=v= Well, dagnabbit, I’ve been saying that since I first learned about Keynes in high school. I want my royalties, dammit!!! 

Posted by Jym

Posted by hedgehog

Oil mercantilism:  The U.S. relationship with Saudi Arabia, Kuwait and the UAE (and formerly Venezuela) is the ultimate in what you call oil mercantilism. These countries all have state-run oil companies. The U.S. has no state-run oil company (instead we have a state run by the oil companies) but for decades, we have desperately needed to get our petrodollars back, lest our currency lose value. The agreement, which some say is tacit and others say has been made quite overt in meetings, is that the Saudis, Kuwaitis and Emirates spend their excess money on U.S. investment, from T-bills to real estate. In return we keep buying their oil with dollars. It’s a Ponzi scheme and it has nothing to do with the free market. If they were investing for maximum return, they would have shifted to euros in early 2001 when it was clear that the American bubble was ready to burst — not just in equities but in foreign exchange. From early 2002 through early 2005, the euro rose  from costing about 80 cents to costing about $1.30, where it remains today. The Canadian dollar soared from 63 cents to about 90. These proportions will continue to degrade as long as the U.S. runs a current account deficit and fails to invest in its own education and prosperity.

Venezuela under Chavez has left the reservation and started moving its foreign currency reserves into euros. (Iran and Venezuela have been threatening for years to start an oil exchange that would trade in euros, but keep putting it on hold. There are those who claim this is the real reason the U.S. is rattling sabres at Iran.) China has considered such a policy, but they are even more addicted than the Saudis to U.S. dollar-stability at this point, so any move that could deflate the dollar will hurt them so much in the short term that it seems almost impossible for them to do. But I digress.

The worst side of our petrodollar situation is how it distorts our supposed national ideals. Look at how we pamper the Saudis even as they bubble over with anti-Semitism, they decline democratic reforms and they remain hated by many of their residents (I won’t say citizens, because that excludes Filipina slaves). For an indication of where such policies go, recall how well it worked out when the U.S. supported the Shah.

The U.S.’s foreign policy, whether in the invasion of Iraq, the positioning of a fleet in the South China Sea (China’s import route from the Persian Gulf and Indonesia), or our ongoing support for dollarized despots in the Arab world, is absolutely oriented toward securing our country a supply of oil. No, we didn’t set up a mercantilist contract with Saddam Husseing (at least not after he fucked with our pals in Kuwait). Instead we TOOK OVER THE COUNTRY. If that isn’t using foreign policy in the interest of an industry, what is?

Your fantasy that the U.S. gives a flying fuck about genocide is cute but sad. The U.S. has set up a likely genocide in Iraq (as I detailed in a post a few clicks below this one) and may be about to take sides to ensure it gets carried out. I’m not sure what to make of your relative disparagement of France and China. I have no great respect for any country, but I think weak countries, like my native Canada, at least tend to learn how to rely on negotiations first and force last. The U.S., like a fast-food-bloated, testosterone-driven prick behind the wheel of a Hummer, has this tendency reversed. 

Posted by hedgehog

Oil mercantilism was a major cause of World War 2. So in 1945 America set out to force an oil capitalist world order. That order certainly benefitted America, but it also benefitted the world at large. Both the winners and the losers in the oil market benefitted from fighting with dollars rather than navies. Now oil mercantilism is rearing up its head again. This is a Bad Thing (TM).

I brought up Darfur to demonstrate this. A more powerful America would have forced a ceasefire in Darfur using economic sanctions alone. Instead, today’s America put its weight against Sudan, but was outweighed by China. And so the genocide continues. As for military intervention, I don’t see it being feasible. The supply lines between the African shore and Darfur stretch insanely long through prime territory for Islamists. That kind of deployment is bound to chew up the GIs without achieving much for the Darfuris.

Posted by Omri

“given” is a word i’d use for how the gun was distributed before the wall came down. since that time, it looks like people operating inside many different FSU states have sold it. here, i’ll make the failure rate of former bloc economies an issue, bring in the question of how hard the USA worked to demolish the finances of the soviets in the 80s along with trying to change their politics, that’ll enliven this quite a bit. gosh, why did the FSU states all end up as havens for black marketeers. transition? what transition? enemies should be punished and then raped.

we aren’t exactly putting our foot down on this. we just bought a couple hundred truckloads of these guns for the iraqis, from the russian and balkan suppliers. some of those guns disappeared — nod if you believe the loss was unanticipated by our representatives in iraq.

omri i really feel like this state-focused vision you’re pitching is behind the times. the gains of working together are too big for anybody to ignore. and harping on darfur is nuts, when nobody was stopping us from intervening in rwanda and we still sat back and watched. if there were no other interference (impossible in international affairs but let’s say it), would we go in there to the rescue? would we leave iraq and enter the sudan instead on a purely humanitarian mission? AYFKM? 

Posted by hibiscus

Furthermore, oil companies do play politics. But oil companies don’t go around arranging deals of oil in exchange for preventing UN action against an ongoing genocide. It takes states to do that, both state suppliers of oil and state consumers. The Sudan-China oil deal arranged for more ghastliness than all the dirty dealings of the corporate oil oligopoly in this century. And that’s just for a start. There is a continuum between oil mercantilism and capitalism, true. But lots of things do. So what? America, in 1945, decided that a world order that is forced toward the capitalist side is one in which oil is less of a prize of war, and thus less likely to lead to more wars, more invasions, more recolonizations. That was the main American interest pushed by the US Navy in the Mediterrenean and Indian Ocean. Compared to the other state actors, that is downright angelic.

Posted by Omri

You can’t seriously believe oil companies don’t play politics (or worse). The hegemony of the US Navy doesn’t produce some ideal market that’s being corroded by shady bilateral agreements. It produces, unsurprisingly, a system favoring American corporations and American interests. We happen to be in America, so perhaps this is a reason to favor that hegemony, but it’s an extremely dull one. Some of us have more divided loyalties.

As to the allegation that American hegemony is somehow benevolent, that just makes me extremely angry. We have a terrible, bloody history - we’ve supported horrible, evil butchers when the oceans of blood they were spilling were at high tide - my god, do I even need to list the dozens of evil regimes we’ve backed? America lets such things enter into its foreign policy calculations, but whether the equation balances in favor of death or against it is at best an even chance. 

Posted by saurabh

Posted by Omri

Posted by hibiscus

It’s also a poignant example of what I mean about the world being more brutal when players other than the United States are better able to flex their muscle. American hegemony would have allowed for much more leverage against Sudan with which to force an end to the janjaweed predations, because America lets such things enter in foreign policy calculations. The Chinese Communist Party does not care less about a pile of dead Darfuris. The same applies to France, albeit to a smaller degree. You’re of course free to turn a blind eye to it.

You’re also free to ignore another glaring issue. Look at almost any blood-soaked, failed-state region in the world. Which firearms proliferate there? They ain’t the M-16. There’s a reason for that.

Posted by Omri