Without Firing a Shot... ?

Interesting analysis of the financial crisis by Walid Phares. Phares acknowledges that "blame can be leveled in two directions" for the real estate market crisis. "First, towards those politicians who threatened political retaliation if the financial system didn’t lend beyond rational limits; and second, Wall Street financiers who risked breaking the financial system by relying on poor judgment regarding the public’s ability to overcome economic challenges." But, as he points out, the last straw that you should excuse the expression broke the camel's back may have come from outside the U.S.:

A thorough psycho-economic observation of the public’s financial behavior, however, tells us that there may be more to the crisis. It reveals that an outside “push” – I now coin it economic terrorism - may have been the tipping point of the collapse. For monitoring how and why buyers massively abandoned their plans shows that it followed, or coincided, with an abrupt rise in the cost of gas dividends. With the numbers at the pumps going ballistic, the cost of living suddenly rose, goods became less attainable and the price of enjoying, let alone using, the newly purchased properties soared. Hence, undoubtedly the lifestyle that was sought by the tens of millions of homes buyers wasn’t possible to achieve anymore; thus they surrendered financially in droves, taking the system down with them.

Economists will tell us if this diagnosis stands up. But if it does, then we cannot avoid investigating the factor that caused the strategic stress in real estate, which turned into economic chaos. In bypassing a narrow economic analysis, we can detect clearly the connection between the dizzying ups in petrol pricing and the slowing of American buying capacity. Stunningly, one can conclude that while it is sadly true that both Wall Street’s corruption and politicians’ abuse of the system handed the tools of doom to the middle class, Main Street’s rapid disenfranchisement was manufactured overseas, thousands of miles away, at the hands of OPEC, or perhaps in some quarters of the oil-producing Cartel.

As usual, Phares is insightful without overstating his case. It is certainly not stretching credibility to assume that OPEC members and the Islamic world in general have been keeping close watch on the U.S. economy, waiting for the right moment to throw a monkey wrench into the works. This sure as hell is the right moment: if Phares is right, their actions will help to propel their favored candidate into the Presidency of this country. "Economic terrorism" indeed -- and without firing a shot.