If the United States gets into the business of providing dollar liquidity to the United Arab Emirates and other Persian Gulf states battered by the Strait of Hormuz's closure, it will amount to a novel use of an old power. The big picture: The Federal Reserve used swap lines with foreign central banks as a key tool to calm global financial disruptions in periods of stress, starting in the early days of the global financial crisis in 2007. They were driven by Fed leaders' belief that dollar funding shortages worldwide risked blowing back to the U.S. banking system and economy. The potential use to backstop Gulf states carries a more explicit geo-strategic role: seeking to reward and bolster key allies in the region. Kevin Warsh, in his Fed chair confirmation hearing this week, explicitly noted "international finance" as an area where the Fed ought not be strictly independent, implying greater collaboration with the executive branch on use of swap lines.…