Think of this as Volume 18, Number 41 of the newsletter I have written weekly since March, 1997. Enjoy.
His subject was the Cold War. He wrote that John F. Kennedy talked the language of soft power but mainly engaged in hard power, the use of military force, while Ronald Reagan talked the language of hard power while mainly using soft power, diplomacy and economic pressure.
Much of what Reagan accomplished was obscured by his stupidities, like the Iran-Contra scandal. But one thing he did do was convince the Saudis to increase production and tank the price of oil, which fell to as low as $10/barrel in 1986.
This gave the Saudi family far more influence in regional and global affairs, which is something we’re still dealing with. But it also strangled the Soviet Union and helped bring it down. Lower oil prices also collapsed gold and diamond prices throughout the decade, eliminating the party’s means of acquiring foreign exchange and keep itself afloat. The final collapse became inevitable.
Something very similar is happening now, spurred by the diplomacy of Barack Obama, who despite his use of drones, planes, and Internet wiretaps has mainly focused on soft power throughout his presidency.
Once again, the Saud family is in the oil market’s driving seat. Once more, they’re hitting the accelerator in order to damage regional and global foes. The 20% drop in oil prices has hurt Iran, which is its main rival for influence over Iraq and Syria. The drop has also hurt Vladimir Putin, and the Russian economy is now circling the drain for the same reasons it did 30 years ago.
The fall in oil prices has also hurt Obama’s main rivals for power in the U.S., the oil barons. Our recovery has mainly been driven by rising oil production, and the producers are giving the Administration no credit for that. On the contrary, oil barons like the Koch Brothers have been spending hundreds of millions of dollars to take back the Congress and, by 2016, the White House.