Is Saudi Arabia really the enemy? � Personally, I think Victor Davis Hanson is one of the most astute humans writing about America's place in the world and this piece in Opinion Journal easily illustrates the depths of his perception. While it�s a bit long, it does make sentient point regarding why America should give the Saudis the old heave ho. We were always connected to that corrupt regime because of one thing: oil. As long as they pumped it reliably, we stood by their side, despite the fact that they are a repressive theocracy, distinguished from the Taliban only by better manners and nicer suits. His explanation of why Saudi Arabia is on its way to the dustbin of history, is spot on, even it�s a trifle premature. He writes:
Russia is now rapidly becoming the world's most important producer, and the demise of the Soviet bloc has meant that the entire world is now under active exploration. Whereas most other nations are no longer overly worried about the politics of oil exportation, and are positively indifferent to the old Marxist rhetoric about Western capitalist exploitation, the petroleum policy of Saudi Arabia--which has threatened or implemented at least three embargoes in past decades--remains both entirely self-interested and never far from the radical interests in the Middle East.
The sheiks, however, are being led by events that are rapidly careering out of their control. If Saudi Arabia pumps less oil, there will be shocks and disruptions, but eager new producing countries will soon fill the void; if the Saudis export more, then the price may well collapse altogether. And because new, non-petroleum-based technologies are on the horizon, both to produce electricity and to power transportation, not to mention the increased efficiency promised in the near future by hybrid engines, most exporting countries now worry about getting what oil they have out of the ground rather than watch it sit untapped and decline in value in the latter half of the century.
In sum, a Saudi Arabia with a sizable debt and no real non-petroleum economy needs consumers as much as, or more than, buyers need Middle Eastern producers. Saudi Arabia is ever so slowly losing its vaunted place as the world's price-fixer, and its past history and present machinations reveal it to be no more or less a friend of the United States than any other Islamic exporting country. If the Saudis declared another embargo, it might fare about as well as Saddam Hussein's recent ban of exports to the United States--and cause a surge in pumping and exploration from Russia and South America.
Now, one of the few oil traders I know told me that Russia is not really in a position to fully replace the Saudis. He also stated that western oil companies have been screwed more than once by ex-communists who grew up under Leonid Breznev and who are now standing next to the spigot. That stated, I do agree with Larry Kudlow, who famously predicted that we might be living in a time where we see OPEC�s power, and hence the Saudi�s, decline to the point of irrelevance.
Is Iraq toast? � My sources will neither confirm nor deny that something is up. However, this mention by Rod Dreher says that Eastern Orthodox Church leaders have been summoned to the White House for an undisclosed reason. He reports that Bush the Elder did similarly just before Desert Storm. I suppose the only confirmation we�ll get that something is really up is if we hear about a spike in the number of pizzas delivered by Dominos to the Pentagon.
10 Jul 02 dpny
