The Meltdown of Wall Street

The meltdown of Wall Street can come as no surprise to major Arab governments throughout the region; we have been watching the George W. Bush administration's Middle East policies – equally reckless and ruinous to its financial strategies – melt down for years.

The political and even the military credibility of the United States in the Middle East is almost at rock bottom already. We take the liberty of assuming sufficient rationality exists in Washington – a dangerous assumption, as the fiscal breakdown and bailout package fiasco obviously make clear – not to launch any air strikes on Iran in the closing chaotic days of the Bush administration. But who can know for sure? Even the supposed success of Gen. David Petraeus's counter-insurgency policy in Iraq is now at mortal risk because of the financial catastrophe in Washington.

The real reason for the relative success of the general's policy in curbing violence and undermining support for al-Qaida in central Iraq was never the much touted and relatively miniscule troop "surge": It was Petraeus's sensible decision to halt operations that had killed thousands of innocent Iraqi civilians, including many women and children, in saturation firepower airstrikes, and instead spend millions of dollars a month buying friends and influencing people among the tribes of the region. But if international confidence in the U.S. government and the value of the dollar collapses because of the chaotic policies and disastrous decisions being taken in Washington, most recently by the U.S. Congress, will the sheikhs and other local leaders in central Iraq be willing any longer to stay quiet or do what U.S. generals on the spot want them to do?

And if the current U.S. government and its successor are so obviously tied up in knots over the financial meltdown and its consequences, what conclusions are Iraqi Prime Minister Nouri al-Maliki and his colleagues in Baghdad going to draw?

They have already openly and even contemptuously defied Washington on a range of crucial issues – most notably insisting on a set deadline for the full withdrawal of U.S. combat forces and also hosting Iranian President Mahmoud Ahmadinejad on a state visit. And they did those things when the Bush government was still keeping its eye on them. As Jesus asks in the Gospels, 'if they did those things when the wood was green, what will they do now that it is dry?'

Then there is the question of how long the dollar is going to remain the world's prime petrocurrency, even among nations like Kuwait and Saudi Arabia that have traditionally supported it. Venezuela, Iran and increasingly mighty Russia are all strongly opposed to letting the dollar continue to reign supreme, even if the financial confidence in it was still there, which it clearly isn't. Russian President Dmitry Medvedev is now even talking about issuing a gold ruble super-currency: The U.S. dollar has not been backed by gold since 1933.

Democrats as well as Republicans in Washington still imagine against all realistic evidence to the contrary that they will be able to do business as usual throughout the Middle East under the next administration. Their wake-up call may come as a rude awakening.