Bush of Arabia -- What the Talk Shows Missed

For late-night talk show hosts, yukking up George W. Bush's visit to the Middle East was like shooting fish in a barrel. Supposedly on a mission promoting peace (between Israel and the Palestinians) the President spent most of his trip rattling sabers against Iran. He spoke glowingly in Abu Dhabi of democracy, but spent most of his trip brandishing swords and holding hands with dictators who are the U.S.'s allies across the region.

One flagrant incongruity, however, seems to have gone unnoticed: Bush's timid request to Saudi King Abdullah and other rulers in the Gulf to rein in soaring oil prices because, said Bush, they are hurting the U.S. economy.

But the point is that the current economic crisis in America was not triggered by Arab but by American greed: the disastrous mortgage melt down provoked by sub-prime loans. That collapse was the result of the Bush administration and U.S. regulatory agencies refusing to reign in the unscrupulous policies of the mortgage industry, despite repeated warnings of looming calamity.

Second point: while our media was focused on Bush's pitch to the Arabs for lower petroleum prices -- which was politely but firmly turned aside by a Saudi official -- at the same time, hugely wealthy Arab investors were helping to bail out some of America's largest financial institutions, staggering in the wake of the sub-prime crisis.

For instance, as Bush was dancing with King Abdullah, the King's nephew, Prince Alwaleed bin Talal, was increasing his stake in Citigroup. This was not the first time the Prince had invested in the stricken company. In fact, he was already Citigroup's largest individual shareholder: Kingdom Holding, which he controls, owns 3.6% of Citirgoup.

Meanwhile, the Kuwait Investment Authority, another sovereign wealth fund, with at least $225 billion in assets, announced it would invest $3 billion in Citigroup and $2 billion in a very grateful Merrill Lynch.

Those were just the latest investments by Middle Eastern sovereign funds in ailing U.S. financial institutions. Last November, the Abu Dhabi Investment Authority paid 7.5 billion dollars for a 4.9% interest in Citigroup.

The Arab investors are not acting out of altruism. As Harvard University economics professor Kenneth Rogoff put it last fall, "some people might view Abu Dhabi as buying Citigroup at a "fire-sale price."

Add up the percentages that those different sovereign funds hold in key institutions like Citigroup and they start looking impressive -- as does their influence over management.

Back in 2006 Prince Alwaleed bin Talal declared that shareholder patience was wearing thin over rising costs at the bank.

"We have to take draconian, and I say draconian, measures to control the costs," he announced.
What additional policies of major U.S. financial institutions could be influenced by the Prince and other immensely wealthy investors from the Gulf?

The ultimate irony: Those huge sovereign funds riding to America's rescue are, of course, fueled by the rampant petroleum prices that Americans (among others) are paying.

At what point does all this become a major U.S. political issue?

Comments

[DC]

This is one way it starts:


Media, writers and other influcence makers spend a generation systameticaly demonizing a people and culture until the general population is thoroughly brainwashed, all through reasoned arguments, of course.

Then we start to attack financial intersts of such a group....then we create fear that they might be controling us as landloads, bankers, etc.

Then we point the finger at this group as the cause of all our problems.

Then we go get them.

The world has seen this before in modern history.

[tyruler]

The same institutionalized, hidden racism that Edward Said addressed in Orientalism is apparent in all political parties, its disgraceful really, esp. for the Democrats who are champions of "civil rights" and against "xenophobia" and racism.

Instead of thanking the Arabs for bailing out the US banks who'd crumble under the heavy weight of its bad loans, you have self-righteous people who've turned nationalists almost overnight whose statements reek of anti-Arab bigotry, that "Oh no" these Arabs are going to control our banks with their "dirty money." Obviously its implied and sometimes stated directly as with the neocons, but come on, would you rather prefer Citi going down the path of Enron?

If Arabs and other SWF are investing in America it means they now have a stake in its America's success and its future.

Its apparent that instead of spending their money wisely these funds controlled by dictators who care only about themselves are recycling their people's money back to the country that literally has invaded and killed thousands of their fellow Arabs in Iraq. This ensures the Arab street and the likes of bin Laden continued anger and shows them whose side their leaders are on.

[vippy]

His trip was called to bring democracy to the ME. What a joke when at the same time he threatened Iran. Democracy to Bush must mean
WAR! And his begging for the increase in oil
production is just for the media and us stupid people. Had he wanted for the US to get weaned away from oil he would have mandated higher CAFE Standards and invested in alternative energy methods. All hogwash!

[Hoelder]

America is for sale. If you follow the word of one of my co workers: "this is no democracy!" He meant the company, of course. Imagine America with foreigners own majority stakes in all kinds of companies and finance political campaigns. A non democratic prince changing policy of the American government to suit his fundamental undemocratic views. Then we are not taking off the cloak of freedom, equality and human rights at the door of the company that we work in, but we will never put it on, ever again. An economy fueled by consumer spending through debt until the whole system collapses and our orders come from Riyadh.

[RickO]

These Arabs aren't stupid. They know the their minimal investments in US institutions keep the oil revenues flowing at a very high return rate. The oil-producing countries, particularly the Saudis, have tremendous leverage with the US and Bush is their man in DC. He talks tough and does that little swagger thing, but they basically tell him what to do and, more importantly, what not to. What that means is that Bush cannot make any meaningful economic or energy policy moves without the king's approval (in case you are puzzled why he hasn't). And the king is not going to agree to anything that is contrary to his interests. This makes the US basically an extension of the Saudi empire and is we start to get out of line, we get a black eye in the form of a pile of rubble somewhere.

[desmirl]

The unmitigated disaster that is the Bush administration is like the gift that keeps on giving. During his term, Bush has done more to weaken the economy of this nation than any natural or human-engineered disaster in our history. His foreign policy has fostered petroleum prices and given foreign nationals--some with questionable agendas--u­nprecedent­ed buying power into and leverage over American corporations. And we still have a year and three days of him.

[radiclib]

You ask: ``At what point does this become a major U.S. political issue?

The answer:

Probably never.

We much prefer sideshow issues, the kind that Chris Matthews, Lou Dobbs and Sean Hannity had spout about. Veiled xenophobia like ``illegal immigrants'' and trumped-up feuds between Sen. Clinton as a woman and Sen. Obama as an African-American. No one EVER will question fundamental building blocks of our shakey economy. So what if oil bankrupts us and poisons our environment while forcing us to tap-dance to the beat of a Saudi king? We love our S.U.V.s. Honk! Honk! Out of my way, dammit.
.
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[mommadona]

He could care less about "freedom and democracy" amongst friends.

He talks their talk.

He's thinking 'legacy', as in, plump checks for just showing up for a four-some and listenin' to the fools talk.

This man is a classic 5150.