Tag Archives: oil

Egypt’s Aftermath: Four Things That Will Happen Here

3 Feb

If the democratic impulses of the people in Egypt and elsewhere in the Middle East prevail, instability will rock the region as their success inspires more revolts against Western-backed dictators. Even if Mubarak’s corrupt regime manages to hold on, it will fuel even more radical responses than we’ve ever seen before throughout the Middle East.

So, what, if anything, will happen in the United States as a result of the turmoil? 

First, everything will cost more. Rightly or wrongly, Western financial and commodity markets perceive stability to be the best of all possible worlds, even if that stability is carried on the backs of poverty-stricken, oppressed people elsewhere. Oil, which underpins our modern economy, will skyrocket in price, driving up the cost of everything else.

When the Shah of Iran lost power, the uncertainty of oil prices helped usher in years of economic stagnation. And while Mubarak does not control oil production, Egypt does manage the Suez canal where a lot of it passes through in tankers. Only the potential of that waterway closing has pushed up crude oil prices to their highest level since the speculator-driven oil crisis of 2008. Imagine the impact if the flame of self-determination begins to burn elsewhere in the region?

Second, the Republicans will gain control of the Senate and extend its hold in the House in 2012. It will also win the White House. (Unless the GOP is stupid enough to put Sarah Palin on the ticket. She’s toxic to a majority of voters who see her as a selfish quitter and an ignorant shrew.) That’s because voters in this country always punish those in power when something bad happens. And because the hard right controls the GOP, it will accelerate the increasing inequality in this country as tax policies will favor the rich even more and, to pay for it, the Republicans will raid the budgets of social services.

Third, the wars in the Middle East will widen beginning in 2013. America depends too much on oil to let it slip from its grasp without a fight. And no political party better represents oil companies than do Republicans. Just as the Iraq war was all about oil from Day One, though gussied up to be about WMDs or spreading democracy, the next Middle East conflagration will be explicitly about keeping petroleum flowing to prime the pump of our economy.

Fourth, incompetent GOP economic policies and those new Middle East wars will hasten the end of the American Empire. The dollar will be the first victim. The British pound sterling dominated the planet for centuries. World War I changed the situation. It only took from 1914 to 1925 for the pound to give way to the Almighty Buck, which replaced it to become the reserve currency of choice among nations. Whether the euro or China’s yuan rides triumphant over the dollar is too early to tell.

Naturally, this is all speculation by your average joe. Nothing qualifies me to see into the future. Admittedly, I’m a glass-is-half-emty kind of guy, but it seems obvious to me that the consequences of what is happening in Egypt will reverberate beyond the the Nile to the broader Middle East and, thus, to the world as a whole. And because the United States has let its dependence on foreign oil become inextricably linked to the health of its economy and polity, risking its loss will become unacceptable to the powers that be, but attempting to sustain it will become how the American Empire passes into history.

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