Backtalk, May 8, 2006

Comrade Cheney vs. President Putin

Being a modest student of geopolitics and the history of the great game, I have never doubted that the primary reason, the final target of America’s involvement in the Middle East is the breakup of Russia. Sure, there are other reasons as well, each playing a part, but if one would study the planet with some understanding one would see that world control oscillates between the land power and the sea power. Russia is and has always been the core of the land power (the Mongols before the Russians). First Britain, and now the U.S. is the sea power. And yes, there are evil old men in positions of power who spend hours staring at the globe, thinking, thinking, thinking, how can it be done.

From that perspective, Putin (whom I have some admiration for, even though he is a statist) is THE (not just an) obstacle in the path of sea power domination. If the land power could be split apart, it would lose its effectiveness. If one were to take a map of Eurasia and color in the territories dominated by or allied with Moscow in the Cold War and then do the same on another map of Moscow’s control and alliance today, you would notice two things.

First, you would be astounded at the enormous loss the land power suffered. … But secondly, it would leap out to you how critical Iran is to Russia’s survival and how critical dominating Iran is to America’s winning the great game. (A win that would be an unthinkable disaster in its implications, including an even more rapid ascendancy of China, with China quickly filling the vacuum left by Russia in control of the core of the land power.) With Iran under subjection to U.S. forces, the soft underbelly of Russia is exposed. American forces would not have to enter European Russia at all. If you go north and a little east of Iran, you see that the occupation by a strong enough force for a long enough period of time of one city, the city of Omsk, would bust Russia apart.

But, on the other hand, I suspect that Putin, in his craftiness, will do nothing to block an American assault on Iran. Sometimes, in this great game, the weaker side has to take extreme risks. But if you know your own cards well enough, as well as your opponent’s cards, there’s a good chance of coming out on top. I suspect that Putin believes that the world will watch the ruin of American power upon the mountains of Iran. This entire generation of Americans believes that when the American military shoots, enemies turn tail and run. I cannot predict the future, and maybe the Iranians will turn tail and run as well, but maybe they won’t. Maybe, at some point, this odd aberration of enemies not fighting back will end. And I also suspect that Putin himself knows exactly why and how it will end. The resurgence of Russian influence and wealth that would come as a result of an American defeat in Iran, the shutoff of Persian Gulf oil (Russia would make big bucks on its remaining oil), and the final destruction of America’s reputation, would be nearly as great as Russia’s loss in the Soviet implosion.

I am not a gambling man, but I suspect that Putin is. I agree with Raimondo that Cheney is not stupid in his attempts to provoke Russia, that he is doing it deliberately. I also find that when Cheney comes to mind, I see not Cheney, but a medieval death’s head. There is no compatibility between American freedom and the great game. Far more Americans need to understand that. Because, in the end, it is no game at all.

~ Daniel Yordy

The last thing Europeans want is a revival of the cold war or a renewed division of Europe. Cheney’s comments will in fact offend people over here. Nothing will be said, but he will just be ignored. NATO membership is just a means of getting money out of the American taxpayer, who gets precious little in return.

However, Justin Raimondo (like Cheney, in fact) makes the classic American mistake of assuming that anyone who is not in America’s face is in its pocket. Europeans are much too subtle for that, and European leaders are nobody’s “stooges.” The voters just won’t stand for it (Aznar gone, Blair’s every sneeze a crisis). That applies as much to Russia or Ukraine or the Baltic States or Bulgaria as to anywhere else in Europe (even Britain!).

~ Michael Kenny

Ray McGovern

Dear Mr. McGovern,


I am a 54-year-old Mexican-American Vietnam veteran. I did 3 tours in ‘Nam during ’71-’75.

I saw your confrontation with Rumsfeld and was proud and honored to be an American with you. While I don’t invest myself in seeking out people who I find honorable, I just had to tell you that you did Americans proud of the way you addressed Rumsfeld!

In the Mexican culture, we say, “Show me who you walk with and I will tell you who you are.” I would be honored to stand by you.

~ Johnny Jos. Anguiano, MPA

Cut and Run? You Bet

The article written by Lt. Gen. (ret.) Odom makes by far the most salient and succinct case for U.S. withdrawal from Iraq. It is truly unfortunate that General Odom is not in a decision-making position in Washington and even more unfortunate that he was not in such a position prior to March 2003. We need the likes of him to provide rational foreign policy advice to our highly irrational leaders in Washington, who are currently forging the most misdirected and dangerous foreign policy decisions ever made in the more than 200 years of American history.

~ Andras Karadi Lt. Col. (R), U.S. Army

Al-Qaeda’s Code

Dear Ms. Napoleoni:

Further to your commentary that “from September 2001 to February 2002, the West had a window of opportunity to hunt al-Qaeda’s financiers and capture bin Laden and followers in Afghanistan and then Pakistan.” The Clinton administration was privy to bin Laden’s itinerary and plans to travel to Afghanistan as early as 1996, information as provided to them by Sudanese intelligence. Also, in 1997, an American journalist traveling in Kandahar discovered the whereabouts of bin Laden which along with a map was provided to American authorities. At that time he was in proximity to the airport in Kandahar, an area which seemed ideal for a special operations team to snag him. Then there are the many overtures initiated by the Taliban to both the Clinton and Bush administrations to make a deal which could have resulted in the capture of bin Laden. The Taliban had and have maintained that Washington did not want to capture bin Laden, that he was a justification for war, the subtext being the imbroglio over the Trans-Afghan-Pipeline, or PIP. What was known and what was done to apprehend bin Laden is a subject that needs critical study; just think, if bin Laden had been captured in 1997 perhaps there never have been a 9/11. At best, given the evidence, it seems that both administrations are guilty of profound parochialism and incompetence prior to 9/11.

~ Bruce G. Richardson, author: Afghanistan, Ending the Reign of Soviet Terror

Loretta Napoleoni replies:

Dear Bruce,

I agree entirely with your analysis but the article was specifically focused on terrorist financing, and prior to 9/11 such a subject did not exist. The fact that prior to 9/11 Clinton and Bush did nothing to capture bin Laden was mistake, yet bin Laden was, relatively speaking, considered a small-time terrorist, who had carried out attacks in Africa and the Middle East. The fact that after he killed 3,000 people the Bush administration did not bring him to justice but focused on Saddam Hussein is, in my view, a crime. Especially considering that window of opportunity.

Gasoline Prices and Energy Policy, True and False

Dear Mr. Henderson,

I just read your article titled “Gasoline Prices and Energy Policy, True and False,” posted on I found it surprising that you neglected to mention a number of salient factors that most economists would agree have contributed to high gas prices:

1. limited refining capacity
2. anti-competitive practices

Oil refining capacity has become a major bottleneck in the value chain of the oil industry (hence a driver for price increases). …

“There has not been a new petroleum refinery built in this country since 1976 … [s]ince 1981, with the removal of refinery subsidies, the number of oil refineries has decreased from 315 to 144 at the end of 2004.”
– “U.S. Refining Industry: A System Stretched to the Limit,”American Petroleum Institute

To demonstrate the validity of this, even Bush is quoted in a New York Times article, titled “Bush Takes Steps to Ease Increase in Energy Prices,” urging oil companies “to reinvest their profits in expanding refining capacity.”

A report by Sen. Ron Wyden called “The Oil Industry, Gas Supply and Refinery Capacity: More Than Meets the Eye,” presented June 14, 2001, reinforces the second factor. Specifically, the document suggests that “major oil companies pursued efforts to curtail refinery capacity as a strategy for improving profit margins; that competing oil companies worked together to subvert supply; that refinery closures inhibited supply; and that oil companies are reaping record profits, yet may benefit from a proposed national energy policy that would offer financial incentives to expand refinery capacity.”

As an economist, I’m sure that you’re aware that competitive pricing occurs when prices are set to short-run marginal costs. When is the last time you’ve seen a price war being waged between two gas stations at the same intersection. This did occur in the past, but was quickly ended. The oil companies quickly realized that rather than price at marginal cost, they would tacitly allow one company to be the price leader and the others would follow.

Why did you not bother addressing these issues in your article?

~ George Katsuras

David R. Henderson replies:

Dear Mr. Katsuras,

You are right on your first point: that limits in refining capacity have contributed to high gasoline prices. I didn’t address this issue because I wasn’t trying to explain high gasoline prices; I was explaining rising gasoline prices. To explain a change in something, as Charles Hooper and I point out in our book, Making Great Decisions in Business and Life, you need to point to something else that changed. The limits on refining capacity have been there a long time: they haven’t changed. What has changed is the demand for gasoline currently, which has risen, and the supply of gasoline, which, as I noted in my article, has fallen due to higher oil prices, which are due in part to President Bush’s threats against Iran.

On your second point, I disagree. There is no credible evidence I know of that justifies blaming refiners for not building more refineries. The people who have stopped that from happening are various governments in the United States, egged on by people who want not to allow gasoline refineries anywhere close to where they live. It may be true that existing refiners have supported, implicitly or explicitly, government decisions to restrict refining capacity of their competitors and, to the extent they have done so, they should be castigated. What I have observed, though, is that the lead movers on this are people in the area who don’t want refineries built. I don’t want to use the standard term, NIMBY, which stands for “Not in My Back Yard,” to describe the people who favor restrictions because no one is advocating that refineries be built in their backyards. Rather, the refiners want to build on their own property and should be allowed to do so.

What About Darfur?

Every day I get pleas from organizations on the Left (I am a left libertarian and do sympathize) to pressure the government to do something about Darfur. But I keep remembering that old saw about how having only a hammer to work with makes every problem look like a nail. Somehow, going in there with guns blazing doesn’t impress me as a solution, either – and that is always how it is done. In Yugoslavia, of course, the purpose was to break up the last, mostly un-failed, socialist state in Eastern Europe, and the crisis we were responding to was at least partly of our own contrivance. So I am further inclined to suspect the worst about any such situation. We’ve made a mess of running stuff, overturning governments, deposing both elected presidents and horrid dictators, imposing sanctions on those we disapprove of. Personally, I am tired of running the world and not at all sure that anyone here knows how to do it well. Perhaps we need to devise peaceful strategies for simply saving those able to get away from such horrors.

~ Adrien Burke

Previous Backtalk