Use to discuss topics unrelated to recent threads (aka. no Ukraine.)
- Ukraine is not morally worse than Iraq, Yemen, or many other wars.
- Russia is not more evil in its foreign affairs than the US.
- Neither fact is whataboutism.
The general cases of these also apply. Most countries that seem good are not good. They are weak, and if they were powerful, they would not continue to act good. (The personal application of that principle will be the subject of another post.)
The point here is that there is NO ethical case for treating the US and Russia differently in terms of sanctions and response. Iraq was just as bad a war crime as Ukraine. So what is happening is not about ethics, it’s about other things. For many Europeans, it’s about fear (that’s another post), but for the US and its allies, this mostly about power: The actual “principle” is “our wars and annexations are good,” and “you can’t do to white, blonde Europeans who we consider part of Western civilization what you do to brown people who aren’t part of Western civilization.”
This is NOT an argument that what Russia has done is not an evil war crime. But countries who are not Western allies, like India, China, and most of the global south, even if they will condemn the actions, do not see this as anything worse than many actions taken by the US and its allies and see no reason to cooperate with sanctions unless those sanctions also benefit them, as they know that this is not about justice, but about power.
Justice applies equally to all. It commands respect. When the ICC declares it is opening a war crimes investigation against Russia, but didn’t against the US, everyone who isn’t a Westerner (and many of us, too) laugh bitterly. Why didn’t the ICC try Cheney and Bush and so on? Because the US threatened to invade if they did. (No, I am not kidding. Look it up.)
Next: Deals made when a nation is weak, do not hold if they are not actually in the country’s self-interest. This is at the heart of the China/US conflict, by the way. The “rules-based” world order was created when China was weak, by the people who put the boots to China for over a century. The Chinese don’t see why they should respect it. They will do so for as long as it is in their interest, and not one second further.
“Don’t keep deals that are bad for you,” is also why Russia is likely to break all Western IP. The only reason why they wouldn’t is that oil and wheat exports are still not subject to sanctions. Do that, and the IP goes. Then China helps Russia reverse engineer and manufacture Western goods, while smiling and denying, since they too hate Western IP. (In WWI, the US broke German patents. The core of the American chemical industry is based on this fact. After the war was over, they did not say, “Okay, we’ll go back to respecting them.”)
I remember the run up to and first period of the Iraq war. Then, as now, pointing out inconvenient truths was regarded as traitorous, and people said, “But Iraq is an evil dictatorship and Saddam, Saddam, Saddam.” Saddamn was an evil dictator, but Iraq was still a war crime (as is Ukraine).
Those same truths, by the way, were acknowledged by almost everyone as true ten years later when it didn’t matter, and many of those people are making the same mistakes now.
This is Great Power politics. The decisions on both sides are not being made for reasons of justice or ethics. That does not mean there isn’t an ethical case, but you can’t say, “We get to have wars, and everyone who isn’t our ally doesn’t.” That’s just the argument of a bully who says, “Only I get to beat people up!” and everyone who is ethical and not ruled by the emotions of the moment knows it.
A world at peace will happen (if it ever does) when powerful nations hold themselves to the same rules they hold the weak to, and not before.
Brief post. Articles about inflation have been coming out, and they’re right, inflation is going to get a lot worse because of the sanctions on Russia, especially when Russia retaliates. If you can afford to stock up now, do. If you want big ticket items other than, perhaps real-estate, you should buy now. If you have a business which needs certain key goods or processed items, buy what you can now.
Russa isn’t really an industrial power, except for arms, but it provides not just energy but an array of minerals that are key to industrial production. While there will be workarounds to sanctions, you should still expect this to hit costs. Russia is also the largest exporter of wheat in the world, with Ukraine as #2, and you can expect food prices in general to keep rising.
Further, it’s hard to say how attempts at enforcing sanctions with China (who will resist), and perhaps with India and other countries, will cause unpredictable inflation spikes in other products.
As for real-estate, the affect is hard to entirely predict. So far, the British have resisted urging to truly sanction Russian money (because it would collapse London real-estate and hurt the City badly), but we’ll see if that continues. Whatever the case, a lot of Europe may be subject to real-estate price reductions due to sanctions, and this might be true in New York. I lack enough expertise to be sure, you should look into it if it concerns you.
Then there is the issue of Chinese money. China won’t be subject to serious sanctions yet, the West can’t afford it. However, the Chinese themselves may be wary of future sanctions, seeing them coming and that may dry up some of their massive foreign investment. Others might increase their investment and seek second passports, so they can flee when the time comes, but I think that’s less likely to be massive than it would have been pre-Covid. Whatever the advantages of living in the West, they are outweighed by, “won’t control the plague” for most, especially older Chinese who control most of the money.
All of this is complicated by the fact that the real-estate market is changing, structurally. Covid was used by private equity and other institutional investors to snap up real-estate, including single family homes and other types that traditionally have not been institutionally controlled. If there is a drop in demand, they will simply hold as much off the market as necessary to adjust supply and demand and allow them to over-charge. Their real risk is financing, but even as the Fed increases interest rates, it will continue special operations to give the rich and large corporations essentially free loans and money, so I don’t think they’ll actually be paying market rates. (We need an article on how this sort of action vastly increases the odds of collapse, and I’ll try to get to it soon.)
Times are going to get worse, not so much because of the Ukraine invasion, but because of its fallout. By itself, it would have changed as much as the Iraq war did (some important things, yes), but because it is being treated as existential and a cause for massive economic war, even centrists have realized that it is the “End of the End of History” (which, of course, never ended).
Welcome back to history and to interesting times.
I’d really hate to be China’s leadership right now. This is rock/hard place for them. If they don’t keep Russia alive, they will have no ally when it’s their turn, but the US and Europe are likely to put a ton of pressure on them for sanctions & that will start the cold war earlier than they wanted (for them — it’s already started for Russia).
Obama famously pivoted to China, calling it the biggest threat. Trump slapped on sanctions and used a ban on semiconducters to absolutely savage Huawei, the flagship Chinese tech company, whose phones were rivaling Apple and Samsung, and whose 5G technology was the most advanced and ready-to-deploy in the world.
They put immense pressure on Europe to not use Huawei 5g tech and largely succeeded.
When Biden came in, he removed none of Trumps sanctions.
In effect, the US has been declaring China its enemy for about 12 years now, through both Democratic and Republican administrations, and over the last few years, anti-China sentiment in DC has solidified. As far as I can tell, it is truly bipartisan.
China has known that a cold war with the US was inevitable for a couple of years now, though they suspected it before. They had hoped to keep Europe as a neutral customer, but Europe has bowed down to the US whenever push comes to shove, so China, like Russia, appears to regard Europe as an American satrapy — a subject state who will do what the US says.
The US and Europe will now put immense pressure on China to comply with sanctions on Russia and to not help Russia get around them.
My guess is that China will not, substantially, comply. The calculus is simple: Cold war with the US is coming, and if they let Russia get taken out, they lose a powerful ally and will then be surrounded, rather than having most of their Western flank covered by another Great Power.
Russia has repeatedly told the West to go fuck itself with regards to sanctions. They regarded, even before this war, more sanctions as inevitable. All that the war has done, they believe, is move the sanctions forward. China is likely to have the same calculus: sanctions, tariffs, and so on are never removed, only increased over time.
Both China and Russia have their own SWIFT alternatives. They will hook together and be offered to the rest of the world. As non-US allies have seen, with Venezuela, Iran, and now Russia (among others) that the US will even freeze reserves, they will join the Chinese and Russian systems and settle trade in Yuan. They will move reserves out of the US/European system.
This is, however, a huge hit to both China and the US. The US cannot currently decouple from China — it’s impossible. The US actually needs China more than China needs them. Remember, China is the largest industrial power, not the US.
It’s still a terrible trap, though, and the Chinese will, I think, play to mitigate. The US will not slap the worst sanctions on just yet, but will rush to move production to low-cost US allies.
There is an alternative, of course. China could buckle, agree to join the “rules-based order,” and play by American rules. The issues here are threefold.
First: This means China is not allowed to take control of value chains, which provides much of the real profit. Probably 15 percent or so of the value in a value chain comes just from that. They will have to keep paying US intellectual property fees, which amount to another ten to 15 percent in a lot of industries.
Intellectual property, if it’s not obvious, is on the table. Certainly Russia will stop paying these fees, that’s almost certain.
Second: Playing by Western rules means, the Chinese believe, staying stuck in the middle income trap and not making it to high income. This is one of those places which is a genuine trap: Decoupling will be a huge hit, but staying in the system and playing by the rules set up to favor the US and its allies means being in a system which keeps China from becoming a rich nation.
Third: There is an emotional component. As much as many Europeans, especially eastern Europeans, hate and fear Russia, China has a deep resevoir of hate for Europe, and the US for the “century of humiliation,” for Taiwan (to them a rebellious province which they would have retaken years ago if the West didn’t support it), and of course, a lot of hatred for Japan, the West’s primary Asian ally, for its invasion, occupation, and atrocities before and during WWII.
Emotionally, the Chinese are primed to tell the West to go fuck itself. They didn’t see why they should’ve play by rules made even when they were at their weakest. The “rules-based international order” to them is nothing but a set of rules set up by people who don’t want them to be a great, rich nation again. Rhetoric from the US has solidified this impression, and I think more correctly than not.
So the “cut a deal and compromise” really means “accept the current world order and play by rules that China thinks are unfair to them, and are made without their input.”
My guess is that China will do whatever it takes to keep Russia alive and to stop Western sanctions from achieving their declared aim: To collapse the Russian economy and cause regime change. Viewed pragmatically, I think that is the right call if you are the Chinese leadership, because the other two options (acquiescing to Western rules or letting Russia collapse and facing the West w/o Russia) seem worse.
I would guess, and it is just a guess, that this takes about four to eight years, because the US would be insane to decouple now, and China also wants time to prepare. But emotions are running high and a lot of policies have been made without clearly thinking through their consequences lately, so I while I think it’s odds on, I won’t be surprised if emotions rule instead. The decoupling may happen sooner.
Welcome to the new Cold War. Remember, in this one, the world’s biggest industrial power and most populous nation is on the other side. This isn’t 1950 or even 2000. China is the biggest trade partner of more nations than the US, not the other way around.
And China needs what Russia has: wheat, oil, and mineral resources.
Cold War 2.0 isn’t one in which the West are necessarily the favorites to win.
Ok. Deep breath.
Is what is happening in Ukraine worse than what happened in Iraq?
Why was the US not hit with crippling sanctions, like is being done to Russia?
Think this stuff through on your own, and if you get it, your belief that anything happening is being driven by ethical considerations will go away, and you’ll be able to think clearly.
Now, let’s talk sanctions. They’re more severe than initial indications, and Russian reserves have been blocked, as was done to Venezuela and Afghanistan (this, plus sanctions, is what is starving Afghans to death this winter, by the way).
Now, put yourself in Putin’s shoes. Assume the sanctions really are severe enough to collapse Russia and kill millions and, not incidentally, remove you from power at which point you, your family, and everyone close to you, will be killed. (That’s what is most likely if Putin loses power.)
You are a nuclear superpower with a Great Power military. What do you do? Do you just sit there? Or do you try and use that military to force the return of your reserves and some reduction in the worst sanctions?
(I don’t think the sanctions are quite that severe, but I could be wrong; I’m still thinking it through. However, many commenters — and even politicians — are clear that this is what they want: To collapse Russia under sanctions. But Russia is not Venezuela, or Iran, or Afghanistan.)
Put yourself in Putin’s shoes, and remember, he’s been known to raze entire cities.
There’s a lot of nonsense going around, including talk of Russia losing the war because, less than five days into the war, they haven’t conquered Ukraine.
The German blitz of Poland took five weeks. The conquest of France took six weeks — and people were astonished. Ukraine is the largest country in Europe except for Russia itself.
The sources I respect say that Russia is taking losses, but the war is not in question, and they are advancing about as fast as the US did into Iraq. Russia will win the war, though they may take more damage than they expected (but as we have no idea what they expected, who knows?). Ukraine is a modern equipped army; it isn’t Iraq with obsolete equipment, or Libya, or Afghanistan.
The question is not whether Russia wins the war, it is who wins the peace.
What the US and Europe want is to turn Ukraine into a guerilla quagmire, like Afghanistan in the 80s, or like Iraq and Afghanistan were for the US.
What Russia wants is to turn Ukraine into a guaranteed neutral state and withdraw its troops out of the country, minus Donbas and Luhansk.
The good result for the Ukraine, which most Westerners don’t seem to get, is what the Russians want. Austria was neutral in the Cold War, and that was not horrid. A multi-year guerilla campaign will devastate Ukraine in ways that will take generations from which to recover, because if the Russians have to fight an insurgency, they will be utterly brutal, as they were in Chechnya (successfully).
Moralist yapping about “the right to choose” is off the board. The only good result for Ukraine and Ukrainians is a negotiated settlement. The West egged them on and left them to swing, as the smart people said they would.
This video, predicting this situation in 2015, is pretty much required watching.
As for the economic consequences for Russia due to sanctions, it depends on what they are. If they are stopped from selling oil, natural gas, and wheat to the West, that will hurt. Sanctions less severe than that will be painful, but not crippling.
The problem here is China. For the last six years or so, the US has declared that China is an enemy. They used sanctions to cripple the most important tech company in China, Huawei, and have slapped sanctions and tariffs on China.
Chinese leadership sees a confrontation with the US as inevitable. They had hoped to keep good relations with Europe, but European countries have bowed to US pressure to shut out Huawei based on jingoistic claims that “they’ll spy on you,” which is hilarious. “Instead of us being able to see all your info, the Chinese will!”
China needs Russia’s resources: oil, wheat, and minerals. They know that they can be cut off from most other sources, but because of geography, and because Russia needs China, Russia is a safe supplier. In turn, China can let Russia into their SWIFT equivalent, finance them, and sell that almost every manufactured good they need, with a few exceptions (primarily semiconductor based, but China’s working on that).
Further, to let Russia fall would mean that China would be encircled. The CCP isn’t that stupid.
Basically, the West wants to use sanctions to “choke out” Russia, but China believes the West will then want to use sanctions to choke them out. If they let Russia go down, they’re next (they’re next either way, really, but they can have a major ally or not).
What the US has succeeded in doing is making Europe choose to turn their back not just on Russia, but, inevitably, on China as well.
This is a strong cold war coalition (Cold War is our future, as I have been saying for about four years now), but notice that it is not as strong as the previous cold war, because China is now the primary manufacturing power and the most populous nation, not the US.
Most of Africa, the Middle East, and South America is staying out of this. Even India refused to vote against Russia in the Security Council. Three of the four gulf states refused to vote against Russia, and, in the UN general assembly, the West is struggling to get 50 percent to vote against Russia.
In the West, we have a huge propaganda bubble going on — “Russia is the worst ever, blah, blah, blah.” What they have done is certainly a crime, but no one outside the bubble can take American and European whinging seriously; they remember Iraq, and Libya, and know that the US still occupies Syrian oil fields, while US ally Saudi Arabia bombs the hell out of Yemen, and Israel has annexed land from neighbouring states (supposedly Russia’s great crime).
Russia has done something bad, but this is not about morality. It is about power. Only the US and its allies are supposed to be able to do what Russia is doing, and people outside the Western bubble recognize this hypocrisy.
The Chinese Embassy in Russia tweeted this:
Among the 248 armed conflicts that occurred in 153 regions across the world from 1945 to 2001, 201 were initiated by the #US, accounting for 81% of the total number. pic.twitter.com/Kjn81VIVXP
— Chinese Embassy in Russia 中国驻俄罗斯大使馆 (@ChineseEmbinRus) February 25, 2022
Indians I follow are noting that Russia has been a firm friend to India since independence, and that the US and Europe have not been.
So the question here is whether or not Russia gets drawn into a guerilla quagmire. If it doesn’t, the question then becomes: How hard will the sanctions hit? In the medium to long term, this leads down the road to two separate economic and political regions and a new cold war, as I have been stating for years.
Despite the hysteria, nothing here is surprising. Russia asked for Ukraine as neutral and security guarantees, and didn’t get them. So they invaded, exactly as I wrote (in advance) was likely. Measheimer predicted this in 2015 (video above), and George Kennan, the architect of the Cold War containment policy, noted that NATO expansion would lead to this back in the 90s.
Russia is not Iraq. It is not Iran. It is not Venezuela. It is not Libya. It cannot be treated as minor state who can be choked out by the West at the West’s whim, especially not when the US has been stupid enough to tell China it is also an enemy.
Even in realpolitik terms, telling both Russia and China they are your enemy, at the same time, is breathtakingly stupid.
If you want the best for Ukraine, hope they negotiate soon. The longer they wait, the weaker their negotiating position. The best case for Ukraine is now (as it was three months ago) an Austrian-style neutrality agreement. There will be overflights and inspections, but that’s just how it’s going to be.
The world, outside the West and some of its closest allies, is not in hysteria about this. They recognize it’s aggressive war, but they do not see that what Russia has done is worse than American and European behavior over the last 20 years. Indeed, at least so far, and unless the US gets its wish for a guerilla quagmire, this is not nearly as bad as Iraq.
So relax and take a deep breath. This is bad, and there is a tiny chance of a miscalculation that will kill us all in nuclear armageddon. But, mostly, this is just geopolitics playing out as anyone with sense knew it would. The US has split Europe from Russia — and soon China and Russia will be strong allies, and a new cold war will occur, though how soon this will be crystal clear to everyone is, well, unclear.
by Tony Wikrent
Ukraine — Russia
“Shipping braces for impact as Russia-Ukraine crisis intensifies”
[Freight Waves, via Naked Capitalism Water Cooler 2-24-2022]
“Military action could curtail ship movements in the Black Sea, a key transit point for dry bulk exports. In fact, Russian military exercises have already done so. VesselsValue analyzed ship-movement data and found that Russian naval maneuvers ‘visibly impacted traffic.; Russian and Ukrainian waters of the Black Sea and Sea of Azov were designated ‘listed areas’ by the insurance industry’s War Risk Council on Feb. 15, meaning higher war risk insurance premiums. According to BRS [brokerage], the Black Sea area was the world’s second-largest grain-exporting region in 2021, with 111.2 million tons of cargo; Russia and Ukraine accounted for 30% of global wheat exports, and Ukraine accounted for 16% of global corn exports. Ukrainian corn could be first in the line of fire. BRS noted that by the end of January, Ukraine had already exported 71% of wheat predicted for the current marketing period but just 32% of its predicted corn exports. Agribulk exports face risks on land as well, not just at sea. ‘An attack or land grab by Russia could sharply reduce grain production as farmers flee the conflict, agricultural infrastructure and equipment are damaged, and the region’s economy is paralyzed,’ said BRS. “A substantial part of Ukraine’s most productive agricultural land is in the east and therefore vulnerable to any potential Russian attack.’ According to Braemar ACM Shipbroking, this landside risk could affect the coming wheat marketing season. ‘The main grain-producing regions are notably located along the Russian border,’ said Braemar, which pointed out that the military threat coincides with the beginning of the spring wheat planting period.”
Putin Looks to Win Both the War & the Peace
Ian Welsh, February 25, 2022
The sanctions which are about to hit Russia are serious, but if they don’t include wheat, aluminum, energy, or maritime shipping or hit oligarchs by kicking them out of London and other European capitals, they aren’t really going to matter.
Putin has made fools of the Western elite class again. Yes, the intelligence was right, but it didn’t matter. He’s figured exactly out what the West will and won’t do. He calculated right, they calculated wrong….
Let’s be clear, China will never let the West choke out Russia because China knows that the US (and increasingly the EU) considers China the real enemy — once Russia is taken out, China’s next. If Russia goes down, China no longer has a secure back, or a secure source of oil, minerals, or food. With Russia, China has a good chance of winning the oncoming Cold War. Without it, China loses that war.
War in Ukraine: How we got here — and what may come next
[Grid, via The Big Picture 2-25]
Grid is Matthew Yglesias’ new platform.
The History of Economic Sanctions as a Tool of War
[Yale University Press Blog , via Naked Capitalism 2-25-2022]
Biden’s Ukraine Plans Face Wall Street Roadblock
David Sirota and Julia Rock [The Daily Poster, February 24, 2022]
…Biden faces a significant obstacle: corporate lobbyists’ success in shrouding the American finance industry in secrecy, which makes it far easier for Russian oligarchs and their business empires to evade economic sanctions.
The situation spotlights how America’s money-drenched political process can create national security challenges. In effect, Wall Street’s overwhelming power to shape U.S. regulatory policy — fueled by massive campaign contributions and an army of lobbyists — may defang some of the White House’s most potent economic weapons against an international adversary.
More than two decades ago, federal investigators warned Congress of potentially illicit streams of cash flowing from Russia into the opaque American financial system — and leaks of the so-called Panama Papers and Pandora Papers over the past few years suggest those flows have only increased, as have oligarchs’ attempts to evade sanctions.
Strategic Political Economy
The Mystery of the Declining U.S. Birth Rate
[EconoFact, via The Big Picture 2-21-2022]
The U.S. birth rate has fallen by 20% since 2007. This decline cannot be explained by demographic, economic, or policy changes.
Use the comments to discuss topic unrelated to the Ukrainian/Russian war.
(I’m afraid that for a while posts will probably be mainly or entirely about this war because it matters and also illustrates a lot of very important things.)