Spare a moment for a rogue trio of economic victims -- Hugo, Vladimir and Mahmoud. Their dreams of world domination and tight grips on power are eroding as the price of oil falls. If there is a silver lining to global recession . . .
The downturn is pulling back the curtain on these oil-drunk, self-styled wizards of Venezuela, Russia and Iran. At $140-plus a barrel, Messrs. Chávez, Putin and Ahmadinejad could bully their neighbors and their people. With crude now hovering around $40, they are smaller autocrats sitting atop wobbly regimes and distorted economies.
Oil made these three -- and could be their undoing. Assuming prices would stay high, they shunned reforms that would diversify and open their economies and nurture a large, entrepreneurial middle class. Their petrobillions were devoted to subsidies and welfare, in the hopes that people don't notice that select insiders pilfered their way to riches, as well as to stirring up trouble abroad.
Pegged to a per-barrel oil price of $60, Iran's and Venezuela's budgets are feeling the strain. Mr. Chávez planned to increase spending 23% next year and now will have trouble meeting those obligations. Inflation is already 36%, a punishing tax on the masses Señor Chávez claims to champion.
Iran relies on oil for 60% of its budget, half of which is spent on welfare. Starved for money, Mr. Ahmadinejad proposes to free some consumer prices and cut spending. Corruption, mismanagement (inflation at 25%) and unmet populist promises already made Mr. Ahmadinejad unpopular at home. Now the austerity talk is raising the domestic temperature. In October, a strike by bazaar merchants forced the government to delay a sales tax. The universities are restive again (see "Iran's YouTube Generation," Dec. 15) and the government wants to push through a hated gasoline rationing plan.
In spite of the differences that Shia and Sunni have, Iran is one of Hamas' chief sponsors. And Hamas is currently making trouble with Israel, which always drives up the price of oil. Do you suppose the Hamas, which is being ridiculed and criticized by other Palestinians and Arabs for doing this, is doing it a Iran's behest to stabalize the government of the Mullahs?