by Ralph Peters [author, novelist]

Feeling gleeful at the misfortunes of others is an ugly-but-common human characteristic. The world delighted in our crashing economy, then we got our own back as Euro-bankers and Russian billionaires proved at least as greedy as our own money-thugs.

Of all the pleasures to be found in the pain of others, though, none seems more justified than smugness over the panic in Moscow, Caracas and Tehran as oil prices plummet.

We may need to be careful what we wish for.

Successful states may generate trouble, but failures produce catastrophes: Nazi Germany erupted from the bankrupt Weimar Republic; Soviet Communism’s economic disasters swelled the Gulag; a feckless state with unpaid armies enabled Mao’s rise.

Economic competition killed a million Tutsis in Rwanda. The deadliest conflict of our time, the multi-sided civil war in Congo, exploded into the power vacuum left by a bankrupt government. A resource-starved Japan attacked Pearl Harbor.

The crucial point: The more a state has to lose, the less likely it is to risk losing it. “Dizzy with success,” Russia’s Vladimir Putin may have dismembered Georgia, but Russian tanks stopped short of Tbilisi as he calculated exactly how much he could get away with.

But now, while our retirement plans have suffered a setback, Russia’s stock market has crashed to a fifth of its value last May. Foreign investment has begun to shun Russia as though the ship of state has plague aboard.

The murk of Russia’s economy is ultimately impenetrable, but analysts take Moscow’s word that it entered this crisis with over $500 billion in foreign-exchange reserves. At least $200 billion of that is now gone, while Russian markets still hemorrhage. And the price of oil – Russia’s lifeblood – has fallen by nearly two-thirds.

If oil climbs to $70 a barrel, the Russian economy may eke by. But the Kremlin can kiss off its military-modernization plans. Urgent infrastructure upgrades won’t happen, either. And the population trapped outside the few garish city centers will continue to live lives that are nasty, brutish and short – on a good day.

Should oil prices and shares keep tumbling, Russia will slip into polni bardak mode – politely translated as “resembling a dockside brothel on the skids.” And that assumes that other aspects of the economy hold up – a fragile hope, given Russia’s overleveraged concentration of wealth, fudged numbers and state lawlessness.

Should we rejoice if the ruble continues to drop? Perhaps. But what incentive would Czar Vladimir have to halt his tanks short of Kiev, if his economy were a basket case shunned by the rest of the world?

Leaders with failures in their laps like the distraction wars provide. (If religion is the opium of the people, nationalism is their methamphetamine.) The least we might expect would be an increased willingness on Moscow’s part to sell advanced weapons to fellow rogue regimes.

Of course, those rogues would need money to pay for the weapons (or for nuclear secrets sold by grasping officials). A positive side of the global downturn is that mischief-makers such as Iran and Venezuela are going to have a great deal less money with which to annoy civilization.

Some analyses calculate that, for Caracas and Tehran to sustain their already-on-life-support economies, the price of oil needs to stay above $90 a barrel. But average prices will probably remain below that for at least two years.

Iran and Venezuela may respond very differently to impoverishment, however. Tehran could turn to regional military aggression in an attempt to keep the population behind the regime – and may the Lord help Israel, if a dead-broke Iran gets nukes.

On the other hand, even devout Muslim businessmen don’t like to go bankrupt. Iran’s power-broker mullahs have relied on the support of the (much bribed) bazaaris, the nation’s merchants. While we obsess about feeble student protests, the bazaaris form the constituency the mullahs dare not alienate. Regime change may come from within.

By contrast, Venezuela’s power is a charade. The regime of Hugo Chavez can’t survive without a constant transfusion of petrodollars. Chavez buys votes – and you can’t buy votes with empty pockets.

Chavez is far more bluster than bravery. Facing empty coffers, his rhetoric will intensify – but he’s not going to invade anyone (he’d lose). And the left-wing regimes that rely on him will have to find a new sugar daddy.

A bankrupt Chavez won’t survive long – he’s no Fidel Castro. The question is whether he’d respect a popular vote that went against him or go out in a splash of blood.

Bottom line on bankrupt enemies: Russia’s dangerous; Iran’s dangerous, but vulnerable; Venezuela’s just vulnerable. There may be serious trouble ahead.

For now, though, it’s satisfying to watch the wicked suffer. ExileStreet

courtesy NY Post / copyright 2008 NY Post

Ralph Peters’ latest book is “Looking For Trouble: Adventures in a Broken World.”

Ralph Peters is a retired Army officer and the author of 19 books, as well as of hundreds of essays and articles, written both under his own name and as Owen Parry. He is a frequent columnist for the New York Post and other publications.

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