On September 15, former U.S. Secretary of State Henry Kissinger and former Reagan-era economic adviser Martin Feldstein published an op-ed in the "International Herald Tribune" entitled "The Rising Danger of High Oil Prices."
The piece notes that, despite recent declines, the high price of energy in recent years has produced "the largest transfer of wealth in human history," from the industrialized democracies of the West to Middle Eastern producers -- although the piece mentions only Abu Dhabi by name! -- that often act in ways inimical to Western interests. The centerpiece of the article is a proposal that "coordinated action" by oil-consuming nations can help stem this wealth transfer.
"America should play a major role in this effort," Kissinger and Feldstein write. "Rather than wait passively for the next blow to fall, the major consuming nations -- the Group of 7, together with India, China and Brazil -- should establish a coordinating group to shift the long-term trends of supply and demand in their favor and to end the blackmail of the strong by the weak. Russia should be invited to participate in this effort."
This paragraph caught my eye because of the startling last sentence, in which it is inexplicably suggested that Russia -- arguably the energy-producing state that has benefited the most from this massive transfer of wealth and that has pursued the most actively inimical policies -- actually be invited into the "oil-consumers" cartel and be enlisted in the effort "to end the blackmail of the strong by the weak."
Kissinger has long been known for his close ties with high-level Russian officials, up to and including Putin himself, and for arguing that the West would do well to form closer ties with Russia. In July, he published a piece in the "International Herald Tribune" that claimed "we are witnessing one of the most promising periods in Russian history" and lauded the many opportunities for "strategic cooperation between the erstwhile Cold War adversaries." One wishes that his consulting firm, Kissinger and Associates, was not so secretive about its client list.
Russian Deputy Prime Minister Igor Sechin
And what of Russia? In recent days, to take just one very visible example, Russian Deputy Prime Minister Igor Sechin -- a shadowy figure in Vladimir Putin's inner circle with a reputed KGB past who oversees the energy sector for the government and is chairman of the board of the state-owned Rosneft oil company -- was in Vienna for talks with OPEC. Russian newspapers reported that the trip was prompted in part by the Russian government's belief that "the United States will try to manipulate prices in order to weaken the Russian economy" in response to Russian actions in Georgia. According to gazeta.ru, Iran and Venezuela -- also countries that could have been mentioned in the Kissinger-Feldstein piece -- have been lobbying intensely inside OPEC for production cuts aimed at keeping prices from declining further. From Vienna, Sechin traveled on to Cuba and Venezuela.
When the Kissinger-Feldstein piece was republished in "The Washington Post" today
the sentence about inviting Russia into the "coordinating group" was among the 250 words or so that had been deleted from the original text. Perhaps some copy editor noticed how absurd it sounded. After all, "The Washington Post" itself reported on May 22: "[High oil prices] are damaging the profits of oil-intensive industries [in the United States], tearing holes in the pockets of American consumers, offsetting the stimulant effect of tax breaks, sapping more than $1.5 billion a day out of the U.S. economy for oil imports and diverting ever-bigger gushers of dollars to oil-producing countries such as Saudi Arabia, Russia, Iran, and Venezuela."
-- Robert Coalson