Thursday, December 8, 2011

President Obama Denies Appeasement Campaign Rhetoric

Today, President Obama denied the campaign rhetoric from GOP candidates Mitt Romney, Rick Perry,  and Newt Gingrich alleging in one form or another that President Obama has engaged in an appeasement foreign policy in the middle east.

The middle east appeasement rhetoric erupted when the Republican hopefuls tried to out do each other while addressing a Jewish Republican audience.  Republican candidate Ron Paul was not invited to the event due to his consistent isolationist foreign policy stance. However, Ron Paul issued his own mid east foreign policy response the night of the event.

During a press conference, President Obama addressed the appeasement question directly, "Ask Osama bin Laden and the 22-out-of-30 top al Qaeda leaders who've been taken off the field whether I engage in appeasement.  Or whoever is left out there, ask them about that."
The President later went on to say during the press conference, "When we came into office, the world was divided, Iran was unified and moving aggressively on its own agenda.  Today, Iran is isolated, and the world is unified in applying the toughest sanctions that Iran has ever experienced.  And it's having an impact inside of Iran.  And that's as a consequence of the extraordinary work that's been done by our national security team. 

Now, Iran understands that they have a choice:  They can break that isolation by acting responsibly and foreswearing the development of nuclear weapons, which would still allow them to pursue peaceful nuclear power, like every other country that's a member of the Non-Proliferation Treaty, or they can continue to operate in a fashion that isolates them from the entire world.  And if they are pursuing nuclear weapons, then I have said very clearly, that is contrary to the national security interests of the United States; it's contrary to the national security interests of our allies, including Israel; and we are going to work with the world community to prevent that."

However, this heightened presidential campaign rhetoric regarding a get tough policy on Iran could further weaken the U.S. economy in the short term, and destroy the Western economies in the long term.

If the Obama administration carries out tougher sanctions and other covert actions against Iran such as the downed CIA drone in order to bolster Obama's Commander-In-Chief image just before the 2012 election, it could mean more pain at the pump for both the U.S. and European economies.
 
The last time there was significant sabre rattling by the U.S. and Israel against Iran was in June 2008.  World oil prices saw the largest 24-hour spike in oil price history as a result.

While Republicans constantly refer to the Reagan Revolution and the changes to 1986 U.S. Tax Code, the sustained drop in oil prices had as much to do, if not more, with the sustained U.S. economic prosperity enjoyed under the Reagan Administration.

Likewise, Democrats constantly refer to Clinton's tax policies for the economic prosperity enjoyed under his administration.  But again, the drop in oil prices after Gulf War I, coupled with technical innovations, were the major contributing factors to U.S. economic growth.

As the inflation-adjusted historical oil price chart demonstrates, not a single sustained economic recovery has occurred in the United States over the last 40 years when oil was over $40 a barrel.




The chart also demonstrates that a rise oil prices coincides with the buildup of U.S. military and political intervention in the Middle East following the 9/11 attacks.

By violating the historical $40 a barrel rule, the chart shows that the economic growth in the 2000s was never real, but just an illusion caused by U.S. government intervention in the housing market that was unsustainable.

When the financial collapse occurred in  2008, oil prices were well on their way under the magical price of $40 a barrel.  

If this drop had been allowed to occur on its own, the U.S. economy would have been in a recovery similar to that of 1986 by 2009. 

But a combination of money printing by the Federal Reserve and other central banks, combined with TARP bailouts, and deficit spending by the Obama administration, weakened the U.S. dollar.

The weakened U.S. dollar pulled oil prices out of their natural tail spin and prevented a U.S. economic recovery while also pulling money out of the pockets of average Americans.  

These bipartisan policies helped Republican special interests ensure profits for oil companies, and also caused unjustified support for Green Industry lobbyists to obtain U.S. taxpayer graft from the Democrats.

The prevention of a global recovery, especially in the U.S. and Europe, allows the policymakers to continue to claim that they are in "crisis" mode which will call for more "unprecedented" actions by politicians and central bankers for the ultimate benefit of international bankers.

Instead of trying to prove who would be tougher on Iran, the presidential candidates should address the real issue that actually matters to Americans: Which candidate's foreign and fiscal policies will result in oil prices sustained under $40 a barrel that will lead to a U.S. economic recovery?  

This is a very Presidential issue because the President can immediately call upon OPEC countries to increase oil production or lose military protection and aid from the U.S.  The President can also open dialogue with Iran to negotiate the removal of sanctions in exchange for increased oil production.
The Republicans ask one segment of Americans to give up some of their entitlements, while the Democrats ask another segment of Americans to pay more taxes, and foreign central bankers are asking all Americans to incur more debt obligations to bail out Europe.  Yet neither party is asking OPEC countries to do their part to contribute to the global economic recovery.

Whether Republican or Democrat, all but a handful of Americans would be opposed to fiscal and foreign policies that result in cheaper gas and economic recovery.