Tag: Biden

Defending Palestine

“Thousands of protesters forced the closure of Grand Central station in New York on Friday night in a large sit-in against Israel’s bombardment of Gaza. The demonstration, [where] made up mostly of Jewish New Yorkers,” “Protest-New York Grand Central-Israel Gaza Palestine”   Bless them.

Palestinians killed by the Israeli military passed 8,000 on Oct 29. Over half were women and children. Hamas’s vicious attack on Israel Oct 7 killed 1,400 Israelis. All of those deaths should be condemned. When President Biden questioned the accuracy of the Gaza Health Ministry’s tally, many Muslims and Arab Americans were shocked and angered having previously been shocked at Biden’s blank check to Netanyahu to do whatever it takes to wipe out Hamas. “Biden Israel Palestine Muslim Americans war”   

“The United States vetoed a draft resolution at the UN Security Council which called for a humanitarian pause in besieged Gaza. The draft resolution, proposed by Brazil, condemned the October 7 terror attacks in Israel by Palestinian militant group Hamas, which killed over 1,400 people, and urged the release of hostages taken. It also called on all parties to comply with international law and protect civilian lives in Hamas-controlled Gaza amid a ferocious retaliation by Israeli warplanes. The international community should engineer “humanitarian pauses” in the fighting to allow for aid delivery, it said. Twelve of the council’s 15 members approved the draft on Wednesday, with the UK and Russia abstaining, and a US veto.” US vetoes Security Council call for ‘humanitarian pause’ in Israel-Hamas war | CNN

More recently the Biden White House has held meetings with its Muslim and Arab staff as well as Arab community leaders to gain a better understanding of the issues from their perspective. Biden now calls for a humanitarian pause and has cautioned Israel to minimize civilian casualties. “Biden Israel Palestine Muslim Americans’ war”

The claims of some that most Palestinians in Gaza support Hamas are simply false “What Palestinians really think about Hamas”  

The viciousness of the attacks by Hamas and Israel has sadly aroused some to challenge America’s cherished free speech tradition with the all too typical cry of antisemitism against those defending Palestinian rights. ”An Israeli American professor at Columbia University’s business school slammed his employer in a fiery speech on campus Wednesday night — ripping the university for apparently not publicly denouncing pro-Palestinian student organizations that he claimed are ‘pro-terror.’”  “Columbia professor rips university’s president over Israel Hamas war response”

But our freedom to speak is too important to our free society to be easily snuff out. Dozens of Columbia University and Bernard College faculty issued an open letter defending not only the right of its students to defend Palestinians but the substance of their letter as well.

The letter stated in part that “In our view, the student statement aims to recontextualize the events of October 7, 2023, pointing out that military operations and state violence did not begin that day, but rather it represented a military response by a people who had endured crushing and unrelenting state violence from an occupying power over many years…. It is worth noting that not all of us agree with every one of the claims made in the students’ statement, but we do agree that making such claims cannot and should not be considered anti-Semitic….

“We ask Columbia University’s leadership, our faculty colleagues, Columbia alumni, potential employers of Columbia students, and all who share a commitment to the notion of a just society to join us in condemning, in the strongest of terms, the vicious targeting of our students with doxing, public shaming, surveillance by members of our community, including other students, and reprisals from employers.” “Open letter from Columbia and Barnard faculties” Amen

We all need this discussion in order to hear and understand everyone’s point of view. Peace will not come to Israel and to the West Bank and Gaza Strip until the Jews and Palestinians living there reconcile their grievance’s and adhere to just treatment of all.

Persuasion or Coercion

Alabama Sen. Tommy Tuberville might be right or wrong about opposing the defense Department’s policy “of providing travel expenses for service women seeking an abortion.” But President Biden is certainly right in claiming that Tuberville’s unilateral “blocking more than 300 military [nominations] with his extreme political agenda” is “jeopardize[ing] the country’s national security.”  “Biden Tuberville military clash”

The DOD must determine the policies that will attract the solders that we need in our All Volunteer Military. Those policies should be open to public debate. But Tuberville has chosen coercion to impose his views rather than persuasion to seek consensus . This is not proper in a free society governed by publicly endorsed laws. It prevents the sort of public debate that will most likely find the best balance between the opposing views of people living in the same space. And it will certainly deepen divides that will diminish rather than enhance civility. In short, it bad for the nation.

But our liberal democracy has survived for two hundred and fifty years because when the pendulum swings too far in one direction, it invariably swings back. Hopefully we are reaching the extreme of the pendulum swing of right-left antagonism. Efforts are growing to rebuild the civil dialog from which we can better live together in liberty. See for example groups like Braver Angles https://braverangels.org/   We should fight to preserve our freedom to live as we choose rather than to restrict the choices of others to live as they choose.

Student Loan Forgiveness

“Writing for a 6-3 majority split along ideological lines, Chief Justice John Roberts ruled in Biden v. Nebraska that President Biden lacks the authority to enact his signature student loan cancellation plan by executive fiat.” “What’s going on with student loans?”

Please note that the Court said nothing about the merits of forgiving such debt nor that Congress could not do so if it so decided. It said that the President does not have the authority to do so without Congressional authorization. So, it is now back to Congress to debt the merits of the issue. I expressed my views on several occasions, most recently last November.

Econ 101:  Student Loan Forgiveness

The Debt Deal

CNN reported today on the compromise bill to raise the Federal debt ceiling agreed between Biden and McCarty, saying that:” The Congressional Budget Office estimates the bill would reduce budget deficits by $1.5 trillion over the next 10 years, and reduce discretionary spending by a projected $1.3 trillion from 2024 to 2033.”

Language can be tricky. Debt and deficit are not the same.  Reducing projected spending need not mean a reduction in actual spending. In fact, the package agree to by Biden and McCarthy will continue to increase the Federal debt (though at a slower rate than was proposed initially by Biden) and all categories of spending will continue to grow.  Not only will they continue to grow, they will be growing from the abnormally high levels reached during the COVID pandemic.

If we really want all of these expenditures, we should, and will ultimately need to, raise taxes to pay for them.  But do all of them pass the cost benefit test? Do all of them contribute to American wellbeing?

One Republican blind spot is defense spending (which, by the way does not include foreign aid to, for example, Ukraine). The defense budget for 2023 is 9.8% higher than in 2022 and is projected in the Biden/McCarthy package to continue to grow over the next two years covered by that deal. Our huge defense budget has resulted from (or encouraged?) American military adventurism that does not contribute to our security.

Competing with China

China is now our main economic and political rival. Our proper and honorable response should be to strengthen our side—to be the best that we can be—in the way that one athletic team would fairly compete with another. Instead, we seem to be following the Michael Corleone—God Father—script of knee capping the enemy. Worse still, rather than pulling China into compliance with the international rules of commerce, we are moving toward their failing system of central guidance (industrial policy) of investment.

Deng Xiaoping, who served as the “paramount leader” of the People’s Republic of China (PRC) from December 1978 to November 1989, ended Mao’s repressive economic policies thus freeing up much of the economy under policies dubbed “socialism with Chinese characteristics.” Deng became known as the “Architect of Modern China.” “Since China began to open up and reform its economy in 1978, GDP growth has averaged almost 10 percent a year, and more than 800 million people have lifted themselves out of poverty.” When Xi Jinping took the throne in 2013, China’s annual GDP growth rate was 7.8%. As he increasingly reversed Deng’s economic liberalizations, China’s growth rate has steadily declined and is expected to average 2.8% in 2022. “World Bank – China”

The dramatic economic growth around the world since the start of the industrial revolution is founded in private property and trade. Trade enables individuals (and families) to specialize in what they have a comparative advantage in producing and trade it for what their neighbors are better at. Both are wealthier as a result. “Econ-101-Trade in very simple terms”    “Benefits of free trade”

Following President Richard Nixon’s page turning first visit to the Peoples Republic of China in 1972, when China’s total exports had drifted down from 4.3% of China’s GDP in 1960 ($2.6 billion) to 3.25% ($3.7 billion), until the U.S. formally established full diplomatic relations with the PRC under Deng in 1979, when its total exports were 5.16% of its GDP ($9.2 billion), exports remained a small part of China’s economic output. U.S. diplomatic recognition opened the door to increased trade with China.

At the time, a friend asked me what China could possibly produce that we would want to buy (I swear). While Chica’s exports changed little over those 19 years as a share of its GDP, it increased threefold in dollar value as a result of Chica’s overall economic growth.

Over the next 19 years (1979-1998) following Deng’s economic liberalization, China’s exports rose to 18.34% of its GDP and to $188.8 billion in absolute terms (over 20 times its exports in 1979). Income growth in developing countries normally reflect investment in capital, but in China’s case the larger share of its spectacular growth after its liberalization resulted from the improved efficiency of its resource allocations (increased labor and capital productivity). According to an IMF study “Analysis of the pre- and post-1978 periods indicates that the market-oriented reforms undertaken by China were critical in creating this productivity boom…. Prior to the 1978 reforms, nearly four in five Chinese worked in agriculture; by 1994, only one in two did. Reforms expanded property rights in the countryside and touched off a race to form small nonagricultural businesses in rural areas.” “Why Is China Growing So Fast”

But to maximize the win-win feature of trade, each person/firm must make its decisions about what to produce and trade without distorting outside interference (taxes, subsidies, buy American, etc.). Thus, communities develop rules and norms for “fair” trade. When trade extended beyond the community to the entire world, individuals and countries could maximize the mutual benefits of trade by extending such rules internationally. The U.S. had high protective tariffs on some Chinese goods under the Smoot–Hawley Tariff Act of 1930 (the Reciprocal Trade Agreements Act of 1934 allowed the US President to negotiate bilateral tariff reductions). China had many restrictions on foreign investments in China and a variety of government interventions in its export markets. These restrictive measures needed to be addressed as part of granting China membership in the World Trade Organization (WTO).

From joining the WTO at the end of 2001, China’s $272.1 billion in exports exploded to almost $3,550 billion over the next 19 years (2020), an increase of 13 times (essentially the same share of its GDP as the result of its extraordinary growth in total output). China’s imports followed a similar, but modestly lower, path, raising from 4.4% of GDP ($2.6 billion) to 17.42% of GDP ($3.090 billion) in 2020.  Prior to China’s admission into the WTO what had historically been generally balanced trade (imports and exports generally balanced) rose to a trade surplus of 4.45% in 1997. China sold more abroad than it bought from abroad and bought U.S. debt and property with the resulting surplus. It was hoped and expected that China’s pursuit of an export promotion policy based on an undervaluation of its exchange rate would be reined in by its adoption of WTO rules.

The Peoples Bank of China requested technical assistance from the IMF with complying with WTO requirements. In July 2002 the IMF sent me to discuss and organize the assistance for what was one of my most enjoyable missions (VIP tours of the Great Wall and the Forbidden City and some fabulous dinners). They wanted an American banking supervisor. One of my conditions was that he be given an office with an open door with the rest of the Chinese supervisors. The Deputy Governor approved our agreement, but the Governor vetoed it reflecting the existence of conflicting views on China’s way forward. The primary difference with the officials I talked to was how fast China should liberalize. They all agreed on the direction. The IMF report cited above stated that: “By welcoming foreign investment, China’s open-door policy has added power to the economic transformation. Cumulative foreign direct investment, negligible before 1978, reached nearly US$100 billion in 1994; annual inflows increased from less than 1 percent of total fixed investment in 1979 to 18 percent in 1994.” Direct foreign investment in 1994 was $34 billion and in 2020 it was $253 billion.

China’s gradual liberalization of its restrictions on capital outflows have resulted in larger outflows than inflows since early 2020. Between February and July of this year (2022), China suffered a record net outflow of US$81 billion via the Stock Connect and Bond Connect mechanisms, according to data from the Institute of International Finance (IIF). 

As developing countries catch up to the developed country leaders, their growth rates are expected to slow. But China’s continued heavy government direction of investment, while producing impressive high-speed trains and many thousands of high-rise apartments, and the resulting level of wasteful malinvestment is increasingly taking its toll. After speaking at a People’s Bank of China and Reinventing Bretton Woods conference in Hangzhou in 2014, I continued West to participate in the Astana Economic Forum, in Astana, Kazakhstan, stopping overnight in Urumqi, China, to celebrate my 72 birthday and change planes. Driving from the airport into a lovely Sheraton Hotel in downtown Urumqi, I passed row upon row of empty high-rise apartments (it was evening, and they were all dark) now the source of a major real estate crisis.

When Xi Jinping took over as China’s leader in 2013, the unfinished project of economic liberalization was stopped and put into reverse. The slowing of China’s growth rate accelerated. Clyde Prestowitz reported that: “The CCP [Chinese Communist Party] has long operated the economy on the basis of five year plans. In 2015, the new five year plan included the objective of: Made in China 2025. It listed a range of hi technology items with a target for making them in China by the year 2025. Semiconductors were high on the list, and as an advisor at the time to Intel, I can say that China exerted enormous pressure on that company and many others to move their production of semiconductor chips to China” “Tom Friedman has Biden and China Backward”

We are competing with China just as every firm competes with every other firm. It is mutually advantageous for both economies to grow. It is win win. But neither of us fully plays by the rules of fair trade. What should we do? While adopting policies to strengthen our own economy, we should encourage China to fulfil its WTO obligations. We are doing the opposite. We are taking the God Father mobster approach. As Edward Luce put it in the Financial Times: “Imagine that a superpower declared war on a great power and nobody noticed. Joe Biden this month launched a full-blown economic war on China — all but committing the US to stopping its rise — and for the most part, Americans did not react”  “Containing China is Biden’s Explicit Goal”

German Chancellor Olaf Scholz declared that “Globalisation has been a success story that enabled prosperity for many people. We must defend it…. Decoupling is the wrong answer…. 

We don’t have to decouple from some countries,… I say emphatically we must continue to do business with China.” “Decoupling China wrong answer says German leader”

“Mr. Xi and President Biden should focus their efforts on the future they seek, rather than the one they fear…. If a peaceful — if competitive — coexistence is the ultimate objective, Washington and Beijing do not need to knock each other out to win.” Jessica Chen Weiss in NY Times

We are restricting and reducing trade rather than encouraging its expansion. Not only has President Biden left former President Trump’s unjustified and damaging steel and aluminum tariffs in place (including on Canada) on national security grounds, but we have also directly knee-capped Chinese industries (Huawei, semiconductor chip supplies, etc.). “On 7 October, the Biden administration imposed a sweeping set of export controls that included measures to cut China off from certain semiconductor chips and chip-making equipment. Under these rules, US companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips unless they first obtain a licence.” “What do US curbs on selling microchips to China mean for the global economy”

Historically, such measures, as well as tariffs and bans on certain imports, have been motivated by protecting domestic firms or industries. “The Reign of Polite Protectionism”  The Jones Act of 1917, which forbids shipping goods between US ports in anything other than US built ships, is one of the most useless and embarrassing such laws (ask Puerto Rico). Banning the sale of some items to China can have a military justification but drawing the line between justifiable security concerns and the protection of uncompetitive domestic firms can be difficult. Trump’s 25% tariff on Canadian steel was (but cannot honestly be) justified on national security grounds. Whither justified or not, such restrictions make China and the U.S. (and the rest of the world) poorer. “Next salvo in Biden’s tech war on China expected to aim at quantum computing parts and artificial intelligence software.”  “US mulling bans to stunt China’s quantum computing”  Such restriction are examples of the knee-capping approach to competing with our rivals. “Trade protection and corruption”

But worse still we are now increasingly adopting China’s approach to economic management by the state—so called industrial policy. The recently adopted Inflation Reduction Act, for example, along with measures to reduce carbon omissions, subsidizes the domestic production of solar panels, wind turbines, batteries, and the processing of some critical minerals. A good economic case can be made for encouraging the use of low or non-carbon emitting sources of energy such as with the carbon taxes imposed in Europe. But there is no good case for incurring the higher cost of subsidizing the manufacture of low carbon emitting energy sources in the U.S. The same applies to subsidizing the domestic production of semiconductor chips as is established in this Act. The historical experience with government selection and support of particular products or technologies is not good to say the least. The Trump administration’s promise to buy successful Covid vaccines was a much better and very successful approach to encouraging the private sector.

“French President Emmanuel Macron slammed US trade and energy policies for creating “a double standard” with Europe…. He complained that ‘they allow state aid going to up to 80% on some sectors while it’s banned here — you get a double standard…. It comes down to the sincerity of transatlantic trade….’ The EU has been chafing over the US stimulus package known as the Inflation Reduction Act, which provides subsidies for electric cars made in North America.” “Macron accuses US of trade double standard amid energy crunch”

The financial incentive for corruption in obtaining government financial support is obvious. But even without it, government agents are at best just as good at determining and funding the best new and promising technologies for the future as are private entrepreneurs. The difference is that the private entrepreneurs are risking their own money and the government is risking yours and my money. The vast majority of such undertakings fail. When funded by the government, however, there is less financial pressure to fold and move on when outcompeted by better products. The government landscape is littered with white elephants.  “Questioning industrial policy”

Our China related policies have become damaging to the US and the West in almost every respect. “The China Initiative, launched in 2018 by the administration of former US president Donald Trump, aimed to fight suspected Chinese theft of technical secrets and intellectual property as competition between the two countries intensified…. At least 1,400 US-based ethnic Chinese scientists switched their affiliation last year from American to Chinese institutions,… The US had been ‘losing talent to China for a while and particularly after the China Initiative’,” “1400 US based ethnic Chinese scientists exited American institutions”  Not only do they return with Western technical knowledge but they also return with a fondness for Western values and freedom. Many Chinese retain that fondness and the desire to import more of it into China. We should not kill off those desires.

Doug Bandow offers sound advice: “There is still much for the West to do. The future is not set, and contra Xi’s boastful rhetoric, freedom still is the better bet for the world. Washington should start by addressing its own weaknesses. Free and allied states can constrain the PRC when necessary while cooperating with Beijing when possible, addressing Chinese abuses without adopting the PRC’s authoritarian and collectivist strategies. Americans should continue to engage the Chinese people, especially the young, showing respect for a great civilization while making the case for a free rather than totalitarian society. America can remember the crises she has overcome in the past, and confidently confront the China challenge today.” “Xi plays Mao without the madness”

President Biden Attacks Internal Enemies

President Biden addressed the nation on September 1 from the site of America’s founding. In many respects it was a positive, uplifting speech reminiscent of Ronald Reagan’s wonderful speeches. Though I disagree with many of the details of his recent policy victories, it is normal for a president to promote them. But there was another part of his speech that has become very controversial.

“When President Biden stood before Independence Hall in Philadelphia on Thursday night, he warned that American democracy stands at the precipice… — one that, he said, comes from within the country’s borders. ‘Donald Trump and the MAGA Republicans represent an extremism that threatens the very foundations of our republic,’ Biden said.”  “Biden-danger within us”

The President of the United States is both the leader and head of state for the entire country and the head of his political party. Did President Biden cross the line between defending the country from serious attacks and partisanship when he made his speech? Biden was not criticizing Trump’s protectionist, isolationist policies as I have done (and I have praised Trump’s tax reform and reduction of excessive regulations). Those are partisan political issues. If we don’t like someone’s policies, we can vote against them. Biden was making a much more serious charge. He clarified that:

 “’I don’t consider any Trump supporter to be a threat to the country. I do think anyone who calls for the use of violence, fails to condemn violence when it’s used, refuses to acknowledge that an election has been won, insists on changing the way in which you count the votes — that is a threat to democracy.’ Yet Trump supporters generally do all of those things, backing the former president’s calls to overturn the 2020 election and elect candidates who vow to rewrite election rules, and supporting his promise to pardon those who attacked the U.S. Capitol on Jan. 6, 2021….

“Rep. Marjorie Taylor Greene (R-Ga.) [stated that], ‘Joe Biden just declared all of us enemies of the state.’”  “Biden-danger within US”

The critical question is who does Rep. Green mean by “all of us?” All Republicans or all who believe and promote what she does? And what does Rep. Green believe?

“Last month [Aug 2020] , The New York Times reported on Greene’s past statements referring to Q as a “patriot” and pushing the idea that Q was working to take down a supposed cabal of Satan-worshipping pedophiles.

“QAnon is a far-right conspiracy theory that falsely claims, among other things, that an individual known only as Q with supposed “Q-Level” government security clearance has been leaking high-level information. The theories allege a global network of child sex traffickers is orchestrating a plot against President Trump. QAnon followers believe Democrats are behind the plot.” Rep Green more recently said that she has changed her mind about QAnon. “Marjorie Taylor Greene has several ties to conspiracy hate groups”

Wikipedia’s summary includes that “Greene has promoted far-right, white-supremacist, and antisemitic conspiracy theories, including the white genocide conspiracy theory, QAnon, and Pizzagate, as well as other extremist conspiracy theories” “Marjorie Taylor Greene”

So, if President Biden means those like Marjorie Taylor Greene, then I fully agree with him that they don’t support American values. But are they dangerous? We don’t generally get too agitated by nut cakes who believe that the Earth is flat (there truly are such people out there on the loose) or that we are being visited by space travelers.

Several things make those like MTG very dangerous and justify President Biden’s warning. The primary danger is Donald Trump himself and the significant number of his True Believers. Trump tried in various ways to overturn the results of his losing Presidential race against Biden climaxing with the attack of the Capitol on Jan 6, 2021, in a final attempt to overturn the elections, which Trump continues to claim he won. He has not, does not, and presumably will not adhere to the rule of law. While we have already seen considerable evidence of his crimes, we must await the final judgement of the Justice Department whether to formally charge him.

“Trump told a right-wing radio host that, if he returns to power, he plans “full pardons with an apology to many” who attacked the Capitol. He also claimed he is ‘financially supporting’ some of those charged in the insurrection to defend them from ‘sick’ prosecutors and ‘nasty’ judges. Oath Keepers? Proud Boys? Unclear.”  “Kevin McCarthy – Joe Biden-semi-fascism – Trump”

Trump’s people have used violence before, as Trump quietly watched, and are threatening to use it again. Former Senator John McCain friend Sen Lindsey Graham, now a Trump worshiper, said on Fox News that “there will be riots in the streets” if the Justice Department indicts former president Donald Trump on charges related to his stashing classified documents in his Palm Beach, Fla., home.” If that doesn’t frighten you for the future of our country, read Jonathan Rauch’s account of what Trump’s reelection could look like: “Trump 2024 reelection-Viktor Orban Hungary”

The second reason for serious concern is that the Republican Party has either given in to Trump or gone silent. Given some of the Trump supported candidates the Republican Party is offering in the November general elections, it could be in serios trouble. More recently, Trump has turned his attack directly on Republicans who do not bow to him.

“Trump (who doesn’t do subtle or even not-so-subtle) blasted McConnell as a “broken down hack” who isn’t doing enough to help Republicans win.”  “Will Trump topple Mitch McConnell”

Trump further stated that: “The party is furious at [Mitch]. We have to put up with him for a period of time, but eventually, he’ll be gone. He’s bad news.”  “Trump rages about GOP” 

“In a statement posted to Truth Social on [August 27], Trump criticized McConnell for a statement he made that week about the crop of GOP Senate hopefuls, before making a dig at Chao, McConnell’s wife of 29 years, calling her ‘crazy.’

‘Chao served as Transportation secretary during the Trump administration for nearly four years, resigning one day after the Jan. 6, 2021, attack on the Capitol. In a letter to Transportation Department staff, she called the riot “entirely avoidable” and said she was ‘deeply troubled’ by the event.

“Chao previously served eight years as Labor Department secretary under former President George W. Bush.

I waited in vail for the Republican (real Republicans) backlash. “Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday said he does not have a reaction to former President Trump’s statement over the weekend that labeled his wife, former Trump administration Transportation Secretary Elaine Chao, ‘crazy.’

“Asked in Kentucky if he had any reaction to Trump’s statement, McConnell responded simply, ‘no.’”  “McConnell asked if he has reaction to Trump’s attack on wife Elaine Chao says no”

If the Republican Party does not stand up and defend its principles and those of our constitution and country, I will be worried. Very worried. As should everyone else who believes in America’s constitutional democracy. “Republican Rep Adam Kinzinger says we have no leadership”

How to stop Russia in Ukraine?

In violation of international law, Russia has invaded Ukraine and the world is rightly outraged. Countermeasures to stop the fighting and punish Russia’s aggression do not include sending NATO armies against Russia for the very good reasons that it would significantly increase the risk of a devastating nuclear war and because our experiences with such wars in the last half century are not encouraging. What countermeasures might we (and are we) use(ing)?

Our primary tools are to economically and culturally isolate Russia in order to damage their economic ability to continue waging their war and to hurt their pride. What might that include within the limits of our commitment to the rule of law?

Each of us as individuals, companies, and governments have the right to decide who we trade and deal with. Refusing to sell to or buy from Russia can have a powerful impact on the Russian economy. Examples of companies that have ended or restricted their sales to and/or operations in Russia include Ford, GM, Toyota, VW, Volvo, Nissan, Honda, Subaru, Harley Davidson, Apple, BP, Equinor, Shell, ExxonMobil, Visa, Mastercard, Google, and Netflix. And the list continues to grow by the hour.

“Ikea, the world’s largest furniture company, is closing its 17 stores in Russia. The company said the conflict is having a “huge human impact” and “resulting in serious disruptions to supply chain and trading conditions.” In addition to pausing its retail and manufacturing operations in Russia, it will suspend all trade with the country and its ally, Belarus.” “CNN: Companies pulling back from Russia”

Sports and entertainment organizations certainly have the right to determine their members and kicking Russian teams or performers out of competitions, etc. can usefully demonstrate disapproval of Russia’s behavior.

More problematic are the announcements by Boeing and Airbus that they have suspended support services to Russian airlines flying their planes. Airbus stated that “it has ‘suspended support services to Russian airlines, as well as the supply of spare parts to the country.’” These are problematic because they might be breaking provisions in contracts these companies have with Russian airlines.  However, such contracts often provide for suspension in the event of war or other unusual circumstances. Moreover, if Russia withdraws from Ukraine in the next few weeks and the more severe sanctions are withdrawn, these reservations may become mute.

While social media platforms and entertainment companies (Disney, DirectTV, and WarnerMedia) also have the right to cut off Russian users, I am not convinced that it is always wise to do so. In my view we should all be able to view the propaganda disseminated by, for example, RT.  While I am sure that WarnerMedia’s decision to “pause the release of ‘The Batman’ in Russia,” will be devastating for many Russians, they do have more challenging issues to worry about at the moment.

A rather different category of sanctions are those taken by and/or imposed on others by governments. For example, all Russian airline flights are now banned from EU, U.S., and Canadian airspace. As a result, or perhaps for other reasons, the Russian delegation to the World Telecommunication Standardization Assembly (WTSA-20) of the International Telecommunications Union now underway in Geneva didn’t come. This important meeting is held every four years to allocate spectrum and set other global telecom standards. By its absence Russia has lost all opportunities to nominate and elect chairmanships of any study groups and task forces for the next four years.

Most payments in dollars, Euros and most other currencies have been forbidden by the issuers of those currencies with specific exception. Russia has been blocked from using S.W.I.F.T. for sending payment instructions. The most important economic exception is that Russia may continue to sell oil and gas to Europe and to receive payment for them. Another is that Russia may continue to make debt service payments on Russian debt securities held abroad. The assets of all Russian banks outside of Russia, including its central bank, have been frozen. I am not sure how these two are reconciled. “BBC News”  

The approach of blocking economic activity by blocking payments for them is a bit similar in spirit to Anti Money Laundering (AML/CFT) restrictions, which attempt to stop illegal activities by stopping the use of the proceeds of “crimes” that haven’t been proven, rather than stopping the illegal activities themselves. The effectiveness of blocking payments in key currencies depends on how widely they are supported. A UN resolution condemning Russia’s invasion of Ukraine was supported by 141 members. Only 5 countries voted against (Russia, Belarus, Eritrea, North Korea, and Syria). China and India and 33 other members (including, surprisingly, Cuba) abstained. Germany completely reversed earlier policies and is sending serious weapons to Ukraine and is increasing its military expenditures above NATO recommended minimums. While the extent of support is impressive, the abstainers open sufficient holes to undermine the impact of financial sanctions. None the less, the dramatic shrinkage of trade and real economic interactions will be devastating. Russia will be flattened and isolated.

More recently some countries have seized the assets of private Russian citizens.

The Russian Oligarch Igor Sechin’s yacht was seized Thursday by French Authorities while docked for repairs in La Ciotat, near Marseille. On the same day “Germany seized the Russian billionaire Alisher Usmanov’s 512-foot mega yacht Dilbar, which is valued at $600m, which was moored in Hamburg.” “Russia sanctions superyacht seizures”. To my knowledge, neither of these Russians committed any crimes in France or Germany or anywhere else outside of Russia. The legal basis for these seizures, unless they are being held temporarily pending a court determination of whether crimes have been committee, is very questionable.  

Imposing harm on Russia and Russians of the types discussed above, will have costs to us as well. This by no means suggests that we should not use them. Properties and businesses abandoned in Russia and goods and services no longer sold there or purchased from there will impose costs on the western companies involved.  Western owners of Russian securities are likely to incur losses. Some Russian debt will default. But Russia’s aggression must be stopped, and future aggression strongly discouraged. Watching the Soviet tanks crush Hungarian and Czech demonstrators in 1968 without our military intervention to help them was very painful but was the right thing to do, just as our nonmilitary approach now is the right approach, as long as we apply sanctions lawfully.

Putin’s reckless war in Ukraine is destroying Russia. Let’s hope that the good and long-suffering people of Russia will not allow him to also destroy the whole world.

Ukraine: How should we help?

It is impossible not to admire the bravery of the people of Ukraine as they fight for their independence and freedom. Without help, Russian troops are almost certain to capture Kyiv and other key cities. The EU and many other countries have pulled together as never before to impose serious sanctions and provide military and humanitarian supplies. See: “Sanctions”  Putin’s failure to prepare the Russian people for a military attack on their fellow Russians and cousins in Ukraine is provoking protests in Russia against this war.  But these may not be enough to save Ukraine and it is tempting to think we should provide boots on the ground to insure a Russian defeat. President Biden is right to believe that this would be a grave mistake.

Military interventions always look more compelling at the start, while going through the front door. Sure, our army can squash whoever. Years later, as we leave or are pushed out the back door (Vietnam, Afghanistan, Iraq, Libya, etc.), they are revealed as foolish endeavors from the beginning. While Vietnam has prospered after our withdrawal and Iraq’s development is promising, they might well have reached these achievements sooner if we had stayed out. Why is this so? Why can’t we just take over countries under attack and make them better?

Generally, the countries we attack are engaged in civil wars (Vietnam, Afghanistan, Libya). Even Russia’s attack on Ukraine has elements of a civil war. We almost never understand the nuances of such battles nor have sufficient military and diplomatic officials who speak their languages and know their histories as they rotate in for two years then out. We can never be sure which side or sides we should support.

Putting aside that we don’t really have the resources to fully police the world, we have rarely achieved our objectives in the wars we have undertaken since WWII even if those objectives seemed reasonable at the outset. Iraq is an example where we did not have a good reason (or any reason at all except feeding our military industrial complex) to begin with. Part of the reason is that we have never invested in the training needed to be successful imperialists. We are bad at running other countries. You can read some of my firsthand experiences with just how bad we were at running Iraq in my book: “My travels to Baghdad”

If we send in the American Army to defend Ukraine against Russia, even if no escalation in fighting results (which is by no means certain), we will be forced to remain there for X number of years to keep the peace. Which factions would we support or favor? Why do we imagine that it would be different than our experiences in Afghanistan or Iraq? While it is emotionally hard not to walk through that front door with our troops, we must remember what the back door feels like, not to mention the X years in between. President Biden is right not to do so. “Reflections from the netherworld”

Most Americans are good hearted and want to help those in need. However, I am hard pressed to think of a time when we successfully did so with our Army.

Ukraine–Russia–NATO

Russia has surprised most of us with an all-out attack on Ukraine. What should the U.S., NATO, and Ukraine do now? Each possible answer implies different possible consequences. We would be wise to understand them as well as possible. We should try to evaluate the probable long-term effects as well as the immediate ones.

The fact of the matter is that that we made serious errors since the disbanding of the Soviet Union (the expansion of NATO, establishing Aegis Ashore missiles in Romania and Poland, etc.) that began on Christmas 1991. The effect was that Russia walked away from NATO rather than becoming a member. While all of this is very regrettable, it is nonetheless history. We are where we are now because this history has inevitably influenced the present and thereafter the future of Russian relations with the rest of the world.

While Ukrainian resistance appears stronger than Putin expected, Russia may well take control of parts of Kyiv and other western Ukrainian cities within days or weeks. However, following earlier examples of Russian incursions and given the inadequate size of its forces, it is likely to quickly withdraw after flexing its now stronger muscles in negotiating an agreement with the U.S., NATO and Ukraine.

According to Edward Luttwak tweeting on the afternoon of Feb 24 “Air strikes can reach any target but Russian troops are much too few to achieve a coup de main, the single act that both starts and ends a war. Yes, they control airfields & some city centers. Beyond them individual soldiers & volunteers will start killing Russian soldiers w/o end. They had a missile strike plan viz Ukraine air force, very weak in any case. Russian troops too few to control the country beyond airfields, central Kiev, Odessa, etc., nothing for hostile W Ukraine. Ukrainian soldiers & volunteers will fire & kill Russians. Final result: the end of Putin.”

President Biden has wisely stated that the U.S. will not send troops into Ukraine, which is not a NATO member. While he has rightly condemned Russia’s illegal attack, and together with our European allies has significantly increased economic sanctions on Russian banks, businesses, and officials, though still with significant carveouts, he has correctly, in my judgement, concluded that the cost to our already overstretched budget to fight a war over Ukraine is not in America’s interests.  We care about many people and things in the world for which it is not justified to spend our financial and human resources rather than focusing them initially on our own domestic needs. Some among us may want to rule the world but we can’t afford it either financially or morally. Our military industrial complex, which profits from wars, probably disagrees.

Luttwak claims that “close[ing] the road and rail connections between Germany and Russia… would be the most powerful of all sanctions.” This could be done unilaterally by Poland or the Polish people. “Polish peace demonstrators [could] stop the unceasing traffic of trucks delivering Western European exports to Russia.  German cars, Dutch vegetables, French luxury exports.  That very powerful sanction does not require NATO or EU approval, just some people who care. ‘No bypass’”

More generally, sanctions have historically not been a very effective tool. “A new history of sanctions has unsettling lessons for today” Trade is win win. Both sides benefit. Thus, blocking trade is loss loss. Both sides suffer. Moreover, it is very difficult to design sanctions that hurt the target government more than its people. “Econ 101-How to help Afghans”

Ukraine is more important and relevant to European security than to ours (though one may argue that if Ukraine falls and the democracy in Europe suffers and crumbles, this affects the United States in the long run as well). In addition to financial and military aid to Ukraine, one or more European countries could, outside of the NATO context, send their troops to help defend the existing government of Ukraine.

It is very unlikely that Putin would escalate the fighting further, though it is not clear how rational Putin is these days and Russia has nuclear weapons. He was close to crazy to have launched the war now underway in Ukraine. Such European military intervention would likely save the Zelensky government and the negotiated peace (which should have been negotiated a month or two ago on the basis of Putin’s eight demands last December) would still need to mutually satisfy the interests of Russia, Europe and Ukraine.

If Ukraine receives no military help, it might still hold off the Russian army from toppling the Zelensky government. Russia might then be forced to be satisfied to hold the eastern, Russian dominated piece of the pie. The final settlement might take a bit longer in this case, but it might contain similar provisions. As Luttwak has argued above, a full Russian victory is unlikely and is expected not to last for long and would be a huge drain on Russian resources. Russia will surely pay a very high price for (presumably) gaining a government subservient to Moscow.

The longer run (five to ten or more years) consequence of one or another of the above scenarios is, of course, hard to predict but it should be taken into account. If the Zelensky government survives largely on the basis of its own efforts, it might be hoped that Zelensky’s far from complete efforts to clean up and reform his government will continue and be strengthened. A Russian victory (replacing Zelensky–dead or alive–with a Moscow puppet) would surely perpetuate and strengthen the corruption Ukraine has suffered for decades. Putin’s original eight demands would still have to be resolved and agreed in a mutually acceptable way. Doing so in January, of course, would have saved everyone a lot of lives and treasure, but discussions of these issues were hard to find in the American press.  

How this war is settled will also have consequences for American, EU, and Russian assessments of each other’s strengths and interests and thus how to deal with one another in the future. Will Russia revert to an enemy in which we keep our defense industry happy with another cold war or will we undo the NATO inflicted damage of the last twenty years that turned a potential friend to a costly enemy? China has decided to stay out of the fray neither supporting the US-Europe alliance nor the Russians which is a wise decision on their part.

The initial reactions in Russia have not favored Putin. The Russian population was not prepared to shift from seeing Ukraine as part of the family to an enemy that its sons and daughters were dying to overturn. A Russian defeat or even stalemate “victory” could be the end of Putin.  I am predisposed to believe in happy endings, which is perhaps why no one pays me for my forecasts.

We must never lose sight of the fact that Russia is more than Putin, Ukraine is more than Zelensky, and NATO is more than Secretary General Jens Stoltenberg. If I had said Biden (or Trump) you would have understood instantly. And among the population are many factions. The U.S. seems rarely to take such domestic realities into account when it decides to march into and take over countries.

In an email February 26, Chas Freeman said: “Regrettably, the place of Ukraine in Europe, which might have been decided through negotiations between Moscow and Washington in consultation with Kyiv, will now be decided through interactions by Russian dictation to Ukrainians without reference to either the United States or NATO.  Russia’s coercive diplomacy failed to elicit an offer to address its longstanding, oft-expressed concerns about the possibility that Ukraine might become part of an American sphere of influence on its border under circumstances in which the United States has officially designated Russia as an adversary.  So, Moscow made good on its ultimatum, and used force.  As it did so, it moved the goalposts.  Now Russia appears to seek the subordination of Ukraine to its domination rather than simply its denial to the United States. This is a tragedy that might have been avoided.  Now we are left to hope for a resurrection of diplomacy when there is no clear path to it.”

On February 25, Pavel K Baev stated that: “Now we know that Putin’s obsession with Ukraine — which constitutes a threat to his regime not because of hypothetic NATO missiles, but because of its choice for democracy and closer ties with Europe — prevailed over common political sense and strategic risk assessments.” “Implications of Russia’s invasion of Ukraine–Brookings Brief”

But the almost last word should go to Edward Luttwak who tweeted on Feb 26: “Having invaded with too few troops to pull off a fait accompli, with many Russian troops killed because of incautious tactics that presumed no real resistance, Putin has also closed the door to talks with Pres Zelensky: ‘I will not talk with drug addicts and neo-Nazis’. Sanctions.   Not too late to send large numbers of small arms and point & shoot anti-tank weapons to Ukraine via Poland or Slovakia. There are warehouses full of both (+ their ammo) across NATO because of the drastic reduction in force-levels. Ukrainians are resisting bravely and deserve help”

And the final word goes to Thomas Pickering (former US Ambassador to the Russian Federation and other places): “The end result must be respectful, fair, and balanced for the people of Russia and for all other parties. It will take wisdom, time, sacrifice, and persistence. To get there, the U.S. must lead, help to finance, and participate extensively in an international coalition — through the United Nations if possible, outside it if necessary — and listen to all like-minded states.” “Implications of Russia’s invasion of Ukraine–Brookings Brief”

Diplomacy

What does the press coverage of the Canadian trucker strike and Russia’s threatened attack on Ukraine have in common?  Matt Taibbi’s column on the “The Great International Convoy Fiasco” will tell you. For good measure, he added that “On February 4th, 2004, the Wall Street Journal published, ‘A Historian’s Take on Islam Steers U.S. in Terrorism Fight’, about the influence of a Princeton Scholar named Bernard Lewis on George W. Bush’s Iraq policy. The ‘Lewis Doctrine’ was simple. The good professor believed there was no point to asking, Why do they hate us?”

For many weeks the American press (I apologize for lumping our somewhat diverse collection of newspapers into one camp) have been shouting that Russia might invade Ukraine any day now. Volodymyr Zelensky, the President of Ukraine, says that that is nonsense and to please stop saying it. I am inclined to believe him over our newspapers.

Something similar is going on with the striking Canadian truck drivers. The message in both cases is that we need to be tough. Arrest them and remove their trucks that are blocking the border with the U.S. Beef up our troops in Europe and tell Putin all the nasty things we will do to him if Russian troops cross the border. The mindset that reacts in these ways is not in our national interest.

Why are the truckers striking and why is Putin demanding a rethink of European defense architecture? While Putin has told us explicitly what he wants, to my knowledge no meetings have occurred between the Canadian truckers and the Canadian government. We may or may not sympathize with some of the Trucker’s concerns, but the proper (dare I say adult) starting point is to sit down with them and understand what they want.  At least the Biden administration is talking with the Russians, but it would be healthier if more were said in the Press about these talks and the issues that Russia has raised, and less about the potential for, if not eminence of, war. Such discussion of the pros and cons of mutually acceptable options are out there, but you need to search for them.

The role of diplomacy (the first intergovernmental tool of civilized nations) is to understand the concerns and desires of the other side. That is the essential first step in seeking out areas of common ground that each side can live with. War is (or should be) a last resort.  I am sure that Lockheed Martin, Raytheon Technologies, General Dynamics, Northrop Grumman, etc. can figure out other uses for their manufacturing and technical capabilities. “National Defense”