Combat Middle Eastern terror with an oil ultimatum

I promised recently that I was going to explain how the US could “encourage” Middle Eastern countries to fix their terrorism problem by using that simple phrase beloved by our parents: “or else.”

As everyone already knows, many Middle Eastern countries survive on oil revenue. That’s basically their only asset. We buy that asset — crude oil — and they pocket the money and everyone walks away more or less happy, except for the occasional price gouging and fake shortages.

It’s been like this for decades.

But a lot has changed in just the past 10 or so years. America has gained substantial leverage in this simple business transaction and someday we might not need Middle Eastern oil at all — or, at least, we won’t if Washington gets on the ball.

Not only has shale oil, which is gathered through a controversial and expensive process called fracking, changed the supply-demand equation, but technological advances in cars could make oil a much less valuable commodity in the future.

I’ve said all this in the past. I have also predicted that once the grip that Wall Street speculators had on energy products was broken prices would come down. Now they have — with a vengeance.

The only real question is: How far into the future will it be before cars run on hydrogen, batteries, sugar cane juice, cow dung, Snickers bars or whatever alternative fuel scientists can conjure up that doesn’t come from Saudi Arabia, Iraq, Kuwait and all the other countries in that troubled area of the world?

So here’s what we should do.

Tell Middle Eastern oil producers in very clear terms that we expect them to handle their radicals in any way they must, “or else” the US will increase oil production through fracking until crude is down to $20 a barrel.

Maybe even $10 a barrel if we really want to get nasty. Oil prices have already had a massive decline to around $30 a barrel. In pre-fracking days, the current tension in the Middle East would have caused oil to spike to $60 or $70 a barrel. But in this different world, OPEC producers know we hold all the cards.

But wait, there’s more.

Washington should start subsidizing our country’s oil industry, especially companies in the nascent fracking business, as much as needed to prevent them going broke and jobs from being lost.

Call it a Freedom From Terrorism Tax.

It’ll still be a bargain compared to the cost of unending wars over Middle Eastern oil fields, not to mention the emotional price terrorism and combat is taking on our citizens.

And just so the environmentalists don’t try to hang me, this oil industry subsidy and production boost will happen alongside a major push by the US government to make cars with alternative fuels more affordable. The day when cars don’t need fossil fuel will be pushed forward.

Middle Eastern countries will have much bigger problems if money from the US is curtailed and the majority of their citizens can’t be bribed into complacency. So these oil producers should be greatly incentivized to deal with radicals.

And these countries might feel that it is wise to act by whatever means they have. Maybe the Saudis and Iraqis could even find common ground to fight their bad guys if there’s the threat of going broke hanging over both of them.

Will we further destabilize the region by cutting off more of their oil revenue? That’s what the leaders of those royal families will also have to worry about. There are already plenty of other unstable parts of the world that we don’t give a hoot about.

Terrorism connected to the Middle East is a problem that only Muslims themselves can solve.

And, by the way, lower energy prices benefit a far greater number of Americans than they hurt. Anyone who heats his or her house or office, drives a car or truck, operates an airline or runs a business gets something out of the oil industry’s problems.

So either Middle Eastern oil industry producers attempt to fix the world’s terrorism issue — or else we’ll make our consumers better off by pushing prices even lower.

Few people have been mentioning the real reason we should be concerned about China’s problems. So I will.

China, as you may have heard, is spending trillions to prop up its economy and its stock market. And most of the discussion in the US is over how bad China’s troubles could be for American companies that do business there.

But that’s not the only problem — or even the biggest one.

China owns $1.25 trillion in US government bonds. And if the Chinese continue to have trouble at home they may need to sell those bonds to fund things like economic recovery and stock market rigging.

In fact, since last spring, China has been reducing the amount of US government bonds it owns.

The US, as you may also have heard, is about $18 trillion in debt. If China, its biggest lender, suddenly decides to unload US government bonds, Washington will have to find some other buyer for its debt.

And it may have to start paying higher interest rates to attract those new buyers. That would raise rates across the board and hurt any American who wants to borrow money.

You may not care about China, but you should.