An Oil-Centric View of the Economy, Politics and War

"Americans are paying $3.00 a gallon," I heard someone say, "in Europe they've been paying $4.00 a gallon for years."

WHY?

Europe was reconstructed, post-WWII, with a built-in high gasoline price structure - to reflect the relative value of the European economy to the rest of the world. Europe was re-building after total destruction.

$4.00 a gallon expresses the value of the regions' economy relative to the American economy at $1.00 a gallon(in our recent past experience).

The victors of WWII(August,1945) had to tie the American dollar to something tangible the real world. They announced the price they would pay for oil, a world price. At the same time they tied the value of the American dollar to the value of a barrel of oil ($35 American = 45 gallons of oil).

They could do this because they were the biggest buyers and they owned the most aircraft carriers.

They set the price low, and they wanted all they could get. Caveat emptor though: if supplies are curtailed the USA would consider that an Act of War. The fact that the US could declare this to be - and have it stick - was the Final Victory of WWII. The USA was the Empire du jour, if she choose that enterprise.

Four years later the world changed. The USSR, a country with the most men in uniform at the time, (5 million) achieved nuclear capability and rocketry. They thus became a de-facto Super Power along with China - shortly there after. The nuclear 'club' has expanded ever since.

The true value of nuclear weapons appears to be coming under some question though: China has said they believe the nuclear threat is that of a Paper Tiger. Apparently it is so; conventional proxy wars continue today as before, through the end of the so called 'Cold' war.

In 1999 real American debt was so high, its value was in question. A result of a concerted effort towards global dominance. This amounted to a revolution in world power. American power was no longer 'Super' with out the balancing terror of the opposite force.

The catalyst for this destabilization was China's new demand for oil which is in the process of changing the balance of power in the world. The relative rarity of the commodity is causing price fluctuations. Instead of a duality (two super-powers) we face an algorithm involving seven power centers: USA, UE, UK, Russia, China, India and Brazil.


This thing, it should not be spoken, least it be believed.


The US could not allow this to happen; firstly because of their incredible foreign debt, the cost of financing it would sky-rocket and hobble the economy; Secondly, it wasn't true , the US economy remained the most efficient and productive, and the largest by double.

One solution was to break OPEC's monopoly through conquest. Another has been the creation of a speculative price bubble, which oil companies and corporate banks are trying to maintain right now - to ensure a stable High-Oil price; since they can no longer maintain the Cheap-Oil model. A retreat for future gains.

The new players in the post cold war era are supporting the insurgency in Iraq. They hope to stale-mate the Bush Whitehouse's conquest plan, and use it as leverage, covertly, not publicly - as that would be an act of war they cannot win. They are forcing the Americans to address a realignment of power with-in a new international political reality.

Politics through the barrel of a gun. A proxy war in Iraq between the same old powers(and some new ones) who involved themselves in the last two world wars, tis time with Arab civilians and coalition volunteers as fodder. Now we see the reason there had to be a 9/11 pretext; The politics of fear and greed. There was no reason that this realignment needed be violent, except by an ascension to power of a Military Industrial/Political alliance in Washington.

The disgraced Neo-Con politician, and deep thinker, Newt Gingridge, as we watched Israeli air power in July 2006, "WWIII has begun" he said.

I love this guy!

Couldn't have said it better.













Newt Gingridge

Economist, J.K.Galbraith Offers Lessons from the Terror Bombings of WWII.

Photo: Reuters

Total war, as we're seeing in Lebanon, includes Strategic Bombing.

In that the Israeli tactics are not an appropriate response to what is not a critical threat to the country, it is a war crime.

During the London Blitz in 1940-41, 43,000 people lost there lives. Out of this came the Area-bombing of German cities, an attempt to derail the Nazi war machine. We should have no illusions, destroying the war capability of the Nazis from the air meant destroying factories and transportation networks. Around these factories and roads and train tracks live the people who work them. This was the first lesson in the horrors of Air Power.

But it went further than that. As the tide began to turn; as the allies began to develop fighter escorts that could fly deep behind German lines, the thinking chamged. Area bombing of German cities came to be seen as a second front that our Soviet allies had been begging for.In the Stratigic Bombing Survey, economist J.K.Galbraith determined 300.000 German civilians were killed and 750.000 were injured in the area bombing champaign. 73 million died on both sides in the war over all in only 5 years of world war. Air Power meant Mass Death.

The tactic should be considered a war crime. If We all could vote on it I'm sure the remaining voters would pass the law.

In 1945, a different kind of mass death was designed and tried on Dresden. A non-industrial city full of refugees and wounded, a city of the arts and culture. With no warning, Strategic Bomber Command immolated the entire city in a raid in two horrendous waves. All those who didn't leave before, before.. Before they would never. Estimates go as high as 200,000 civilians killed. The British, choose 45,000 dead. As I am a Canadian, I must report a conflict of interest - roughly half of those sorties were flown by Canadians.(this is based on a break down of nationalalities of pilots in the RAF at the time.)

"We're all sons-of-a-bitches now", the nuclear physicist Robert Oppenheimer said. He was commenting after viewing the 'results' of the Strategic nuclear bombing of Hiroshima, August 6,1945.

If there's no good guys any more then I'm afraid the gig is up. We cannot choose total war and throw out civilization. There must be limits, therefore the UN should pass a resolution against the use of area bombing. It is state terror, and thus President George.W. Bushs' representative Mr. Bolton should lead the way.

"But were not aiming at the houses." goes the familiar refrain nowadays, "And we have smart bombs!". Smart bombs are great for taking out infrastructure as a precursor to invasion, or to decapitate the enemy's command.

But what of this vengeful flattening of cities? Stalingrad showed us that razing the place doesn't avoid the street to street fighting all generals want to avoid; the enemy actually ends up with better cover. It has no purpose other than terror, to clog the roads with refugees, which disrupts enemy manouvers. If this is not a crime, watch the starvation now beginning in Lebanon, watch how it asymmetrically plays on TV.

It's been book since WWII, to neutralize a strongly defended city that would slow down your fast advance go around it, and siege it so it doesn't get out and crawl up your back. This is no picnic for non-combatants either, but at least it leaves an opportunity for escape, or to negotiate a walking exit, before the artillery starts. This window for civilians should be standard operating procedure. After all that's what we're fighting for isn't it, the ones we leave behind at HOME?

In April 2004 a large part of the city of Fallujah, Iraq was flattened with air power and artillery. Read the link RAHUL MAHAJAN. He's lucky to be alive, they drove right into a free fire zone controlled by the insurgency. Luck, just plain luck. The siege of the city started slowly and built for two weeks. First the US commander turned off the electricity. What he was saying was, "Go now."; Now, no water, "GO!"; Road blocks choke the food supply, "GO!!". But now incompetence (or worse), there were mixed messages at the road blocks. Some US forces weren't letting people out! The word must have spread like wild-fire with in the dying city, forcing innocents to make choices about their lives and the lives of their children, choices they didn't need to make!

The local insurgency adapted in the horror and came back a month later, more professional and disciplined in organization and tactics, and perhaps in numbers too.

Area bombing doesn't work as a tool of counter insurgency. Check out the British Empires experience in India.(I'll add a link soon)

I can hear King George W. Bush the ll, somewhere down the road to the New American Century codify, "We will have a free and democratic world empire, even if we have to kill all the voters and destroy all the institutions to do it!"

As J.K.Gailbraith said concerning allied area bombing, "random cruelty and death inflicted from the sky had no appreciable effect on war production or the war." You can't bring enlightenment with random death. You can't get oil from blood. You can't win friends with shrapnel(sing to Simpsons' tune;"You can't make friends with salad").