Problem: In order to fully control the oil supply from the Middle East the Bush administration needs to destabilize Iran, and then attempt to install a US friendly government there. The US military currently occupies Afghanistan to the east, and Iraq to the west of Iran, but as long as the US has little or no sway with the Iranian government, the US does not have full geopolitical control of Middle Eastern oil reserves.
The Bush administration's plan for geopolitical domination of Middle Eastern oil has always involved destabilizing the Iranian government, even if this means limited airstrikes under the pretense of eliminating the stalled, incipient Iranian nuclear program. Indeed, the Bush administration has spent untold billions flexing its muscles by moving the US military into and around the Persian Gulf, and using covert assets to undermine confidence among the Iranians.
However, the Bush administration's slavish adherence to supply side Reaganomics, and their stubborn insistence that it is best the way to a strong economy, may eventually be the undoing of their imperialist plans for Iranian oil.
The dilemma: Bush's military occupations of both Afghanistan and Iraq, while simultaneously saber rattling at Iran, have had a significant impact on the price of oil over the last several years. Instability in the world’s most oil-rich region resulting from the US military occupations, lack of international dialogue, and demonization of political leaders in Iran and neighboring countries, account for the lion's share of increases in the price of oil. As the price of oil shot through $100 a barrel, and now resides above $130 per barrel, at the same time that the US dollar is nearing all-time lows against foreign currencies, the buying power of the average American family has declined precipitously. As the economy moves more certainly into a recession, and as home values continue to decline, the Bush administration's economic policies are becoming less and less popular with the public.
This leads to Bush's dilemma. Any air strikes against Iran directed at destabilizing that nation's government will immediately send oil prices above $150 per barrel. At this price, the recession will worsen greatly as energy costs bleed over into almost every other sector of the economy. But the status quo is barely better for Bush.
Because this is an election year, and the country is headed into a deeper recession, Bush needs to do something more than send out checks for a couple hundred bucks to taxpayers in order to turn the economy around. This is an essential aspect for any incumbent administration in the run-up to an election. However, they are also desperate to play the war card one more time to try and rally the American people again behind Middle Eastern adventurism in the name of fighting “terrorism”.
It's a Catch-22. If they don't attack Iran, they don't get the “rally round the flag” effect, but if they do attack Iran, they drive the price of oil even higher, further deepening the recession here at home. Is there a way out for Bush & Co.?
I am certain that the talk in the West Wing regularly turns to ways that the government can accomplish the incompatible goals of repairing the economy while simultaneously bombing Iran into submission. However I do not see any way to reduce oil prices other than to reduce tensions and instability in the Middle East. That not only involves negotiations with Iran but also negotiations with Hamas, Hezbollah, and the Taliban, while simultaneously reducing the US military footprint throughout the region. This is clearly not going to happen on Bush's watch. As such, we will be heading into the next election with high oil prices, high tensions throughout the Middle East, and a sagging economy at home. This could drive Bush to desperate measures as the election approaches. Only time will tell if they can figure a way out of Bush's dilemma.