Sunday, July 21, 2002

Crown Prince Abdullah of Saudi Arabia met with George Bush in April, 2002 at Bush's ranch in Crawford, Texas, and, for a very short time, Bush's Middle East policy became a little more 'balanced', though no where near what the Saudis were looking for. The Crown Prince no doubt explained the facts of life to Bush - that the U. S. economy was sailing on a mix of a high dollar (propped up by the fact that the dollar is the international currency for oil transactions), and trillions of dollars of petro-wealth poured back into the U. S. economy by Arab nations. I quote from an article by Arjun Makhijani:
The flow of oil as well as the position of the U.S. dollar as a global currency are dependent on Organization of Petroleum Exporting Countries (OPEC). OPEC’s decision . . . to denominate the price of oil in U.S. dollars, is one of the anchors of the U.S dollar. In the present crisis, the states of the Persian Gulf may be pushed by their people to follow the 1999 example of Saddam Hussein, who asked to be paid for Iraqi oil in euros, the new European currency. If OPEC decides to denominate the price of oil in euros, the effect on the U.S. and world economies could be profoundly de-stabilizing, with unpredictable economic, political, and military consequences.
The Crown Prince later noted that Bush was an idiot (he used more polite words, but the meaning was clear), but seemed to understand what he was told. Unfortunately, almost as soon as the Crown Prince left, Bush forgot the value of his Arab friends, and adopted the current U. S policy on the Middle East, which is basically giving Sharon carte blanche to do whatever he wants to the Palestinians, promising the Palestinians a country if they can meet certain preconditions which Sharon can ensure they cannot meet, and having free Palestinian elections as long as the Palestinians elect someone that Bush likes. This policy has angered everyone in the world except the Israelis. The triumphalist U. S. opinion seems to be that Arab threats are just bombast, as there is nothing that they can do to the U. S. Empire. Therefore, Bush is free to cater to the U. S. fundamentalist voters who want the area of Greater Israel ethnically cleansed of Palestinians for religious reasons. Everyone seems to have very vague theories about the current U. S. economic problems, and I'm wondering if the answer isn't fairly simple. Is it in any way possible that the current U. S. dollar and stock market problems are a result of Arab nations starting to sell their oil denominated in Euros rather than U. S. Dollars, or at least threatening to do so, and withdrawing large amounts of money from the U. S. stock markets to invest elsewhere (other countries may also be deciding to fight U. S. hegemony and unilateralism by starting to hold their reserves in Euros rather than the traditional U. S. Dollars)? If this is so, could Bush's policy decisions make him the President who presided over a Dow of say, 4500? Does he want to be the new Herbert Hoover? The United States could enter a twenty-year recession, and it may take that long for a Republican to be elected President again. I note that the Arabs have presented yet another peace initiative, and Bush has been encouraging. It will be interesting to see if the Arabs have enough economic power over the United States to affect U. S. foreign policy.