Neoliberalism has undermined and continues to chisel away at remnants of liberalism in the United States and other western states. Key to this process, underway since the 1970s, is the erosion of the social wage. The social dislocation and precarity caused by this process created a crisis of legitimacy for neoliberalism, which it attempts to alleviate by doling out an affective wage to its citizens. This wage is premised on the reification of ontological difference between a civilized, humane, and rational west, and an uncivilized, irrational, and fundamentally illiberal Muslim other. This paper situates the 2003 war in Iraq within this context through an examination of public statements, personal narratives, and journalistic reports of key American policy makers and participants in the war. It argues that the invasion and occupation was premised on and worked to maintain anti-Muslim racism in order to scaffold legitimacy for a neoliberal state that is hollowed out of its previous liberal promises.