There is something surreal about the spectacle of President Bush touring the Persian Gulf.  It calls to mind the signature line of Mad Magazine’s mascot, Alfred E. Neuman: “What, me worry?”

Mr. Bush’s trip is, after all, premised on the notion that the Arab leaders he is courting there are reliable allies. Such a proposition should be subjected to the closest of critical scrutiny by Congress, the press and the American electorate since a number of highly debatable, and increasingly portentous, policies are predicated on this assumption.  These include:

*         Saudi Arabia and the other, smaller desert principalities are “moderates” who are as opposed as we to the totalitarian political agenda of fanatical ideologues such as Osama bin Laden.   

*         The Gulfies share our concern about the rising power of Iran and therefore can be counted upon to join us in countering that region’s would-be Islamofascist superpower.  It follows not only that we can safely provide these autocracies with an array of advanced weapons, but we must do so.

*         The Arab regimes in the Persian Gulf will be helpful in brokering a peace between Palestinians and Israelis – if only the United States pressures the Jewish State to make territorial and other concessions that may imperil the latter.  And,

*         The willingness of the Gulf’s potentates to recycle the immense wealth they have accumulated in recent years – primarily through oil sales at exorbitantly inflated prices – to purchase big stakes in U.S. companies and capital markets is a welcome development.  Such investment is to be encouraged, and those who say otherwise should be condemned as “Chicken Little xenophobes” in the words of former GE chairman Jack Welch and his wife, Suzy. 

In fact, the Welch tag-team used a January 21 Business Week column to admonish a letter-writer worried about Arab and other sovereign wealth funds buying up American corporations:  “In trying times, U.S. companies always attract opportunistic, activist shareholders.  Sometimes they look like Carl Icahn or Nelson Peltz.  Sometimes they look like shiny-faced hedge fund managers just out of Wharton or Harvard Business School.  And sometimes – like now – they look Chinese or Saudi or whatever.  It doesn’t matter.  They’re all after the same thing: the opportunities in America’s capitalistic market.”

            Unfortunately, this confidence in the inexorable forces of “globalization” is as misplaced in the case of the so-called “pro-Western” Arab states as are the other assumptions driving American policy towards the region at the moment.  To be sure, at least some of those to whom President Bush has been paying court in recent days are genuinely desirous of American protection, arms, pressure on Israel and investment opportunities.  But to confuse such short-term, expediency-driven common interests with a durable strategic partnership is, for want of a better term, globaloney.

            A litmus test of the true intentions of the Saudis and other oil-rich Arab fiefdoms  can be found in an initiative moving forward in Western capital markets – including, increasingly those of the United States – in parallel with their sovereign wealth investments in major financial institutions and exchanges: Shariah finance.  Continued...