For whatever reason, Wall Street has become obsessed, all of a sudden, with the price of crude oil. Of course there has been a glut in oil for well over a year, but analysts and investors saw no correlation between oil and the value of stocks in other sectors of the market until this month. Now it appears that we have a full-blown crisis centered on plunging oil prices.
To be blunt, we have a president who could care less about the price of oil or oil-related companies. Think about it: That industry has been heavily supportive of Republicans and states such as Texas, the home of President George H.W. Bush and President George W. Bush. This is not exactly beloved political territory for President Obama. That's why Obama gave little thought to the implications of an agreement with Iran that frees up a massive amount of Iranian oil and accelerates the glut.
Up until now the presidential contest on the Republican side has been dominated by issues related to terrorism and immigration. The Democratic candidates have spent their time fighting over who can redistribute wealth the fastest and to the greatest extent. The problem is that by November, the wealth they want to give away might not even be there.
Yes, the decline of China's economy kicked off this year's Wall Street correction, but the entire market appears to be rising or falling in tandem with the price of crude.
This is a serious situation that could spin completely out of control. With the IMF having already warned of an economic slowdown worldwide and the Atlanta Fed's now-revered system of predicting U.S. GDP suggesting growth in the last quarter of 2015 at only .7 percent, talk of a recession is increasing. Yes, it costs a lot less to fill your gas tank, but if the company you work for lays you off due to an economic slowdown, those extra savings won't mean much. We could possibly see housing, manufacturing and retail stop dead in their tracks if this situation does not reverse itself.
And as the presidential-year economic meltdown of 2008 helped put Republicans on the defensive, such an event this year could spell doom for the Democrats.
How would Hillary Clinton defend Barack Obama and John Kerry's idiotic agreement with Iran once Republicans point out how it's freeing up of Iranian crude oil and helping to destroy our economy?
The Republican candidates must address this matter quickly with a plan to stabilize the oil and financial markets before a meltdown takes place. That plan might start with a strong message to Saudi Arabia.
The U.S. government allows sales of military equipment and provides military support for Saudi Arabia, such as in the recent Saudi battle against rebel forces in Yemen. But while we were helping the Saudis last year, they were accelerating the slide in oil prices by refusing to cut production as the glut in oil deepened, in part to kill off U.S. oil producers. Should we be so cooperative with a nation whose intent was -- and is -- to run our own domestic oil companies out of business?
Years ago the late Secretary of State Alexander Haig told me that Iran's top goal is not the defeat of the United States nor the destruction of Israel. He stated that Iran's greatest goal has been and always will be conquering Saudi Arabia. It was a conversation I have never forgotten. And my guess is it is a concept the Saudis understand all too well.
A presidential candidate who devises a strategy to force the Saudis to reverse their position on oil production, and therefore stabilize both the oil and stock markets, might take true control of the race in the coming weeks. Reminding them of their vulnerability and need for U.S. goodwill and our powerful defense contractors would be a good place to start.
Since the Saudis no longer seem to cooperate with OPEC, perhaps they should be encouraged to form a new "cartel": one with the United States that helps stabilize the price of oil and our financial markets. In exchange for less Saudi oil production, we'll grant the Saudis continued access to U.S. defense systems and assistance.