Two big breaking stories appear today which suggest that key strategic alliances between the US and critical middle east allies may be coming apart. The first story , concerns the refusal of the United Arab Emirates to allow the US to use their territory in an attack on Iran. The second story reports that Saudi King Abdullah has called the US occupation of Iraq “illegitimate.” The details of these stories — and other significant developments can be found in cskendrick’s diary US Mideast Allies Bailing, Big Time.
As usual, my interest is more focused on the big picture. I have said here many times that the war in Iraq represents what I call a “crisis of corporate imperialism.” These stories represent a step closer to a full blown crisis. As such, this is a good time to explain exactly why the current debacle in Iraq threatens the very survival of American corporate hegemony — including the possibility of some very serious economic ramifications.
The place to begin is with the purpose of the war in Iraq. No, it isn’t about “democracy” or WMD’s, or battling terrorism or any of the other shifting justifications offered. The goal in Iraq was two fold. The first was the establishment of permanent military bases there. This was described in the seminal national security document for the Bush Adminstration published by the PNAC entitled, Rebuilding America’s Defenses
Although Saudi domestic sensibilities
demand that the forces based in the
Kingdom nominally remain rotational
forces, it has become apparent that this is
now a semi-permanent mission. From an
American perspective, the value of such
bases would endure even should Saddam
pass from the scene. Over the long term,
Iran may well prove as large a threat to U.S.
interests in the Gulf as Iraq has. And even
should U.S.-Iranian relations improve,
retaining forward-based forces in the region
would still be an essential element in U.S.
security strategy given the longstanding
American interests in the region.
This quote suggests the second reason, specifically dealing with Iran. Once again, publications of the PNAC from way back in 2002, lay out the eventual strategy. Regime Change In Iran?
Eventually, the administration may have to deal
forcefully with the Lebanese Hezbollah—who remain
perhaps the most lethal terrorist organization in the Middle
East—and their Iranian and Syrian backers. The
administration may have to tell the Russians, sooner
rather than later, that their support of Iran’s nuclear program
is unacceptable. (If the Russians ignore us—and we
should try to devise the most painful arm-twisting that
we can for Moscow—then the administration ought to
prepare for a military strike against the Bushehr reactor
facility. Under no circumstances should the United States
allow Bushehr to become operational.)
What they never explain is what is meant by that little phrase “longstanding American interests.” We have only one “longstanding interest” in the Persian Gulf, namely oil. But wait, the PNAC announced the major goal of it’s military program — a goal in which oil is critical.
The United States is the
world’s only superpower, combining
preeminent military power, global
technological leadership, and the world’s
largest economy. Moreover, America stands
at the head of a system of alliances which
includes the world’s other leading
democratic powers. At present the United
States faces no global rival. America’s
grand strategy should aim to preserve and
extend this advantageous position as far into
the future as possible.
In other words, the goal was — as is — to cement the position of the US as the “sole superpower,” and to discourage the emergence of any rival superpower. Oil being a key strategic resource for any would be military rival, controlling as much of the world’s oil supplies as possible — especially with respect to China — must be a primary strategic goal. Regime change in Iraq, followed by Iran, with permanent military bases controlling the oil fields is all part of this neoconservative grand strategy.
Notice that none of this was necessary to secure adequate oil resources for the US domestic economy. Our stable relations with Saudi Arabia and the other Gulf States — including the more or less permanent military presence already in place in the Middle East — along with keeping Saddam Hussein in check, guaranteed stability in oil supplies and oil prices. The only reason to want more control than we already had was to deal with some perceived military rivalry with China and/or Russia. As things have turned out, now our domestic economy is in fact threatened with the potential for a radical restructructuring of the balance of power in the middle east. That radical restructuring was occasioned by our ill-considered invasion of Iraq.
As many have pointed out, Saddam Hussein was our friend before he was our enemy. He was our friend for a very simple reason. He was our surrogate against revolutionary Iran. Among other useful policies was his repression of the Shiite majority in Iraq — natural allies of Shiite Iran. As long as Saddam was in power, there would be no Shiite regime in Iraq, aligning itself with Iran, giving Iran substantial influence over Iraqi as well Iranian oil reserves. Deposing Sadddam obviously removed a key obstacle to Shiite dominance over Iraq. The question is why any neoconservative couldn’t understand the natural outcome of democratizing Iraq. That natural outcome would be a predominantly Shiite regime. Reading the previously mention article on regime change in Iran, apparently they believed that a democratic Shiite regime would be hostile to Iran. It doesn’t seem to have occured to them that the Shiites in Iraq might actually prefer a Islamic theocracy and take common cause with Iran — as now appears to be the case.
At this moment, it is now clear that continued US occupation of Iraq is untenable, whether we are looking at it militarily, diplomatically, or from the standpoint of domestic politics. [Interesting how these armchair Alexander's never consider what the American people might think.] Unfortunately, retreat from Iraq pretty well leaves Iran to step in a pick up the pieces. Iran being the dominant military power in the middle east — aside from the US — they become the force every other middle eastern government will need to reckon with. Today’s twin developments both signal a shift in favor of Iran on the part of the UAE and Saudi Arabia. It is conceivable — though not a foregone conclusion by any means — that the future could hold a complete US military withdrawal from the entire Persian Gulf region.
Without a US military threat over those oil fields — and it is a threat, make no mistake — how long will it be before the gulf states start considering economic moves like say, converting from dollars to euro’s as the preferred currency for oil transactions. Some say Saddam’s conversion in November 2000 is what sealed his fate. A general withdrawal of US forces from Iraq, and possibly the entire Persian Gulf, clears the way for such a move. The consequences, when the dollar is no longer the preferred “reserve currency,” are potentially dire. We would then be looking at a wholesale “dollar dump,” with massive inflation, and a fiscal crisis from hell as foreign governments also dump their US treasury bonds.
You can guess the rest. We’re talking about the “Argentinization” of the US economy in a matter of months, not years.
Which is exactly why — the UAE’s declaration today, notwithstanding — I wouldn’t bet against war with Iran. It may not appear that way, but Corporate America’s back is to the wall. It reminds me of the scene in “A Bronx Tale,” where the bikers swagger into the local bar to start some trouble. The resident mobster asks them to leave. When they don’t, one of his hoods locks the door.
Then he looks at the bikers and says, “now youse can’t leave.”