On October 8 Russian forces made a final withdrawal from their former vassal state of Georgia. This little-noticed compliance with demands made by U.S. and European diplomats put an end to a drama that had stunned the world and threatened to upset the coronation of His Divine Majesty Barack Hussein Obama by spotlighting the Chosen One’s complete lack of foreign policy capabilities. The August invasion caught everyone by surprise, coming as it did during the Summer Olympics — prompting Mr. Obama, in a foreshadowing of future diplomatic toughness, to complain, “This action is wholly inconsistent with the Olympic ideal” — and sparking fears of a new cold war with Vladimir Putin’s Russia. There was a mad scramble to turn the page as the Obama campaign, along with a friendly news media, sought desperately to return the discussion to economic issues. And so it has.
But this whole affair was largely over economic issues, and its rather ignominious end has been brought about because of pressure imposed unintentionally in America. John McCain has failed to grasp the significance of what happened here, something that he could put to great advantage if he would aggressively make the connection.
In short, “drill here, drill now” has made the invasion too expensive for Russia to be bothered with.
Before the Democratic Party piggy banks of Fannie and Freddie collapsed — something that any acute observer understood was coming and which Senator McCain took efforts to prevent — the principal topic of discussion around kitchen tables across the Fruited Plain was the price of gas. Americans were furious about $4 a gallon gasoline and Newt Gingrich developed the “drill here, drill now” campaign to kick the Democrats in the family jewels. Environmentalists and other opponents of the internal combustion engine held the Democratic Party in a stranglehold and they dared not endorse any new drilling or exploration. Speaker Pelosi and Senate Majority Leader Harry Reid feared the loss of state power that more drilling implied. Obama was reduced to his 10-year plan, saying we have to kick our “addiction to oil” and promising pain to act as a spur to this lofty goal. The House Republicans performed their political theater and this issue was turning McCain’s way. President Bush did his part and Congress was forced to cave on domestic drilling.
Now, Obama claims we won’t see any oil for at least a decade — of course, we won’t see any alternatives for a decade with his plan — but that is immaterial; the threat of future competition by the U.S. forced oil producers to drop their prices. Coupled with a strengthening of the U.S. dollar, oil hit a low under $70 a barrel after having peaked in July over $140.
This strikes at the heart of our current economic crisis; ours is a petroleum-based economic system and the high prices for oil and natural gas drove the cost of most things up. The subprime borrowers were scrimping to get by and the increase in food prices, in fuel prices, and in the prices of most items due to higher transportation costs pushed many subprime borrowers into default. This crisis was decades in the making — with the Community Reinvestment Act and demands by government that lenders make these subprime loans — but came to a head at this juncture because of spiraling energy costs.
And Russia invaded Georgia.
During the first presidential debate, the subject of this invasion came up and Obama hemmed and hawed with the standard “we must use our allies to pressure” fare. John McCain had the perfect opportunity, but let it pass, sounding strikingly similar to Senator Government in his analysis of the situation. He has since repeatedly missed the opportunity; the answer was “drill here, drill now.”
Russia is resurgent because of energy, and the invasion of Georgia was largely over the natural gas pipeline built to supply Europe and bypassing both Russia and Iran. The Russians tried to destroy it with air raids in the opening days of the war. Vladimir Putin’s strategy for a return to superpower status for Russia is built on oil and gas money; the increase in worldwide demand has made Russia rich, and Putin and his oligarchy own a piece of most oil and gas companies operating there. Their power is based on their control of this wealth and the stability of the Russian government hinges on the stability of these commodities. A drop in the price of fossil fuels is destabilizing to the princes of Muscovy.
And the financial crisis in America is, indeed, hurting them. Russian oil companies have been forced to cut prices, leading investors to withdraw $33 billion from the Russian economy. Russia already has serious problems finding people to work the Central Asian oil fields, and depopulation problems have driven them to offering free land to American farmers if they would become Russians. (Perhaps we should settle illegal immigrants there; many have a working knowledge of U.S. farm practices, work hard, and want a better life for themselves.) Economics is a tyrant, especially where a nation is ruled by plutocrats and not by laws. Putin cannot afford the slow bleed of petroleum wealth.
His war in Georgia was costly. The current hemorrhage in oil prices makes military adventurism just too expensive.
That is why John McCain should have called for “drill here, drill now” in the debates and it is why he should harp on this issue. McCain is positioned to take advantage of the drop in oil prices, since it was the threat of new U.S. drilling, led by his own party, which brought those prices down. This is a winner: good for the economy; a foreign policy success, if unintentional; and a clear difference between himself and Barack Obama, who has employed the audacity of soap to scrub his connections with Fannie Mae and Freddie Mac, along with Tony Rezko, William Ayers, Jeremiah Wright, communist Frank Marshall Davis, Raila Odinga, ACORN, the Chicago Democratic Socialists of America, etc., from under his fingernails. McCain should remind everyone, and continuously, that four-bucks-a-gallon gas is only the beginning if Obama strolls down the Potomac to the White House.
The stock market crash in 1929 became the Great Depression because taxes were raised at a time when the market needed liquidity and Smoot-Hawley placed tariffs (taxes) on imported goods at a time when free trade was needed most. Obama proposes raising taxes and rethinking NAFTA while wanting higher gas prices. Anyone can do the math, if it is laid out for them. The Obama plan makes economic collapse likely. Oil is the lifeblood of our economy and McCain has already promised to remove ethanol subsidies. This is a winner for him and he should trumpet this to the heavens.
If he’ll only listen.