USA
JAMESSRODES
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Veteran commentator on Washington & Wall Street
The Israeli factor On top of all his other troubles, President Barack Obama finds himself being squeezed politically by the prospect of a war he doesn’t want.
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he stalled American economic recovery remains the central issue in this election year and there is little prospect of a sudden revival in growth that might lift Mr Obama back into the White House for another four years. Still, the lacklustre campaign waged thus far by Mr Romney has failed to define him in the minds of most voters as a clear choice to pull the country out of its malaise. Mr Obama’s strategists are counting on the fact that even voters who fault his administration’s performance still view him as a more sympathetic character than his opponent and that might be just enough. While much of political Washington has been away at the conventions, or back in the home precincts mending fences, the level of alarm over an Israeli raid on Iranian nuclear enrichment sites has begun to spread among the defense and security bureaucracy who will have to deal with the threat no matter who is elected on the 6th of November. The question that really alarms is whether the government of Benjamin Netanyahu will even wait for the American election results to make the final decision to attack or not. While a certain level of paranoia is present whenever there is political uncertainty, Mr Obama and his senior Pentagon and intelligence chiefs have been remarkably outspoken in stating
publicly that they do not want Israel to attack Iran and that American commitment to continuing diplomatic and economic pressure on Tehran to abandon its nuclear weapons ambitions is the path to follow. But what should be a defence strategy dilemma has now taken on a layer of presidential election politics. There is also a layer of personal relationships at work here too. Mr Netanyahu and President Obama have never liked each other; the Prime Minister finds Mr Obama stand-offish and a bit inclined to lecture; the President finds Netanyahu abrasive and resents his use of the powerful community of Jewish Americans within the Democratic Party to pressure the White House. On the other hand, Mr Netanyahu and Mitt Romney have a close personal friendship that goes back to 1976 when both were young strivers at the Boston Consulting Group analysis tank. Moreover, Governor Romney has been clear he faults the Obama reliance on economic sanctions as having failed to move the Iranian regime to cancel its nuclear weapons programme. Romney went a step further during his visit to Israel in July when his top security adviser told reporters: “If Israel has to take action on its own in order to stop Iran from developing the capability, the US government would respect that decision,” under his administration.
Win-win, lose-lose But will Israel strike first, and when? Pentagon and White House security analysts are in rare agreement that the Israeli military lacks the logistical capability and the sheer weight of bombing power to launch on its own a single surgical strike against the heavily protected Iranian nuclear enrichment sites. But with the next breath, many of these same analysts concede that Israel has been surprisingly innovative in making military might out of scarce resources and they concede they do not really know what its current capacities are for a limited and focused attack. What has many of these strategists worried is that Prime Minister Netanyahu may conclude he has no option, particularly if he fears the re-election of Mr Obama. The Israelis still recall with some bitterness the embarrassment they, the British and French experienced in 1956 when it was assumed the United States would back their invasion to regain control of the Suez Canal from Egyptian nationalisation. President Dwight Eisenhower refused to support the adventure. One hypothetical view wonders if Mr Netanyahu may not calculate that a quick strike before the November US elections would offer two happier prospects. Faced with an Israeli commitment in Iran, Mr Obama could agree to back the play
lest he outrage Jewish-American voters who make up a large and vocal wing of the Democratic Party. Or, if the President balks at supporting such an attack with US military support and aid, the election could be tipped to Mr Romney, who is on record advocating a more hawkish stance against the Tehran regime. While this might be a win-win strategy for Mr Netanyahu, it certainly would be a lose-lose development for the American economy that would have a profound and harmful impact on the troubled economies of Europe and Asia. Barclays Capital in New York is just one of the many analysts who forecast that the benchmark price of Brent crude petroleum which has been bouncing between $90 and $100 a barrel thus far will likely close above $113 by the end of the year unless the Iran nuclear controversy is settled. And if Israel were to attack, either before or after the elections, that price is forecast to skyrocket to $150 a barrel. While it is true that the US energy scene has been buoyed recently by a boom in natural gas production, most consumers of hydrocarbon energy still rely on petroleum, especially petrol, for motor cars and transport. At $150 a barrel, the fragile American recovery would be snuffed out and neither Mr Obama nor n Mr Romney want that. Industry Europe 7
