Why The Neutralist? The term Isolationist implies a narrow Fortress America outlook and is used as an epithet. The term Neutralist does not indicate someone hiding out from the world. No one calls the Swiss isolationists. The Wilsonian world view is old, tired and wrong. Our interventions have been less and less successful and now the failure can no longer be covered up.

Monday, July 07, 2008

Things fall apart; the centre cannot hold

So Yeats says in his poem the second coming. The Neutralist has not the power of a critic to analyze the poetry, the line we quote in the title may have some validity in the event of an Iranian crisis. It is a useful turn of a phrase.

Today on the news, I heard that the Persians have stated they will not change their nuclear program. Now here we are shouting and shouting to them to stop or , or well we're gonna do something.

And we do have the capacity to do something. We can do a lot. Yet they still do not alter their path.

Israel screams it may do something. They too can do something and the Iranian government does the equivalent of a yawn.

Maybe the people who are cheerleading should give it thought.

The above is a digression from the purpose of referencing the poem. If we or the Israelis engage Iran and it does not go well, the ramifications will be vast. The news reports we are all altering our behavior due to high oil prices. It is tight, but most of us can do some workarounds whether it''s carpooling or trading in a Hummer for a Yaris.

Well, what would be the result if the Mullahs get attacked and have a plan and it impedes if not actually interdicts the Straits of Hormuz? At least temporarily the price per barrel will hit astronomical levels. That may be enough to make the words of Yeats' poem real.

In a Parapundit post Randall Parker quotes a Marketwatch article about a happy little prediction

IN 2004, ARJUN N. MURTI, A TOP ENERGY ANALYST AT GOLDMAN SACHS , published a report predicting "a potentially large upward spike in crude oil, natural gas and refining margins at some point this decade." It was a controversial call, with crude around $40 a barrel at the time. But it was right on the money. Four years later, crude is trading around 139. Murti sees energy in the later stages of a "super spike," in which prices rise to a point where demand drops off. In a note last month, he wrote that "the possibility of $150-to-$200-per-barrel oil seems increasingly likely over the next six to 24 months."

Now, few would doubt the possibility. I would not argue the probability as I am not equipped. In a country that has an inflation problem and yet sends out checks to every working taxpayer, I admit to shock if it did not happen sooner or later.

In my previous post, Maybe He Needs To Be A Tad More Skeptical I react to the Skeptical CPA's idea that Israel should take on Shia Iran as defender of Sunnis. He sees good, The Neutralist sees disaster.

If the mullahs have a plan it would probably have something to do with oil. They have no force that can take us on conventionally and if we do not send in land forces that is there only possible option other than mayhem in Iraq. They don't even have to actually set mines, they just have to say they did to devastate futures markets and getting insurance could become interesting.

I waited in line in 1973 for gas. We had money for it, the supply was the problem. If nobody is at the gas station because $10 is too much per gallon, I would be worried about the center holding.

We can probably get by this to another era of seeming abundance. A gradual runup of oil so that we transfer to electric cars over time would have some pain, but is endurable. If Mr. Murti's prediction is exceeded over the weekend due to a tanker blowing up near the straits, even by accident, all bets are off.

An adventure against Iran will not end well.

4 comments:

Independent Accountant said...

I waited in gas lines too. Suppose the US does nothing with Iran. Now what? We'll see a nuclear armed: Saudi Arabia (SA), Egypt, Jordan and Libya. Not a pretty prospect. Suppose Iran two years from now drops some cobalt shrouded nukes on SA, making its oil fields useless for decades, now what? Oil goes from $138 to about $250. The US has no good options here. I think we should crush Iran. Now. Bear in mind, I opposed our Iraq and Afghanistan adventures believing we had no national interest in either place. I disagree with you on Iran.
I feel uncomfortable siding with SA, Egypt, Libya and Jordan. So be it.

Independent Accountant said...

I reread your blog headnote. I have long felt Woodrow Wilson was the worst US president. I read a book you might like on that topic: "The Illusion of Victory" by Thomas Fleming, 2003.
Another US adventure I opposed, Serbia.

Joseph Moroco said...

uppose Iran two years from now drops some cobalt shrouded nukes on SA, making its oil fields useless for decades, now what? Oil goes from $138 to about $250.

Unless Zimben can get inflation under control, $250 will seem moderate someday.

When it is a choice between cyanide and arsenic, my basic philosophy is don't make the choice.

Saudi Arabia is not getting nukes unless we give them. Name one important Saudi nuclear scientist. Name one important Saudi anything in any of the arts and sciences. Somehow, all those doctorates in Koranic law will be of little help no matter how much they believe the holy books anwer all of life's questions.

Can the house of Saud buy one? Maybe. Maybe, if we keep bugging the Russkies they will sell one. Maybe we should stop bugging the Russkies.

Joseph Moroco said...

The Illusion of Victory" by Thomas Fleming, 2003

It is on my list. At the rate I'm going and Zimben is going, we'll be at $1000 bbl by the time I read it.