"According to an Aug. 2 report on Bloomberg.com, “Iran spent $25 billion on subsidies last year, or more than half the $44.6 billion it collected through crude oil exports.” But Iran actually has to import more than one-third of its gasoline, because it can’t refine enough itself. This became so expensive the regime wanted to ration subsidized gas but feared a public backlash. No wonder. Bloomberg reported that subsidized gasoline in Iran is 34 cents a gallon.
Repressive governments like Iran’s and Syria’s use oil money to buy off their people and insulate themselves from the pressure of political and economic reform. When oil prices get high enough, they can even buy a monthlong war in Lebanon. Why not? It’s like a summer sale: “Now, this summer only: 34 cents-a-gallon gasoline and a war with the Jews and new living room furniture for Lebanese Shiites! Such a deal!”
If we could cut the price of crude in half, it would mean that all of Iran’s oil income would go to subsidies — which would be unsustainable and therefore a huge threat to the regime. It would also make Iran’s puppets, like Nasrallah, think three times about launching wars with Israel that might ravage Lebanon again.
Too bad we have a president who tells us we’re “addicted to oil” but won’t do anything about it. That sort of hypocrisy just makes Nasrallah’s day."
Friday, August 18, 2006
War on Daddy’s Dime
Friedman today, "War on Daddy’s Dime" with another aspect of the Israel/Hezbollah conflict worth considering: