Ilargi: Ukraine – Part of United States’ Desperate Solutions For Not Sinking Alone?

Yves here. While most of the commentary on the Ukraine has focused on geopolitical issues, and on the role of the neocons in the Obama Administration, this post looks at the Ukraine conflict from a different angle. It contends the drivers are actually economic (not that economics and politics are necessarily distinct). The source that Ilargi relies on is a bit screechy and appears to labor under the misapprehension that the US needs foreign lenders to finance its deficit spending. But if you can read past those shortcomings, I hope you’ll find it also raises some provocative issues.

By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth

LEAP2020 is a European political/economic research institute that doesn’t shy away from volunteering opinions on the topics it researches, something that works both for and against it. It publishes a new GEAB (Global Europe Anticipation Bulletin) report every month. I thought I’d share the ‘public announcement’ of the April 2014 issue with you, because it provides a clear idea of what some people think is going on with regards to the US/EU involvement in Ukraine and the war of verbal bellicosity they have initiated with Russia. Some voices, among them former US government official Paul Craig Roberts, are convinced there is a new neocon attempt aimed at provoking war with Putin happening. Others have pointed to the arms race many US allies in the Middle East and Asia appear to be conducting.

Personally, I prefer to remain on the cautious side for now, but I do think Americans and Europeans alike should demand their media and politicians explain what really goes on, instead of merely shouting insults at anyone who looks remotely Russian. What did the US spend the $5 billion+ on that Undersecretary of State Victoria Nuland has stated was handed to an alphabet soup of Ukraine NGOs? What was Nuland doing in Kiev in the months leading up to the February coup in the first place? Ukraine had a poorly functioning government, true, but then so do dozens of other countries. Why Ukraine? Why did NATO rapidly expand eastward after the break-up of the Soviet Union despite explicit promises not to do that? Why is the US apparently about to deploy perhaps as many as 10,000 soldiers to Poland when it just signed a de-escalation deal with Russia? Are we going to hold back on asking these questions until the military chest thumping stand-off has reached a point of no return?

For LEAP2020, the issues are primarily economic, not military. It sees the US as a nation on the verge of breaking down economically, which seeks to drag others (Europe) with it in order to disguise its own troubles:

Europe Dragged Into A Division Of The World Between Debtors And Creditors: The United States’ Desperate Solutions For Not Sinking Alone

In the present confrontation between Russia and the West over the Ukrainian crisis, the image of the Cold War inevitably comes to mind and the media are obviously fond of it. However, contrary to what it gives us to understand, it’s not Russia that seeks the return of an iron curtain but really the US. An iron curtain separating the old powers and emerging nations; the world before and the world afterwards; debtors and creditors. And this in the crazy hope of preserving the American way of life and the US influence over its camp in the absence of being able to impose it on the whole world. In other words, go down with as many companions as possible to give the impression of not sinking.

For the US, these are the current stakes in fact: drag along the whole Western camp with them to be able to continue dominating and trading with enough countries. So, we are witnessing a formidable operation of turning round opinion and leaders in Europe to ensure docile and understanding rulers vis-a-vis the American boss, supported by a blitzkrieg to link them permanently with the TTIP and to cut them off from what could be their lifeline, namely the BRICS, their huge markets, their vibrant future, their link with developing countries, etc. We are analyzing all these aspects in this GEAB issue, as well as the subtle use of the fear of deflation to convince Europeans to adopt US methods.

In the light of the extreme danger of these methods used by the US, it goes without saying that leaving the US ship wouldn’t be an act of betrayal by Europe, but really a major step forward for the world as we have already extensively analyzed in previous GEAB issues. Unfortunately, the most reasonable European leaders are completely paralyzed and the best strategy that they are still capable of currently putting into effect, in the best case scenario, seems to be simply to delay, certainly useful and welcome but hardly sufficient …

Layout of the full article:

1. LOWER THE MASKS

2. QUICK A TTIP

3. AN ECONOMIC ABERRATION

4. INSTIL THE FEAR OF DEFLATION IN EUROPE, THE SECOND US WEAPON

5. DEBTORS VERSUS CREDITORS, THE WORLD CUT IN TWO

This public announcement contains excerpt from sections 1 and 2.

LOWER THE MASKS

With the internet and leak type issues, keeping a secret has become difficult for secret agents and countries with dirty hands. Besides Snowden’s or WikiLeaks disclosures, we have further learned recently that the US was behind a social network in Cuba targeting the destabilization of the government in power. We have been able to watch a video opportunely leaked on YouTube showing the Americans at work behind the coup d’etat in the Ukraine. Or again, it would seem that they are not innocent in Erdogan s current destabilization in Turkey, a country whose situation we will go into in more detail in the next GEAB issue … The masks are falling, certainly on the evidence, but that nobody can ignore.

But the United States is no longer satisfied with developing countries or banana republics. In Europe, they are also managing to turn round the leaders one after the other, so that they obediently follow American interests. It’s no longer what’s good for General Motors is good for America as Charles Wilson (former GM CEO) said in 1953, but what’s good for the US is good for Europe. It already has Cameron, Rajoy, Barroso and Ashton’s support. It has succeeded in getting Donald Tusk’s Poland’s whilst he was strongly resistant at the beginning of his term of office, Italy’s thanks to Renzi s opportunist coup d’etat, and France’s Hollande/Valls thanks in particular to a ministerial reshuffle and a Prime Minister little suspected of anti-Americanism. Unlike the beginning of his term of office when he played the independence card on Mali or on other fronts, Francois Hollande seems to be completely submissive to the United States. What pressure has been put on him? As for Germany, it s still resisting somewhat but for how long (9)? We will expand on these remarks in the Telescope.

Europe is thus dragged towards US interests that aren’t its own, neither in terms of politics, geopolitics, or trade as we will see. Whilst the BRICS have chosen an opposite path and are seeking to withdraw from the henceforth profoundly negative influence of the US at any price, Europe is now being taken for a ride. Evidenced, for example, by Belgium’s purchase of $130 billion worth of US Treasuries in three months from October 2013 to January 2014, being at an annual rate greater than its GDP. It’s certainly not Belgium itself which is responsible for this aberration, but Brussels of course, that’s to say the EU as a little US soldier. Politically Europe is stifled by the US which can take heart in the absence of any leadership. And the way to permanently seal this American stranglehold over Europe is called the TTIP …

QUICK A TTIP

We have already amply documented it: unlike the triumphant discussions of recovery based on rising real estate prices and the stock exchange which is at its highest, the real US economy is in dire straits. Food shortages are higher than in Greece.

WorldHunger
On the right, percentage of the population which can’t afford food, by country (on the left, change 2007-2012). Source : Bloomberg / OECD.
Shops, even good value ones, are closing through lack of customers. Demand for real estate loans are at their lowest, which bodes ill for what follows next and presages an imminent reversal, as we anticipated in the GEAB no 81.

[…]

But as we have already said, this isn’t the most important thing. The TTIP’s major stake is the Dollar’s preservation in trade and keeping Europe in the US lap in order to avoid the constitution of a Euro-BRICS bloc able to counterbalance the US. Thus, the Ukrainian crisis, under the pretext of Russian aggression and gas supply, is a good way, in the panic, of imposing the US and the lobbies’ agenda in the face of European leaders who are too weak to act. What wasn’t expected is that the lobbies‘ interests are not necessarily going in the direction one thinks …

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59 comments

  1. sd

    It’s already clear this will end much much worse than any of us are capable of imagining. The glimmers of just what that might mean are terrifying.

    1. R Foreman

      When I read that article about the Big Four horsemen banks of the apocalypse, I knew right then just exactly where we were headed.

      http://www.zerohedge.com/news/2014-04-19/david-stockman-qe-follies-bernankes-swell-gift-big-four-banks

      That crushing deflation from 2008 that would’ve fallen on the elite and big big banks.. well, they’ve arranged it to fall on me and you first brother. It’s all about keeping the goods, and socializing the misery out among the people.

      But before that happens, we enter the twilight zone of The Matrix, where nothing is real, and the Ministry of Truth tells us everything we need to know to get by day to day.

      If you’re a good machine they might let you leave the factory, but it won’t matter since there won’t be any place you can go which is out of their sight. There is one way out though. Just remember, save the last bullet for yourself.

  2. JGordon

    “and appears to labor under the misapprehension that the US needs foreign lenders to finance its deficit spending.”

    The US requires a steady supply of imported resources to function. Regarding that, Max Keiser recently called out Yves on his show for being fooled by the nominal value of the USD currency units residing on foreign central bank balance sheets, and thus not having a good grasp of how the economics change once we move to resource-backed currencies.

    Nicole Foss’ thesis, and presumably Ilargi’s as well, is that once the multiple claims on resources are wiped out (I suppose created by infinite rehypothication or some such), then fiat currencies will lose their value either through deflation or hyperinflation (though most probably deflation) and the only “wealthy” people left will be the ones who have their hands (and armed guards most like) on actual resources at that time. Last week Max Keiser also specifically admonished Yves for misapprehending the nominal value of the USD numbers on the balance sheets of foreign central banks–when their actual value could all drop to exactly nothing in a heartbeat if some country or another decided to adopt a resource-backed currency. Which is not as implausible as it sounds consider the geopolitical situation and America’s continued insistence on trying to weaponize its reserve currency status.

    Whether Yves or Ilargi are right or wrong here I am not going to speculate. Personally, Nicole Foss and Max Keiser make a lot more sense to me, but that’s only because my intuition tells me that MMT is complete BS, and that the most important thing that exists with regards to economics (and the continued existence of the human species) as it exists in reality is the ecology of the planet and the sustainable use of the planet’s resources. Therefore, I have to look at it a bit askew to see someone speaking of “misapprending” an economic situation with such confidence when in the very first place we are speaking in terms of beliefs and ideologies here (with some mostly irrelevant math and fictitious thought experiments thrown to make it seem scholarly), and not in terms of empiricism.

    1. JGordon

      Oohh no. Kind of repeated myself there. Well it’s late and I should be working on something that’s due tomorrow. So sorry.

    2. Yves Smith Post author

      If the best you can muster as an MMT critic is the likes of Max Keiser, frankly you don’t have much of a case.

      1. mansoor h. khan

        Yves,

        I believe MMT is the correct description of reality. The part of MMT that I think is troublesome (in my not so humble opinion) is the part where we still accept bank credit (i.e., lending money with interest as being ok) as being part of the MIX that is OK to keep and do in the future.

        I believe all money (currency) should be government issued debt and interest free. Furthermore, in order to stop the shadow banking system from pyramiding over the gov issued fiat and essentially creating liquidity/cheating (currency) we need to outlaw lending money with interest. PERIOD.

        My justification for this (in my not so humble opinion) is world history but most importantly it is Allah per his commandments in the Torah, Bible and the Quran.

        Our trade deficit is big but still it is only about 3% of our GDP. This means that if foreigners stopped accumulating our currency our standard of living will fall by only 3%.

        America is still able to “earn” most of what it imports by exporting (contrary to popular belief)

        The more important worry for me is will there be as much importable oil for America if fracking and renewables don’t pan out. Fracking I believe is a investment bubble like the dot com bubble and renewables are a dud too dependent on subsidies.

        Oil/Gasoline price right now is much too how to allow economic growth. However, as I have discussed here at NC many times we can better (more fairly) share/distribute our stupendously whopping $16.8 Trillion GDP (alhumdolillah) via a “dignified guaranteed income program” to keep socially stable and avoid social chaos like it exists in third world countries. We can set a good example for them too to share “scarce” resources/production/output more.

        If humanity does not find a source of “cheap abundant energy” with high net energy (EREOI) soon than we should become familiar with the words “economic contraction”. (opposite of economic growth slow economic contraction in the decades to come.

        More at:

        http://aquinums-razor.blogspot.com/2013/02/the-banking-system-and-economic-growth.html

        Mansoor H. Khan

      2. skippy

        Hay…. the fact they can’t say gold out loud any more is a huge tell, resorting to resource-backed currency (perishables) instead. Yet at the end of the day its all arbitrary values floating about.

        They don’t call it the sweat of the gawds for nothing Gordon…. crazy as the gawds, as good as the gawds during collapse, no fiatists in a foxhole thingy.

        skippy… the Gods must be Crazy movie covered this cognitive terrain well methinks.

        1. mansoor h. khan

          skippy said:

          “Yet at the end of the day its all arbitrary values floating about.”

          No it is all about being able to buy groceries and attract a mate. Dollars and most fiat currencies still work.

          Don’t be too cynical. There is practical value to this stuff!

          Yes, it may not last (given cheap energy depletion) then we will have something else “to buy groceries and attract a mate”.

          Mansoor H. Khan

          1. skippy

            Know what your saying Khan tho’ too me “the transaction is the value” the “medium” is just the trust society puts in itself.

            Sadly trust was treated like a [can’t say name without unjustly diminishing the – take your pick] for a neoliberal good time.

            skippy… MMT – Post Keynesian w/carrying capacity observed is where I stand.

            1. mansoor h. khan

              Skippy said:

              “MMT – Post Keynesian w/carrying capacity observed is where I stand.” Also, we should “try” to distribute “w/carrying capacity observed” with justice and mercy. Justice and Mercy to be decided with discussion, debate and consensus with the help of world history and hopefully the holy scriptures.

              Same here minus all forms of usury (that is lending money with interest).

              http://mansoorkhan114.blogspot.com/2013/03/why-islam-last-update-31-2013-this.html

              Mansoor H. Khan

              1. skippy

                Is co sharing a business transaction[?] – that might cover the justice and mercy issues.

                skippy…. I owe a debt to society… whence the day I was born… tho’ if you like the – Universe – is – ultimate – no matter how you slice it.

    3. financial matters

      I think more to the point of MMT, Keynes and Post-Keynesian thinking is that if the resources and labor are available money (from the sovereign standpoint) shouldn’t be the stumbling block. An example for the US, EU and China would be that if cement is available and labor is available we shouldn’t be saying we don’t have the money to improve our infrastructure. Assuming this infrastructure is actually being used for public purpose and business activity. Unoccupied cities don’t count. And the infrastructure doesn’t need to be sold into private rent-extracting hands.

      1. mansoor h. khan

        financial matters,

        I agree with but in the real world (as shown by world history to date) the following will happen unless we manage it:

        1) Bankers and usurers (the creditor class) love to be leeches off the rest of us. And usually end-up cornering the money (currency) issuance systems of nations. The lure of usury (easy money) is too strong to resist for too many people. As part of the cornering process they spread lies about about how the currency is issued and also lie about how an economy works so the gov won’t do deficit spending so they can issue more as bank credit.

        2) Even if Bankers and usurers (the creditor class) don’t actually “corner” official currency issuance via the regular banking system of a nation they will still try to do it via the shadow banking system by pyramiding/fractionalizing the gov issued currency. This of course means the gov won’t issue as much since the productive capacity of the economy limits liquidity/currency creation and speding. And of course this is cheating by the shadow banking operators which always eventually collapses anyway causing massive deflation and need for bailout of these morons eventually.

        C) Therefore it is best to follow the lord’s wisdom and outlaw lending money with interest. PERIOD.

        Mansoor H. KHan

        1. financial matters

          Thanks mansoor, good points. If we also had things like job guarantee, single payer health insurance, reliable social security programs backed by a productive workforce we would also have less need for such destructive high interest products like payday loans and less need to carry credit card balances.

          1. mansoor h. khan

            financial matters,

            Yes. baby steps. The lord wants us to solve our issues and show us how much knowledge and intelligence and wisdom he has given us but he won’t let this place become a heaven (not even close) because then we would have no incentive to seek him. Which better for us!

            Mansoor H. Khan

    4. susan the other

      JGordon, you and I think toward the same goal in opposite directions. I agree completely that what needs to be done is create a healthy planet, and asap. But what really scares me is that some people think the solution is “gold” or “resources” as you put it. I’m convinced that the value of gold is fiat too, just like paper currency, but less useful since paper currency is backed by agreement – the consensus of everyone who uses it – to accomplish a certain goal. It really is the goal that gives it value. There is no intrinsic value in anything on the human planet – only the value recognized intellectually – and thankfully, we can all see how precious the environment is. It is far more precious than a bunch of gold shekels or a load of gilded tungsten bars, etc. Only fiat – only fiat – can serve to accomplish what we want to do because it is such a gigantic undertaking at this point. Using scarce tangible resources as currency now is laughable in the face of this environmental emergency. You and I share a “fiat” (in a sense) in that we agree on the goal. Let it be.

      1. allcoppedout

        Keiser is probably tolerable until he turns gold bug or crowd-sourcer (for such as a large statue off the West Coast to save America). Gold or fiat doesn’t matter much. The systems get cheated anyway. I do think the notion we are back to something like 1971 is worth considering, along with the ‘hidden’ Radio Moscow beat that the rest of the world subsidises US military spending and empire.

        We aren’t getting the politics or relevant science right at all. This renders economics a non-subject to me. This post is worth debating. One can certainly wonder if USUK money is about to be told it ain’t welcome ‘here’.

  3. Ben Johannson

    This post from LEAP2020 is a jumble of polemical and normative statements lacking any clear argument other than “U.S. = BAD”.

    While that might indeed be the case, it certainly isn’t made by these fine fellows.

  4. Banger

    The article of course is incomplete so we don’t know the full argument but since we live in a world where “it’s the economy, stupid” or as I prefer, “it’s the stupid economy” money, trade and so on is an important component in all this. But it is not, in my view, the main component.

    I don’t believe the U.S. is in serious economic trouble, the economy as such can be easily fixed if it weren’t for the cultural prejudice against the poor. Dollar hegemony still is untreatened and is backed up by overwhelming conventional and covert military force. The U.S. is prepared to do “anything” it has to to keep this power intact and Euro leaders know this. The official U.S. stance towards the world is “full spectrum dominance” so that cooperation, dialogue is not something the U.S. does in terms of international politics at this time. This could change since the U.S. population seems uninterested in the imperial project.

    As for the Europeans, it seems they want the New Rome to rule them. It gives their leadership class stability, insures open shipping lanes and access to energy supplies to be sure but mainly the U.S. assures Europe with protection from all internal and external threat. Also, it doesn’t hurt that the U.S. is willing to use any means to accomplish its goals including, obviously, assassination, torture and so on.

    Ukraine is significant mainly as a pretext to harass Russia which stubbornly resists being sucked up into the Empire.

    1. Jackrabbit

      What you say has been mostly true so far, but . . .
      US Economy: can’t be weaned off QE; housing boom-let has faltered; economy struggling (most news jobs are poor quality, GDP estimates lowered, etc.)

      Dollar hegemony: alternative arrangements gaining traction

      US military force: US wins wars, loses the peace

      U.S. population seems uninterested: MSM propaganda? rise of police state?

      Europe: So which is it? Europeans WANT to be ruled by a “new Rome” or US uses “any means” to rule them?

      1. hunkerdown

        The Europeans that want to be ruled are probably not the same ones as will require “any means” to rule them. So both?

    2. Wayne Reynolds

      As for the Europeans, you are right that the New Rome (a.k.a. the USA) gives their LEADERSHIP CLASS stability, but the ten thousands of people in the streets of Madrid, Paris, Rome, Athens etc. sheds a lot of light that this stability is on shaky grounds. In regards that American military muscle keeps the access to energy supplies open is turning into a canard. Europe is greatly dependent on Russia for its’ energy, as the situation in Ukraine has exposed and our actions there are detrimental to Europe’s energy needs. One cannot argue against your assertions concerning the US as willing to use any means to accomplish its’ goals. An William Bowles, a commenter at Moon on Alabama wrote, “Capitalism maybe on its’ last legs but those legs are made of nuclear missiles.” Frightening indeed. One aspect concerning the spectrum of power missing in the OP is the power of the masses. In Europe there is a loud rumbling coming from the bottom occurring all the way from Scotland across the entire continent. A word of advice to the leaders is ignore that at your own risk, any attempts to repress this discontent will soon fail.

    3. egonomics

      Your faith in US conventional military superiority might possibly be overstated:
      http://www.counterpunch.org/2014/04/18/ground-troops-to-ukraine-really-mr-ambassador/

      “Thanks to the last 12 years of superb political and military leadership, what forces the United States once had were squandered in Iraq and Afghanistan. Today’s wheeled Army constabulary forces along with Army and Marine light infantry are incapable of challenging Russian ground forces anywhere in Central or Eastern Europe without risking certain annihilation. As for alleged American conventional superiority, policing Arabs and Afghans with no armies, no air forces, no air defenses and no missile forces is not much evidence for the kind of military superiority the Russians respect.”

  5. Andrea

    (I read the those bulletins, I’m a little surprised to see them quoted on US sites.)

    From a broad geo-pol perspective, I would rather stress that Russia is a natural ally for Europe (history, trade, culture, geo. proximity, energy ties..) and the US will do much to prevent that seeing the light of day. **Divide to rule.**

    > Make Europe a vassal to counter the Bear. (A long term policy which actually contributed, or some would claim, created, the EU and the Euro currency, itself.)

    Not so much a question of ‘not going down alone‘ which I don’t think the US is actually envisaging, as it knows perfectly well its military might totally scares everyone to death (except Joe or Jean 6 who rant about Putin, Obama, Hollande, their Mayor, etc.)

    As for commercial-mega (US and Int’l) Corp interests in Ukr. – Chevron, Cargill, Monsanto, J. Deere, and many others, these have always been present and have had more or less a free hand, that is basically no obstacles to overcome. More control (stooges at the Gvmt. table) might be better … or not really. Moot, imho.

    One blogger who writes about this aspect, good: News vandal.

    This post links to some of his other pieces.

    http://tinyurl.com/nxxvgtv

    1. James Levy

      Forgive me for repeating myself, but I am not sure how much American military power scares people around the world. America has an extremely dubious record militarily since 1950. The elites overseas might be afraid because they can be killed, but the masses know they can outlast the Americans easily. Take a look at Libya and explain how American military power accomplishes anything. America fled Iraq, they’ll be pushed out of Afghanistan within two or three years, and they can’t even overawe the average Venezuelan. The idea that America is some flawless military juggernaut is simply untrue.

      1. hunkerdown

        One doesn’t need to win an officially refereed competition to control an entire nation. Just keep drones in the air and pick a few people off every week.

        Pitched battle is the first refuge of those who didn’t want to win in the first place.

      2. Fiver

        James Levy says “…I am not sure how much American military power scares people around the world…”

        Are you kidding? The world is terrified of US military power.

      3. Andrea

        The US killed millions (sic) of people and destroys countries for a long time. (e.g, Iraq, Afgh, and other.)

        “You” (not you James the poster but anyone), or family members, might be decimated, or your biz destroyed, your ground poisoned, your health care, schools destroyed, infrastructure gone, goons breaking into your house and stealing, sectarian shootings and local power fights cos some bandits have arms, hubris, funding, etc. Fleeing with one suitcase to a dirty hopeless refugee camp. Seeing your daughter shot or worse…at random. Your gran sigh and give up. All hope destroyed.

        Lybia has become a country ruled by local militias in cahoots with ‘some’ Gvmt stooges. It will split up, for sure, and after how much suffering? (OK the EU was heavily involved as well ..)

        All this is just ‘away’ and not a reason to be terrified and submissive? You feel safe in the US I suppose.

      4. NotTimothyGeithner

        I don’t think it frightens disciplined outfits, but if we found dinosaurs in Costa Rica, tree sloths aren’t going to save the day.

  6. NotTimothyGeithner

    I’m not sure about the original impetus. I think the Kiev locals wanted to join the EU and were already not high on the elected government of the whole Ukraine. Like Syria and Libya, powers made moves to grab power while making promises to their foreign contacts.

    As for the current US situation, Obama’s foreign policy successes are controversial at best. Leaving Iraq and Afghanistan have been forced by the public and logistical/manpower reasons. Syria is a disaster we fanned the flames with no way of interfering besides small arms and false flags. Obama hasn’t been to a parade, well they love fireworks, in Libya. On the world stage Put in has one upped Obama over Snowden and Syria while going markets for Russian industries, staying strong domestically, more or less exposing the weakness of american imperialism.

    Put in has made slights against the MOTU’s from both parties who have claimed to have kept us safe with unending military spending despite the US’s weakness before Russian air defense and the inability of our vaunted intelligence system to avert the Boston bombings despite the Russians telling us to watch the bombers. The real economic dimension is Americans demanding accountibility. Putin has the Crimea, and yet, the mail was delivered. The uniparty has to stand tall or they risk teabaggers* running the gop camp and enough good Democrats around to prevent wasteful spending. Also, they don’t want to discuss the domestic economy because…well duh.

    *The teaparty element existed before the branding exercise meant to bring them under control to prepare gop voters for the favorite of the gop elite and former governor of taxachusetts after years of bashing the greater Boston area. The love for Palin from gop voters scared the blue bloods.

  7. Dana

    Thought I’d add the following article to this discussion; in my opinion a powerful one. It may have appeared on NC already, but it’s worth repeating.

    The title says it all.

    Profit from CrisisWhy capitalists do not want recovery, and what that means for America

    The authors limit the topic to the US, but it would be safe to say that their observations apply to any so-called “advanced economy”.

    “Capitalists seek not utility through consumption but more power through redistribution. And they achieve their goal not by raising investment and fueling growth, but by allowing unemployment to rise and jobs to become scarce”.

  8. Dan Kervick

    I don’t know about all these reductionist accounts that boil everything down to “dollar hegemony” when there are so many other obvious strategic political and economic factors in play.

    1. Chauncey Gardiner

      Thanks, Dan Kervick. I agree. And Susan the Other has pointed to another one below.

      Netanyahu has adopted an interesting and surprising position just a couple of weeks after the Big Meet-up in Vegas (http://www.timesofisrael.com/cheney-endorses-iran-strike-to-laughter-applause/)

      Apparently “Bibi” is taking a neutral posture on the Ukraine matter and U.S. sanctions. Is it all that Russian money in Israeli banks?

      http://vestnikkavkaza.net/news/politics/54056.html

      http://www.jpost.com/Diplomacy-and-Politics/Netanyahu-Putin-discuss-Iran-Ukraine-via-telephone-348601

      http://www.timesofisrael.com/netanyahu-putin-confer-on-ukraine-crisis/

      In any event, appears the neocons are now freelancing without the support of a key constituency.

      Oh well, there are still the big agribiz and oil majors… and the China connection:

      http://www.bloomberg.com/news/2014-02-20/dupont-seed-sales-hurt-as-ukraine-violence-intensifies.html

      http://www.bloomberg.com/news/2014-02-19/cargill-says-ukraine-unrest-hasn-t-affected-its-grain-exports.html

      http://www.bloomberg.com/news/2012-05-11/ukrlandfarming-seeks-to-supply-corn-as-china-diversifies-sources.html

      As far as the “RestofUS” are concerned, I remain deeply puzzled why We the American people are being force-fed this engineered issue. And Ilargi has provided and linked to explanations here that are as good as anyone’s IMO.

      1. NotTimothyGeithner

        Bibi’s coalition requires the votes of the Russian immigrants, and they left for economic reasons with plenty doctoring their ethnic background. Israel was happy to accept well educated Soviets who probably didn’t like muslims. They may not approve of anti-russian policy. Israel pulled back it’s Syria rhetoric too, but that may be recognition that the Assad regime has been a stable neighbor.

    2. allcoppedout

      Dollar hegemony was the first economic explanation I remember, The term was never mentioned by Dad and his old army mates, but I remember plenty about expletive, expletive Yanks and expletive dollar printing. From about 1964.

      You are right. Most of us should be arguing for a food and essential services ‘Plan B’ to protect us when this silly fascination with money is blown away.

      1. Dan Kervick

        I just mean that I have been encountering these foreign policy theories since the beginning of the Iraq War attributing every move behind every event to the desire to preserve the global reserve currency status of the dollar, and claiming the the displacement of the dollar is just around the corner. I suppose the theory will finally prove true some day. Meanwhile, there are a whole host of factors and tensions in US-Russia relations – global fossil fuels competition, the Middle East, Snowden, opening up new arms markets – that seem just as plausible.

        I wish that when people provided these analyses of events they would supply some accompanying evidence.

        1. Ben Johannson

          I think it more likely Washington implicitly assumes the dollar will always be ascendant and acts accordingly, rather than every act being to assure that ascendancy.

          1. NotTimothyGeithner

            I don’t think Versailles would frame it in terms of the dollar as much as a sense of divine right.

  9. susan the other

    It was an interesting thesis, that the US is going to drag the EU into some long decline because misery loves company. But I’m skeptical about the BRICS being that vibrant. I think they are not doing very well either. We have power, still, because we have control. We control the world militarily and we control with financialism. If all the independent movements in all the countries around the world demanded recognition, a la the Ukranian nazis, the chaos would bring them all down fast. Because they have no broader organization. It’s true we want ridiculously unilateral trade agreements, and we have the nerve to strong-arm our best allies toward them… but it is also true that we are not very successful. If Belgium/Brussels is buying all our bonds lately they are our intended import market – not export market. So it’s not raw imperialism; it’s more like the only game we know how to play. I think the best explanation for our behavior in the Middle East (Syria, Turkey, Georgia, Dagestan, Iran) is Caspian oil. Why else? We want to supply the EU with oil, and we want Russia to supply China. And world markets could continue to work smoothly (for us) for a while longer. Maybe.

    1. NotTimothyGeithner

      “We control the world militarily ”

      The Empire didn’t become big because we conquered the empire. Rather smaller countries joined us out of good will and of our offer of prosperity in exchange for forward bases and logistical support, and much of our military footprint requires large scale cooperation and propaganda of our military might from these smaller powers.

      Local police forces could disrupt U.S. military hegemony because it lacks the local presence needed to maintain supply routes. Our fighters need to have their engines rebuilt after a few days of operation, and if they have to travel from Point A to Point Z bouncing from rock to rock, they won’t be very effective versus a local air force with a reasonable level of discipline.

      The memory of good will and the promises of Hollywood-marketed prosperity control the empire. When local populations notice this isn’t happening, the American empire will be truncated.

  10. Rosario

    I am most disturbed by the exceptional nature of this proxy conflict and the lack of even transient anxiety being shown by USA media, politicians, and citizens. I’m convinced that American citizens are so conditioned to our involvement in foreign conflicts and political meddling that we seem to miss how bizarre and desperate the Ukraine proxy war really is. Even if the US involvement is just a bunch of neo-cons directing the theater of the absurd along (and I am skeptical of this) they are still whispering (or shouting) into sticky ears. The more likely reality is far worse. Most of the elite are on board, beating their chests in unison. Reflecting on my living history, this is the path to war in the United States.
    The reasons I’m concerned are many. Capitalist Peace Theory only has a branch to stand on when there is an entire tree. Resources are getting scarce and our levels of consumption continue to grow. This conflict reflects that desperate realization among an elite whose power hinges on endless and massive consumption. There is little ideological difference between Russia and the USA. They are playing the same game, but they both can’t have enormous appetites. The other concern should be obvious. A war with Russia would be a global total war. The use of nuclear weapons is very likely, and their effects cannot be contained to any nation state. I may be over reacting here, but my only wish is that someone in power would over react with me, just to play it safe.

    1. James Levy

      I ran into a related issue when reading someone trying, rather weakly, to debunk Marxist interpretations of the Scramble for Africa. The argument was that since Europe really didn’t need those markets/resources, they couldn’t possibly have carved up Africa for that purpose, so Capitalism was off the hook. The idea that the capitalists 1) thought they needed those resources and markets, and 2) were thinking long-term and competitively, as capitalists once often tended to do, was not considered. I think a lot of what is going on today in terms of grabbing resources (think of China and Saudi Arabia buying up Ethiopia) is snatching and looting in preparation for the Climate Change/Peak Oil crack-up. Cooperation has become unimaginable, as have prophylactic measures, so its every power center for itself and the devil take the hindmost.

      One wonders if Obama takes a minute from his busy day to ever contemplate the world such policies will leave his daughters when they are his age.

      I doubt it.

  11. Greg T

    I read the LEAP 2020 public announcements every month. I find their analyses very plausible, though the timing of their predictions isn’t terribly accurate. I think they understand the general tenor of global power movements quite well. They see the US as a declining global hegemon, a nation that no longer exercises leadership except at the barrel of a gun. Ultimately, they see the BRICS as a counterweight to American power. The biggest manifestation of that power is dollar hegemony. It isn’t the only one, but its the biggest one. If the dollar loses its legitimacy as a global currency, many American advantages vanish. For example, we could no longer run budget deficits or trade deficits without runs on the currency. This would limit the ability of the FED to monetize our budget and trade deficits and would severely curtail the projection of military power.

    I agree with Banger in that our economic problems are solvable, but the lack of public power makes widely shared benefits impossible. We can be certain that under the present arrangement, the public will pay the costs of further elite enrichment. Since Americans are somnambulant, the BRICS organizing against the US empire offer the only potential counterforce to American hegemony. How long this takes to play out is anyone’s guess.

    1. Wayne Reynolds

      I sometimes wonder if Americans are somnambulant or are terminally repressed? The Left certainly was terminally repressed from the time of the Wobblies and Eugene Debs, pacified in the 1930 Roosevelt years, tormented in the McCarthy period, and disdained in the 1960s, after which it is nowhere to be found. A brief attempt to resurrect itself as Occupy in 2010 was brutally put down. The iron fist inside Capitalism’s velvet glove is ever ready to pull punches.

  12. cwaltz

    It’s an interesting theory. However, it kind of ignores the fact that Europe also has a history of instigating. The Iranian coup that installed the Shah was actually the Brits brainchild from what I’ve read. It would not surprise me if Europe was the genius behind Ukraine and we just were going to go along with it.

    1. Massinissa

      The Brits may have lobbied for it, but it was the CIA that did it.

      Maybe Germany or Europe is pushing us to do this shit, which I find doubtful, but its still us doing it.

      1. Synopticist

        The Germans wanted Klitchko, he was their man. That we’ve ended up with that Yats bloke, who is number 2 to Julia Timeshenko, shows who was in charge when push came to shove.

      2. allcoppedout

        Britain and the USSR actually invaded Iran in WW2. And left, more or less as promised. Britain had discovered oil there and our government bought out the private company. We had a 60 year agreement to pay £4 a ton for the oil – I guess about 60 cents a barrel. Some commie over there nationalised this generous agreement, so we had to send the boys in. Without money from our traditional heroin trade with China, I guess we had to ask the CIA for a few quid. By then we’d crushed former allies in Greece who wanted communism there, and done joint ops bombing Italy to make commies unpopular there. The idea of Ukraine as a USUK joint operation sounds a lot like some interpretations of WW2. The idea is to send Germany into Russia to get the gas. The Magnificent Two will ride in at the end to bring freedom.

      3. sufferin' succotash

        Regarding 1953 in Iran, the British (who had a good deal more experience in that part of the world than did the US at that time) supplied Kermit Roosevelt & Co. with the necessary contacts/networks while the US provided the money to lubricate the process (bribe bazaar thugs to stage anti-Mossadeq riots so army units loyal to the Shah could intervene to “restore order”, etc.).
        It’s not exactly like handing out cookies in the Maidan or using paid shooters to turn demonstrations into a full-scale rebellion, but those were more innocent times (uh huh!).

  13. Dennis Redmond

    Not sure what Ilargi’s feverish screed is arguing about. The US has almost nothing to do with anything happening in Eurasia these days. Ukraine had a democratic uprising to overthrow a corrupt gaz-ogarchy, which stole cheap gas from Russia and re-sold it at a markup (see the links in this Daily Beast article for the story behind Kurchenko, a shady oligarch who was the bag-man for Yanukovych’s kleptocracy: http://www.thedailybeast.com/articles/2014/03/11/sergiy-kurchenko-ukraine-s-missing-oligarch.html). Russia’s Putinist elites took advantage of the opportunity to take back Crimea, which is problematic on lots of levels. It’s true Khruschev gave the region to Ukraine in 1954 for no reason any sane person can discern – it was and is majority ethnic Russian and always had deep links to the rest of Russia – but still, these things need to be handled through a democratic and credible popular vote, which never happened.

    I’d argue the more important story is that the BRIC nations are not magically better than the US and EU. China and India have their own greedy neoliberal elites, Russia is run by a paranoid, thuggish petro-plutocracy, and only Brazil has the beginnings of a democratic developmental state, but just the beginnings (it also has its own neoliberal elites). We urgently need mass movements against Wall Street greed and the EU’s eurobankster austerity, not fantasies of how some Chinese version of Steve Jobs will magically save us.

    1. Synopticist

      “The US has almost nothing to do with anything happening in Eurasia these days. Ukraine had a democratic uprising…’

      No Dennis, this is not how things work any longer. I can’t be bothered to school you on soft power, the neo-con revival and colour revolutions, but this thing was manufactured elsewhere. Foreign funding and organisation turned a demonstation into a succesful (temporarily?) revolt. A couple of oligarchs who are too close to the outgoing, obscenely corrupt government will be replaced, possibly, by a few more who will be closer to the next, obscenely corrupt, government.

      I totally agree with your second paragraph.

    2. James Levy

      Boy, you just missed completely that Ambassador Nuland and the 5 billion dollars part of the story–what a strange oversight!

  14. The Dork of Cork

    Its a mistake to think of these political units as nations on either side of the Atlantic pond.
    These are mere estates with some added embroidery.

    The Anglo dutch capitalistic cabal see the US as a area of global operations somewhat isolated from the Euro – Asian heartland.
    This isolated geopolitical structure is then used to inflate or deflate the euro entrepot depending on global resource constraints or perhaps the mere whim of the masters.
    If things go pear shaped then one can retreat to ones continental island of liberty democracy and all that other good stuff……….

    Its important to understand that everything and I mean everything of political substance is a lie.
    The simple objective is to maintain the structural integrity of the apex AT ALL COSTS.
    The rats are in the walls.
    https://www.youtube.com/watch?v=k-HAqYDXNxs

    Just to add – on a micro level
    The level of the Irish estate…………….
    It helps if the stupid little whore sees turmoil to the east once again as its credit hyperinflationary decline follows a parallel course to eastern banking gyrations.

    The amount of physical energy needed to keep a banking union of European scale together and therefore not used for real end use consumption is simply enormous.
    Sometimes is a simple question of distance.

    One question for Yves.
    Is fiat power solely used to maintain the structure of fractional reserve banking truely fiat ?
    Me thinks not,

    We can all now see what “The West” is and always was.
    It is not a pretty picture.

  15. H. Alexander Ivey

    Neh, neh, neh. Analogies are important, and good ones are what we use to understand (and predict) what is happening. Ilargi’s idea that, today, the US is reversing its position vis-a-vis the Iron Curtain is a good one. It explains why the various US players are acting the why they do. (And Dan, no, I will not provide analysis for my point – the hour is late, the bartender has called time, and I’m down to my last drink. I don’t blog, I’m just a post note (er))

    I agree with Dan K, not everything is about keeping the US dollar the prime currency, but I don’t think Ilargi is arguing for a single driver. The take away for me is the picture of the US “circling the wagons”. They have openly advocated a me-versus-them attitude since W’s regime.

  16. Reify

    I agree that the US is getting overextended in every way. I read somewhere that we have special ops in something like 130 countries. So we may not be able to take you over but we can still mess you up. Asymmetric warfare our way. So the smart play might be to go along with us and pray that we implode. Set up some side deals as contingencies.
    The frenetic TPP/TTIP push for corporate hegemony is running on borrowed time, militarily, environmentally, financially. Desperate land grab before we run out of juice. Plant the flag everywhere the ice melts. Sow chaos, reap profits.

    The problem is that everyone is more quickly wise to us. Just not our own people.

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