Voice

Dear Ayatollah Khamenei: Go Ahead, Shut Down That Strait

High oil prices? Bring 'em on.

President Barack Obama's political advisors look at the prospect of high oil prices and get heart palpitations. Vice President Joseph Biden hinted at their anxieties when he said, "I think we'll be beaten -- if we are -- by something happening in the eurozone or something happening in the Gulf, which could be difficult for us."

One former top national security official told me he thought that the administration was so worried about the possibility of spiking gas prices as the result of an Israeli strike on Iran that they "made a deal with the devil: getting Netanyahu to agree not to strike until after November in exchange for a promise that we would have his back after that." (Prompting one Israeli to say to me, "We're now trying to figure out what this American expression 'I've got your back' really means." I told him it meant something different for police officers who were real partners than it did for inmates that found themselves reluctantly forced to occupy the same prison cell.)

These days it is a fairly regular occurrence for visiting heads of state, whether or not they are from big oil-producing nations, to be asked by the White House to make some kind of statement saying they will help keep prices low by releasing reserves or increasing production. It was a top item on the agenda when President Obama met with British Prime Minister David Cameron, another guy who is already getting absolutely hammered due to unusually high prices at the pump. It is likely to be a top item on the agenda when Brazil's President Dilma Rousseff visits Washington next week -- even though Brazil's role as a major oil producer is still years in the future.

But while at the White House they worry that high gas prices might threaten their reelection chances, I say bring 'em on. I say to Americans, if you have a shred of patriotism in you, every time you head down to the gas station and the price goes up a dime or a quarter or a buck, you say, "Thank you sir, may I have another." Say, "If the average Frenchman can pay 8 bucks a gallon for gas, I can handle $5 without whining." Rather than worrying about high gas prices, we should all be cheering them on, because nothing will do more to advance the progress of our economy and the health of our environment than high gas prices. 

Economists know this. They know that the best way to reduce our consumption of gasoline isn't some complicated cap-and-trade program but a simple charge that makes it harder to buy the stuff in such quantities. That will be the best reason to force us to use more of the increasingly abundant energy supplies we have right here within our borders. Of course, economists would prefer a tax, but why wait for a dysfunctional government here at home to produce a tax when dysfunctional or maliciously inclined governments in the Middle East will do the same thing? 

Sure, high gas prices will be a burden on some folks. That's not the problem, that's the point. Perhaps we can offer some special tax reductions for the poor so this is not so onerous for them that they can't make their way to work or school or to receive health care. (In fact, I would welcome seeing the Democrats, who at least in theory care about such things, propose such a deal and the Republicans come back demanding we give relief to the top 1 percent too, because if their chauffeurs can't afford to drive them to work, how will they earn those giant bonuses that will come trickling down to us any minute now?)

Either way, we should be sending a note to Ayatollah Khamenei over there in Tehran saying, "Go ahead, make our day. Shut down the Strait of Hormuz. Help us break our addiction to what you're selling. Not only will it be good for us, but perhaps it will trigger your downfall."

It's fascinating how energy policy has become so central to the 2012 elections. I spend a lot of time talking to senior people in energy companies of one sort or another, and pretty much the conventional wisdom among them has been that this would be a year when precious little got accomplished on the big energy issues. But instead, energy has become not only a top issue in the campaign but perhaps the central question -- tied as it is not only to gas prices (which are a domestic as well as a foreign-policy issue) but also to the question of how to create the next American economic renaissance and new jobs along with it. 

Already, the list of energy issues rating politically in 2012 is longer than it has been in any recent year, from the impact of new domestic shale-gas supplies and debates over pipelines connecting us to vast oil sands reserves in the Canadian North to the promise of new technologies or offshore reserves and the controversies over the role of the Environmental Protection Agency (which has become perhaps the leading non-health care symbol of "big government") and Energy Department loan programs. And of course, there are the global implications of the energy debate, from political upheaval in the Middle East to the impact spiking oil prices might have on Europe's fragile social dynamic or that in China. 

Make a list of the big issues in the world and put a check next to the ones that have an important energy component. The list is long: Iran; Iraq; the Arab Spring; terrorism; the rise of China; resource competition worldwide; the focus in our pivot to Asia on keeping open sea lanes for the shipment of energy through the Indian Ocean, Straits of Malacca, and the South China Sea; the future of the Japanese economy; our concerns about instability in Africa; the rise of the BRICS and other emerging powers. Then think for a minute about the huge impact that growing American energy independence, fueled by a dramatic increase in U.S. oil and gas production from previously inaccessible or newly discovered sources, might have on geopolitics. 

Despite all this, we remain a country without a coherent whole-of-government, whole-of-the-economy energy policy -- or even a responsible debate about what such a policy would look like. The candidate who comes closest to remedying this long-lamented vacuum and who seems best able to seize our burgeoning new energy opportunities and reduce our enduring energy risks will likely win the upcoming election. Which one is it? For now, it's not yet clear: While Obama emphasizes alternative energy somewhat more than his presumptive GOP challenger Mitt Romney, both have essentially adopted 2008 Republican nominee John McCain's "all of the above" approach. Obama is likely to go after Big Oil as a theme and Romney is likely to protect the oil companies in the name of keeping prices low. But the x-factor is that until now, neither has built a compelling, specific, realistic vision for the future of our economy with a comprehensive energy policy at its core.

But even as we wait for vision in high places in Washington -- which history suggests could be a very long wait -- we are fortunate that the utter absence of good policies is having the most important effect we could hope for: Spiking gas prices will make it more profitable to look for alternatives, more profitable to drill at home, more profitable to embrace efficiency, and more profitable to conserve. Rather than being careful what we wish for, we should be careful not to fear what we need most.

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David Rothkopf

Hunger Games

Where's this big, transformational change we've been craving from Barack Obama?

No U.S. president is ever quite as simple as the caricatures that emerge from pundits' sound bites. That said, few presidents are so complex or full of contradictions as Barack Obama. That was illustrated again this past week with Obama's smart, troubling nomination of Dartmouth College President Jim Yong Kim to be World Bank president.

It is almost axiomatic that stories about Obama initiatives can be written at least two ways, one focusing on real accomplishments, the other on frustrating shortcomings. Take his health-care program: Is the story his passage of the first major reform in a generation, or is it instead a failure to address underlying costs or to provide coverage for all? On the economy, should he get credit for steps to oversee banks, or is this a story of the failure to fund proper enforcement or deal with problems like opaque, risky derivative markets? Is it saving America from depression or failing to address the housing crisis that started the disaster of 2008 and 2009? Is the narrative of Obama's foreign policy about getting out of Iraq or doubling down in Afghanistan; effective sanctions against Iran or giving extra time to the mullahs; stepping in for Libya or letting Syria bleed?

For the world, one of the most frustrating of these dichotomies has to do with the hopes that Obama raised even prior to entering office that he would oversee both a transformation in America's traditional exceptionalist, Atlanticist approach to global affairs and a consequent shift in the structure and function of global institutions. This past week, with the U.S. nomination of the Korean-born, MacArthur "genius award" winner and physician Kim to succeed Robert Zoellick at the World Bank, we have again seen two steps forward undone by having one foot immovably anchored in the past.

The steps forward are Obama's decision to put a man who has devoted much of his life to development issues in line for a job held primarily by politicians and bureaucrats in the past and the move to pick someone for the job who was actually born in a developing country, not in the United States. But Obama failed to seize the moment to put his actions where his rhetoric was about creating a new global order and actually end the tradition of requiring that a U.S. citizen occupy the World Bank's top job. This error was further compounded by Obama's decision to go ahead and pick someone who was far from the best available candidate, even after correctly asserting it was time for a bank president chosen based on development credentials. Kim, though admirable and accomplished, is not better qualified for the job than other prominently mentioned U.S. choices like Larry Summers, Jeffrey Sachs, Hillary Clinton, or PepsiCo CEO Indra Nooyi. Nor is he in the same league as serious international contenders for the job like Nigeria's Ngozi Okonjo-Iweala or Colombia's José Antonio Ocampo. All these candidates have far broader international development backgrounds and greater experience dealing with the global leadership of the international development and financial communities.

As a consequence, Obama's nomination of Kim has produced not only criticism from some in the development community (Harvard University's Lant Pritchett likened it to picking a minor leaguer to start at shortstop for the New York Yankees), but intensified speculation about whether the rest of the world might finally be ready to outvote the United States at the bank. Of course, if the United States obligates its European allies to honor the gentleman's agreement that has either side voting with the other to ensure U.S. leadership at the World Bank and European leadership at the IMF, then Kim is a shoo-in.

If Obama really believes his man is the best for the job, he should publicly end the gentleman's agreement and encourage all countries to vote for whomever they think is best. He won't. But he should. One reason he won't is the belief -- promoted in part by Zoellick -- that the U.S. Congress won't support the World Bank if it doesn't have a U.S. president. That's where leadership should come in and the president should be confident that he could persuade enough members of the opposition to vote with him based on the simple fact that it's in the U.S. interest to do so as a way of leveraging limited American contributions into a safer, more prosperous world.

But beyond the considerations associated with World Bank politics or operations, there is a bigger issue here. Obama is not the transformational figure on the global stage many expected him to be. Certainly there are myriad positive achievements that deserve respect -- getting out of Iraq, undoing much of the damage done to the U.S. reputation associated with that war, fashioning a coalition to oust Libya's Muammar al-Qaddafi, pivoting to Asia, recognizing the importance of the U.S.-India relationship, etc. But while it is clear that the era of bullying, values-compromising, international law-breaking policies of George W. Bush's administration are over, what Obama has replaced it with is exceptionalism-lite.

America may not invade countries with great armies as it did in Iraq, but instead the country is increasingly relying on attacks by drones and special operations forces in violation of national sovereignty worldwide -- raising the specter of the rich United States waging white-collar wars against poor and failed states. Such tactics may not be as boldly contemptuous of international law, but they are still illegal and arrogant. America may not publicly thumb its noses at the international system that it created, but neither has it renounced the elements of that system that anachronistically and anti-democratically give special privileges and disproportionate power to the victors of a war that ended almost seven decades ago.

Perhaps it was the fact that Obama's father was born in Kenya or that he spent part of his childhood in Indonesia that led the world to think he would embrace a different approach. Perhaps it was his and his cabinet's repeated rhetoric that the United States wanted to reflect and respect a new global order with its actions. Perhaps it was his early embrace of a broader group of international decision-makers like the G-20 or Secretary of State Clinton's focus on strengthening ties in Asia and with big emerging markets.

But that's not where things stand now. The G-20 has not in fact emerged as a centerpiece of a new international order, and the United States' dealings with emerging powers like India may have been strengthened, but look at how prickly Washington remains when such new players dare to offer contrary approaches (see the backlash to Turkey and Brazil's Iran initiative). Against that backdrop, the World Bank choice is another missed opportunity to do the right thing and actively seek to remake the outmoded, unjust international order.

Is Obama's America an improvement over that which immediately preceded it? No doubt. Is the good he has done compromised by the seemingly enduring view that there should be one set of rules and privileges for America and rich countries and another for the world's poor? It is.

But it's not too late -- in his remaining year, or more likely five, there's still time for a more confident president to go from promising compromiser to agent of lasting and overdue change.

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