February 2004 -- When you get right down to the bottom of the matter, the war in Iraq was ultimately about oil -- or so say the anti-globalists and the hard Left. We've all seen the signs and heard the chants: "No Blood For Oil!". Many hardcore Leftists seem to believe that both President Bush I and II dragged the United States into war as a favor to their "oil buddies." After all, both Bushes have backgrounds in the oil industry. And the fact that Vice President Cheney once headed an oil company closes the case for them.
These cynical views are largely ignored and dismissed as extreme by the vast majority, hence nobody bothers to refute them, including Bush's conservative supporters. This passivity only serves to reinforce the cynicism of those who hold such views. For their sake as well everyone else's, these claims need to be taken at face value and examined to see if they could possibly hold any water.
Suppose for a moment that the Bushes really care more about their "oil buddies" than they do about the 280 million Americans they were elected to lead and defend. Suppose they care more about the oil industry than they do about the rest of the economy. Yes, it seems awfully cynical, and it would obviously make re-election a major challenge, but suspend judgment for now on the Bushes' true allegiances. If they were truly beholden to the oil industry, what would or should they do?
Let's start with economics 101 and some common sense. Fact 1: When oil supplies are cut, the price of oil goes up. In fact, supplies don't even need to be cut to drive the price up. Any uncertainty about future supplies is enough to drive up the price of oil, sometimes dramatically. Fact 2: The oil industry likes high oil prices. Any commodity industry obviously likes to see the price of its product increase if they know people will still buy it.
Let's take it a step further. When the price of oil goes up, so does the price of oil stocks and the market capitalization of oil companies -- particularly oil companies that own reserves of oil in the ground. When that happens, oil executives -- including Bush's "oil buddies" -- instantly become wealthier without lifting a finger to earn it. At the same time, the rest of the economy suffers, thus further magnifying the relative wealth of the oil executives and stockholders.
Another obvious but seemingly often forgotten fact needs to be pointed out here. The oil reserves in the ground in the Middle East are owned by the people or regimes of the region, not by Bush's American "oil buddies." They pay market rates for oil even in Kuwait, which was liberated under the leadership of Bush I. This means that when American oil companies sell Middle-Eastern oil, they must earn their income by providing services such as extracting, transporting, and/or refining the oil at market rates.
Oh, a few obvious geopolitical facts are also relevant. When Saddam Hussein tramples Kuwait and threatens to do the same to Saudi Arabia, oil supplies from the Middle East are either cut or severely threatened. As a result, oil prices shoot up like a rocket. And when American forces drive Hussein's forces out of Kuwait or topple his regime and capture him personally, the long-term stability of Middle-Eastern oil supplies is enhanced immeasurably -- a nice side effect of liberating 25 million people.
So let's summarize the basic facts. When oil supplies are cut or even threatened, oil prices goes up. When oil prices go up, Bush's "oil buddies" become wealthier without earning it. When Saddam Hussein controlled Kuwait and threatened Saudi Arabia, oil supplies were seriously jeopardized. Given those basic facts, what should President Bush I have done to cynically enrich his "oil buddies." And what should President Bush II have done?
If you said Both Bushes should have left Saddam Hussein free to wreak havoc, pass go and collect $200. That's right. The very policy demanded by the hard Left would have wildly enriched Bush's "oil buddies" at the expense of the American and world economies. The Bush policies, on the other hand, saved the economy from unimaginable hardship and prevented their "oil buddies" from hitting the jackpot bigtime.
So common sense leads to the indisputable conclusion that the Bushes did not, in fact, do the bidding for the oil industry. Quite the opposite. Maybe the oil industry should demand some of those campaign contributions back! Or maybe some of Bush's "oil buddies" are not as cynical as the hard Left protesters themselves and actually wish the nation well. And maybe those protesters should learn some basic economics and get some common sense. But don't count on it.