Indeed, we did supply intel and the Russians did supply arms but we also facilitated the sale of chemical and biological weapons to Iraq as well as knowingly allow third parties to sell cluster bombs to Iraq when there was an embargo going on.
And yes at the it made sence to those involved. I believe one former CIA analyst commented something to the effect that it was horrible mistake but, "we have got it right now". And the British at the time thought that it was good idea too. Nobody wanted Iran to win a war with Iraq because it would be too destabilizing to that part of the world
You're right, prescience does not exist. And hindsite is always 20-20. but I remember when Hamas won the election in Palestine a short while ago and Condaleeza expressed surprise at that result. It didn't a genius to predict that Palestinians, when given a chance to vote, would pick the party who fixed their roads, provided aid and whatever else, rather than the corrupt officials they currently had. No hind-site of prescience required then. Now, if the analysts couldn't see that, and that's what those people are paid to do, what else haven't they been able to predict?