I've always read it as at least a little bit a comment on the Iraq war, but what's it's deal? It's the only anime I can think of that climaxes with a military coup, and its cool that mustang wants to put people on trial for war crimes, but then he gets in power and doesn't do it.
It's also just got a whole plotline about racism, but it feels slightly off? Like minorities are okay if they save your life.
I did not understand that distinction. Most of the high level positions are taken up by high ranking state alchemists correct?
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Exactly, and State Alchemists are not even that well regarded by the regular troops either. The overall perception seems to be that it's an easy way to get an early leg up in the military career. I don't remember who said it, but someone said wrt to Ed "this snot-faced child has the rank of a Major?" Other named majors in the series include Hughes and Miles (ishvalan guy), who have had several years of experience and are shown to be pretty competent at their jobs. So, the thought that a nobody who didn't even go through bootcamp can skip to an officer's rank by being good at drawing circles must not be great for morale.
Wrt to Armstrong, he got court martialed because he deserted during the Ishvalan genocide, so it's very likely he got demoted to captain or something, and had to re-climb the ranks to Major.