American voters who approve of President Obama’s sanctions on Iran should also approve of gasoline prices that are 25 cents per gallon higher than they would have been apart from the sanctions.
Economic sanctions are restrictions on trade. Restrictions on trade raise prices. There can be no economic sanctions imposed by the federal government that are not paid for by American consumers.
Blaming Obama for (say) $1.00 of price hikes is good politics and bad economics. Blaming him for 25 cents worth of price hikes is good economics but (in some circles) bad politics. There are voters who think that Iran deserves sanctions, despite the fact that Iran does not threaten the interests of the vast majority of citizens in the United States. These voters will bring political sanctions against Obama’s re-election campaign if he were to call off the sanctions.
This goes back to 1806. Jefferson imposed a trade embargo with both France and Great Britain in an effort to keep the United States neutral. The result was the first recession in the young nation. The embargo ruined New England’s economy.
The difference today is that most voters are unaware of the gasoline price “tax” imposed by Obama’s sanctions on Iran. In 1806, voters knew that Jefferson’s embargo was to blame for the rotten economy.
The sanctions which the U.S.A. and other nations have imposed on Iran’s energy sector and on its central bank are costing Iran about 300,000 barrels a day in exports. The sanctions have imposed something in the range of $10 per barrel of oil, according to some specialists in the oil market.
The sanctions on Iran are a subsidy to OPEC. The House of Saud is quietly ecstatic. “The hated infidels are paying more to Sunni Islam, while the even more hated Shi’ites are suffering. Allah is great.”
Because voters are untrained in economics, they are unaware of all this. This protects the sanctions program. If it were promoted as “subsidize Sunni Islam,” it would not be nearly so popular.
Saudi Arabians took down the trade towers in 2001. Iranians did not. Iraqis did not. The Taliban did not. So, who gets our sanctions money? Saudi Arabia.
Try to find any other analyst who connects these dots. I have looked. If he is out there, I have not found him.
I can see why the House of Saud applauds Obama’s decision. I can see why the Likkud Party does. I do not see why anyone else does.