Staying economically involved with the Mid East

[blueback]

So, the current NewsWeek has a debate about energy policy.
It got me questioning something that seems to be taken for granted. For a long time the US has been sending money to people in the mid east that we disagree with, and we are kind of dependent on them for the oil they send us in return. This is generally considered a bad situation and everyone agrees that we should try to be more energy independent so that we aren't supporting people we disagree with.

However, if we need their oil they are just as dependent on us for our money.

So, if you look at it in reverse, they have been sending oil to people (us) that they disagree with and they probably consider that a bad situation.

Despite this fact we still do business with each other. And that is what I think is important. Would the world in general, or us in particular, really be better off if we had absolutely nothing to do with each other? If we aren't dependent on them then they aren't dependent on us. The deal goes both ways. Since we need each other we have a powerful incentive to not actually ruin each other. Sure, we posture, and every now and then someone goes too far, but the incentive structure helps to pull things back into stability rather than out of stability.

It's like what we have with China. The US and China will not go to war with each other as long as they are economically dependent on each other.

[eternaltriangle]

That is an interesting idea - I have personally contemplated myself what the impact of the collapse of oil as a source of power would be on the Middle East.

Firstly, I don't think the "they attack us here, because we are engaged over there" line is correct. The majority of governments in the middle east are reasonably pro-US, or at least neutral. Egypt has been since the 70's, Jordan is, Saudi Arabia has been continuously, Iraq is now, Afghanistan is now, and both Turkey and Pakistan have generally been pro-US. Syria and Iran are the only strongly anti-American states (and Iran's anti-American government came to power when Jimmy Carter stopped backing the pro-American shah of Iran).

The United States is disliked by a fair proportion of citizens, but ultimately it is governments that have power, and make foreign policy decisions according to their self-interest (which is always to keep selling oil). A very minute proportion of those citizens become terrorists. I think that so long as Israel exists, and so long as America is the dominant country in the world culturally (they cannot but experience America's cultural artifacts, which offends the sensibilities of the more conservative) there will exist some people that harbour deeply anti-American attitudes.

Foreign policy disengagement could lead to the rise of more anti-American governments. Certainly in at least Egypt, Iraq and Afghanistan, there are fundamentalist and anti-American opposition parties. What the past decade should have demonstrated is that international terrorism without a state sponsor is small potatoes. 9/11 and Bali were big, but everything since then has really failed to move the casualty-meter - and have been directed at military targets (and often their own countrymen).

The end of American and middle eastern mutual dependence upon each other would dampen the argument pro-American regimes have for their existence. "Yes, America sucks, but we need their money." Almost certainly there would be some regime change of the negative sort (there could actually be more democracy - Iran is more democratic today than it was under the Shah, which is why I do not support spreading democracy as a policy objective).

In practice, the switch away from fossil fuels will be a gradual one. This leaves a long window of time where there is still a lot of money around to fund terrorism, and an increasing economic imperative to hate America. It would probably not be sold in such terms - death to Israel or American troops too close to Mecca or whatever are probable rallying cries but I think it would be foolish to mistake the argument they give to schmucks to strap dynamite to their chests for the actual raison d'etre of terrorism...

Terrorism is a strategy aimed at accomplishing something when conventional means are not available. American "imperialism" takes place by accident, every time some random person buys "You Got Mail" at a bazaar in Kandahar. That the Middle east is not in control of its own destiny is reinforced by the continued existence of Israel. Moreover, fundamentalists find themselves disenfranchised by their own domestic governments (which the US supports). Eliminate that support, and you will eliminate terrorism - but only because you have allowed fundamentalists to seize control of most of the states in the Middle East. While in the long-run those states face bankruptcy, they will still be flush with oil money in the medium turn. Their governments will have every incentive to wage a diversionary war with the US, in order to convince their domestic populace that declining economic fortunes are the result of the perfidious machinations of Israel and America.

In the coming US-China confrontation (not necessarily a war), which will probably happen when oil is still an important source of fuel, particularly for less developed China, many of those governments will choose China over the US as they align themselves. So the US probably does have to end its dependence on fossil fuels, but it should not disengage entirely from the Middle East.

[RBM]

@ blueback

Here's a Google search (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.).

Can you specify the article ?

Are you aware of the 2009 EIA conference this week, where the agenda was about energy policy ?

[blueback]

This is the one by Gingrich
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this is the one by Zakaria
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I can't think of anything I've ever read that expressed the opinion I expressed in the OP. That's why I wanted to get it on here and see what you guys thought about it. A couple times I've heard other people say that China won't cause too much trouble because of their economic involvement with us, but nothing about the hypothetical benefit to remaining economically involved with the mid east.

It just seems like the principle should be consistent. I mean, how many stories feature two enemies who have to put aside their differences because they each have something the other needs? It's a relatively common plot device, which means it must have some basis in reality. It would seem to set up the proper incentive.

[RBM]

That is an interesting idea - I have personally contemplated myself what the impact of the collapse of oil as a source of power would be on the Middle East.

“My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel.”
—Saudi saying





RBM added to this post, 20 minutes and 24 seconds later...

This is the one by Gingrich
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this is the one by Zakaria
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I can't think of anything I've ever read that expressed the opinion I expressed in the OP. That's why I wanted to get it on here and see what you guys thought about it. A couple times I've heard other people say that China won't cause too much trouble because of their economic involvement with us, but nothing about the hypothetical benefit to remaining economically involved with the mid east.

It just seems like the principle should be consistent. I mean, how many stories feature two enemies who have to put aside their differences because they each have something the other needs? It's a relatively common plot device, which means it must have some basis in reality. It would seem to set up the proper incentive.

@ blueback

The cliche' is if you're trading with someone, you're not at war with that entity.

It is true in a simplistic way. It is also practically a worthless realization in the world today.

Your desire for consistency is .... mmmm .... in your head ;-))

Do you know about the the Carter Sweater speech (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) ?

[blueback]

It is true in a simplistic way. It is also practically a worthless realization in the world today.

Your desire for consistency is .... mmmm .... in your head ;-))


Could you expand on that idea? What makes it "practically" worthless, as opposed to just worthless or even useful?

I operate under the assumption that truth is perfectly consistent, and that therefore any contradiction is my mistake. So, the best way to discover truth is to reconcile all contradictions.

Actual events aren't consistent, but the rules which control them should be, so it is profitable to hypothesize what those rules are and then to test them. They won't hold up as they are first phrased but they at least provide a framework for the next (more accurate) question.

[Tristan]

Despite this fact we still do business with each other. And that is what I think is important. Would the world in general, or us in particular, really be better off if we had absolutely nothing to do with each other? If we aren't dependent on them then they aren't dependent on us. The deal goes both ways. Since we need each other we have a powerful incentive to not actually ruin each other. Sure, we posture, and every now and then someone goes too far, but the incentive structure helps to pull things back into stability rather than out of stability.

It's like what we have with China. The US and China will not go to war with each other as long as they are economically dependent on each other.

Amen. Where money crosses borders, troops do not. Even though I despise President Ahmadinejad just as much as the next red-blooded 'merican, I have always been an opponent of the economic sanctions we have against his country. Sanctions *obviously* have no ability to put the sanctioners' friends in power. There is no argument for them, nothing. They fail every time they are tried. If anything, they are a rallying point for the anti-Western sentiment and voting bloc, a good starting point for Ahmadinejad's speeches about America's callous, evil nature. If I were President and people wanted me to end the Iranian nuclear threat, I'd go bomb the missile silos and set up Wal-Marts over every ruin, bringing capital, consumer choice, and Everyday Low Prices™ to the people of that miserable place.

[RBM]

@ blueback

What truth would you like to assume ?

[Tyrant Soup]

Oil is basically free money for many of the competing nations. Opportunists like Ahmadinejad know how to create world tension in order to drive prices up. Because they don't need to work very hard for their money, they have a lot of free time to dream up of ways to stir up more trouble. It's a very inequitable trading arrangement.

[Indy]

I agree that the more authoritarian governments like Egypt and Saudi Arabia are far more amicable to the West than their own population would desire and that this is creates more stability than would be the case otherwise.

You made an interesting point that we use that argument with respect to China, but not with the Middle East. The difference is that we wouldn't have anything to do with them, if it were not for oil. They are too undeveloped and have little global influence, outside of the benefits they have received from the oil industry. The fact that we choose to do business there, while supporting Israel, using military force in the region and being infidels on holy soil, antagonises the local populace. The historical legacy has created this current situation in which our mutual dependence serves as a stabilizer.

China is major power in itself and due to its wages, educational standards, infrastructure, etc. So the relation is more complex and diversified than our Middle Eastern reliance on a single natural resource.

Historically, more economic interaction and dependence hasn't always been enough to prevent conflict, from WWI and II, to the US-British war of 1812. There have always been leaders that have defined succes by military glory and political influence and respect above the needs and desires of their own people.

[zibber]

However, if we need their oil they are just as dependent on us for our money.

Who run the oil market? Exorbitantly, decadently rich people.

You could say these astronomically rich people "depend on" getting more and more money, but that's not the same as actual dependency.

So, if you look at it in reverse, they have been sending oil to people (us) that they disagree with and they probably consider that a bad situation.

Who disagrees with "you" (I'll read that as "the US government")? I think there's more of an understanding than you'd think. You talk about business being done between two enemies, but in the big money world, everybody mostly seems to help each other.

Despite this fact we still do business with each other. And that is what I think is important. Would the world in general, or us in particular, really be better off if we had absolutely nothing to do with each other?

I have to ask, now: who are "we"? What benefits do you, personally, reap from oil trade between elite globalists?

[Tristan]

Who disagrees with "you" (I'll read that as "the US government")? I think there's more of an understanding than you'd think. You talk about business being done between two enemies, but in the big money world, everybody mostly seems to help each other.Well... the need to trade came first. I doubt that decadently rich people are just naturally pleasant to one another. This mutual need between producers and merchants, the enjoined quest for riches, the relationship between trading partners, is what engenders the good will you perceive in "the big money world." We, the little oil-consuming people, get to pay lower, steadier prices for oil products because present rates are locked-in somewhat by the global futures market. If the "big money world" institutions did not exist, the leftover, "little money world" would resemble a Mad Max movie.


I have to ask, now: who are "we"? What benefits do you, personally, reap from oil trade between elite globalists?Oil :lovestruck:

[LaoTzu]

.... everyone agrees that we should try to be more energy independent so that we aren't supporting people we disagree with.

However, if we need their oil they are just as dependent on us for our money.

So, if you look at it in reverse, they have been sending oil to people (us) that they disagree with and they probably consider that a bad situation.

Part of the reason that 'Mo Public' over there hates us, is that they aren't getting as much of the benefit of the petro-dollars that the Monarchy of Saudi is getting (for one example). The West basically prop's up that dictatorship, and then makes overatures about peace and democracy, all while supporting military regimes who treat the people like peons. We don't care, as long as the oil keeps flowing and we have input on where it goes.

If we stop buying their product, it will be sold elsewhere anyway...giving an economic boost to another country/countries. Part of the 'war for oil' is simply to keep it out of the hands of other emerging world powers.
Also important is controlling the price of oil; as a method of keeping those emerging powers under our boot. (China/India for example...)

The reason that stability isn't guaranteed with this dependence is that it is a finite resource. It will run out eventually, and the M.E. will lose much of its strategic importance.

[blueback]

Historically, more economic interaction and dependence hasn't always been enough to prevent conflict, from WWI and II, to the US-British war of 1812. There have always been leaders that have defined succes by military glory and political influence and respect above the needs and desires of their own people.

Absolutely, but economics is just as powerful a force as military might. For example, it was the economic shit-storm forced on Germany after WWI that lead directly to WWII and it was Germany's inability to afford to continue the war that led to the end of WWII. In those situations the money was just as important, if not more important, than the actual fighting.

As in war, so in peace. America won the cold war by baiting Russia into spending so much on their military it prematurely exposed the weaknesses in their economic system and caused a crash. If they hadn't tried to keep up with the US during the arms race the Soviet Union probably would have lasted a lot longer. Today we have to be careful around China because they are basically our bankers and we have to be careful around the lords of the MidEast because they are basically our gas station.

The DIME is a good way to begin an examination of a topic like this: Diplomacy, Information, Military, Economic.

You could say these astronomically rich people "depend on" getting more and more money, but that's not the same as actual dependency.

I have to ask, now: who are "we"? What benefits do you, personally, reap from oil trade between elite globalists?

Certain people are rich because they control a resource that everyone wants. It is arguable that all the improvements of the last century (and a half or so) descended directly from the availability of cheap and plentiful oil. It's simply the best energy source anyone's ever discovered, and it allows us to make a lot of mistakes while still having something left over to use when we finally figure out what works. Thus, everyone wants it, and whoever controls it gets rich.

It's not complicated. If you wanted a piece of the action you could always join them.

There wouldn't be a global oil trade "between elites" without a market. It's not like we're talking about pet rocks here. Oil is incredibly useful, so everyone wants to use it. I want to use it. If it wasn't available, I wouldn't be able to use it. Thus, I appreciate that someone has gone to the trouble of bringing it from where it is to where I am at a price I can afford to pay. Of course I can only speak for myself.

The West basically prop's up that dictatorship, and then makes overatures about peace and democracy, all while supporting military regimes who treat the people like peons. We don't care, as long as the oil keeps flowing and we have input on where it goes.

To be fair, Bush tried invading a country just to remove a dictator and establish a democracy. . .and look how that turned out. So it's not like the solution is obvious.

Yeah, the US is friendlier to dictators than the people who might replace them. My theory is that dictators are easier to make predictable deals with. We help them, they help us. Easy. The dictator ensures that there is only one power in the country that we need to deal with. Things get a lot messier when there isn't an obvious locus of power. Personally, I think that a lot of the times we've supported a dictator instead of the "democratically" elected leader is that the country was a republic in name only. I don't think a country which allows a dictator is actually ready for democracy. There is too much momentum in the system. It is full of graft, corruption, and thugs; so there's no chance for a fair election, let alone a chance for a person elected democratically to do anything except fight off coups. I mean, look at how hard it is for the US to hold a fair election, and then compare the US to any country in the MidEast or South America.

Also important is controlling the price of oil; as a method of keeping those emerging powers under our boot. (China/India for example...)

America lost its ability to control world oil prices back in the 70s. Now we just influence them like everyone else. Even the OPEC countries don't control world oil prices any more. They learned their lesson back in the 70s too and now they just try to keep it stable.

The reason that stability isn't guaranteed with this dependence is that it is a finite resource. It will run out eventually, and the M.E. will lose much of its strategic importance.
That will depend on how ready everyone is for it to run out. It's entirely possible the peak will catch too many people by surprise and we'll end up fighting over the last drops. . .thus wasting the last drops (ironically).

[RBM]

America lost its ability to control world oil prices back in the 70s. Now we just influence them like everyone else. Even the OPEC countries don't control world oil prices any more. They learned their lesson back in the 70s too and now they just try to keep it stable.

That will depend on how ready everyone is for it to run out. It's entirely possible the peak will catch too many people by surprise and we'll end up fighting over the last drops. . .thus wasting the last drops (ironically).

The SA king has gone on the record admitting to tapping a well and closing it 'for the children'. SA production projections are National Security Secrets.

The rest of the world is only left to guess how much will be available tomorrow. That's the definition of 'uncertainty'. True knowledge will occur after the fact as 'in the rear view mirror'.

The official worry point ( as in shortages ) is 2030. The unofficial worry point is 2010.

Update:

The 2009 EIA Energy Conference: Day 2 (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)As always, Sankey made a lot of interesting comments. He said that while the banks might make a lot of money in a cap and trade system, intellectually it didn't seem like a good idea to him. He said he preferred a direct carbon tax. He said that we are setting up a slingshot for prices right now, but "2010 could be a bloodbath." He also said that the overall policy imperative of the new administration seems to be "anything but oil", but he believes that "attacking the oil and gas industry will be incredibly harmful to the U.S. economy."

Other Sankey zingers:

"Alaska would rate as one of the 'countries' most hostile to the U.S. oil industry."

"I am not sure there is any equity in any bank in the U.S."

"If we stopped producing gold tomorrow, we have 100 years of supply in inventory. If we stopped producing oil tomorrow, we have 55 days in inventory."

[blueback]

The official worry point ( as in shortages ) is 2030. The unofficial worry point is 2010.

True, unfortunately.

However, that would seem to be a really good reason to remain as involved with the MidEast as possible. We're not ready for the peak, which means we're gonna need all the oil we can get, but so will everyone else, so we'll need to compete for it. I think the US has provided ample evidence that its ability to deal with the actors in the MidEast is pathetic at best, and harmful at worst. So we need all the experience we can get. By way of example; when the Chinese go to negotiate with OPEC countries they learn Arabic; when we go we awkwardly try to avoid the subject of Israel.

[RBM]

True, unfortunately.

However, that would seem to be a really good reason to remain as involved with the MidEast as possible. We're not ready for the peak, which means we're gonna need all the oil we can get, but so will everyone else, so we'll need to compete for it. I think the US has provided ample evidence that its ability to deal with the actors in the MidEast is pathetic at best, and harmful at worst. So we need all the experience we can get. By way of example; when the Chinese go to negotiate with OPEC countries they learn Arabic; when we go we awkwardly try to avoid the subject of Israel.

blueback, your restatement of your OP still evades any logic I can see. The best I've understanding for your position is you've got a personal vested interest in maintaining the status quo.

Since you see ONLY competition as the path you might want to consider ALL your competition. I suspect you haven't considered The Export Land Model (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.). If not, you could be excused as it's not a mainstream model.

[blueback]

blueback, your restatement of your OP still evades any logic I can see.

Whatev's. Your replies haven't had any logical structure that I've been able to see, so my conclusion is that we think very differently. In my experience, that means a discussion will be very difficult and will result in very little. Therefore I have little interest in making the effort to communicate with you. I'd be open to you making the effort, but that's about it.

The best I've understanding for your position is you've got a personal vested interest in maintaining the status quo.

I have a vested interest in maintaining what works. Or in changing what doesn't work until it works. Whichever.

The way I see it; things happen in a certain way because that way works. I think it is much more useful to try to figure out a good reason for why things happened the way they did, and why they are still structured the way they are, instead of trying to pretend we can rebuild the universe from scratch.

There is a big difference between an optimized subsystem and an optimized system. If you want your car to perform at is peak potential you can't make the engine as powerful as possible because you'll break something else. Each subsystem has to function sub-optimally so that the overall system can function optimally. It's called compromise and it is a law of reality.

Thus, I don't particularly care about what the status quo is, but it is appropriate to examine it for lessons which an be applied to a better understanding of life, the universe, and everything. One of the best ways to do that is to take something that everyone assumes is true and start from the assumption that it isn't. That is what I did in the OP because I thought the direction the thought-train took at that point was interesting and deserved feedback from the community. I wasn't trying to brainwash all of you into accepting the things the way they are like sheep.

Actually, (and this is in the archives of this board somewhere) I thought there was a very good possibility that the reason Bush (et all) invaded Iraq was to establish military control over the MidEast in preparation for a Peak Oil scenario. Everyone knows Bush (et all) are in bed with the oil companies, and they should know better than anyone that the supply will run out sooner rather than later, so it makes sense to destabilize the region and establish an enduring military presence. Convincing Americans that all towel-heads are terrorists, and are trying to attack the world economy, is just a bonus. It makes it more likely that when Peak Oil hits, and the American military is kind enough to "secure" the major oil fields to ensure a steady supply, that Americans will believe all the camel-jockeys attacking our troops are terrorists (instead of people defending their homes).

That being said, I'm not convinced said plan is entirely without merit. Like I said before, we need oil, and the DIME dictates that we should be in a position to apply diplomatic, informational, military, and economic pressure when necessary. As long as we remain economically and militarily involved with the MidEast it serves the same purpose.

So make of that what you will. It would be nice if you'd address the point of the thread, tho.

[RBM]

@ blueback

To be factual (and non partisan), access to oil. has been a US National Security issue since Carter's 'sweater speech. Doing business with the ME for oil is a direct consequence of that policy.

[Latte]

The evolving of events and language suggest strong interests are attempting to instigate a sunni-shiite pan middle east war as an alternative to the eventual toppling of saudi-majority nation dictatorships by groups not very amicable and not very controllable by the west, some of them rather friendly towards Iran.

A simultaneous pressuing towards Iran with an escalation of the Balochistan conflict during or after the seeming objective of the dismembering of parts of Pakistan (Pashtun areas, Balochistan mainly) (or, if to be portrayed naively; "failure of NATO and Pakistani government efforts")

This, as well as Iran potentially being dragged into a war against Neo-taliban forces after a NATO withdrawal (of course, obstacles have to mature first for the withdrawal of NATO, probably through supply lines being cut almost entirely, due to worsened relations between the US and some/most surrounding nations possibly coupled with power striuggles in some of them - or, a large US crisis, like Mexico becoming a failed state, or economic collapse) would probably be quite straining for Iran & Co.
Add in Israeli participation too (Neutralizing Lebanon and potentially Syria, should it not be flippable).


The US power interests could never alone occupy Iran and keep it (without mass-scale killing, such as using nukes, I guess). Not even Nato as a whole would be able to do that (if you doubt this, consider the amount of militarily trained, and well-trained Iranians, the almost homogenous support in the fight against an invasion force and the asymmetrical weapons deployment strategies and tactics of their armed forces).

With the help of both willing, and seemingly (in most media outlets) accidental enemies of the enemy (like the balochis, neo-talibs. Heck, even factions in Iranian kurdistan could, with support, add some significant help), the US power interests could not only have the help it needs, it might even be able to have its friends grind Iran down to a much lesser state than it is today without being more than indirectly involved, or with a non back-breaking and discontent-at-home causing level of involvement, and at least having a good shot at achieving a middle east to its design.

A wild card, would probably be how well the sunni-shiite strife idea (coupled with the 'threat of the persian expansionism') will increasingly lodge itself in Arab minds as the popaganda effort escalates (causing the setting aside of differences with their quite unliked rulers, stifling dissent). The neo-talibs and other sunni authoritarian-religious "afpak" factions such as Hekmatyar's Hezb-e-Islami are not entirely predictable too. There's also the possibility of Libya and other Islamic african nations getting involved in ways and on various sides.

Former Soviet central asian nations are also question marks. Will they experience revolutions of some sorts? What allegiences would they have (or not have)? Will there be a pattern of sufi-insipired liberal-islamic & secular forces vs authoritarian wahhabis? Will Russia involve itself? Will movements stage popular revolts in economic discontentness? What would be the consequences for Russia, China and India in the event of a NATO withdrawal?
How the the pakistani armed forces and secutiry forces align themselves? Will we possibly see a hindu-muslim war, depending on the outcome of the Indian elections?

In any case, it all goes down the quite basic divide and rule. Have supressor of others dependent on you, and the supressor of others will share the honey of those it supresses with you. Like exploitative trade agreements, economic policies and monetary policies. A government supported by its people, having its people's best interest as first priority, wouldn't have any reason to share the honey of its populace to get help for staying in power.

edit: I forgot teh Turkey. How could I forget the turkey?! I think the importance of the tilt-side of Turkey doesn't need to be exclaimed.