Buying Lebanon "for peanuts"

Hezbollah is handing out bundles of cash to the Lebanese.

BEIRUT (Reuters) - Hezbollah handed out bundles of cash on Friday to people whose homes were wrecked by Israeli bombing, consolidating the Iranian-backed group's support among Lebanon's Shi'ites and embarrassing the Beirut government.

"This is a very, very reasonable amount. It is not small," said Ayman Jaber, 27, holding a wad he had just picked up from Hezbollah of $12,000 in banknotes wrapped in tissue

I haven't yet blogged yesterday's One Jerusalem conference call with Uri Lubrani (sorry, sorry), but something he mentioned seems appropriate to add here. He said that, through Hezbollah, Iran has bought a country ... "for peanuts." That is, for the cost of arming Hezbollah to the teeth, over several years, Iran now enjoys near total sway in Lebanon. Add these few thousand here and there, and the homeless Lebanese refugees are forever grateful to the Hezbos. This they call social work. It's how Osama bin Laden got his start in Afghanistan.

What I don't understand is that if Lebanon could be bought so easily, why didn't the US get in there and outbid Iran early on? Surely, if Iran could afford it, so could we. They may have petro-dollars, but we have GDP (USA per capita $42,000 - to their $8,300).

Speaking of the economy, let me go off on a little tangent here. I heard yesterday that the deficit had been cut in half from the all-time high. That's not exactly correct. Let's look at this report from (Dow Jones) Market Watch:

The Congressional Budget Office on Thursday estimated that the federal deficit will narrow to $260 billion in the current fiscal year, down from $318 billion in fiscal 2005, amid surging tax revenues.

The new figure, contained in CBO's annual summer budget update, is $112 billion lower than the nonpartisan agency's March projection. The $260 billion figure matches an estimate contained in a monthly CBO report released a few weeks ago.

"Higher-than-anticipated revenues, mostly from individual and corporate income taxes, account for the bulk of that improvement," the CBO report said.

Measured against the economy, the 2006 deficit is equal to around 2% of gross domestic product, down from around 2.6% in fiscal 2005. In nominal terms, the deficit hit an all-time high of $412 billion in fiscal 2004, a figure equal to 3.6% of GDP.

Acting CBO Director Donald B. Marron told reporters that the updated figures show the federal deficit has been reduced to a "sustainable" level.

It's good news, so what's my point? Yes, the President's tax cuts seem to have done exactly what he said they would do, and yes, he has been successful in dealing with the deficit in exactly the way he said he would, but there's more. I want you to see what the Drive By (And Ambush Bush) Media does with this good news:

New York Times: Brighter ’06 Deficit Outlook, but Long Term Looks Grim

Associated Press: CBO sees $1.76 trillion deficit ahead

al Reuters: US budget deficit seen rising in fiscal 2007
(It's not until the fourth paragraph that they mention that "The CBO's projected fiscal 2006 deficit ... is some $112 billion lower than its March projection" and they quote twice as many Democrats as Republicans, saying of course that this is "no reason to celebrate" and "the long-term outlook remains ... bleak.")

Same story, negative spin. Just so you'll know.

The Iranian economy, on the other hand, is not so hot according to Ambassador Lubrani. He told us bloggers that they may have 40-50 billion petro-dollars in their coffers, but they admit to an unemployment rate of 20% (Lubrani says that means it must be 30-35%) and inflation is at 24%. Thus, their economy is a vulnerability that Lubrani says the US could and should exploit.

I didn't know this, but even though Iran is one of the world's largest exporters of oil, they have to import 40% of their gasoline from elsewhere because of limited refining capacity. [See also Gasoline, the Silent Bomb].

According to the Washington Post, Iran spends billions of dollars a year to import gasoline (8% of the national budget) and billions more, artificially holding down the price to Iranian consumers.

Their sources include Western Europe, India, China, Brazil, United Arab Emirates and Saudi Arabia, among others. Surely we could get some help from somewhere on that list?

Now I don't know any more about this than what I've told you here, but so far Lubrani's idea of exploiting this in an effort to bring down the mullah-regime seems a reasonable one. We could certainly give it a shot, it makes more sense than "engagement" and "diplomacy."

Lubrani, like so many others, said there's no point in engaging with those who believe they are doing Allah's work. He said you can't even threaten them because they don't mind martyring themselves. What would we talk about with Ahmadinejad, anyway? The Hidden Imam? The spread of the Iranian/Islamic revolution? No, I think gasoline is the way to go.

Given that it's too late to buy Lebanon.