on the terrorists and criminals. But this eagerness for counter-terrorism ignores the fact that the corruption is one of the main reasons for the terrorism in the first place. Al Qaeda was founded to replace the corrupt leaders of the Middle East with honest rulers. That has not worked, as one can see in Iraq and Afghanistan, the two places where "Islamic Republics" were established. While many smart, knowledgeable (about how things work in the West) Iraqi leaders admit that reducing corruption would be a good thing, there is little enthusiasm for taking the lead in setting a good example. Thus the other bad guys, the corrupt politicians, clerics, businessmen and academics, continue to threaten Iraq, even as al Qaeda gets pounded into the dust.