What Fresh Hell Is This?

January 25, 2009

Jack Kelly Sunday

This week's column in a nutshell:

Much has been made of the challenges confronting President Barack Obama, who assumes office in what appear to be the early stages of the worst economic downturn since the Great Depression. More should be made of the opportunities he faces.

We Americans are more than $2 trillion poorer, and counting, as a result of the subprime mortgage crisis, and our confidence has been badly shaken. But power is relative. The United States is more powerful today relative to our adversaries than at any time since Aug. 29, 1949, when the Soviet Union exploded its first atomic bomb.

Jack's first two paragraphs.

So to nutshell his nutshell description it's a situation of, "Yes, things are bad but they're so much worse elsewhere so in comparison President Obama should have the advantage."

Or something.

For example:
More beneficial than the relief the oil price collapse provides to our pocketbooks is the harm it does to our enemies.

Venezuelan dictator Hugo Chavez, who kicked out foreign oil companies from his country in 2007, is now begging them to return.

Oddly for Jack, this is more or less true. From the NYTimes:
President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.

Until recently, Mr. Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.

Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.

But the shift also shows how the global financial crisis is hampering Mr. Chávez’s ideological agenda and demanding his pragmatic side. At stake are no less than Venezuela’s economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.
Jack, of course, can't resist:
What is essentially a victory in Iraq, coupled with the harm done to Iran by the oil price collapse and rising Sunni Muslim fear of Iran and her proxies, gives President Obama a more tractable situation in the Middle East than President Bush faced when he assumed office.
Gee thanks, President Bush! This is the meme to watch, my friends. Now that it's "established" that there's "victory" in Iraq, any bad news coming out of Bush's war are now and forever will be on Obama's shoulders.

Of course, any bad news during Bush's administration were never his fault. (9/11? Blame the intelligence failures on Jamie Gorelick! Bush's first recession? The downturn started at the tail end of the Clinton Administration so it must be "The Clinton Recession." Bush's second recession? It all had something to do with the Carter-era CRA and something Barney Frank said! and so on). But now that there's a Democrat in the Oval, everything will be pinned on him.

Get used to it.


Jared McLaughlin said...

I won't argue Bush's economic foresight or lack thereof. I'm not certain that there has been any one individual in federal elected office who could pass economics 101 in decades.

However, Obama has found himself in a good position with regards to the situation in Iraq. The word I get is that he may want to focus his leadership capabilities on Afghanistan. Hey, maybe he'll be the president that brings in Osama, since it seems it's become a economy of force mission since the invasion of Iraq. Oh, wait, that's basically President Obama and senior Pentagon leader's plans already.

A steady transition of military authority, which has been happening for a few years, coupled with a phased withdraw from the Iraqi theater will allow more use of force in the Afghani theater.

I can't really comment on Afghanistan other than through hearsay, as I haven't ever been there.

EdHeath said...

With respect, I have to disagree with some of what Mr. McLaughlin says. I think it is the easy way out to say that our last few Presidents don’t understand economics. I think the trap Presidents find themselves in is that they must work with or balance the interests of their own and the opposition party in Congress, as well as lobbyists, campaign donors and selected subsets of the constituency at large. This is also true for Congresspersons and lobbyists, donors and constituents. What results is an elaborate dance where, for example, when President Bush wanted to aid his party in becoming a “permanent majority”, he largely ignored the notion of fiscal restraint in favor of allowing Congress to provide government programs and money where the thought it was needed. I am hoping Obama will not allow himself to be fully captive to this trap, but it will be awfully hard to avoid.

As for victory in Iraq, I strongly suspect there are individuals who are affiliated with factions in Iraq who would either like to seize power or perhaps just split a part f the country off. They are credible threats to the continued stability of Iraq as long as they command groups of people who could be turned quickly into an army. As long as there are such people in Iraq, not committed to the continued existence of the government in its current form and potentially able to change it, then as we leave Iraq there will be a threat that the country will plunge into civil war, and voters here and people abroad will no longer see a US victory. That is the problem for Obama, one he inherited from Bush but will be given the blame for.

Bob said...

Venezuelan oil is a bit of a joke on wall street.

It's nothing to fret about.

Oil may go back to the 20's, but will probably go back up too, maybe near 100 (in the next year).