He suggests we should do an FDR style plan (he even sites FDR!): Give every Iraqi who wants one a good job, with benefits and pay, rebuilding their own country. He suggests, I believe, to let the local traditional powerstructure (shieks, etc) have a major role in determining what projects need to be undertook, and what priority, etc.

We've been doing pretty much this exact thing in Iraq for almost three years. Provincial Reconstruction Teams and many other projects. Doesn't get a lot of news coverage.

There have been problems with this kind of thing. It requires walking a fine line between coalition and local control. Too far on one side, and foreign contractors are getting all the goodies. Too far on the other side, and corrupt local officials walk off with the cash. Both have been happening, but many such projects are working, too.

Where I think they should have gone sooner is a mechanism for distributing oil profits directly to the people (see also: Alaska). They're starting something like this now, but it would have been easier earlier on.