Saturday, August 13, 2005

The future of Iraq, the future of America
Yesterday the price of a barrell of oil spiked up to $67, which is nearly seven times what it was trading for six years ago. Though the markets are nervous about Iran's nuclear program and the instability in Iraq, there is nothing obviously driving up the price -- no boycott, no massive disruption, just the slow realization that the oil is running out and that everyone wants their share of what's left. Chevron has been running print advertisements acknowledging the finite nature of oil resources, ads which sound a lot like they were written by this guy. Here' s a snippet Chevron's ad that has been running in The Economist:

At the same time, many of the world’s oil and gas fields are maturing. And new energy discoveries are mainly occurring in places where resources are difficult to extract, physically, economically and even politically. When growing demand meets tighter supplies, the result is more competition for the same resources.

If you think this is all a red herring, remember that British Petroleum is now just BP and no longer stands for British Petroleum, much the way KFC no longer stands for Kentucky Fried Chicken. Everyone is starting to get nervous about the future of global oil supplies, including the oil companies. So far the American economy has been able to handle the price of oil doubling in the past year alone, but can economic disruption be far behind if the price continues to climb? As James Kunstler notes, if oil and natural gas prices continue to soar, this winter could be an abject nightmare for people trying to keep their houses warm in the Northeast and Midwest. Not that anyone in the Bush administration cares about ordinary people who struggle from paycheck to paycheck, any more than it cares about the GIs and contractors who are still dying at an alarming rate half a world away. Remember that the architects of domestic policy in Washington wake up every morning wondering how to make life harder for working people. They had a new idea the other day, which is to violate the right of an individual's freedom of assembly so that corporations can avoid paying their workers a decent wage.

Meanwhile, no one knows what's going to happen with the Iraqi constitution. The Sunni delegates appear to have stupidly drawn a line in the sand against federalism, which is the deal-breaker for the Kurds. The line for a long time has been that the Kurds would never break away with a hostile Turkey to their north threatening to invade, but does anyone believe that the Turks would roll into Iraqi Kurdistan with 100,000 troops a few hundred clicks away? One thing of which you can be sure is this -- the Kurds will never accept re-integration into a centralized and Arabo-centric Iraqi state, and they have a sophisticated and well-trained 50,000-man militia to back up their claims. The Turks may smack the PKK around with impunity, but they would have a bit more difficulty dispatching Kurdish peshmerga in Iraq. Even if negotiators manage to hammer out a compromise, or push through a federal constitution in the face of Sunni opposition, the Sunni provinces may veto the Constitution and send the whole thing back to the drawing board. And while the insurgency is doomed in the long run, it is still not showing any signs of ending. Those hoping for a quick and happy ending to this drama will continue to be disappointed. Those hoping for an end to the drain on the U.S. treasury are dreaming.

But even as the bulk of America's degraded military is stuck in Iraq, the Bush Administration continues to make ominous threats about the use of force against Iran. This is like the scene in the Holy Grail where the knight has had all of his limbs chopped off and continues to threaten his opponent with violence. What are we going to do, bleed on Iran? We could send in an air strike against the nuclear facilities, but no one is even sure that we know where they all are, and anyway, do we really want to bomb a uranium enrichment plant? Would we really be willing to use tactical nuclear weapons? Furthermore, the Iranian military, unlike the Iraqi "army" before the invasion, is not completely demolished. They have missile batteries and functioning airplanes, and they would put up a fight. And if you think the denizens of Muslim nations are upset with us now, just wait until we launch another unprovoked attack on another sovereign Islamic-majority nation.

So this is what is going to happen -- Iran is going to get their a-bomb, and there will be sanctions, and hemming and hawing, and much hand-wringing by the international community, but no amount of incentives and trade deals is going to convince the Iranians that they should give it up, since the fate of their neighbor is an enduring testament to what great powers can to do countries without the bomb. So instead of toppling the Iranian dictatorship, the Iraq War will ultimately have brought to power a hard-line government which successfully developed nuclear weapons. Well done! Yet another policy triumph for the crack team of experts that brought us the worst terrorist attack in U.S. history, a recession, the worst loss of U.S. military personnel since Vietnam, the nuclearization of North Korea, $2.65-a-gallon oil, and total estrangement from the international community.

I, for one, positively cannot wait to see what happens next. It's bound to be positive.


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