Aftermath of Katrina suggest we neither must fight for oil nor control

[1932]

other countries' politics and economies to get oil.

I think many politicians perpetuate the idea that if we don't engage in imperialist foreign policy, countries like Iraq and Venezuela might withhold oil from us. So, by controlling those countries, we protect ourselves.

I think the truth is that other countries want us to have a functioning economy so that we can buy oil at reasonable price and have regular sustained economic growth. They don't want to deny us oil. They want to sell us oil. Their only difference with Washington is that they want a bigger profit margin for the selling country, and a smaller profit margin for the half-dozen oil companies that control most of the oil business.

How do we know this? Because oil countries, including Venezuela, are donating huge sums of money to help reconstruction to ensure that the US economy doesn't slide into recession, thus dampening economic development and, therefore, the demand for their major source of revenue -- oil.

We actually didn't have to wait until this past week to learn this. The early '70s OPEC oil embargo taught everyone the same lesson. OPEC countries suffered greatly from the constriction on demand caused by the reduction in industrial activity and growth. Their embargo bit the hand that fed them, and they knew it. This is why Saudi Arabia was willing to reinvest so many petrodollars back in the US after the early 70s. They thought they were propping up the US consumer. However, a lot of that money has subsequently concentrated in the hands of the wealthy in a way that Keynes would tell you isn't helping the US consumer very much. But that's another issue.

Katrina, and the oil countries' response to it, raises some other interesting questions. I'm starting to think that Bush is engaging in wealth-concentrating policies at home knowing that it's bad for the economy, but he's holding the American middle class as hostage, knowing that the rest of the world wants to save us and will be willing to pay the bribe to keep Bush from slitting our throats. This is what China's doing. They may or may not agree with the the Bush ideology of wealth polarization in America, but they do need the American middle class desperately, and they're willing to keep buying US debt to stave off a complete collapse of the US economy.

With Katrina, conservative political ideology is responsible for the global warming, and the decay of infrastructure and of social (and emergency) services, and for the creating of an underclass that was extremely vulnerable to this crisis (both the natural disaster and the poor rescue effort that followed), yet countries which depend on the US consumer to buy their oil are tripping over each other donating to the reconstruction effort. They're being blackmailed too. They're willing to be the final insurer of the problems Bush is creating, and I suspect Bush knows this.

But back to my first point: ultimately, it seems, American oil imperialism isn't about protecting the US economy from being denied oil. It's about protecting the profitability of a few large oil companies. So, when politicians tell you we need to be in control of Iraq so that we're guaranteed a cheap source of oil, tell them, the best defense to being denied oil is to have a strong, healthy American middle class. So long as we have people who can purchase oil, Iraq and Venezuela and Iran will always want to sell it to us.

[MadeinOhio]

1. You hit the nail on the head....This is the whole reason for PNAC...

Their whole world plan is to have all the rich sustain their wealth by getting rid of the middle class. This is easily achieved by taking over countries and preserving all their oil, and water so we don't pay a dime.

Of course, its an insane idea that will never work. We needed to MOVE ENTIRELY AWAY from relying on fossil fuels years ago and now we pay the price. It is not as profitable as the world thinks, a new energy policy and bio-hydrogen fuel is five times as lucrative and safe for the warming of the air.....

[1932]

3. And notice how the thing staving off disaster so far is...

...the willingness of countries like China to pay the bribe (to buy our debt) so that they can have an American middle class to which they can sell goods until they're able to build their own self-sustaining middle class economies in China and in the region.

Katrina disaster relief falls in the same category. Venezuela, Kuwaint and Qatar (IIRC) have pledged over 600 million dollars so far. Why? Because they need people to whom they can sell oil.

Bush is killing this country with bad policies, and developing economies (China) and resource-rich exporters (Venezuela, Kuwait, Qatar, etc.) are bailing him out because they still need US consumer demand.

[MadeinOhio]

6. Good point. Also changes the whole method of stock trading..

[HysteryDiagnosis]

2. If the haves cannot maintain their exhorbitant lifestyle by letting

them sell their oil the way they want at the price they want then they need to take it down a notch or two. If the elitists MUST MAINTAIN their godlike lifestyles, then they need to find their own frigging planet to do it on.

[many a good man]

4. Yes and No

Its true the US has engineered a highly interdependent international economy with America at its center. We are still its engine. When we sneeze they catch the cold. Its worth it to them to buy us cold medicine.

But this isn't new or unique to Katrina. How do you think its possible for us to run up such astronomical budget and trade surpluses? bush* is just pushing the envelop a little further than before.

I also don't agree with your "lessons learned" about the OPEC oil embargo. Oil prices fell because of a huge investment in exploration and drilling in places like the North Sea, Alaska, Africa, Latin America, etc. Demand has not dropped in the past 25 years.

The creation of the Petro-Dollar Recycling paradigm has been widely written about. It explains the huge flow of Saudi, etc. investments dollars into US markets. In return they promise to sell their oil in US dollars, which allows us some measure of CONTROL over the economic development of other countries.

Any country that has oil is going to sell it. The issue is not supply, its control. IMHO the OP minimizes the strategic role oil plays in world politics. I'm sure the big intl oil companies are delighted with their excess profits, but I think they're more worried about the possible consequences of instability. Especially since the limits to US military power are on world-wide display in Iraq.

[1932]

5. reread my post -- I said it wasn't new; I mentioned china.

As for the lessons learned commment. I didn't make that up. Perkins says this in his book Confessions of an Economic Hit Man. He says that OPEC countries ended up getting hurt badly in the aftermath of the boycott because they upset economic development so badly that demand for oil tanked. You'd also know this if you've seen the documentary Life and Debt (with Jamaica as the example).

Re your last paragraph, trying to control oil CREATES instability. If the oil companies wanted stability, they'd let countries control their own oil. Look at Nigeria, for example. Economically exploiting that country has and will (for as long as it lasts) cause instability. Imperialism is inherently destabilizing. Oil companies almost certainly realize this (since we have 300 years of history (or more) proving this point, and no examples of it working, especially since the mid-20th century). So that leaves you with private profit being the motivating force for the bang-you-head-on-the-wall imperialism in which we engage.