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EuroSoap

Off the keyboard of John Ward

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Published on The Slog on March 20, 2015

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TSIPRAS/MERKEL SUMMIT: You thought Greek politics complicated? Wait until you tot up the seismic splits in the EU

Take a close look at the timeline since Thursday night’s mini-summit marathon between Alexis Tsipras and Angela Merkel.

After a 3am Friday finish, German Chancellor Angela Merkel described the meeting as “good and constructive,” but warned that the Greek government will have to meet commitments before it can access EU money. She gave Syriza exactly seven days to offer fully detailed “reform” proposals to Troika2, and then left clutching several haunches of Venison and 683 sausages for her beloved fridge.

A few hours later, however, Jean-Claude Juncker – the President of the European Commission (EC) – announced a completely unconditional 2 billion euro contribution immediately available to Greece to boost growth, tackle youth unemployment and help with the “humanitarian crisis”. Juncker said the cash for this would come from “unused EU development funds”.

When I called the EC press office this afternoon and asked how this circle might be squared, there was much scurrying about and promises of getting back to me…none of which materialised.

Those EU schisms in full

This is what’s really going on here: pissed off by the degree to which Germany and the Troikanauts are increasingly adopting the Führerprinzip in relation to EU affairs, the EC as led by J-CJ is doing everything in its power to be good-cop to Greece in general, and Tsipras in particular. This is a good old-fashioned Nazi Party power struggle, and there is every opportunity for Athens to exploit it.

But equally, we must remember that on another level entirely, Francois Hollande of France got away almost scot-free last week on deficit failures that far outweigh those of Greece….but was forced to bring in Troika-demanded laws about tax evasion…and ECB diktats about bank liquidity. This has not gone down well in his Party.

The Parti Socialiste de France doesn’t like this crap because (like many of us) they foresee the wholesale handing over of millions of votes to Marine Le Pen’s Front Nationale.

So then: we have the EC at war with Berlin and Troika2, plus France at war with Frankfurt. But just when you thought you had it sussed, more fractures appear.

For Wolfgang Schäuble is at war with Merkel over his single-minded obsession to become Supreme Leader of the as yet unformed Fiskalunion…and fighting a second front against Mario Draghi’s ECB, which in turn is fighting on another front entirely with Jens Weidemann and the German Central Bank…who rightly think that Draghula is working not for the euro, but a planned eurodollar spookily approaching parity with, um, the euro. And Merkel too distrusts the ECB boss’s motives….preferring as she does to keep her options open on the subject of which way to jump in the Dollar v Rublenimbi chasm.

Confused? You will be after this latest episode of Eurosoap. But there are far more plot lines and faultlines to develop before your confusion is comprehensively constructed.

There is the coming UK election, and the increasing likelihood of the ‘biggest’ Party needing to do a deal with EU-secessionists. There is the growing secessionist and europhobic tendency in Italy. There is Podemos support in Spain growing with every act of defiance from Greece. There is the Austro-German bank collapse epidemiology threatening everyone from Santander to Deutsche. And there remains the implacable unwillingness of Viktor Orban in Hungary to have anything to do with globalism in general, or the euro in particular.

Face facts: the EU is imploding.

 

ANOTHER Greek BAILOUT!

Off the keyboard of John Ward

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Published on The Slog on December 3, 2014

tsipras14COMETH THE HOUR, IS HE THE MAN?

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GREECE: Slog vindicated again as Athens calls for new €10bn bailout

It does strike me as very odd (as I’ve written many times before) than an old pro-am hack like me, hunkered down in the south west of France, seems able to understand the real Greek debt situation…..but most experts don’t. Or do, but don’t write about it – I’m never entirely sure.

Last January, I posted a long piece – “Mind the Gap” – pointing out with the use of simple maths that, without further bailout monies, Greece would default in May 2014; and even if they got that money, they’d be in trouble again during the Autumn and early winter.

So it proved. With the European elections as a handy distraction, I was nevertheless able to confirm on March 27th that the Samaras Coalition would be given €8.5bn toavoid default in May. The Wall Street Journal  ran a piece soon afterwards agreeing with the view. After some deliberate obfuscation, on 10th May Athens got the money it needed to make a dent in over €11bn of bond maturaties that became due.

The previous year, Angela Merkel had gone into the German elections and lied her fat head off about the Volk not being asked for any more money, and how the future was bright. She plodded home with ease, since when –  in general eurozone and specific Greek terms – things have gone from very bad to a whole lot worse.

Now Mish’s Global Analysis (which reblogged my January piece) reveals that, yes indeed, Athens needs more money. To be more exact, €10bn. Back in January, I said it would be €5.6bn….but then other targets were missed as the economy got worse and worse; and last week in Paris, the Troika up and mentioned that there were €2.5bn of cuts that the Greeks hadn’t fulfilled. So as I say, now it’s worse than ever.

One side of the devalued coin in this farcical saga is that – even allowing for the fact that Homo Kalamatus Antonikis Samaras has an olive stone where his brain should be – he has lied three times on national Greek television about the reality of the situation. So not surprisingly, Alexis Tsipras’s Party Syriza is now comfortably leading in the polls…..and with the Assembly vote for a new President coming up, Samaras possibly lacks the support required to carry the day. Technically, under the Greek constitution this is a resigning issue, and so we’ll get elections early next year rather than in 2016.

For Brussels, this has all the makings of the sort of nightmare in which a loose nuclear cannon is careering all over the eurozone and fomenting revolt. But sadly, Tsipras has toned down his rhetoric: today he claims that the loan package will have to be renegotiated, but he doesn’t want to dump the euro. Economically this is idiocy, but the Syriza leader knows he can only win the election by appearing ‘reasonable’…ie, he is – as David Cameron would say – a non-violent extremist.

I confess to being disappointed by Tsipras, and here’s why. If you look at the numbers involved in ‘saving’ Greece, then the four bailouts represent probably the most expensive face-saving exercise in history. To protect a potential original loss in the region of €40bn, the Troika threw confetti money at a debt write-off roughly equivalent to Cameron’s HS2 folly. As of this latest bailout, it will have poured €240bn of confetti money onto a debt conflagration that is raging like a Greek forest fire in August.

Do the Sprouts feel humble about this? They do not: “Greece is not in a position to negotiate“, they told the media last week. That is about as Betty Swollocks as Brussels fantasy gets: Although it has a huge debt, Greece at last has a current account surplus. If it renounces the debt, it could reverse the austerity nonsense, leave the euro and be quids in. Which is why I think Tsipras, if he does win the election, needs to play some serious hardball.

I posted at the weekend that 2 euros in 3 being ‘repaid’ by Greece are funny money. The truth is that – with most of the vultures having had their kilo of flesh – the ECB could write off two-thirds of the debt without losing any real money at all. Better that, I would’ve thought, than a defaulting defector with Italy now looming over the same horizon.

In licking the creditors like this, Tsipras is sending a signal to say he’ll be happy with a compromise. He says he wants “a €chunk” of the debt “forgiven”, whereas I think he should shout “fraud” and shoot for the Moon. It’s actually Brussels-am-Berlin that’s in no position to press too hard with the jackboot on this one.

Aimless Circling of Doom

Off the keyboard of Steve from Virginia

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Published on Economic Undertow on June 4, 2014

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Fast forward two weeks and the media obsession with Piketty has receded, he has been replaced in the public consciousness by self-driving cars and Rihanna’s see-through dress.

It wasn’t the errors found in Piketty’s spreadsheets that did him in, nor is it the ongoing compression of the international media cycle. Rather, it is the creeping awareness that Piketty’s argument for ending wealth inequality resolves into a great leveling process that does not conclude with everyone becoming tycoons. Meanwhile … in the background where no one is paying attention … the leveling process is already underway and feeding on itself. As billions of hyper-greedy wannabes maximize their rational self-interests they not only exploit whatever is within reach, they end up competing against each other = unseemly micro-tycoon fratricide:

Triangle of Doom 060114

Kill them all and let God sort them out: the Triangle of Tycoonery; WTI continuous crude futures by way of TFC Charts (click on for big). How long with the party last? Only a few more days if Russia invades Ukraine or the Vietnamese navy fires torpedoes at a Chinese ship …

Largely left out of the peak oil- and energy discussions is the consumer side of the process. Generally, petroleum analysis focuses on how much we have left; extraction and the rate of extraction. We love talking about how much we have left, it makes our private parts seem that much larger, it reinforces our sense of how clever we are, it also distracts us from how much treasure we’ve already squandered along with what little we have to show for it. As with other critical areas of our society, we set out to get rich first so that we could afford to solve wealth-related problems later. To pursue the highest level of growth we put hundreds of millions of drivers onto the roads circling between gas stations like flying Dutchmen …

This is where the self-driving cars enter the picture, billions of them can motor aimlessly around the clock whether they carry passengers or not and make more growth all by themselves = singularity.

It’s a great pretty stupid plan, I didn’t come up with it.

Recently, there is a little bit more discussion about fuel industry costs as drillers confront the near-certain prospect of bankruptcy as their only product runs out. The focus on how much we have left is silly because the consumption (waste) side is where all the action is. Customers cannot earn by driving in circles so the fuel industry is funded by the same customers reaching for the plastic. When customers are unable to borrow it means that fuel supply is ‘unsustainable’; the drillers must borrow from their own lenders, from finance or from the government (which borrows for them). Customers also borrow to buy cars, homes, freeways, office-buildings, military forces, etc. Since 2000 the price of fuel has increased five times while the return on the use of the same fuel has remained the same: squat. Over the same period credit has ballooned in a frantic effort to keep pace.

There are two interlinked problems: when one buys fuel at the higher price there is the tendency to buy fewer other ‘Brand X’ goods; driving cars competes with retail sales. The second problem is that higher fuel costs hit that plastic a lot harder than the lower variety. Debt retirement and service costs become burdensome … they increase exponentially … eventually these costs are breaking. The ‘Minsky Moment’ occurs when total borrowing capacity is insufficient to service existing debt. We aren’t quite there yet but getting close enough to hear the weeping; (Jim Quinn, Burning Platform):

Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:

  • Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%
  • Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%
  • Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%
  • JC Penney Thrilled With Loss of Only $358 Million For the Quarter
  • Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%
  • Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%
  • Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores
  • Gap Income Drops 22% as Same Store Sales Fall
  • … etc.

Beginning in the 19th century, petroleum fuel supply was intended as loss leader for auto- and retail industries which grew to become giants. High fuel prices are now cannibalizing this paradigm. The more stores that die, the fewer ex-employees are able to drive, those that can afford to will have fewer places to go and spend money. The bloodletting in retail adversely affects credit provision, the ability of the country as a whole to afford higher priced fuels is diminished.

Thomas Malthus in the 18th century observed that human population expanded geometrically while agricultural output increased arithmetically. Malthus erroneously discounted the ability of farmers to increase production, he did not live long enough to witness the effect of fossil fuels on agricultural output. His thesis turns out to be right when applied to machines: fuel-guzzling gadgets multiply much faster than industry can grow the fuel supply. The means of sustenance is outstripped and the costs multiply; the excess of machines is like every other surplus, subject to the First Law which holds that the costs associated with managing any surplus increase along with it until at some point they exceed the worth of the surplus itself.

Surplus- associated costs flow where they will; stranded machines don’t experience finance difficulties, they simply rust. The surplus of cars and other machines bankrupts the owners, exhaustion of the fuel supply is another associated cost, so is the death ride of retail.

The deathly triangle pops up in odd corners of the mainstream media where the focus is not entirely on the see-through dress, (NY Times):

 

America’s Highways, Running on EmptyJoshua L. SchankIF you think your commute is getting worse, it’s probably not your imagination. And no, it’s not because there are more cars on the road. The potholes, the stalled construction projects, the congestion — it’s because the highway trust fund is almost empty and, without a fix, could run out of money this summer.Federal transportation funding relies heavily on user-based fees, in the form of gas taxes. While that worked for decades, it began to break down after Congress stopped raising the tax, which has been stuck at 18.4 cents a gallon for over 20 years. Since then, people have begun driving less and using more fuel-efficient cars, which means less tax is paid. Even worse, the tax is not indexed to inflation.The only solution is to supplement the tax with dedicated federal funding — which would not only solve the money problem, but open the door to long-dreamed-of innovations in our transportation system.The obvious solution, raising the gas tax, is a political nonstarter. And even if it could pass, Congress would be tempted to direct some or all of that revenue to other purposes, like deficit reduction — it did just that in 1990 and 1993.

In any case, raising the gas tax wouldn’t help in the long run. When America planned the Interstate System in the 1950s, only half the country was urbanized and the number of cars was growing rapidly. Now more than 80 percent of Americans live in metropolitan regions, and total driving has stagnated. Even if we could raise the tax, it would only reinforce an outdated program.

 

If the Federal government raises the puny 18.4¢ gas tax, the higher retail price will discourage aimless circling, which will adversely affect growth. Already gas prices are in the danger zone with the 2014 Summer circling season just underway:

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Heat map from Gasbuddy.com. Prices are high in California because the need to formulate special gasoline blends for the state, because of higher state taxes, Californians are richer and can afford to pay … and there is a gasoline shortage otherwise gasoline would cost less than a dollar per gallon and the world would have plenty.

Because gas price increases are an incentive to reduce consumption, the government cannot afford to tax users to fix the roads. The government must borrow and fund repairs by way of the back door, the same back door that funded the roads in the first place. Debt service payments and principal retirements must be borrowed as well; in the end it does not matter about the repairs but rather how far away is the Minsky Moment?

Keep in mind, high fuel prices are a special kind of tax paid to the energy companies and their material suppliers. Highway contractors, drivers, lenders, refiners and drillers are all competing against each other for the proportionately largest slice of the credit pie. If one of them succeeds he does so at the expense of the others. At the same time, the failure of any of the others becomes the failure of all.

Policy makers are caught in a familiar trap: without repairs, the poor quality of roads will reduce driving. If the government borrows more to fix the roads, the borrowing costs are added to the fuel costs and everything becomes more expensive including driving. More driving destroys capital inviting destitution, less driving = reduces growth which also invites destitution … the end of the gangplank has very little maneuvering room.

More triangulation underway everywhere not just in California, (Nouriel Roubini, Project Syndicate):

 

The Great Backlash

NEW YORK – In the immediate aftermath of the 2008 global financial crisis, policymakers’ success in preventing the Great Recession from turning into Great Depression II held in check demands for protectionist and inward-looking measures. But now the backlash against globalization – and the freer movement of goods, services, capital, labor, and technology that came with it – has arrived.

This new nationalism takes different economic forms: trade barriers, asset protection, reaction against foreign direct investment, policies favoring domestic workers and firms, anti-immigration measures, state capitalism, and resource nationalism. In the political realm, populist, anti-globalization, anti-immigration, and in some cases outright racist and anti-Semitic parties are on the rise.

 

Globalization has done little but accelerate destruction of capital while funneling credit to a handful of tycoons. That there is a backlash isn’t surprising, neither is its form. The capital exhaustion that undermines economies in 2014 would not have arrived until 2050 had consumption been limited to Japan and the Americanized West. The development rabbit has long fled from of the hat: demand for cars, TVs, appliances, tract houses and luxury jobs is infinite, it exists everywhere there are televisions and credit money.

Popular nationalism does not provide an armature for a conservation economy, it offers instead strident demands for a ‘fair share’ of capital to consume and for ‘enemies’ to exploit. The nationalists in Greece, Egypt, Ukraine and elsewhere promise, “if the technocrats and moderate Old Guard cannot give us what we want, the Nazis will!” Countries are deprived of fuel because because the have exhausted their domestic supply; they are destitute and have nothing to offer in trade nor can they borrow. Ideology is not an economic good, it cannot be swapped for petroleum. Euro-Nazis stomping across television screens are irrelevant to the oil sheiks who want purchasing power. The Nazis have the same ability to marshal purchasing power as do pigeons who flutter in the parks of Rome, Athens or Lisbon.

A competent approach would target bankers and billionaires rather than migrants, it would include forensic audits of national debts, with the ‘odious’ variety cancelled outright. The state treasury of (any) South European country or countries would issue euros and put them into circulation, to end bank-driven money shortages and provide basic services such as sanitation and education, while making retirees whole. Fiat euros would be issued to retire those debts not judged to be odious. The countries would challenge the ECB or Brussels to do anything about it, as the alternative is continuation of current ruinous policies that fatten political cronies and banking criminals.

Borrowing would be much reduced as banks would rebel and refuse to lend to fiat-producing countries, but it would not matter. Coupled with stringent resource conservation, the South European nations would actually become more credit-worthy as debt-reduction would be certain and the need to take on more — to buy and waste fuel — would be reduced. If the Germans or others did not like ‘new euros’ appearing across the Continent they could buy them on the open market. Germans can exchange goods or finance paper for them … but not automobiles. Fiat euros courtesy of Greece, Spain, Ireland and/or the others would put the requirement on Germany to manage its own trade surplus related costs within Germany rather than distributing them to others who lack the means to bear them.

Roubini does not offer any suggestions to remedy the current situation … neither do other ‘Brand X’ economists. There are no useful suggestions in the conventional economists’ toolkit other than muddling through. The only real solution to the exhaustion of capital is to carefully husband what remains. Our current way of doing business including its blandishments, is obsolete and needs to be replaced. If nothing is done, replacement is taking place by itself; the time remaining to continue muddling is shrinking fast.

The Anti-Empire Report #128

From the Keyboard of William Blum

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 Obama Putin chess

Published originally in The Anti-Empire Report May 9, 2014

“The Russians are coming … again … and they’re still ten feet tall!”

So, what do we have here? In Libya, in Syria, and elsewhere the United States has been on the same side as the al-Qaeda types. But not in Ukraine. That’s the good news. The bad news is that in Ukraine the United States is on the same side as the neo-Nazi types, who – taking time off from parading around with their swastika-like symbols and calling for the death of Jews, Russians and Communists – on May 2 burned down a trade-union building in Odessa, killing scores of people and sending hundreds to hospital; many of the victims were beaten or shot when they tried to flee the flames and smoke; ambulances were blocked from reaching the wounded. Try and find an American mainstream media entity that has made a serious attempt to capture the horror.

And how did this latest example of American foreign-policy exceptionalism come to be? One starting point that can be considered is what former Secretary of Defense and CIA Director Robert Gates says in his recently published memoir: “When the Soviet Union was collapsing in late 1991, [Defense Secretary Dick Cheney] wanted to see the dismemberment not only of the Soviet Union and the Russian empire but of Russia itself, so it could never again be a threat to the rest of the world.” That can serve as an early marker for the new cold war while the corpse of the old one was still warm. Soon thereafter, NATO began to surround Russia with military bases, missile sites, and NATO members, while yearning for perhaps the most important part needed to complete the circle – Ukraine.

In February of this year, US State Department officials, undiplomatically, joined anti-government protesters in the capital city of Kiev, handing out encouragement and food, from which emanated the infamous leaked audio tape between the US ambassador to Ukraine, Geoffrey Pyatt, and the State Department’s Victoria Nuland, former US ambassador to NATO and former State Department spokesperson for Hillary Clinton. Their conversation dealt with who should be running the new Ukraine government after the government of Viktor Yanukovich was overthrown; their most favored for this position being one Arseniy Yatsenuk.

My dear, and recently departed, Washington friend, John Judge, liked to say that if you want to call him a “conspiracy theorist” you have to call others “coincidence theorists”. Thus it was by the most remarkable of coincidences that Arseniy Yatsenuk did indeed become the new prime minister. He could very soon be found in private meetings and public press conferences with the president of the United States and the Secretary-General of NATO, as well as meeting with the soon-to-be new owners of Ukraine, the World Bank and the International Monetary Fund, preparing to impose their standard financial shock therapy. The current protestors in Ukraine don’t need PHDs in economics to know what this portends. They know about the impoverishment of Greece, Spain, et al. They also despise the new regime for its overthrow of their democratically-elected government, whatever its shortcomings. But the American media obscures these motivations by almost always referring to them simply as “pro-Russian”.

An exception, albeit rather unemphasized, was the April 17 Washington Post which reported from Donetsk that many of the eastern Ukrainians whom the author interviewed said the unrest in their region was driven by fear of “economic hardship” and the IMF austerity plan that will make their lives even harder: “At a most dangerous and delicate time, just as it battles Moscow for hearts and minds across the east, the pro-Western government is set to initiate a shock therapy of economic measures to meet the demands of an emergency bailout from the International Monetary Fund.”

Arseniy Yatsenuk, it should be noted, has something called the Arseniy Yatsenuk Foundation. If you go to the foundation’s website you will see the logos of the foundation’s “partners”. Among these partners we find NATO, the National Endowment for Democracy, the US State Department, Chatham House (Royal Institute of International Affairs in the UK), the German Marshall Fund (a think tank founded by the German government in honor of the US Marshall Plan), as well as a couple of international banks. Is any comment needed?

Getting away with supporting al-Qaeda and Nazi types may be giving US officials the idea that they can say or do anything they want in their foreign policy. In a May 2 press conference, President Obama, referring to Ukraine and the NATO Treaty, said: “We’re united in our unwavering Article 5 commitment to the security of our NATO allies”. (Article 5 states: “The Parties agree that an armed attack against one or more of them … shall be considered an attack against them all.”) Did the president forget that Ukraine is not (yet) a member of NATO? And in the same press conference, the president referred to the “duly elected government in Kyiv (Kiev)”, when in fact it had come to power via a coup and then proceeded to establish a new regime in which the vice-premier, minister of defense, minister of agriculture, and minister of environment, all belonged to far-right neo-Nazi parties.

The pure awfulness of the Ukrainian right-wingers can scarcely be exaggerated. In early March, the leader of Pravy Sektor (Right Sector) called upon his comrades, the infamous Chechnyan terrorists, to carry out further terrorist actions in Russia.

There may be one important difference between the old Cold War and the new one. The American people, as well as the world, can not be as easily brainwashed as they were during the earlier period.

Over the course of a decade, in doing the research for my first books and articles on US foreign policy, one of the oddities to me of the Cold War was how often the Soviet Union seemed to know what the United States was really up to, even if the American people didn’t. Every once in a while in the 1950s to 70s a careful reader would notice a two- or three-inch story in the New York Times on the bottom of some distant inside page, reporting that Pravda or Izvestia had claimed that a recent coup or political assassination in Africa or Asia or Latin America had been the work of the CIA; the Times might add that a US State Department official had labeled the story as “absurd”. And that was that; no further details were provided; and none were needed, for how many American readers gave it a second thought? It was just more commie propaganda. Who did they think they were fooling? This ignorance/complicity on the part of the mainstream media allowed the United States to get away with all manner of international crimes and mischief.

It was only in the 1980s when I began to do the serious research that resulted in my first book, which later became Killing Hope, that I was able to fill in the details and realize that the United States had indeed masterminded that particular coup or assassination, and many other coups and assassinations, not to mention countless bombings, chemical and biological warfare, perversion of elections, drug dealings, kidnapings, and much more that had not appeared in the American mainstream media or schoolbooks. (And a significant portion of which was apparently unknown to the Soviets as well.)

But there have been countless revelations about US crimes in the past two decades. Many Americans and much of the rest of the planet have become educated. They’re much more skeptical of American proclamations and the fawning media.

President Obama recently declared: “The strong condemnation that it’s received from around the world indicates the degree to which Russia is on the wrong side of history on this.” Marvelous … coming from the man who partners with jihadists and Nazis and has waged war against seven nations. In the past half century is there any country whose foreign policy has received more bitter condemnation than the United States? If the United States is not on the wrong side of history, it may be only in the history books published by the United States.

Barack Obama, like virtually all Americans, likely believes that the Soviet Union, with perhaps the sole exception of the Second World War, was consistently on the wrong side of history in its foreign policy as well as at home. Yet, in a survey conducted by an independent Russian polling center this past January, and reported in the Washington Post in April, 86 percent of respondents older than 55 expressed regret for the Soviet Union’s collapse; 37 percent of those aged 25 to 39 did so. (Similar poll results have been reported regularly since the demise of the Soviet Union. This is from USA Today in 1999: “When the Berlin Wall crumbled, East Germans imagined a life of freedom where consumer goods were abundant and hardships would fade. Ten years later, a remarkable 51% say they were happier with communism.”)

Or as the new Russian proverb put it: “Everything the Communists said about Communism was a lie, but everything they said about capitalism turned out to be the truth.”

A week before the above Post report in April the newspaper printed an article about happiness around the world, which contains the following charming lines: “Worldwide polls show that life seems better to older people – except in Russia.” … “Essentially, life under President Vladimir Putin is one continuous downward spiral into despair.” … “What’s going on in Russia is deep unhappiness.” … “In Russia, the only thing to look forward to is death’s sweet embrace.”

No, I don’t think it was meant to be any kind of satire. It appears to be a scientific study, complete with graphs, but it reads like something straight out of the 1950s.

The views Americans hold of themselves and other societies are not necessarily more distorted than the views found amongst people elsewhere in the world, but the Americans’ distortion can lead to much more harm. Most Americans and members of Congress have convinced themselves that the US/NATO encirclement of Russia is benign – we are, after all, the Good Guys – and they don’t understand why Russia can’t see this.

The first Cold War, from Washington’s point of view, was often designated as one of “containment”, referring to the US policy of preventing the spread of communism around the world, trying to block the very idea of communism or socialism. There’s still some leftover from that – see Venezuela and Cuba, for example – but the new Cold War can be seen more in terms of a military strategy. Washington thinks in terms of who could pose a barrier to the ever-expanding empire adding to its bases and other military necessities.

Whatever the rationale, it’s imperative that the United States suppress any lingering desire to bring Ukraine (and Georgia) into the NATO alliance. Nothing is more likely to bring large numbers of Russian boots onto the Ukrainian ground than the idea that Washington wants to have NATO troops right on the Russian border and in spitting distance of the country’s historic Black Sea naval base in Crimea.

The myth of Soviet expansionism

One still comes across references in the mainstream media to Russian “expansionism” and “the Soviet empire”, in addition to that old favorite “the evil empire”. These terms stem largely from erstwhile Soviet control of Eastern European states. But was the creation of these satellites following World War II an act of imperialism or expansionism? Or did the decisive impetus lie elsewhere?

Within the space of less than 25 years, Western powers had invaded Russia three times – the two world wars and the “Intervention” of 1918-20 – inflicting some 40 million casualties in the two wars alone. To carry out these invasions, the West had used Eastern Europe as a highway. Should it be any cause for wonder that after World War II the Soviets wanted to close this highway down? In almost any other context, Americans would have no problem in seeing this as an act of self defense. But in the context of the Cold War such thinking could not find a home in mainstream discourse.

The Baltic states of the Soviet Union – Estonia, Latvia, and Lithuania – were not part of the highway and were frequently in the news because of their demands for more autonomy from Moscow, a story “natural” for the American media. These articles invariably reminded the reader that the “once independent” Baltic states were invaded in 1939 by the Soviet Union, incorporated as republics of the USSR, and had been “occupied” ever since. Another case of brutal Russian imperialism. Period. History etched in stone.

The three countries, it happens, were part of the Russian empire from 1721 up to the Russian Revolution of 1917, in the midst of World War I. When the war ended in November 1918, and the Germans had been defeated, the victorious Allied nations (US, Great Britain, France, et al.) permitted/encouraged the German forces to remain in the Baltics for a full year to crush the spread of Bolshevism there; this, with ample military assistance from the Allied nations. In each of the three republics, the Germans installed collaborators in power who declared their independence from the new Bolshevik state which, by this time, was so devastated by the World War, the revolution, and the civil war prolonged by the Allies’ intervention, that it had no choice but to accept the fait accompli. The rest of the fledgling Soviet Union had to be saved.

To at least win some propaganda points from this unfortunate state of affairs, the Soviets announced that they were relinquishing the Baltic republics “voluntarily” in line with their principles of anti-imperialism and self-determination. But is should not be surprising that the Soviets continued to regard the Baltics as a rightful part of their nation or that they waited until they were powerful enough to reclaim the territory.

Then we had Afghanistan. Surely this was an imperialist grab. But the Soviet Union had lived next door to Afghanistan for more than 60 years without gobbling it up. And when the Russians invaded in 1979, the key motivation was the United States involvement in a movement, largely Islamic, to topple the Afghan government, which was friendly to Moscow. The Soviets could not have been expected to tolerate a pro-US, anti-communist government on its border any more than the United States could have been expected to tolerate a pro-Soviet, communist government in Mexico.

Moreover, if the rebel movement took power it likely would have set up a fundamentalist Islamic government, which would have been in a position to proselytize the numerous Muslims in the Soviet border republics.

Notes

  1. See RT.com (formerly Russia Today) for many stories, images and videos
  2. Robert Gates, Duty (2014), p.97
  3. If this site has gone missing again, a saved version can be found here.
  4. Voice of Russia radio station, Moscow, April 18, 2014; also see Answer Coalition, “Who’s who in Ukraine’s new [semi-fascist] government”, March 11, 2014
  5. RT.com, news report March 5, 2014
  6. CBS News, March 3, 2014
  7. Washington Post, April 11, 2014
  8. USA Today (Virginia), Oct. 11, 1999, page 1
  9. Washington Post print edition, April 2, 2014; online here

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

William Blum is an author, historian, and renowned critic of U.S. foreign policy. He is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II and Rogue State: A Guide to the World’s Only Superpower, among others.

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

 

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