Causation is crucial here, since Iran would never have considered such a move, had it not been pushed against the wall by the neocons-Israel.

Dollar monopoly is not just a neocon priority, its an American priority. However, it is neocon designs that have ultimately compelled other governments to consider different currencies for exchange.

Shall we agree on the strong correlation, and agree to disagree on the causation?

Their actions, as I said, have clearly resuled in the opposite, as predicted by foreign policy realists. Hegemony has been sacrificed in an attempt project overt military power. On that, I agree, Iraq was used as an object lesson for those may think of challenging US might. In that respect, it has been a veritable disaster.

Whenever another state moves towards allowing oil to be traded in anything other than dollars, they are ostracised and, depending on the severity of their threat, brutally put down.

In this instance you have the causation backwards. The only states which have considered trading oil in other currancies are the ones who have been rebuffed, confronted or attacked by the US. Before 2000, I don’t know of any other state which was considering doing such a thing. Iraq only did after two major wars against it (1991, 1998) and 8 years of sanctions. US has much more reliable ways to deal with such situations, as it did when King Saud decided to get his own tanker fleet in the 50s. War was completley unnecessary.

When I talk about the US hegemony, I do not mean its preeminence in the Middle East or indeed the wider world. Someone will always be preeminent, why not America. But America isn’t just a first among equals, it is overwhelmingly more powerful than any other country, and has a carte-blanche to act how it likes. This isn’t necessarily good even for America, but it is the goal of the neocons.

You seem to think that I am naively taking their intentions at face value, but this is the inescapable conclusion of their actions. Whenever another state moves towards allowing oil to be traded in anything other than dollars, they are ostracised and, depending on the severity of their threat, brutally put down.

Iraq moved towards selling in Euros in 2000, and soon afterwards the neocons started frantically looking for excuses to overthrow him. And do you think anyone is bothered by Hugo Chavez’ dictatorial attitude and anti-American rhetoric? It’s his willingness to sell oil through barter programs rather than dollars that makes Venezuela a pole of evil or whatever they call it now.

Despite the hysterical anti-Iranian propaganda, even most Israelis do not consider it to be a serious threat to their security (or their Lebensraum). The IOB is a serious (even “existential”) threat to the dollar hegemony, and that is the real reason for all this “second holocaust” bullshit.

Israel could so easily befriend Iran and Syria without compromising its fascist occupation of Palestine or designs on Lebanon – the sad fact is that most Middle Eastern governments are quite happy to sell the Palestinians down the river, though they will make token gestures to the contrary to appease their populations – that it chooses not to despite making peace with, say, Egypt, shows that there is more to this than simple zionist ideology.

As regards hegemony, US remained the preeminent hegemon until it was first challenged by Nasser — only after the Israel succeeded in rebuffing Nasser’s overtures towards the US with things like the Lavon Affair.

Its hegemony was challenged against in ’73 in the wake of the yom kippur war and in ’79 by the iranian revolution. In 91 it only emerged as the most powerful force because it wisely chose not to entangle itself in an occupation. Its hegemony in the region outside of Iran was total. The only problem was, this was making Israel irrelevant. Moshe Arens provides a good account of Baker’s rough dealings with Israel around the time. This is what the neocons sought to reverse, as is obvious from the policy document they wrote for Netanyahu.

Everything that has happened since, is precisely what was predicted by Baker, Scowcroft, Brzezinski et al. American power in the region is on the decline.

If Israel is seeking new friends, it is precisely for this reason. And it isn’t chosing randomly. And if the Arab regimes are reciprocating, its because, like Israel, they know the decline of US hegemony will unleash the forces that are equally inimical to both — namely, the people of the middle east.

As you point out, there is a plurarility of interests here. Some do indeed see Israel more in ideological terms than strategic ones. What, for example, do you mean by “the good of the Empire”? Baker’s plan for the Middle East would certainly have improved America’s diplomatic standing, facilitated a peaceful resolution of a costly and more or less interminable conflict, lowered the price of oil and reduced security risks to Americans.

That is better for America, by any rational assessment… except that it is an explicit cornerstone of neoconservative philosophy that America remain a superpower. To them, the “good of the Empire” means “strength beyond challenge”. The U.S. is beyond challenge, militarily and economically, as long as the dollar remains the global currency, and whatever the cost to American citizens and businessed, they will fight for it to remain the global currency.

When Saddam started to vaguely threaten Israel, America bombed and sanctioned Iraq into powerlessness. They only went for regime change – and with a passion, mind – when he started to sell his oil in Euros. Likewise, knocking out Iran is irrelevant to Israeli security – Iran has even offered to cease the support of Hezbollah and Hamas that gains it such popularity in return for US recognition of Iran’s interests – but the American-Israeli-Saudi neocon alliance cannot allow Iran to complete its Oil Bourse, the online non-dollar fossil-fuel exchange it hopes to complete this year.

James Baker is promoting the interests of America. The neocons are promoting the interests of America’s unnassailable hegemony. And there’s a world of difference between the two.

For the “Israel as a strategic asset” argument to be correct, one would first have to assume that all the right-wing arab regimes are unwilling to trade with US, or keep dollar reserves.

Jonathan Cutler offers the best analysis of the varied interests of the Washington power elite.

The U.S.’ overwhelming power comes from the fact that the dollar is the de facto world currency. Dollar inflation means that countries with dollar reserves effectively pay a tax to the U.S., and have as strong an interest in keeping the dollar strong as America itself (hence Japan’s recent hostility toward Iran).

The reason those countries keep reserves in dollars instead of, say, gold or euros is that dollars are necessary to buy oil. With the U.S. controlling, through diplomacy and occupation, most of the Middle East’s oil output, that’s not about to change – except that a few countries like Iran won’t play ball.

Certainly, America’s agenda in keeping Israel as a violent and indestructible superpower is partly based on religious and even borderline-fascist fundamentalism, but it’s also crucial to controlling oil output. If the countries of the Middle East were to develop independent oil programs, “Big Oil” might indeed benefit, but the hegemony of the dollar would be completely undermined.

What Arab rightwing governments do for their survival is irrelevant to this equation.

Bush probably couldn’t even find Syria on a map, he has no opinion on it. The decisions are made by Cheney, whose chief middle east advisor is David Wurmser, a hardline zionist extremist.