The debt crisis, chronic high unemployment, the tumbling stock market, the credit downgrade — these are — fairly obviously — symptoms of an economy in distress. We might disagree about the best policy responses. But perhaps we can agree on the worst: Borrow massive amounts of money from the Communists who want to diminish us and transfer that wealth to the jihadis who want to destroy us. Surprise: That long has been U.S. government policy. Both Democrats and Republicans have endorsed it and, so far at least, it remains in place.
This reality was driven home last week when China’s rulers, who sit on at least $1.16 trillion in U.S. Treasury securities, scolded “debt-ridden Uncle Sam,” instructing Washington that “the good old days when it could just borrow its way out of messes of its own making are finally gone.”
At about the same time, it was announced that Rostam Ghasemi would be the next president of OPEC, the cartel that controls much of the world’s oil and manipulates its price on global markets. Unsavory characters have run OPEC in the past, but this smashes all records: Ghasemi is a senior commander in the Iranian Revolutionary Guards Corps — the Brown Shirts of a regime that has been murdering Americans for more than a quarter century and which is openly dedicated to the proposition that a “world without America is . . . achievable.”
Ghasemi is under EU and U.S. sanctions for his involvement in terrorism and nuclear proliferation. He also, until recently, headed Khatam al-Anbiya (KAA), the “industrial division” of the Guards, an entity deeply involved in the exploitation of Iranian oil, also under EU and U.S. sanctions — and U.N. sanctions, too.
The EU passed its sanctions with great fanfare last June, highlighting strict travel bans on designated persons as a particularly meaningful penalty. But — another surprise — the EU left a loophole in its law: An exception to the travel ban will allow Ghasemi, as Iran’s new oil minister and president of OPEC, to travel to Vienna to attend meetings of an international organization.
To say this more succinctly: OPEC will now be headed by an Iranian terrorist master, but sanctions on him will be waived to help him do his new job, which is to squeeze out of Americans and Europeans as much money as possible, which he’ll use to fund terrorism and illegal nuclear proliferation. If you’d read this in a novel, you’d say the plot was not believable.
What is fiction? The belief that we can reduce our dependence on foreign oil, shrink the amount of money we transfer to the Middle East, and lower the price of gas by driving our cars less. Nor does it help to raise fuel-efficiency standards as was grandly announced last week. When we use less gas, OPEC responds by tightening the faucet, reducing the supply, and causing the price to rise again.
What we need to do instead is lift the barriers that are preventing us from utilizing domestic, Canadian, and Third World energy resources, including not just Gulf of Mexico and Alaskan oil but also shale oil, shale gas, natural gas, and coal (all of which North America has in great abundance), and methanol (which can be made from coal, natural gas, urban garbage, and agricultural and forestry waste).
It would help if American automobile manufacturers would make all new vehicles capable of running on the widest possible variety of liquid fuels. The technology already exists. It costs about the same as a seatbelt. Having a critical mass of such vehicles on the road would open an enormous opportunity for entrepreneurs and investors to bring to market a variety of liquid fuels that can compete with gasoline.
That ought to be the goal: creating a diverse, abundant, and — most importantly — competitive market in transportation fuels. Let me stress: It is not for politicians to pick winners and losers. They should end subsidies for domestic ethanol. They also should abolish tariffs on imported ethanol. Purchasing energy from farmers in what we hopefully call the developing world is preferable — for many reasons — to purchasing energy from Iranian mullahs and Saudi sheikhs.
If Congress and the White House would establish and then maintain a truly free market, one in which consumers determine which transportation fuels and technologies offer the best values, that would put a leash on gas prices and reduce our need to spend in the Middle East and borrow from the Far East. Cheaper energy also would facilitate faster economic growth which increases tax revenues without increasing tax rates.
At the moment, however, U.S. policy continues to be what it has been: not just stealing from Peter to pay Paul, but also borrowing from Hu to pay Abdullah. It’s hard to imagine how we could do worse.