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Hmmm. Iran isn’t like other oil producing countries …

by Brad Setser
June 23, 2006

Iran has a bit more interest than average in nuclear power.    Setting Russia aside, of course. 

And Iran is actually spending its surging oil revenue rather than salting most of it away, unlike most other oil states.

The fact that Iran keeps its domestic petrol price very, very low doesn’t differentiate it from other oil producers.  Nor does the fact that it has to import refined product. Iraq also sells imported "product" at a very low price.  Even with an IMF program and lots of advice on economic management from the US.  

All big oil producers tend to sell petrol at artificially low prices – it is one way of sharing the oil wealth with the people.   The real outliers are oil-consuming countries like China that subsidize (rather than tax) petrol.   What differentiates Iran is that it has a lot of people relative to its oil – so demand for cheap oil is higher than in say Saudi Arabia.  

Yesterday’s Wall Street Journal article reminded me of one of the more surprising outcomes of the survey of  the spending – really importing – patterns of the big oil producers than Malcolm Easton and I did as part of our work on the oil surplus (alas, that paper is not something I can give away).    It turned out that Iran was at the top of the league table when it comes to oil spending – ahead of even Venezuela.     Ahmedinejad isn’t just emulating Chavez, as the Wall Street Journal argues. 

Mr. Ahmadinejad is emerging as an Iranian version of Venezuela's Hugo Chávez: a pugnacious politician, buoyed by oil money, whose anti-elite message and defiance of the West is causing his popularity to soar.

Iran is setting the pace – topping Chavez.  Iran spent 64% of the increase in its exports revenue between 2002 and 2005 on imports ($18.6b of $29.1b). Venezuela lagged a bit, spending only 56% of our estimate of the increase in its export revenues on imports ($11b of an estimated $19.6b increase). 

Iran stands in stark contrast with its neighbors to the south.  Most Gulf oil states are importing (and basing government budgets) as if oil was at roughly $30 a barrel.   See the IMF’s quite good Middle East Regional outlook.

My guess – and I haven’t worked out the details – is that Iran is spending and importing at a pace that works only if oil is above roughly $50 a barrel.   

That suggests, at least to me, that if the US and others really wanted to encourage political change in Iran, the strategy that would be most likely to succeed is rather simple.   

Consume less oil.   Tax it heavily here in the US.  Encourage China to do the same.  Drive down global demand.   Low oil prices would put an awful lot of pressure on Ahmadinejad and the others in control of Iran.  Friedman is right on this.

That isn’t to say, though, that I think it is a good idea for say Saudi Arabia to have a budget that balances with oil at $30 anymore than it is a good idea for Iran to have a budget that balances with oil at $50.    There is a happy median. 

There does need to be, in my view, more thought given to innovative ways of sharing more of the Gulf’s oil wealth – and its current oil windfall — with its people.   I am all for saving for a rainy day, and for using the proceeds from an oil field that will be exhausted in ten years or even thirty years to build up an investment fund rather than just spending the windfall on the current generation.  

But everything can be taken to excess.  

The folks who are benefiting the most from the current oil windfall in some ways are Saudi Arabia’s bankers (and others managing the Saudis money).  More of the oil windfall right now is being sequestered in offshore bank accounts – and purchase of foreign securities – than is being spent in the key Gulf states.   Think about it.   The Saudi government (counting Saudi Aramco as part of the government) produces oil for $5 a barrel, probably less.  It sells it for say $65.    The budget balances if oil is at $30, maybe less.    For background, see this Riyad bank publication.

That means that right now $25 of Saudi Arabia’s oil rent goes to budget (and gets injected into the Saudi economy) and $35 or so goes into the international financial markets. 

That directly and indirectly helps finance the US current account deficit.

But it also means that many folks in the Gulf aren’t benefiting as much as they could from the oil windfall and that the oil states are contributing far more to global demand for financial assets than global demand for goods and services.

 One standard concern about more spending is that it leads a real appreciation and that hurts efforts to diversify oil states economies.  But in all honesty, Saudi Arabia shouldn’t be diversifying with oil at $70.   At least not beyond Petroleum refining, petrochemicals and managing all the petrodollars and petroeuros that it now has in its bank and investment accounts.    If God wanted the Saudis to manufacture textiles, he (she) wouldn’t have put so much oil under the desert …

Oil production doesn’t employ many people, and that is a problem.  But putting a bit more money into the local economy might stimulate the services sector, and that does employ people.   More boutiques and the like.

One obvious first step would be for the Gulf countries to stop pegging to the dollar.   Right now, the dollar peg implies that the Gulf countries have to drive the value of their currency down (in real terms) even as the real value of their exports soars.   There is no particular reason why a Saudi riyal should buy fewer European goods now than it did in say 2002 …

I also think that letting the real value of oil exporters currencies fluctuate with the real value of their exports – Jeff Frankel has proposed that commodity producers peg to the price of their main export– is an easy way to help the governments of oil states manage oil related volatility in their revenues.   Currency flexibility can substitute – to a degree – for large stock of fiscal reserves (dollars and euros in the bank).    But that is a topic for another day. 

80 Comments

  • Posted by Gcs

    brad i agree

    two very intricated issues but
    i think we can all

    keep the zionist project

    and the track of arab develpoment
    at least conceptually apart from each other

    may i add

    what may or even must happen
    to the arab world
    is driven ultimately by deep inner forces
    of that civilization itself
    forces that would exist
    with or without
    the current tragedy
    running 24/7 inside land
    that is holy
    to
    all three faiths

  • Posted by Guest

    Paul McCulley: A Kind Word for the Austrian School – Asset prices matter, and not just in the context of their influence on aggregate demand relative to aggregate supply and, thus, inflation. Asset prices matter in their own right, because wild swings in asset prices, even in the context of “stable” goods and services inflation, are a source of both volatility and maldistribution in investment.

    Stephen Roach: Defensive Economics – [T]he “win-win” theories of globalization are in real trouble. The basic conclusion of Ricardian comparative advantage that all economists are taught to worship from birth holds that trade liberalization not only brings poor workers from the developing world into the global economic equation (win #1), but workers in the developed world then benefit by buying low-cost, high-quality goods from the developing world (win #2). The theory breaks down because of a new disruptive technology — in this case, the Internet — that dramatically accelerates both the speed and scope of worker displacement in the developed world.

  • Posted by Stormy

    Guest,

    I am not convinced that the Internet is the prime culprit here; more of a secondary or tertiary or lower culprit. I do agree that the theory of Ricardian advantage is broken…or should we say, temporarily suffering from severe dislocations.

    About a year ago, the Recardian issue surfaced in this blog. My primary argument has always been that the incredible magnitude of cheap labor now available is swamping all boats. That, and the insistence of every business under the sun to find a way to exploit it—and, of course, to keep labor cheap in the process. The mobility of capital is the prime culprit—and its opportunistic drive for profits at all costs.

    The American worker is losing ground, rapidly. Given average wages in China, I do not see the Chinese becoming consumers quickly.

    Addressing the issue of comparative advantage, let’s review the advantages in much of the developing world:

    1. Cheap labor, labor that has little in the way of bargaining power or defense against exploitation.

    2. Corporate tax breaks that are difficult for Western countries to match

    3. Loose or non-existent environmental regulations.

    4. And, sometimes, a power elite that is quite happy to keep the first three points operative as long as they get their share.

    To frame my point another way: Imagine a world well advanced in IT but a world in which labor, taxation, and environmental regulations were more homogenous. No problem.

  • Posted by Guest

    I don’t think you have to look to designs on monarchy to find why leaders of countries with supposedly democratic ideals repeatedly support monarchs, dictators, and single-party regimes as clients: rather, if you want client states, you only have to buy a dictator once in a generation, but you have to buy an election every few years. The Cold War was a bad time for democracy in the developing world, because both of the superpowers wanted reliable clients, and democracies don’t make reliable clients. During the 1990s, this dynamic fell apart, and with it the rules of many of the world’s strongmen.

    The War on Terror has been another bad turn for democracy, at least in countries deemed part of the battleground: U.S. foreign policy again prefers reliably friendly regimes to democratic ones. In places like Malaysia, this means holding up a mostly corrupt, quasi-single party albeit sort-of democratic regime as a model of democracy in the Muslim world, although locally participating in the War on Terror has meant the ruling party simply has an excuse to harrass its Islamist opposition, even though this opposition has thus far worked through the democratic process.

  • Posted by Guest

    re: “Many states have been created by removing the original inhabitants — though it is no longer the accepted way of doing things.”

    Yes – but forced relocations and the removal of original inhabitants are still happening. (eminent domain?) And on top of that, we are still living with the consequences of history. Canada and its aboriginal and other ethnic community issues. And although Canada has now officially apologized to the Chinese for the treatment of Chinese immigrants to Canada, it is my understanding that ‘China’ has not officially apologized to the Chinese people for its role in facilitating the circumstances that prompted them to leave. And on and on. Pick any nation, find an example. All important and enduring issues in their own right.

    “…”We are in the middle of a struggle over how to interpret the GDR,” says Marianne Birthler, an ex-dissident. She now heads the federal body set up in 1990 to oversee and catalogue the Stasi files—a vast collection of personal data on East German citizens gathered by the Stasi’s 90,000 employees and the 600,000 people who served at various times as informants….” http://economist.com/world/europe/displaystory.cfm?story_id=7090332

    Brad – if you haven’t read it, you may be interested in Paris 1919 by Margaret McMillan.
    http://www.amazon.com/gp/product/0375760520/002-9507261-5169669?v=glance&n=283155

    Doesn’t religion tend to be strongest in areas where economic inequality is greatest and public institutions are weakest? People have to believe in something. Not sure what the apparent resurgence of religion in the US may say about its institutions.

    re: “i am not convinced that the Internet is the prime culprit here”

    Although the erosion of (North) American worker rights is an issue worth addressing, the internet has facilitated a great deal of legitimate entrepreneurialism which has enabled many people to gain much more control over their incomes and economic security – and escape deteriorating employment conditions

    However, it seems that activity is not sufficient to stem the increase in economic inequality. But as most of the economists are ultimately employed by elites (yes?), won’t the wealthy have to be convinced that this is an issue worth addressing before the economists can do much about it?

    “…Some scientists believe that growing inequality leads to more health problems in the overall population — a situation that can reduce workers’ efficiency and increase national spending on health, diverting resources away from productive endeavors like saving and investment…Other researchers have focused on how income inequality can breed corruption… Unchecked inequality may also tend to create still more inequality… The trend of growing income inequality may eventually be reversed, but at the moment, current policies appear to be worsening the situation…” http://www.nytimes.com/2006/06/25/business/yourmoney/25view.html?_r=1&oref=slogin

    If the respective administrations are dysfunctional or broken, difficult to solve the problem of (equitably) redistributing the oil windfall, or the problem of the energy economics that created it.

    Interesting Economist article on Chinese tourism: “CHINA’S citizens do not only export goods; increasingly they export themselves… Although there is money to be made, profits will be harder to come by than the headline numbers suggest. For a start, of those 31m, some 21m only made it as far as Hong Kong and Macau. Half of the rest were “border tourists”, on day trips to Russia, Vietnam or Laos to trade or gamble in casinos, which are illegal in China…” http://economist.com/business/displaystory.cfm?story_id=7088698

  • Posted by Raphael Kahan

    One final word on Israel: I have never said orimplied that all was black and white, that Palestinians were all antisemite terrorists (although if you read their schoolbooks you wonder how can’t they become antisemites) and all Israelis angels. (In fact, most problems in the region are created by 20% of all palestinians and israelis. The others get along just fine.) If you asked my friends and family, I have a long history of defending the palestinian cause. I just reacted to the comparison of today’s Israel with nazis, or even with american conquest of the west; because such a comparison is so far from the facts that it can only be stated by someone whose mind is easily influenced by antisemites.
    Now let’s keep this blog an econ blog.
    For Israel/Jew bashing, you can send your anger thoughts to my email adress.

  • Posted by Stormy

    DF

    My congratulations as well. You travelled a difficult road, as many of us here can attest.

    May we now call you “Dr. DF”?

  • Posted by Stormy

    Guest (I really do wish you would adopt a moniker),

    The Internet—and IT in general—is a double-edged sword. On the one hand, it provides an avenue for political expression for the likes of me—I prefer very rural, out of the way places—as well as facilitation “of a great deal of legitimate entrepreneurialism which has enabled many people to gain much more control over their incomes and economic security…”

    On the other hand, however, in the hands of tncs it has become a powerful weapon to exploit differences in labor, taxation, and environmental regulations.

    My little thought experiment, I think, focuses the light directly on the real culprits: “Imagine a world….”

    China, for example, is now worried about giant monopolies devouring its economy. And those players are foreign firms. For an interesting overview of who does the moving and shaking in Chinese imports and exports, try

    http://en.chinabroadcast.cn/2946/2006/06/24/272@106435.htm

    China now has a draft for an anti-monopoly law.

    “The 22nd session of the 10th NPC Standing Committee is to be held from June 24 to 29.
    “The draft law bans monopolistic agreements, such as price-fixing and other forms of collusion and provides for investigation and prosecution of monopolistic practices.
    The draft law bans monopolies wielding their dominant status to curb competition.

    “It would help open some markets wider to foreign competition, at the same time would help prevent foreign companies from acquiring “more and more Chinese firms” and help safeguard national economic security.

    “He also said “with the frequent domestic and overseas company merging and reshuffle, monopolies emerged in some areas and in certain sectors. Therefore, it is very necessary to formulate the anti-monopoly law.”

    http://www.chinadaily.com.cn/bizchina/2006-06/24/content_625159.htm

    China is concerned about the effects of FDI—and rightly so. If we were smart, we too would be concerned.

  • Posted by Guest

    Setting some of the record straight

    1) The Nazis never could have achieved what they did in terms of their extermination of the vast majority of European Jews without the almost total and willing collaboration of occupied Europe and also the so-called neutral countries (in Holland, for example, 107,000 Jews (over 80% of the population) were betrayed by their gentile neighbours, rounded up by Dutch policemen on Dutch orders, taken to a Dutch-run concentration camp, shipped to Auschwitz on Dutch trains with Dutch drivers – and none of thse collaborators were every punished). The Allies were little better. Indeed, had FDR and WSC been fully-paid up members of the SS they couldn’t have done less to help the drowning Jews of Europe. The Allies fought a war in spite of and not because of the Jews. Their open collaboration with some of the very worst Nazis after the war only compounded that guilt. That much of the Muslim world either collaborated with the Nazis or openly sympathised with them is also something that is often overlooked.

    2) The notion that the Arabs were simply dispossesed hides a far more complex reality, including: the continuous two-thousand-year-old connection of the Jewish people with that nation (Jerusalem had had a Jewish majority since the 1850s); the ethnic cleansing and theft of all the property of a far greater number of Jews (800,000) from Arab lands – people who today make up a majority of Israel’s Jewish citizens; the attack on a nascent Jewish state by many armies from the Arab world who were intent on wiping her out; the fact that while a number of Arabs were chased off, a much greater number left for the duration hoping that the Jews would be defeated and they could come back to claim their land; the ethnic cleansing and killing of many Jews caught on the wrong side of the lines in 1948; the fact that many Holocaust survivors who attempted to return to their homes were either chased off or in a number of cases in Poland actually murdered.

    One should also not forget the vast amount of property (estimated at over one trillion dollars) that was stolen by the gentiles of Europe from the Jews they murdered, virtually none of which has ever been returned.

    3) The idea that Israel is the “most racist state in the world” flies in the face of reality. Israel was the first state in the Middle East where Muslim women were entitled to vote. Despite the fact virtually no Muslims put their lives on the line for Israel, there are countless Muslim judges, doctors, members of parliament (including a speaker of the house), scientists, professors etc. etc. If one wants to see true racism in action one should observe the Arab nations where Jews are not even allowed to live (and when Jews were allowed to live there they were treated as dhimmis – third-class citizens who were subject to special taxes, possessed virtually no protection under the criminal law, suffered all kinds of other special restrictions on daily life and more than the occasional pogrom).

    Would that the people who today live in the fascist state which is China enjoyed even a fraction of the civil rights granted to the lucky inhabitants of Israel.

    4) The notion that “anti-Israelism” (sic) is not anti-Semitism is pure bunkum, at least in so far as an adherence to that ideology requires one to work towards the destruction of Israel. Israel is the Jewish state. More Jews currently live in Israel than in any other nation on earth. Anti-Semitism, for the most part, has simply moved on from persecuting the individual Jew to persecuting the collective Jew represented by Israel. To suggest it is not anti-Semitism is every bit as mad as saying that a person is not anti-American simply because he wishes America to be destroyed.

    A note about Tibet

    Those people who happily discuss China without mentioning the ongoing holocaust against Tibet (or worse, excuse it) are absolutely no different to the many people in the West who were happy to play footsy with the Nazis even after they had invaded Czechoslovakia. Then again I expect the same moral pygmies overlook the brutal rape of Chechenya. China and Russia get a free pass mainly because most people don’t give a damn about their depredations (had Israel committed the same crimes every man and his dog would have been up in arms – I guess the Tibetans and Chechens picked the wrong enemies), but also due to the fact that they are too big and scary to pick a fight with. This doesn’t alter the fact that the entire leadership of both countries should have been charged (should still be charged) with the commission of multiple crimes against humanity.

  • Posted by Stormy

    Guest (I really do wish you would adopt a moniker),

    The Internet—and IT in general—is a double-edged sword. On the one hand, it provides an avenue for political expression for the likes of me—I prefer very rural, out of the way places—as well as facilitation “of a great deal of legitimate entrepreneurialism which has enabled many people to gain much more control over their incomes and economic security…”

    On the other hand, however, in the hands of tncs it has become a powerful weapon to exploit differences in labor, taxation, and environmental regulations.

    My little thought experiment, I think, focuses the light directly on the real culprits: “Imagine a world advanced in IT but more homongenous in labor costs, taxation, and environmental regulations.”

    China, for example, is now worried about giant monopolies devouring its economy. And those players are foreign firms. For an interesting overview of who does the moving and shaking in Chinese imports and exports, try

    http://en.chinabroadcast.cn/2946/2006/06/24/272@106435.htm

    And here is a link to the why’s and wherefore’s of the draft anti-monopoly legislation.

    “The 22nd session of the 10th NPC Standing Committee is to be held from June 24 to 29.
    “The draft law bans monopolistic agreements, such as price-fixing and other forms of collusion and provides for investigation and prosecution of monopolistic practices.
    The draft law bans monopolies wielding their dominant status to curb competition.

    “It would help open some markets wider to foreign competition, at the same time would help prevent foreign companies from acquiring “more and more Chinese firms” and help safeguard national economic security.

    “He also said “with the frequent domestic and overseas company merging and reshuffle, monopolies emerged in some areas and in certain sectors. Therefore, it is very necessary to formulate the anti-monopoly law.”
    http://www.chinadaily.com.cn/bizchina/2006-06/24/content_625159.htm

    China is concerned about the effects of FDI—and rightly so. If we were smart, we too would be concerned. The big boys are dangerous to us all.

    Sorry for the repost…the first was really fouled.

  • Posted by Stormy
  • Posted by Guest

    NEWvet writes:

    “What the nazi did sure was horrible but what the israelis are doing is not much less terrible and all of this is sponsored by the US”

    Only a person who is either mad or evil could have made such a comment. That nobody here sought to rebuke you about this despicable piece of undiluted anti-Semitism only goes to show once again that when push comes to shove we Jews can rely on absolutely no one but ourselves.

  • Posted by Guest

    re: “The Internet—and IT in general—is a double-edged sword…”

    agreed. I was just trying to look at the bright side. Perhaps poverty is not as bad as we think – there could be some people who have become very good at developing legitimate means for supporting themselves that don’t register, at least in the usual places, in statistics generated by methods which may be getting a bit inadequate and outdated.

    There are many guests on this blog. At times I’m comfortable with the majority, at other times, like today, I’m not.

    I agree with Brad and Raphael. Rants that delve into the pure politics of specific situations are out of bounds here.

  • Posted by Guest

    re: “I agree with Brad and Raphael…” I’ll just add to my comment that – of course as it’s Brad’s blog, only to ask a that a certain Guest respect Brad’s generous guidelines.

  • Posted by Gcs

    stormy

    how do you know which guest is … guest
    and which guest is just … another guest named guest

  • Posted by psh

    would be funny it was all one guy

  • Posted by Stormy

    Gcs,

    Damned if I know who is which guest. A guest is a guess, I guess. Which guest is this, which guest is that, is more a quest for a guess than any guest should have.

    Who knows, psh, maybe it’s a family of Guests.

    We could all just post as “Guest” and drive this blog into the Guest-Madland, I guess.

  • Posted by OldVet

    Referring back to the “BS” I offered on claims about China’s vaunted technical prowess, here are some references for “Mr. Chiang”:

    The shape of things to come
    Jun 1st 2006 The Economist, Science and Technology: Nuclear Power

    How tomorrow’s nuclear power stations will differ from today’s
    A South African design, called the “pebble-bed”, is, however, truly passive. Instead of water, it uses graphite to regulate the flow of neutrons, and instead of making steam, the reactor’s output heats an inert or semi-inert gas such as helium, nitrogen or carbon dioxide, which is then used to drive the turbines.
    The name of the design comes from the fact that the graphite is used to coat pebble-like spheres of nuclear fuel. Like the CANDU design, pebble-bed reactors can be refuelled while running. China is also developing pebble-bed reactors.

    Faking it
    May 18th 2006
    From The Economist print edition

    The latest blow to the country’s image came on May 5th, when Jiaotong University uncovered a fraud committed by one of its top microelectronics researchers, Chen Jin. Dr Chen claimed to have developed the country’s first home-grown microchip, capable of processing 200m instructions a second. It looked set to save China billions of dollars in imports and advance the country’s own high-tech industries. But an investigation by the university found that Dr Chen had simply removed the marking from chips made by Motorola and replaced them with the logo of his company. No wonder the announcements were never followed by the sales they seemed to deserve.

    Deutsche Welle http://www.dw-world.de/dw/0,,266,00.html
    Business | 28.04.2006
    China Masters German Train Technology, Will Cut Costs
    Original designer

    Germany’s Transrapid International, a consortium between German industrial giants ThyssenKrupp and Siemens, is the original designer and builder of the MAGLEV trains, which travel at up to 430 kilometers (270 miles) per hour.

    Transrapid has already signed a deal to be involved in the new line to Hangzhou, but Thursday’s report indicates its role will be scaled back compared with the service between Shanghai and the airport.

    As in many other high-tech industries such as aerospace and autos, China is intent on developing its own technologies so as not to be reliant on foreign companies and to ensure it can cut costs.

    The China Daily said the State Council, China’s cabinet, was encouraging engineers to “learn and absorb foreign advanced technologies while making further innovations.”

    Technology theft?

    But some in Germany are concerned about copyright protection, and accuse the Chinese of copying technology from countries doing business there.

    “What’s happening in China smells suspiciously like technology theft,” said Bavarian Premier Edmund Stoiber after he learned of China’s plans to build its own MAGLEV train. He has suggested putting the issue of Chinese development and intellectual property protections on the agenda of the next G8 meeting.

    The head of ThyssenKrupp, Ekkehard Schulz, was somewhat more diplomatic. “It appears that some Chinese patents overlap quite a bit with our own,” he said.

    There are similar worries about technology and China being voiced across the Atlantic. Former US Commerce Secretary Donald Evans made US concerns official in Beijing. He cited the example the QQ mini car from China’s Chery Automobile Co. American carmaker General Motors claims the QQ is a copy of its Chevrolet Spark model.

    The Chinese deny any technology plagiarism in both cases. The China Aviation Industry Corporation has said the new Chinese “Zhui Feng” magnetic train is not dependent on foreign technology. It is much lighter than the Transrapid product, the company said, and features a much more advanced design.

  • Posted by Observer

    We could all just post as “Guest” and drive this blog into the Guest-Madland, I guess.

    Written by Stormy on 2006-06-25 14:45:54

    Entertaining idea.

    It would certainly make your point.

  • Posted by Anonymous

    I thought we were going to drop the arguments re Israel, but then another “Guest” popped up to give the Zionist Lobby version of things. So I will simply say this. It is my opinion that Israel has been the worst thing that could have happened to Jews, worse than the Holocaust. Why? Because it has besmirched them, inevitably, with the stain of a racist, oppressive regime or state, as you wish, that has engaged since it beginning in ethnic cleansing (not completely successful yet) and systematic oppression in defiance of most world opinion. If you want the real skinny re Israel you don’t need to read Muslim or Arab historians since honest and responsible Jewish historians such as Finkelstein and Chomsky and others explain it all very well. And as for US complicity in it all, we have now the detailed explanation from Mearsheimer and Walt. I now eagerly await “Guest” to inform us that Finkelstein and Chomsky are “anti-Semites” as well as Mearsheimer and Walt.

  • Posted by Guest

    they are self-hating semites 😛

    cheers!

  • Posted by DF

    Lol, Stormy, you can sure call me Dr DF, but this is not my field of inquiry, just my area of concern, now that my PH D is over, I may try to close the gap between those.

  • Posted by MrBill

    Although I am no expert on the Reformation, or Martin Luther, it was only the start of a process that played-out ultimately in Europe becoming no less a secular state, and the erosion of European states seeing themselves as part of Christendom. Which is not how the EU defines itself today, unlike Islamic Republics where there is no seperation between state and religion.

    Up to that point in history the Church had survived quite well against the split between the Roman Church and the Orthodox Church, and even at one point in time having three different Popes claiming legitimacy.

    Martin Luther actually saw himself as a true believer and his calls on the Church were to bring it back from its excesses such as Dominicans selling tithes to pay for a new Bascillica. However, once he started challenging the Eucarest and other Church doctrine he was excommunicated. He would have never survived to be a threat to the Church if not for the protection of a German prince.

    Then of course others took up the process of reformation in his name, and like on the Internet he felt compelled to clarify everything he wrote, which was distorted and had taken on a life of its own to support new causes, sounds like the anti-globalism movement to me? A banner for all sorts of groups to air their grievances.

    The point that he was the thin edge of the wedge in the chink in the wall of the Church’s orthodoxy. Various views of Islam in the ME, financed by oil exports, are also competing for a wider audience, and many of those voices are not of calm or reason. They want redress for many past greivances real or imagined. So, yes, finding away to share current oil revenues, and then planning for a future with declining oil production, is fairly important if you do not subscribe to some of the less moderate Islamic sects who see world Islam as the answer. And that history means that the end justifies the means.

    As the execution of Russian hostages this week proves, it is not only potentially the USA that has reason to fear developments in the ME or their ability to spill outside their own region.

    Martin Luther certainly never intended to start what he did, or knew where it would end, and likely without the printing press with moveable fonts combined with an emerging German nationalism against a foreign Pope, it would have been handily contained by a still powerful Church. Do we ever know the end result of our actions? Clash of civilizations anyone?

  • Posted by MrBill

    “I am more interested in the discussion on the analogy between the protestan reformation in the Germanic world (and wars of religion)and any potential Islamic reformation … or transformation.”

    Sorry this is what I meant to respond to and I have no idea what happened to the font? Duh.

  • Posted by Gcs

    bill sez all i meant

    history has its devious ways

    martin L leads to the EC
    the 666 multinational state if there ever was one

    but god bless him
    luther thought revelations was bunk anyway

    mr bill’s punch line

    “Martin Luther certainly never intended to start what he did”

    well perhaps in a couple hundred years
    we’ll be able to say
    neither did the ayatollah K

  • Posted by Guest

    «Martin Luther actually saw himself as a true believer and his calls on the Church were to bring it back from its excesses such as Dominicans selling tithes to pay for a new Bascillica.»

    Luther was a Renaissance intellectual, University professor and literary critic who used the kind of textual criticism that the Italians had developed to rediscover Roman literature, but applied it instead to the text of the Bible. In short, he ignored the vast amount of Biblical exegesis that had been produced during the Middle Ages in favor of taking a fresh look at the original “document”. In the process he discovered what he regarded as the “original” Christianity and found it devoid of the vast amount of elaboration of all kinds produced by the mediaeval Church. And it was indulgences, not tithes, that he denounced— pardons for sins sold by the Church (Dominicans prominent in the business) for profit.

  • Posted by Guest

    Luther’s doctrines spread because various German princes both believed in his ideas and saw them as useful to “reform” the Church within their principalities, and in the process taking much of the control away from the Papacy, as Henry VIII did on a national scale later in England. Lutheranism could not have spread without its adoption by German princes and princelings. When the first period of the Reformation came to a close in 1555 the “terms” of settlement were that whatever relgion the prince adopted (whether Lutheran or Roman) was imposed on the population of his state: cuius regio, eius religio. The people had no choice.

  • Posted by Guest

    …maybe what’s needed is more renaissance and enlightenment than reformation?

  • Posted by MrBill

    “And it was indulgences, not tithes, that he denounced— pardons for sins sold by the Church (Dominicans prominent in the business) for profit.

    Written by Guest on 2006-06-27 15:16:56”

    Sorry, that was what I meant, but got it backwards. Thanks.

  • Posted by Guest

    You need to provide a little context if you want to compare Iran’s imports to Venezuela’s. In 2002, your starting point, Venezuela’s imports fell by over 30% due to the coup and the business lockout. Currently,imports as a percentage of GDP are well within the range recorded during the 1990s, a period of economic stagnation. Much of the growth in imports last year was attributable not to consumables but to capital goods, such as machinery, parts, and equipment used for future production to support the highest economic growth rate in Latin America. Venezuela is a popular whipping boy, but the government’s economic management has actually been pretty impressive.