Maureen Dowd : Fire Sale

Monday, January 21, 2008

When President Bush finished doing his sword dances and Arabian stallion inspections, when he finished making a speech in Abu Dhabi on the importance of freedom that fell flat, when he finished lounging in his fur-lined George of Arabia robe in the Saudi king’s tent, he came home.  Or he came to what was left of home.  A Washington Post cartoon by Tom Toles summed it up best: …..

(click for larger image)

Wherever he went, W. seemed dazzled by the can-do spirit of the J. Pierrepont Finches of the new Middle East.  “It’s important for the president to hear thoughts, hopes, dreams, aspirations, concerns from folks that are out making a living,” he told Saudi entrepreneurs.  In Dubai, he commended young Arab leaders, saying, “The entrepreneurial spirit is strong.”  In Abu Dhabi, he marveled at the royal family’s plans to build a city based entirely upon renewable energy.  “Amazing, isn’t it?” W. said.  You know you’re in trouble when your Middle East oil pump is greener than you are.  Even as W. played cheerleader for Arab business, the Arabs were cleaning our clocks — then buying them.  Our addiction to oil has allowed our pushers in the Persian Gulf to go on a shopping spree to snap us up. Hillary Clinton was right when she said it was “pathetic” that President Bush had to beg the Saudis to drop the price of oil. One cascading rationale he offered for invading Iraq was the benign domino theory, that bringing democracy to Iraq would sway the autocrats in the region to be less repressive.  But when W. visited Saudi Arabia and Egypt last week, he did not have the whip hand. He could not demand anything of the autocrats in the way of more rights for women and dissidents, much less get the Saudis to help on oil production.  He needs their help in corralling Iran, which has been puffed up by the occupation of Iraq.  So he was a supplicant in Saudi Arabia.  The American economy is a supplicant, too. 

Two decades ago, we fretted that Japan was taking over America when Sony bought Columbia Pictures and Mitsubishi bought a chunk of Rockefeller Center. But they overpaid for everything.  Now, because of Wall Street’s overreaching, our economy depends on foreign oil and foreign loans to stay afloat.  China and Arab countries have a staggering amount of treasury securities.  And the oil-rich countries are sitting on so many petrodollars that they are looking beyond prestige hotels and fashion labels and taking advantage of the fire sale to buy eye-popping stakes in our major financial institutions.  Like the president, Citigroup and Merrill Lynch came with tin cups to Middle Eastern, Asian and American investors last week, for a combined total of nearly $19.1 billion, after the subprime mortgage debacle blew up their books.  Citigroup, which raised $7.5 billion from Abu Dhabi in November, raised another $12.5 billion, including from Singapore, Kuwait and Saudi Prince Walid bin Talal.  Merrill Lynch gave $6.6 billion in preferred stock to Kuwait, South Korea, a Japanese bank and others. (While the great sage Bob Rubin was advising Hillary Clinton on sound fiscal policy, he seemed to be asleep at the Citigroup switch.) As Warren Buffett has said, we are giving ourselves a party to feed our appetite for oil and imported goods and paying for it by selling off the furniture, our most precious assets…..Maybe if the president had spent the trillion he squandered on his Iraq odyssey on energy research, we might have broken the oil addiction.  Now it’s a race between Iraq, stupid, or the economy, stupid, to see which one will usher out W.  The country is engaged in a fit of nativism and Lou Dobbsism, obsessing about the millions of Mexicans who might be sneaking across the border when billions in foreign money are pouring into Citigroup.  You figure out what might be a bigger problem.  The national boundaries that really matter are the financial ones: Who’s going to own the American economy?

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