4/17/18 Daniel Lazare on Saudi Arabia’s Resource Curse

by | Apr 22, 2018 | Interviews

Journalist and author Daniel Lazare returns to the show to discuss the latest issues facing Saudi Arabia and his latest article for The American Conservative, “Will the Saudi Kingdom Collapse Under the Resource Curse?” Lazare compares the Saudi Arabian kingdom to 16th Century Spain, which discovered the new world and was overwhelmed with the sudden flow of gold and silver, which, despite its incredible resources was ruined and needed to file bankruptcy in order to limp along. Lazare then explains why he refers to the Saudi-American alliance in the Middle East as “a marriage made in hell.” Scot then asks Lazare: Why on earth would Saudi Arabia go along with the plan to get rid of Saddam Hussein and empower their enemy Iran in the process? Lazare then explains why diversifying the economy, as Mohammad bin Salman desires, will be far more difficult done than said. Finally, Scott wonders whether the Saudis believe the propaganda they spread about Iran’s global evil or whether it’s politically expedient for the regime.

Daniel Lazare is the author of The Frozen Republic: How the constitution is Paralyzing Democracy and a regular contributor at Consortium News. Find all of his work at his website and follow him on Twitter @dhlazare.

This episode of the Scott Horton Show is sponsored by: Zen CashThe War State, by Mike Swanson; WallStreetWindow.comRoberts and Roberts Brokerage Inc.LibertyStickers.comTheBumperSticker.com; and ExpandDesigns.com/Scott.

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Hey y'all, so here's the thing, I'm giving a speech to the Tarrant County Libertarian Party on April the 28th, that's Saturday, April the 28th, from 2 to 4, Central Time, up there in Fort Worth, so if you're anywhere near the 200 square miles of concrete known as Dallas-Fort Worth, head on out there, and I'll see you, it'll be cool.
I'll sell you a book.
Oh, you can find out all about it at eventbrite.com.
Oh, and I guess I'll write up a blog entry too at the Libertarian Institute and at scotthorton.org.
Sorry I'm late, I had to stop by the Wax Museum again and give the finger to FDR.
We know Al-Qaeda, Zawahiri, is supporting the opposition in Syria.
Are we supporting Al-Qaeda in Syria?
It's a proud day for America, and by God, we've kicked Vietnam Syndrome once and for all.
Thank you very, very much.
I say it, I say it again, you've been had, you've been took, you've been hoodwinked.
These witnesses are trying to simply deny things that just about everybody else accepts as fact.
He came, he saw, he died.
We ain't killing their army, but we killing them.
We be on CNN like Say Our Name been saying, saying it three times.
The meeting of the largest armies in the history of the world, then there's going to be an invasion.
All right, y'all, introducing Daniel Lazer, writing lately for the American Conservative Magazine.
This one is called, Will the Saudi Kingdom Collapse Under the Resource Curse?
Very interesting work.
Well, thank you, Daniel.
Thank you.
Thank you.
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This is the most ceremonial thing left over from olden days, and yet in Saudi Arabia, it just somehow makes perfect sense that you have an absolute monarchy here, and then this blatantly corrupt system where whoever is the second cousin gets to have a million dollars or whatever it is here.
Yeah.
But the point is that this thing can't end.
It can only end in war and bankruptcy, and the U.S.-Saudi alliance is just the stranger aspect of it.
Well, but now when you say end, I mean, that's – well, I'm sorry to interrupt, but in how long?
I mean, they still have a ton of oil left, don't they?
No one.
Predicting the future is really difficult, but the real strange thing is this U.S. alliance.
I mean, the countries are opposite in so many different respects, but the Saudis are the strongest U.S. partner in the Middle East, and as a consequence, the U.S. has allowed the Saudis to essentially dictate policy in this increasingly important part of the world.
That just boggles my mind.
Well, and is it – I mean, the obvious things are they buy U.S. debt and they buy U.S. weapons, and they sell Americans gasoline, at least somewhat, right?
Yeah.
And they sell Americans – yeah, and America then therefore gets to control the world economy by controlling the Persian Gulf.
So it's a perfect marriage, but it's a marriage made in hell.
It's going to have incredible consequences.
Well, and so here's the thing, too.
I was talking with this guy – I'm sorry his name's escaped me for the moment, but he was a real military expert, and I was interviewing him about the war in Yemen, and I was recycling what I'd heard, I guess, about Saudis do nothing military, that's just a bunch of pampered princes sitting around polishing their jets or whatever, but not really doing any work.
And he said, oh yeah, no, on the contrary, they have spent a lot of money building a very real modern army with – I don't know how many men he said it had, but he said they're very well trained and professionalized now, and it's a whole different game from that kind of old cliche of basically just collecting weapons as trophies, but not really, you know, having the ability to do anything about it.
I mean, as bad as it is, having al-Qaeda as their shock troops may not be as bad as them actually having real wars, you know?
Well, actually, I still believe the old cliches.
I mean, everything it tells me, it's an army for show only.
They're top-heavy on royal jet pilots and have very few ground troops.
They're short on grunts to actually do the real serious fighting for them.
I guess that's what the U.S. Army's for, huh?
Yeah, but after all, who wants to fight for the Saudi royal family?
You know what I don't understand?
How come Prince Bandar and all them went along with George W. Bush telling him he was smart to overthrow Saddam?
How come they didn't say, no, no, no, don't do this?
In fact, it's in the WikiLeaks where the king of Saudi Arabia said, I don't understand.
It was always you and us working together with Saddam to contain Iran, but now you're handing Iraq to Iran on a golden platter, he said.
Not a silver one, but a golden one.
I don't know if he screwed up the idiom or he was trying to make a point there.
But anyway, but why didn't they stop him?
Why didn't they say, wait, don't you see what's going to happen here with the whole Shiite supermajority coming to power thing?
They did say that, but George W. Bush was so headstrong, they had no impact.
They really did try to stop him, though?
Bandar did?
Oh, yeah.
Yeah, yeah, yeah.
You know, Bandar got his, you know, got his deals in return.
And you know, Bandar, you know, let Bush know that, you know, that the Americans owe the Saudis big time for going along with this crazy adventure.
That's why, that's why the U.S. was so helpless when it came to calling the Saudis to account for 9-11.
That's why the U.S. was so anxious to blame everybody else except the Saudis, who of course were most responsible for the, for the attack.
Well, they also, especially right during that moment, they didn't want to divert attention from Saddam, Saddam, Saddam all day long and trying to conflate him with Osama bin Laden so they could hurry up and get in there.
Talking about Saudi Arabia would have been a major diversion from the narrative there.
Right.
It really is a bad marriage.
You know, it's like something out of, like, you know, who's afraid of Virginia Woolf?
Just it's just two, two, two partners clawing at one another, but sort of locked in this utterly dysfunctional relationship.
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All right, I'm sorry, I'm all over the place here talking about Iraq War II and all this stuff.
Back to your article here.
This resource curse, well, I don't understand it.
It seems like if I, you know, had a natural gas well, then I mean, I might spend all my money lounging around and skateboarding with my friends maybe half the time, but then I would also make investments in sound businesses run by other people at least, even if I was lazy, right?
So how come resources are a curse when you're talking about, it's not exactly free money, you have to do some work to produce it and to get the energy out of the ground and distribute it and whatever?
You have to do very little.
Very very little.
I mean, you have to bear in mind that Saudi oil wells are abundant, they're very close to the surface.
It costs just pennies to extract a barrel of oil, which sells now for $65 on the international market.
So the profits are huge, and with those huge profits, you can hire others to run your oil industry for you.
You know, Americans, you know, Texans, who are very good at that.
And really, you can sit around and do nothing, and not only for a year or two, but for generation after generation.
And your kids will grow up doing the same thing, and think it's their God-given right to lie on a couch all day.
And just, you know, not even bother counting the money as it flows in, but you know, hiring someone else to do that.
It's debilitating.
The best countries in the world are the ones that are resource poor, and therefore they've had to work and think and plan and invest and invent.
And the worst countries are the ones that are resource rich, and have therefore been able to sit on their derrieres and do nothing.
Well, the soon-to-be king, the crown prince now, bin Salman, has been making a big deal about diversifying their economy, because, you know, he may be cruel, but he's no dummy, something like that.
So does he have a prayer there?
I don't think so.
I mean, they could go into glass exports.
But you have to have workers to make glass.
That's what Filipinos are for, right?
Well, you can import Filipinos or Bangladeshis to make the glass, and then hire some other people to sell it for you, and then sit back and collect the proceeds.
It's just a lot easier just to do that with oil.
And that's really, that's part of it, right?
Is that their entire workforce, any actual manual labor that needs doing.
Not even the Saudi poor do that work.
Not even the holy poly or whatever you call them out there.
It's all foreigners do that work, even.
Absolutely.
And the private sector workforce in Saudi Arabia is 95 percent foreign-born.
And if you're a Saudi, if you're a poor Saudi growing up in some slum, and there actually are big slums in Saudi Arabia, you're focused on one thing, and that is landing a no-show government job that will set you up for life.
It may take you a few years.
You may have to pull strings.
You may have to have to call upon and suck up to your third cousin or your fifth uncle or your second great-grandfather, whatever the hell.
But you've got to somehow land this public job.
And once you have that public job, you've got two things.
You've got a decent salary, and you've got a couch to sit on and do nothing else but keep that couch warm.
Believe me, that is how the country works.
The country works on essentially this kind of no-show job system.
And it's falling apart.
And the more it falls apart, the angrier Saudis get, the more convinced they are the rest of the world is ganging up on them.
It is a really demented, demented system.
And the U.S. is tied to this thing, you know, by the hip, joined by the hip.
Anyway.
Well, so, but now about trying to diversify the economy, they say they're building this fancy new high-tech city to rival Silicon Valley in the West somewhere, I think, on the Red Sea.
And then something, something, you know, what, Gropikons or something, huh?
But no one built Silicon Valley, right?
Well, yeah.
I mean, Silicon Valley is just a place on the map where a lot of smart kids, you know, are gravitating to and opening up companies.
And eventually it became a big deal, but no one, no one built a Silicon Valley.
So you just can't build this thing.
You've got to have, you know, you have to have like, you know, well-educated, you know, well-trained young workers who are hungry and ambitious and have freedom, et cetera, et cetera, to create all these things.
Those elements are absent in Saudi Arabia because all those young people are just trying to get one of those no-show jobs I described.
So in other words, the best you can tell, there's only a bad end, a huge crash coming one day when the price of gas is so low that they can't do anything about it anymore because there's so much diverse supply on the planet, or when somebody invents the most killer solar panel that just makes oil obsolete forever or whatever it is at some point, they're doomed.
And there's only a brick wall way out of this rather than, well, like he's talking about trying to head this off with, you know, some kind of public works.
Yeah.
I mean, I mean, I mean, the Spain is the story in Spain went into a deep freeze that lasted for two centuries.
It's incredible.
No hope.
And also Latin America as well.
The devastation was enormous and the amazing thing was that it was devastation that was not caused by poverty.
It was devastation that was caused by wealth.
Really an amazing.
It's very, it's a difficult concept to wrap your head around, but it's true.
And so, so Spain didn't begin to emerge out of that, that, that deep, you know, slough until the late 19th century.
And even to this day, it's still lags behind in many, many crucial respects.
The same is true for, you know, for Latin America.
And so, so, so all the Saudi wealth, I think in the end will, will, will cause far more backward, cause far more harm than good, far more backwardness than progress.
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OK, so then switching back to some current politics here, MBS came and did a big PR tour of the United States, including a big spot on 60 Minutes and all of this.
And one of the things he did, I'm sure you noticed, was talk with Jeffrey Goldberg and really, again, demonize Iran.
It was amazing the way Goldberg, well, only kind of amazing the way Goldberg let him slide on Yemen and all that.
But he said, Iran, they're worse than Hitler.
The Ayatollah is worse than Hitler, because Hitler wanted to conquer all of Europe, but the Ayatollah wants to conquer the whole world.
And so, I guess I'm not sure what a good question would be.
What comes to my mind is, do you fear, like I do, that this guy believes his own B.S. at all?
Or, nah, don't worry, it's clearly just B.S.?
No, I think the former.
I think the really horrible thing is he really believes what he's saying.
These people have developed, have nurtured this paranoid worldview.
The Saudi regime rests on two things, oil and Wahhabism.
And Wahhabism is this very pernicious ideology.
And they have, it's very sectarian, and they have essentially declared war on Shiite Iran, not to mention Shiite Syria and Shiite Hezbollah.
So there simply is no telling where this will end, but there's no reason to think that reason will prevail.
Yeah, you got that right.
Well, and especially this week.
And I don't know what to do about this, because I keep beating this dead horse, and I know you've done so much work on this as well.
I guess I think that we can't really call it off until you have some greater plurality of Americans who understand, basically, that our government has us taking the side of the American people's enemies, Al-Qaeda, in order to fight the American empire's rivals for dominance of the Middle East, Iran, which actually never did anything to us.
And that, you know, when they say, I mean, you look at the current situation now, where they go, oh my God, look, Iran is dominant in Iraq and Syria, and never mind what happened the day before yesterday or the last 15 years here and how it got that way.
But Iran, Iran, Iran.
How can you and I make an argument that we have to call off the intervention now, right when the intervention has not only created a couple of 10,000 Bin Ladenites or more, but it's also helped to enhance the power of their enemies in the name of fighting them?
In the Iranians and Hezbollah that you mentioned, that the Saudis and the Israelis, of course, are absolutely obsessed with, it seems like our only argument really is, yeah, but look who caused it, right?
Show me an Iran hawk who's not at fault for this.
I don't know what else to say, because yeah, Iran is more dominant in Iraq and Syria than before.
But I don't care about that, and I got to blame the guys who caused it on the American side first, because I'm an American.
But so, it really leaves us in a bad position, right, in a real quandary, that right when everything is absolutely at its most horrible, our argument can only be that America can only make it worse, and we got to stop now, but nobody else wants to hear that.
Everybody else, I don't know, everybody else in the population, certainly everyone in Washington DC and in the Pentagon wants to hear that, well, now's our chance to finally fix that, right?
That's what John Bolton's going to say, is we just got to get rid of the Ayatollah, and then everything else will be all right.
Yeah, I think it's very important to distinguish between Washington and the Pentagon on one hand and the American people on the other hand.
The average man in the street or woman in the street has no idea what's going on, doesn't give a damn about either country, Iran or Saudi Arabia, and doesn't want his or her kids going to war.
That's the really important part.
I mean, it's not the kids of John Bolton or Donald Trump who will fight this war, right?
I mean, it's the kids from some tiny little burg in West Virginia or Texas that are putting their bodies on the line and coming back crippled and maimed.
It's insane.
I mean, the US is just caught up in this web of imperial alliances.
It can't think straight, and consequently there is a real war fever that is raging, and rational analysis has just been shoved aside.
If you read the press today, it's just out of control.
It's amazing.
You know, I actually got a chance to hang out with Ron Paul yesterday.
He interviewed me on the Liberty Report, and we were sitting around talking afterwards a little bit, and we talked about the Amal militia bombing of the American Marines and the French Marines, I think they were, in Beirut in 1983.
It's really great, actually.
It's in Ron Paul's book, A Foreign Policy of Freedom.
It's a collection of speeches, and there's a speech where he says, Reagan, don't put the Marines in Beirut, and then he says, Reagan, get the Marines out of Beirut before something bad happens, and then the next one is, see, I told you, you got to get the troops out, and then the next one is, congratulations, Mr. Reagan, you finally made the right decision and ended up pulling out of Lebanon there.
So I was reminding him of that, how I'd read that in the book, and he said, you know, Ronald Reagan in his memoirs said that he didn't want to cut and run and he's a tough guy and all this macho Republican stuff and whatever, but he realized that, in his words, the irrationality of Middle Eastern politics just precluded the possibility that America could fix things by picking and choosing winners in these situations, and that we really had to just forget it.
And that, you know, and then Dr. Paul lamented how, you know, Republicans will quote Reagan on anything where he agrees with them, but when he says something like that, they want to ignore it.
You know, the rest of the time, he's their great sage of wisdom.
He finally says something wise, and they don't want to pay attention.
Well, it's pretty amazing, isn't it, when Ronald Reagan is now a paragon of rationality compared to the people in Washington today?
Jellybeans and Alzheimer's and all.
Yeah, it's amazing.
But I just must, I must just stop you at one point.
I mean, the irrationality of politics in the Middle East is thoroughly matched by the irrationality of politics in the United States.
You've got that right.
I mean, this is really very important, and, you know, an energy policy is at the basis of this whole thing.
You're in Texas, right?
You're in Austin.
Yeah.
And, you know, and energy policy, oil, America's consumption of energy is just off the charts.
Off the charts.
And with remarkably little effort, it could reign it in dramatically.
And if it did so, it would send the price of oil crashing, crashing to the floor.
It would completely, you know, bankrupt all the oil producers in the Middle East and would also serve at least to kind of, you know, to tamp down the fires in the Middle East.
But the U.S. chooses instead to, you know, to maintain, you know, its sky-high oil consumption as, you know, it's kind of a gift of God, a divine right.
And prefers, you know, to pour in literally trillions of dollars into the Persian Gulf in order to throw oil on the fire, to mix numbers.
And, you know, and why does the Trump no love MBS, Mohammed bin Salman so much these days, the crown prince?
Because he's buying U.S. weapons.
And what do U.S. weapons do?
But, you know, this is just to pump up these flames to an ever hotter, ever higher level.
It's that the mind reels.
I mean, really, this is really a 1914 moment, you know, where the world is spinning out of control and all sides are pitching in to, you know, to contribute to the collapse.
Yeah.
You know, I used to be such a conspiracy theorist and like, oh, the skull and bones is behind it all or whatever.
I kind of wish they were now.
It seems like such a free for all that, you know, no one's really driving this this ship, this empire.
And whoever can, you know, tweak an interest this way or that way at any given point can change the course of history.
And it's really just about some airplane sales.
Right.
And and where the U.S. national interest doesn't even exist compared to special interests getting what they want.
But the way the press is falling into line is amazing.
I mean, everything that CNN, The New York Times, Washington Post, they're all falling into line.
They're all they're all, you know, playing the same tune and no one's forcing them to.
That's the amazing thing.
No one's no one has a gun to their head, but they're just doing it anyway.
They're all playing the same damn tune.
And it's so reckless and self-destructive.
I just I'm just beside myself.
Well, keep writing about it because the rest of us are counting on you, Daniel.
All right.
Thanks.
Thank you, sir.
That's Daniel Lazar, everybody at the American Conservative magazine.
This time, will the Saudi kingdom collapse under the resource curse?
Hey, I want to add on a special thanks to the heroic Ron Paul, the greatest American hero ever, in my estimation, for interviewing me on his show, The Liberty Report with the great Dan McAdams as well.
It's really great.
They interviewed me on Monday and it ran on today, Wednesday.
I don't know what day you guys are hearing this, but it ran on Wednesday.
You can find it on YouTube.com and I'll blog it and all that.
We talked about Syria and Afghanistan and other things, libertarianism.
So thanks, Ron.
You're great.

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