War on Daddy's Dime

By Thomas L. Friedman
The New York Times

I’m not sure yet who’s the winner in the war between Hezbollah and Israel, but I know who’s the big loser: Iran’s taxpayers. What a bunch of suckers.

Isn’t it obvious? As soon as the reckless war he started was over, Hezbollah’s leader, Hassan Nasrallah, declared that Hezbollah would begin paying out cash to the thousands of Lebanese families whose homes were destroyed. “We will pay compensation, a certain amount of money for every family to rent for one year, plus buy furniture for those whose homes were totally destroyed,” said Nasrallah. “These number 15,000.”

Nasrallah also vowed that his organization would help rebuild damaged houses and businesses, promising those affected that they will “not need to ask anyone for money or wait in queues” to get relief funds. To paraphrase the All-State commercial, “You’re in good hands with Hezbollah.”

But wait — where will Hezbollah get some of the $3 billion-plus needed to rebuild Lebanon? Last time I checked, Hezbollah did not have any companies listed on the Nasdaq. The organization doesn’t manufacture anything. It doesn’t tax its followers. The answer, of course, is that Iran will dip into its oil income and ship cash to Nasrallah, so that he will not have to face the wrath of Lebanese for starting a war that reaped nothing but destruction.

Yes, thanks to $70-a-barrel oil you can have Katyusha rockets and butter at the same time. When oil money is so prevalent, why not? Hezbollah and Iran are like a couple of rich college students who rented Lebanon for the summer, as if it were a beach house. “C’mon, let’s smash up the place,” they said to themselves. “Who cares? Dad will pay!” The only thing Nasrallah didn’t say to Lebanese was, “Hey, keep the change.”

In the cold war, Russian taxpayers were the suckers who rebuilt Arab armies every time they got crushed by Israel. Now Iran’s citizens will foot the bill with their oil income — assuming the ayatollahs actually put their money where their mouth is. (Iran was always happy to spend money on Hezbollah rockets. Let’s see if it will pay for schools and clinics.)

This is why I am obsessed with bringing down the price of oil. Unless we take this issue seriously, we are never going to produce more transparent, accountable government in the Middle East. Just the opposite — we will witness even more reckless, unaccountable behavior like Nasrallah’s and Iran’s.

Been to Syria lately? Why do you think it can afford to shrug off U.S. sanctions? It also is not making microchips. It is, though, exporting about 200,000 barrels of oil a day, and that is what keeps a corrupt and antiquated regime in power. The Syrian regime subsidizes everything from diesel to bread. As in Iran, almost half of Syria’s people are teenagers, and without real economic reforms, widespread unemployment and unrest are just around the corner — but for now, oil money postpones the reckoning.

Ditto Iran. Iran is OPEC’s second-largest producer, selling the world about 2.4 million barrels of oil a day and earning the regime some $4 billion a month — the government’s main source of income. To buy public support, Iran’s regime subsidizes housing, gasoline, interest rates, flour and rice.

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.

Photo credit: Thomas Friedman. (Fred R. Conrad/The New York Times)

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