Michael Hudson: Has the IMF Annexed Ukraine?

Yves here. Ukraine is going into an IMF program in even worse condition that Greece with its various loans from the Troika in 2010, and we can see how well borrowing more when you were already overindebted worked out for Greece. In addition, this interview with Michael Hudson makes clear that the loan to Ukraine is wildly out of line with IMF rules, making it painfully obvious that this “rescue” is all about propping up the government so it can continue to wage war rather than economic development.

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to the Michael Hudson report on The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

A ceasefire in Eastern Ukraine has been agreed to, following a marathon all-night, 17-hour negotiation between Russian President Vladimir Putin and Ukraine President Petro Poroshenko. They were flanked byother European leaders keeping vigil. Russia and Ukraine may have many differences, but what they have in common is a looming economic crisis, with oil prices taking a dive on the Russian side and a very expensive war they were not counting on on the Ukrainian side.

Joining us now to talk about all of this is Michael Hudson. He is a distinguished research professor of economics at the University of Missouri-Kansas City. His upcoming book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global Economy.

Michael, thank you, as always, for joining us.


PERIES: So, Michael, in a recent interview published in The National Interest magazine, you said that most media covers Russia as if it is the greatest threat to Ukraine. History suggests the IMF may be far moredangerous. What did you mean by that?

HUDSON: First of all, the terms on which the IMF make loans require more austerity and a withdrawal of all the public subsidies. The Ukrainian population already is economically devastated. The conditions that the IMF’s program is laying down for making loans to Ukraine is that it must repay the debts. But it doesn’t have the ability to pay. So there’s only one way to do it, and that’s the way that the IMF has told Greece and other countries to do: It has to begin selling off whatever the nation has left of its public domain; or, to have your leading oligarchs take on partnerships with American or European investors, so that they can buy out into the monopolies in the Ukraine and indulge in rent-extraction.

This is the IMF’s one-two punch. Punch number one is: here’s the loan – to pay your bondholders, so that you now owe us, the IMF, to whom you can’t write down debts. The terms of this loan is to believe our Guiding Fiction: that you can pay foreign debt by running a domestic budgetary surplus, by cutting back public spending and causing an even deeper depression.

This idea that foreign debts can be paid by squeezing out domestic tax revenues was controverted by Keynes in the 1920s in his discussion of German reparations. (I devote a chapter to reviewing the controversy in my Trade, Development and Foreign Debt.) There is no excuse for making this error – except that the error is deliberate, and is intended to lead to failure, so that the IMF can then say that to everyone’s surprise and nobody’s blame, their “stabilization program” destabilized rather than stabilized the economy.

The penalty for following this junk economics must be paid by the victim, not by the victimizer. This is part of the IMF’s “blame the victim” strategy.

The IMF then throws its Number Two punch. It says, “Oh, you can’t pay us? I’m sorry that our projections were so wrong. But you’ve got to find some way to pay – by forfeiting whatever assets your economy may still have in domestic hands.

The IMF has been wrong on Ukraine year after year, almost as much as it’s been wrong on Ireland and on Greece. Its prescriptions are the same as those that devastated Third World economies from the 1970s onward.

So now the problem becomes one of just what Ukraine is going to have to sell off to pay the foreign debts – run up increasingly for waging the war that’s devastated its economy.

One asset that foreign investors want is Ukrainian farmland. Monsanto has been buying into Ukraine – or rather, leasing its land, because Ukraine has a law against alienating its farmland and agricultural land to foreigners. And a matter of fact, its law is very much the same as what the Financial Times reports Australia is wanting to do to block Chinese and American purchase of farmland.[1]

The IMF also insists that debtor countries dismantle public regulations againstforeign investment, as well as consumer protection and environmental protection regulations. This means that what is in store for Ukraine is a neoliberal policy that’s guaranteed to actually make the situation even worse.

In that sense, finance is war. Finance is the new kind of warfare, using finance and forced sell-offs in a new kind of battlefield. This will not help Ukraine. It promises to lead to yet another crisis down the road very, very quickly.

PERIES: Michael, let’s unpack the debt in this crisis. The war has led Ukraine into a deeper crisis. Talk about the devastation that has caused and what they have to manage in addition to what the IMF is trying to impose on it.

HUDSON: When Kiev went to war against Eastern Ukraine, it fought primarily the coal mining region and theexport region. Thirty-eight percent of Ukraine’s exports are to Russia. Yet much of this export capacity has been bombed out of existence. Also, the electric companies that fuel the electricity to the coal mines been bombed out. So Ukraine can’t even supply itself with coal.

What is so striking about all this is that just a few weeks ago, on January 28, Christine Lagarde, the head of the IMF, said that the IMF does not make loans to countries that are engaged in war. That would befunding one side or another. Yet Ukraine is involved in a civil war. The great question is thus when the IMF will even begin to release the loan it has been discussing.

Also, the IMF articles of agreement say that it cannot make loans to an insolvent country. So how on earth can it be part of a loan bailout for the Ukraine if, number one, it’s at war (which has to stop totally), and number two, it’s insolvent?

The only solution is that Ukraine will scale back its debts to private investors. And that means a lot of contrarian hedge funds investors. The Financial Times today has an article showing that one American investor alone, Michael Hasenstab, has $7 billion of Ukraine debts and wants to speculate in it, along with Templeton Global Bond Fund.[2] How is Ukraine going to treat the speculators? And then, finally, how is the IMF going to treat the fact that Russia’s sovereign fund lent 3 billion euros to the Ukraine on harsh terms through the London agreement terms that can’t be written down? Is the IMF going to insist that Russia take the same haircut that it’s imposing on the hedge funds? All of this is going to be the kind of conflict that’s going to take much more effort than even the solutions that we’ve seen over the last few days have taken on the military battlefront.

PERIES: And so how could Ukraine imagine getting out of this crisis?

HUDSON: It probably imagines a dream world in which it’ll get out of the crisis by the West giving it $50 billion and saying, here’s all the money you need, spend it as you want. That’s the extent of its imagination. It is fantasy, of course. It’s living in a dream world – except that a few weeks ago, George Soros came out in The New York Review of Books and urged Congress and “the West” to give Ukraine $50 billion and look at it as a down payment on military or with Russia. Well, immediately Kiev said, yes, we will only spend them on defensive arms. We will defend Ukraine all the way up toSiberia as we wipe out the Russians.

Bit today a Financial Times editorial said, yes, give Ukraine the $50 billion that George Soros asked for.[3] We’ve got to enable it to have enough money to fight America’s New Cold War against Russia. But the continental Europeans are saying, “Wait a minute. At the end of this, there’ll be no more Ukrainians to fight. The war might even spread into Poland and into elsewhere, because if the money that’s given to Ukraine is really for what the Obama administration and Hillary and Soros are all pressing for – to go to war with Russia – then Russia’s going to say, ‘Okay, if we’re being attacked by foreign troops, we’re going to have to not only bomb the troops, but the airports they are coming in through, and the railway stations they’re coming in through. We’re going to extend our own defense towards Europe.’”

Apparently there are reports that Putin told Europe, look, you have two choices before you. Choice one: Europe, Germany and Russia can be a very prosperous area. With Russia’s raw materials and European technology, we can be one of the most prosperous areas in the world. Or, Choice two: You can go to war with us and you can be wiped out. Take your choice.

PERIES: Michael, complex and interesting times in Ukraine, as well as at the IMF. Thank you so much for joining us.

HUDSON: It’s good to be here, Sharmini.

PERIES: And thank you for joining us on The Real News Network.

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  1. cripes

    Well, Michael, don’t sugarcoat it for us.
    Of course, it’s hard to argue with his perspective: the war state impoverishes everyone except the war profiteers, which now includes the western financial system in full flower.
    Maybe my 401K has an emerging market fund so I can profit from Slavic misery?
    That’s about the extent of our democratic participation in this fiasco.

    1. participant-observer-observed

      Hudson’s voice needs echoing, since the reality here is much worse than 401k investments gone evil

      As FL Rep A Grayson pointed out in January (Fake Trade TPP), with 14 yeas of half-billion trade deficits, USA has nothing left to export than death and destruction, and since no one wants to buy it, it can only be peddled through force or swindling.

      That’s one reason Hudson did not fail to mention Monsanto, which has found no one is interested in their sterile seeds. This is like dumping nuclear wastes in developing countries.

      1. Michael

        Or like dumping deplete uranium all over American war zones. I hate that we are a nation that only knows how to destroy. We are amazing in that regard. Our culture embraces death and destruction and pays lip service to constructive solutions.

        In the farming realm organic and even veganic agriculture is growing but it perhaps DECADES away from becoming a dominant force in agriculture even if that is possible. Most homeowners spray pesticides on their lawns then allow their infants, toddlers, and young kids to play in their toxic brew. Most do not question if its harmful to their children. They simply want green lawns to keep up the facade of the American dream.

        The thing that disturbs me is that most people completely agree with the standard American frame. At least they agree as long as they do not have to think about these issues. Once they start to think about our culture they need to deal with the inherent cognitive dissonance associated with a culture that embraces death and sex but claims to uphold all that is good and righteous in the world.

  2. James Levy

    Every army needs motivated and competent trigger-pullers. What this and other policies of Washington, Berlin, and Kiev are doing is making almost all potential Ukrainian trigger-pullers (except for the fanatical right-wing nationalist kind) disgruntled, demoralized, or already in flight from service. The more desperate measures the West and Kiev take to “win” this war the worse things get and the less likely they are to come out with even a respectable draw. The Donbas rebels and their Russian backers would be wise to just apply moderate pressure over time and let the Kiev government implode.

    1. fairleft

      I agree with your overall point, just that these phenomena have already been taking place. Moderate pressure is what the rebels, restrained by Russia, have been doing for the last six or seven months. And the lack of a real army (which the far right oligarch militias are not) that wants to fight the rebels has been the critical problem for the Kiev forces nearly since the war’s beginning. The Kiev forces’ main weapon has been indiscriminate bombardment of Eastern Ukraine’s towns and villages, which incompetent militias and demoralized conscripts are ‘good at’. But when attacked they run, as we’ve seen again in the last few weeks, and as we saw last summer.

      Quieting Debaltseve is an important victory, but I’m not sure whether Kiev’s forces have been pushed back sufficiently, out of artillery range of Donbass’s bigger cities. I hope so, Donbass deserves peace.

  3. Procopius

    This is why I’ve thought there was a Great Divide within the IMF. After reading Prof. Hudson’s comments here I’m thinking there isn’t really a divide — the so-called research part of the IMF is actually a public relations exercise. They come out and say, “Oh, our new research shows that we actually greatly underestimated the multiplier effect of austerity. So sorry, we won’t make that mistake again.” Then the knuckledraggers* who actually implement IMF policy go out and demand exactly the same terms the next time. From what I’ve read the IMF research people are actually pretty good, and lots of stenographers and right-leaning economists praise them to the skies as creating good policy, but they don’t actually affect policy at all.

    *knuckledraggers — originally the operations division in the CIA, the guys who were actually out there conducting coups and killing people, so called in contrast to the analysts. I don’t know what the operations people called the analysts, but I’ll bet it’s not fit for a family oriented publication.

  4. Pearl

    I hate that I’m always the one here at N.C. who has to have things “dumbed down” for me.

    But I have learned that when Michael Hudson speaks–I want to be in the front row and listening intently to what he has to say–because, where Professor Hudson leads, I ultimately always seem to follow. So, may I stop and regurgitate what I think Professor Hudson is saying–and then let you smart people correct me and, hopefully (and helpfully) enable me to make sure that I have, at least, a rudimentary grasp on that which he has said? (And to correct me and to further elaborate, if anyone has the time or patience for it.)

    Okay. So, if my pea-sized brain were asked to explain (in housewife-ese) what Professor Hudson is saying, would I be on the right track in asking the following questions and making the following assumptions?

    1) Is Professor Hudson suggesting that Putin is suggesting one of two options–that Russia, Germany, and Europe will either be allowed to play nice together (in the sandbox that we call the European Continent), making up a happy, well-balanced, partnership/playgroup, OR…… the U.S. will help fund the defense of Ukraine so that Ukraine will go to war defending itself against Russia (which Ukraine would, obviously and ultimately lose without U.S. boots on the ground)?

    2) And is Professor Hudson suggesting that Putin is saying that if the latter scenario is chosen, and that once a military operation involving the U.S. is underway, Russia would just go ahead and undertake a more hostility-induced “insertion of itself” into said German/European sandbox?

    3) Although not addressed directly in Professor’s Hudson’s commentary above, does Professor Hudson think that this is Putin’s Russia trying to re-assert Russia’s domination over the European continent or is this just Russia wanting to be taken as a serious and trustworthy playmate in the EU sandbox? (Is Russia having a little temper tantrum that is worth giving in to, or is this Russia being, ya know–just a re-branded USSR?)


    Because the latter seems like a pretty significant threat, doesn’t it?

    And if (we think) that Putin’s end-goal is “total bully-driven European sandbox domination,” that sort of seems like not a very good situation for Europe or for the U.S. (I would think?)

    And, furthermore, if “total bully-driven European sandbox domination,” is what Putin has in mind, I think I could see my way clear to allowing a few of our militaristic capabilities a bit closer-in and a bit more “visible” to Putin at this point in time. (I mean–we gotta park our fleet of battleships somewhere, anyway.)

    I don’t want a war with Putin’s Russia, but I think that I so much don’t want a war that I would tend to want for Putin to get the message that he’ll be given very little latitude in his behavior–until we’re absolutely certain that his intention is only to be allowed to make new friends and to flourish in the EU sandbox; not total sandbox domination.

    (And, btw, he can start by leaving his shirt on and leaving his tiger at home. I mean–we need to see that he is capable of confining himself to a few very basic social norms, right?) :-)

    Nevertheless, I’m still not sure that I have understood the true underlying issues as Professor Hudson has tried to convey them–and I have always looked to Professor Hudson as always being an authoritative commentator on “underlying issues.”

    So–I would greatly appreciate any feedback, insight or clarification that anyone has to offer me. Thanks.

      1. Pearl

        @ Sleepy.

        May I call you “Grumpy,” instead? :-)

        I’m sorry if I prompted you to distill down my words into some organic form of “Putin-hatred.”

        On the other hand, thank you for referring to my rhetoric as “cute.” (I must admit–I’m quite flattered. Ya know–I’m at that awkward age of 51–anything about me that may once have been considered “cute” is now sagging or drooping or expanding or wrinkling. And any promise of being “cute,” as in the Justice Ruth Bader Ginsburg sense of the word, the “lovable Bubbe” sort of “cute” –is still quite a few years off.) So I sorta feel like Rudolph the Red-Nosed Reindeer in the 1960s Rankin Bass classic of the same name when Clarice refers to Rudolf as “cute.” Indeed–all day long there’s gonna be an extra little bounce in my step as I think to myself, “Sleepy” at Naked Capitalism thinks my rhetoric is CUTE!!!

        I did not mean for my questions and/or comments to come off as sounding as though I hated Mr. Putin. Indeed, I have never met the man, and I do not know if I would like him or not. But my bar for hatred is a very high bar–like Adolf Hitler high. So I doubt very much that I would hate Mr. Putin.

        Perhaps, if I were a better writer, my view of Mr. Putin would have struck you as nothing more than a healthy respect for a well-armed and powerful leader of a large country that is largely run by a handful of powerful business oligarchs in whom I have no trust.

        I made reference to the shirtless thing and the tiger thing (which, in retrospect, I probably shouldn’t have done) only because my brain often frames world issues in terms of how I, a former preschool teacher, would deal with a playground of preschoolers.

        Putin’s behavior in seemingly insignificant forums (i.e. shirtless, tiger-hugging photo-ops) is something that I refuse to disregard as “quirkiness.” Indeed, I personally regard such behavior as a “red flag” that this is a person who operates outside of social norms, and is, therefore less predictable, and is therefore, more worthy of keeping a closer eye on.

        That’s all.

        Furthermore, as a preschool teacher–I would be keeping my eyes on my whole class. Putin? I would probably recommend a one-on-one aide for his initial mainstreaming. (It would benefit him in that it might help him to not fail, and it would benefit the other children who might be harmed by any of the many ways in which he might fail.)

        And, if Putin had been one of my preschoolers–I most-certainly wouldn’t have hated him; I’ve never hated a preschooler. I’ve never even disliked a preschooler.

        The IMF? I view them as administrators of the preschool who have never had any hands-on preschool teaching experience, and therefore, usually walk a precarious tightrope of being either useless or harmful. (Some of whom are UNintentionally clueless, some of whom are idiots, and some of whom are decent–yet exist in a bubble without realizing it. Which makes most of them ill-suited for their jobs.)

        I don’t exactly parade around N.C. as some sort of policy wonk. I am authentically what I claim to be. I’m literally just a housewife. And it just so happens that I used to teach preschool. And I am the first to admit that my “C.V.” does not measure up to the C.V. of practically any of the other folks who occasionally comment here.

        I cannot convey to you the extent to which I wish that I could bring to this forum the background and experience of one who was expert in international diplomacy or geo-politics or even basic economics and finance. But I realized a long time ago that Yves allows me to come to this forum with the only experience and background that I have–which is, admittedly, no more than and no less than that of an average housewife. (And, truth be told–I’m really not even any good at being a housewife.)

        So, I’m grateful to have a forum such as Naked Capitalism to read and to sometimes even feel welcome enough to chime in, despite my lowly status. Indeed, I always look forward to having my questions answered and I look forward to gleaning insightful feedback to my occasional comments.

        But now I know I can come here for compliments on my rhetorical style, too!

        Now. How about you go pour yourself a cup of coffee, “Sleepy,” and we’ll call you “Happy,” instead of “Sleepy” or “Grumpy?”

        (Did I mention that I used to teach preschool?)

          1. Ned Ludd

            Examples of Pearl’s sense of humor and good-natured-ness:

            • “Is Russia having a little temper tantrum that is worth giving in to, or is this Russia being, ya know–just a re-branded USSR?… Because the latter seems like a pretty significant threat, doesn’t it?”

            • “And, furthermore, if ‘total bully-driven European sandbox domination,’ is what Putin has in mind, I think I could see my way clear to allowing a few of our militaristic capabilities a bit closer-in and a bit more ‘visible’ to Putin at this point in time. (I mean–we gotta park our fleet of battleships somewhere, anyway.)”

            A “fleet of battleships” is an instrument of war and death. Rhetorical cuteness should not mask the implied threat of violence, when moving “a few of our militaristic capabilities a bit closer-in and a bit more ‘visible’ to Putin”.

            From Raúl Ilargi Meijer:

            [O]ur media told us Putin is the bogeyman. And ‘we’ never asked for any proof. […]

            But here we are: no proof and layer upon layer of sanctions. And nary a voice is raised in the west. If one is, it’s to denounce the Russians as bloodthirsty barbarians. Even though there is no proof they did anything other than protecting what they see as their own people. Something we all would do too, no questions asked.

            Ukraine defines 2014 as the year western propaganda came into its own. Not just fictional stories about an economic recovery anymore, no, we had our politico-media establishment ram an entire new cold war down our throats. And we swallowed it whole.

            2014: The Year Propaganda Came Of Age

            1. craazyboy

              I guess it’s not surprising the Obots will be out in support of the New Cold War – if they even plan on keeping it only a Cold War.

              No Drama Obama???? Puleeze.

              Besides – I like seeing Putin having to pander to Russian voters. (all the macho leader stuff). Makes him seem like less of a “Mad Dictator”.

            2. Pearl

              @Ned Ludd

              Perhaps I wasn’t clear, or perhaps my original comment was not put in the context of Michael Hudson’s interview.

              Or perhaps most everyone on this thread had a really crappy Valentine’s Day yesterday and they’re taking out their frustrations on me today. I don’t know.

              But I know this.

              I am the daughter of a Nazi Holocaust Camp Liberator. Here is a video clip of the day my father, an 18 year old Private from Sioux City Iowa, along with allied forces, liberated the Nazi camp at Ludwigslust.


              I was born into, raised in, and am a product of a family that is as about as “war-avoidant” as one could imagine. Nevertheless, I also understand and appreciate that there are times when it’s nice to have a military force so that you can do stuff like helping to stop the extermination of entire race of humans.

              I also appreciate that Russians were our allies in that effort, and I grieve for the (literally) millions of Russians who died as a result of that war.

              So please do not misunderstand or mis-characterize any of my statements as being that of some sort of war monger.

              Here is the part of Michael Hudson’s interview to which I was referring and then asking for clarification about:

              “[Bit] today a Financial Times editorial said, yes, give Ukraine the $50 billion that George Soros asked for.[3] We’ve got to enable it to have enough money to fight America’s New Cold War against Russia. But the continental Europeans are saying, “Wait a minute. At the end of this, there’ll be no more Ukrainians to fight. The war might even spread into Poland and into elsewhere, because if the money that’s given to Ukraine is really for what the Obama administration and Hillary and Soros are all pressing for – to go to war with Russia – then Russia’s going to say, ‘Okay, if we’re being attacked by foreign troops, we’re going to have to not only bomb the troops, but the airports they are coming in through, and the railway stations they’re coming in through. We’re going to extend our own defense towards Europe.’”

              Apparently there are reports that Putin told Europe, look, you have two choices before you. Choice one: Europe, Germany and Russia can be a very prosperous area. With Russia’s raw materials and European technology, we can be one of the most prosperous areas in the world. Or, Choice two: You can go to war with us and you can be wiped out. Take your choice.”

              So, my question/observation was just (if the question is should we arm Ukraine against the Russians) is that, no we shouldn’t–because there would (in all likelihood) be a greater loss of life if we did that. And, in alternate, I was asking –couldn’t we, instead, just park a few of our ships over there and hope that everyone will play nice (as nice as possible under the circumstances.)

              I’m not saying that the parking of a few battleships over there is a good idea–In fact, I’ll gladly concede that it’s quite possibly an entirely sucky idea. I was simply trying to come up with an alternative option to arming Ukraine with $50 billion of weaponry.

              We have a bloated military industrial complex; I hate that we do, and I wish that it weren’t the case.

              I was just wondering if–being that we already have this bloated military industrial complex–couldn’t we at least try to use it for something more innocuous–like just some plumage-showing as opposed to arming a country that would lead ultimately to lot of death and destruction–when, in the alternate, maybe just plumage-showing would do the trick.

              So I know this thread has out-lived its time–but I just couldn’t leave it inferred and dangling out there an insinuation that I am some sort of war-monger.

              1. OIFVet

                “Plumage-showing” should be reserved for mating rituals. In matters of war and peace, it leads to escalations.

                Perhaps you missed this past year’s attempts by the US to goad Russia into a war, and the Euro poodles willingness to submit to the US “leadership” even though that’s ultimately not in their own best interests. That’s what Putin would have been referring to when it came to the Euro’s choices. This past week also saw the Euro’s realization that the US is not interested in de-escalaton, and that any further escalation is only going to hurt Europe more. That’s why Merkel and Hollande went to Moscow. They know that cornering Russia can only lead to Russia lashing out, Russia will never back out as it is not their way, and besides they have no place left to back out to, what with NATO’s eastward march. . So please explain, if you can, how will “plumage showing” lead to de-escalation and enhanced Euro poodle security?

              2. Ned Ludd

                Sending a “fleet of battleships” over to Russia is an implied threat of force. Otherwise, if the goal is “just some plumage-showing”, why not send over some cruise liners or Wall Street yachts?

                If Russia parked a fleet of warships off of the coast of Florida – to discourage U.S. meddling in Latin America – would you support such an action?

              3. Michael

                I do not think you understand the importance of framing a discussion. I also think you are used to imposing the dominant culture on children therefore you are not aware of its role in shaping your frame of reference.

                In every post you have written you have discounted US aggression towards Russia. The sandbox analogy was hard to read. I would have lost my temper if I were talking to you in person. Many other posters/readers share my sentiments.

                In your analogy you are assuming that the US has complete control of the sandbox and that Russia wants to enter that sandbox and take it over. I’m not think you are even aware that the US has control.

                Russia is not acting inappropriately. The Russians have warned the US to not abuse international law for their own gain. The US has repeatedly ignored this advice and has made unilateral decisions (Kosovo independence, bombing Serbia (worst atrocities committed against not by the Serbs, Iraq II, Syria, Lybia, QE and I’m sure people could find dozens of other examples). Russia has decided to use those unilateral decisions has a precedent to take territory after a vote (Crimea). Russia has not sent troops into Ukraine even though it could use NATO involvement in civil disturbances as a precedent. Russia is a RATIONAL actor in this scenario. The US is basically being run by Nero.

                The problem with the sandbox is that the US bully does not know how to share with people that are not subservient. The Russians will not back down from Ukraine because there is nowhere for them to turn. In your sandbox scenario Russia is not a bully. They are a self confident pre-schooler aware of their strengths and limitations.

                They consider a NATO aligned Ukraine as an existential threat. This is when we leave the sandbox. If the US does not stop with its aggression then we will face WWIV (I accept neo-con logic that the Cold War was WWIII) The US is the aggressor in this scenario.

                Basically you can just assume the opposite of whatever narrative the NYT or other corporate newspaper/media is telling you.

                I hope this helps.

        1. juliania

          I believe sleepy’s comment was justified. No need to pile on. You gave two alternative negative assessments of Putin’s motives.

          How about this one? A ceasefire in Ukraine, commencing now on an important Russian feast day and the 70th anniversary of the dreadful allied firebombing of Dresden, has components to it that are hugely humanitarian and devoutly to be wished for. You seem to be ignoring that fact in your rush to judgment.

          I will leave it at that.

          1. Pearl


            Who gave two alternative negative assessments of Putin’s motives?

            I did?

            (I can’t tell for sure if your comment was directed at me or not.)

            Just in case it was aimed at me, please let me draw attention to the fact that I was quoting Michael Hudson when he said:

            Apparently there are reports that Putin told Europe, look, you have two choices before you. Choice one: Europe, Germany and Russia can be a very prosperous area. With Russia’s raw materials and European technology, we can be one of the most prosperous areas in the world. Or, Choice two: You can go to war with us and you can be wiped out. Take your choice.

            So those were NOT my assessments, and I don’t even know that those were Michael Hudson’s assessments. In fact I was trying to gain clarity on that point.

            And of course I want a ceasefire. I’m always in the “let’s stop shooting at each other” camp.

            Hope that clears it up.

            Geesh. Rough crowd today.

            (You have a pretty name, btw. I was gonna name my son Juliana–had he not been, you know–a son. I like Juliania even more.) :-)

          1. Pearl

            Hmmmm…..I don’t know if look anything like that.

            At the age of 41 I had all of the mirrors, cameras, and scales in our house removed and destroyed and I changed all higher-wattage bulbs down to 25s or lower.

            But I know that if I do look like her, I would be a black-leggings, son’s old XL sweatshirt clad version of her.

            (At least I still have enough dignity to not have yet purchased a Forever Lazy. That’s gotta count for something, right?)

            1. Otter

              Instead of keeping yourself attractive, you have claimed that others around you are less attractive than you. Then you have made yourself even more unattractive, in the foolish hope that we are stupid enough to think they must be real hags, just because you say so.

              Hint : failure to purchase a Forever Lazy means only that you, deep down in your wizzend heart, know you have no prospects, and you can only pretend to extend.

        2. OIFVet

          Whose “mainstream” are you referring to? American? If so, that’s rather blatant exceptionalism and “indispensable nation”-mongering. Which is the US political way of going shirtless on a horse while pledging to spread “freedum and democracy” everywhere there’s oil and/or other strategic interests.

    1. craazyboy

      The Pentagon has already revealed the Weird and Shocking Truth – Putin is one of the Lizard People!

      He has plans to subvert the IMF using alien mind control techniques and have the IMF loan Mexico 50 billion dollars so that Mexico may purchase arms (the defensive kind – like the US DEFENSE DEPT has!) and defend itself from US and NATO Adventurism. But Inquiring minds ask, “Will It Stop There?! Will Mexico roll across our borders?”. Of course they will. Central America basically sucks, so no reason to go that direction.

      Clearly, the West must act preemptively towards this real threat and defend whatever allies we install – anywhere in our free world!

      1. participant-observer-observed

        Thanks for that!

        Reminds me of my contemplation yesterday about how when certain people in AZ one day wish to flee south to get away from nefarious forces, they will have a hard time getting over that wall!

        1. craazyboy

          Yes, perplexing, I know. But we may have a 100 year drought going on too – so everyone is fcked everywhere. I’m waiting for Texas to really freak out when the Western US AND Mexico decide to migrate there.

    2. NotTimothyGeithner

      From Putin’s perspective, NATO has been rapidly growing, the U.S. is a drunk child on the world stage, Russian peace keepers have already been attacked by an adviser to Poroshenko*, has faced economic sanctions (an act of war by most standards), sees old time Bandarists running Kiev, is compared in public to ISIS and Ebola by the U.S. President, was accused of downing a civilian airliner**, and even has American officials publishing fake evidence of Russian troops in the Ukraine.

      War has been declared, and if the 500 million people in the EU can’t handle a population of 150 million recovering from the Yeltsin years and predatory Western finance (Putin kicked them out; his real sin), it would probably be for the best if Russian troops returned to Berlin.

      *Georgia hasn’t come up in the propaganda for a reason.
      **Obama and crew haven’t brought it up, and the official dutch report mentions a plane crash.

      Also, Putin likely means Western Europe can stop being a U.S. vassal or be frozen out of the Shangai Cooperative which includes Russia, China, India, Iran, Pakistan, and non-EU members of the USSR. The U.S. isn’t going to fuel Europe any time soon, and most of Europe’s governments are weak with major employment problems.

      As for Crimea, the old Ukraine ceased to exist after the coup, and every sane person in the world recognized that Russian defense depends on Crimea. They will never risk losing it.

    3. Santi

      The next blog entry (Itargi’s) is about being trapped in narrative. After reading it you might feel less so…

      Regarding narratives, I am very much remembered of Cuban missile crisis and subsequent naval blockade by the USA. I guess US people should not feel strange if Putin warns aggressively when they get too close to Russia. Negotiations between the IMF and Russia should ensue, I think Poroshenko, Merkel and Hollande are not really useful in the talks. (Tongue in cheek)

    4. OIFVet

      ” I think I could see my way clear to allowing a few of our militaristic capabilities a bit closer-in and a bit more “visible” to Putin at this point in time.” So you would? I just want to ask, who will pick up the tab and the responsibility for the consequences of your cock-swinging contest with Putin? These policies do not do anything to undermine Putin but they do a lot to destabilize US colonies, or as we colloquially refer to them, “allies”. I wrote about the latest such case a few days ago.

      Chaos only benefits American imperial elites, thus chaos is our main export these days. So why in the world would you want to support such non-sense? I doubt that’s where Michael Hudson will ever take you but you can bet your bottom dollar that’s where the warmongers in DC want to take us.

    5. participant-observer-observed

      Did you watch the video or just read the transcript? Because my viewing didn’t lead me to hear Michael’s thesis to be about Putin and Russia at all.

      Rather, Hudson is pointing out that once past military interventions, rape, pillage etc. of the brutish, arm-to-arm combat sort, we will still have the spectacle to observe of the economic rape & pillage to contend with. I.e., that the “solutions” on offer (Oligarchic tunnel vision as usual), from all directions, are just more of the same problem-creating dynamic.

      He is essentially elaborating on German Chancellor’s point of there being no military solution, and following it to the natural conclusion, which consequence remaining is absurdity showing economic solutions on offer are just a slower and more painful death and suffering than the brutish variety. (It is a logical argument form going back millennia “reduction to the absurd”)

      You point out an important issue: Hudson’s message is quite subtle, and therefore may be hard for many people to grasp (let alone try like yourself), which is actually quite sad, because somewhere in Ukraine right now some babies are being born to parents who want their kid to live a life not dictacted by death and destruction, of the slower or coarser varieties!

    6. Doug Terpstra

      False humility and self-deprecation hardly mask your russophobia. And to your purported honest inquiry with a clever twist of Hudson’s arguments: yep, you’ve got it exactly bass-ackwards (but points scored for creativity in regurgitating all the standard agit-prop behind a mask of feigned curiosity).

      One more time, the Ukrainian coup was US sponsored; the evidence, including recordings, is beyond dispute; all of the evidence of Russian aggression (including the now disappeared flight MH17) that you blithely presume has been demonstrably, repeatedly discredited; there is no evidence of Russian aggression, not in Crimea (peacefully re-admitted) nor anywhere else in Europe. And Hudson’s representation of Putin’s choice was not an ultimatum for one of two forms of domination as you disingenuisly paraphrased it, but one of mutually beneficial peace or war at only at their unilateral insistence.

      If your inqiry is genuinely honest, start your preschool education at another of today’s posts by Ilargi, and if you want to get to the beginning, visit his site.

      1. Vatch

        One more time, the Ukrainian uprising was not U.S. sponsored. The Ukrainian people were sick and tired of a succession of corrupt governments, and they wanted a change. Coups d’état are not characterized by massive crowds numbering in tens or hundreds of thousands. Coups d’état are carried out by small groups, often with the assistance of a country’s military. What the U.S. sponsored were some of (or many of) the members of the post-uprising temporary government. This is what was recorded by eavesdropping.

        The seizure of Crimea was mostly peaceful, but it was a military event, nonetheless. In February, 2014, Russian soldiers stationed in Crimean bases illegally left those bases and seized Ukrainian government installations. Of course, the Russians have plausible deniability, because the Russian soldiers were not wearing any insignia that might identify them as Russians; hence their nickname “the Little Green Men”. The referendum in March, 2014, was a farce worthy of North Korea: more than 96% in favor of unification with Russia. An honest election would probably still have approved the referendum, but 96%? Give me a break!

        Is Russia still paying for the use of the naval base in Crimea? They’re obligated to do so under an international treaty with Ukraine, but of course Russia unilaterally abrogated that treaty:

        The Agreement between Ukraine and Russia on the Black Sea Fleet in Ukraine, widely referred to as the Kharkiv Pact (Ukrainian: Харківський пакт)[1][2] or Kharkiv Accords (Russian: Харьковские соглашения),[3][4][5] was a treaty between Ukraine and Russia whereby the Russian lease on naval facilities in Crimea was extended beyond 2017 until 2042, with an additional five year renewal option in exchange for a multiyear discounted contract to provide Ukraine with Russian natural gas.[6] The agreement, signed on 21 April 2010 in Kharkiv, Ukraine, by Ukrainian President Viktor Yanukovych and Russian President Dimitry Medvedev and ratified by the parliaments of the two countries on 27 April 2010, aroused much controversy in Ukraine. The treaty was a continuation of a treaty signed in 1997 between the two nations. Shortly after the (disputed) March 2014 accession of Crimea to the Russian Federation,[7] Russia unilateral [sic] terminated the treaty on 31 March 2014.

        1. OIFVet

          “Coups d’état are not characterized by massive crowds numbering in tens or hundreds of thousands.” They were used as a cover. It’s called “legitimizing the junta”, giving it the appearance of “popular” support. Yes, the people were sick and tired of corruption. What they got was another set of corrupt flunkies, this time loyal to the US, who hijacked the Maidan. Your recurring desperate attempts to legitimize the junta by invoking the Maidan only delegitimizes the latter.

          “What the U.S. sponsored were some of (or many of) the members of the post-uprising temporary government.” LOL, funny how the US sponsorees and US citizens ended up taking the reigns, and not temporarily either. They must be exceedingly honest and democratic lovers of freedum.

          “Is Russia still paying for the use of the naval base in Crimea?” Inanity, thy name is Vatch. I will play though, so tell me how much is the US paying Cuba for Guantanamo?

          1. Vatch

            Crowds in coups d’état might be used as cover while the overthrow is occurring, or after it has already happened. They do not occur months before the overthrow, which is exactly what happened in Ukraine starting in November, 2013.

            I have no argument with you about the people who have joined the government since the uprising. Obviously the U.S. retains a huge influence.

            I think the U.S. does pay a trivial amount to Cuba for the Guantanamo naval Base under the terms of the treaty. This amount should be renegotiated. Even better, the U.S. should shut it down.

            1. OIFVet

              “They do not occur months before the overthrow…” I know your reading comprehension couldn’t possibly be this bad, even if you are a Chicago public school product. The US saw a great opportunity to throw a little coup d’etat and claim that it was the will of the crowds. Hence, my use of the term ‘cover’. It really is not that hard to comprehend for anyone with an ounce of objectivity. And since you brought up the Nuland recording, is she some clairvoyant latter day Nostradamus that she foresaw that Yats will be the PM several weeks prior to the coup?

              “I think the U.S. does pay a trivial amount to Cuba for the Guantanamo naval Base under the terms of the treaty.” No, it doesn’t. Cuba, unlike Ukraine, has a modicum of self-respect and refuses to accept the generous lease payment of $4,000. Also, since when is Russia supposed to pay a lease for anything located on its sovereign territory?

            2. Ned Ludd

              They do not occur months before the overthrow, which is exactly what happened in Ukraine starting in November, 2013.

              Chile, 1973.

              1. Vatch

                Okay, the history of the Chilean coup in 1973 is messy, and I guess mass demonstrations can be used to mask more nefarious activities. Still, the demonstrations in Chile were, as far as I can tell, on a smaller scale than the Ukrainian demonstrations, and didn’t last as long as the Ukrainian demonstrations. Also, the Chilean demonstrations occurred after there had been an abortive military coup attempt in June, 1973. The Chilean coup was clearly a military operation, from the failure in June to the success in September.

                1. OIFVet

                  Back then there was “communism” to justify sponsoring military coups. These days “communism” is gone and military coups are frowned upon, they don’t make a good visual. Not to mention the cognitive dissonance that accompanies “America, the guarantor of freedum and democracy” and “America, the sponsor of military dictatorships.” So tactics and methods have evolved, and so has propaganda. So we now have color revolutions to cloth our coups in democratic duds. We fund NGOs that disseminate propaganda and disinformation, groom native “leaders”, and otherwise serve as agents of US influence. We bring the promising “leaders” to the West for further grooming in the World Bank, or further education in one of our higher institutions of miseducation. Meanwhile we turn the financial screws on the targeted country through the IMF and the World Bank, while the “free” Western media misinforms the Western masses on what is really going on. Full spectrum hybrid warfare dominance. We liberally spread illiberality and call it “democracy and freedum”. The evidence surrounding the events in Ukraine fits this pattern perfectly.

                  1. Ned Ludd

                    Chapter Ⅰ – Organizing Chaos

                    The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.

                    Propaganda, by Edward L. Bernays, 1928

            3. Ned Ludd

              The words change, but the music stays the same.

              Earlier this year, we broke the story about USAID co-investing with Omidyar Network in Ukraine NGOs that organized and led the Maidan revolution in Kiev, resulting in the overthrow of President Viktor Yanukovych. […]

              The truth is, USAID’s role in a covert ops and subversion should be common knowledge—it’s not like the record is that hard to find. Either USAID has developed those Men In Black memory-zappers, or else—maybe we don’t want to remember. […]

              After populist left-wing candidate Jean-Bertrand Aristide won the first democratic elections in Haiti in 1990, USAID and the National Endowment for Democracy began pouring funds into opposition groups opposed to Aristide. Noam Chomsky writes:

              “Aid for ‘democracy promotion’ sharply increased, directed to antigovernment, probusiness groups, mainly through the US Agency for International Development (USAID), also the National Endowment for Democracy and AIFLD (the AFL-CIO affiliate with a notorious antilabor record throughout the Third World). One of the closest observers of Haiti, Amy Wilentz, wrote that USAID’s huge ‘Democracy Enhancement’ project was ‘specifically designed to fund those sectors of the Haitian political spectrum where opposition to the Aristide government could be encouraged.’”

              A few months later, in 1991, Aristide was overthrown in a coup.

        2. Doug Terpstra

          Not one but TWO Gallup polls tend to support the legitimacy of the election results in Crimea and there is little evidence of fraud or coercion… at the level suggested by your cogent “gimme a break” innuendo that Crimea is equivalent to North Korea.. This is further corroborated by the manifest peacefulness of the process itself and the year since — little or no unnrest or discontent. This was the overwhelming will of a people in the aftermath of an illegitimate coup, who had for generations prior always been Russian.

          And yes, one more time, what don’t you get about “f**k the EU” and “our man Yats”, and. “five billion dollars” and the neo-Nazis militantscCain and Pyatt pal around with.

          1. Vatch

            96%? No, I don’t believe it. Did either of your Gallup polls show such a percentage? Of course I could believe a smaller number.

            What don’t you get about hundreds of thousands of people demonstrating against a corrupt government?

              1. Vatch

                Thanks, I missed that. Still less than 96%, and I suspect that some of the respondents might have feared that the FSB would find out if they didn’t answer “correctly”. As I said, I could believe a smaller number.

                The annexation was handled very badly. It was a clear violation of the Budapest Memorandum of 1994, and it was unnecessary for Russia’s security, since they had access to their naval base at least until 2042, with an option to extend their lease to 2047. At the very least, the Russians should have waited until after the temporary Ukrainian government was replaced by the permanent government.

            1. lolcar

              Even if hundreds of thousands of people were demonstrating against a corrupt government (and let’s face it, it would be surprising if more than 1 in a 100 of those demonstrators came from east of the Dnieper), is that supposed to preemptively justify any and all actions of the government that follows. Personally, I think that the fact that the present government is allowing oligarch-funded private brigades to conduct military operations outside the aegis of the Ukrainian national army is a just a tad more corrupt than anything Yanukovych was accused of.

              1. Vatch

                I agree. Things are very bad in Ukraine, and the legitimacy of the uprising against Yanukovych certainly does not justify everything that followed. However, much of what followed was caused or worsened because Russia annexed Crimea, which increased the polarization of the country. I think the Kiev government would have been much more willing to negotiate with the people in the east if Crimea had still been part of the country. After the annexation, they feared, rightly or wrongly, that Luhansk and Donetsk were also going to be annexed by Russia.

                1. OIFVet

                  Trying to create your own alternative reality by endlessly repeating the same debunked arguments will not work. Crimea would still be part of Ukraine had the US not organized a coup d’etat in Kiev. You care so darn much about the glorious Maidan’s will, but don’t care one bit for the overwhelming majority of Crimea who made it clear by democratic means that they don’t care to be a part of Banderastan that illegally overthrew the president that they voted for, whatever his shortcomings. Fits your established pattern of hypocrisy re Russkies. Hate a Russkie, save Banderastan.

                  1. Vatch

                    And now we see the inevitable name calling. You just can’t tolerate other opinions, can you? If someone disagrees with you, there must be something wrong with that person; he must be a hypocrite or a hater. In your comic book world, everything is black or white.

                    1. OIFVet

                      First of all, I am the one who told you that the world is not black and white. That’s one lesson you seem to have picked up on. You are welcome.

                      Second, pointing out the underlying hypocrisy of your arguments is not name calling. It is pointing out the fact of it. So many of your stated positions on the larger issues facing us in the US are absolutely in tune with what I believe as well, but the moment it comes to the Russkies you drop your own stated positions like hot potatoes. Given that you have failed to articulate an explanation for this phenomenon, the only explanation that I have is that your hypocrisy is driven by a deeply innate hatred of Russkies. I would be happy to hear your alternative explanation and consider it on its merits.

                    2. Vatch

                      “Hypocrisy” has a different meaning from “contradiction”. The first has an ethical meaning, and the second is logical. When you accuse person of hypocrisy, it is an insult.

                      I have long believed in the existence of multiple causes for complex events. It is not something I learned from you. I recognize that both the U.S. government and the Russian government commit outrageous acts (other governments do so, too). You seem to think that the U.S. government (and U.S. allies) are the only ones who commit such acts. That is the nature of your black and white thinking.

                      I don’t hate Russians. In fact, most of the victims of Putin and the oligarchs are Russians. If I truly hated Russians, I would applaud Putin and the other oligarchs.

                    3. OIFVet

                      So you have long known that the world is not black and white yet your arguments re Ukraine are just that: black and white. It is possible to dismiss “self-contradiction” once, twice, three times. It is not possible to do so for an entire year. I know I used to stand up by you when others accused you of the same thing I am accusing you of now. You even thanked me for it, as I recall. So please spare me the non-sense about gratuitous name calling. Your arguments are willfully hypocritical and I got tired of giving you the benefit of the doubt.

                      Moreover, do link to where I’ve said that only the US does such things. I dare you, because that’s again a willful lie. I am no fan of Putin, oligarchy, or Eastern Orthodox non-sense, and have said so. That does not preclude me from seeing Russia’s POV and acknowledging its validity. You, OTOH, refuse to acknowledge that a US sponsored coup took place, because to do so would acknowledge the Russian position. You go to great lengths of inanity and weasel non-sense like “the US didn’t organize the coup but supported it after the fact”, as if that somehow makes it better even if such was the case. It wasn’t. Then there is the comparison of the Crimean Referendum to North Korea, which is a willful smear job and complete dismissal of the overwhelming desire of Crimeans to get away from the US-backed junta. No doubt that’s because you “love Russians and don’t want to see them suffer under Putin’s oligarchs.” But it’s ok for Crimeans to suffer under the US-backed banderites and oligarchs, right? Oh, you love them Russkies, in a LOVE IS HATE kind of way.

                      In short, your explanation is as substantive as your hypocrisy on Ukraine. Too bad if you don’t like me pointing that out, and good luck with your transparent attempt to get our hosts to ban me.

                    4. Doug Terpstra

                      OIFVet, you’ve dug down to the root of it here. I’m not sure if it’s a question of integrity or gut-level tribalism, but Vatch has clearly made up his mind and is determined to resist any amount of contrary evidence. Where Russia is concerned, this irrationality is not uncommon, given the deep-seated polarized ideological baggage. It seems to affect the mind at root level impervious to reason. An interesting dynamic, not unlike the Obama phenomenon for others.

      1. JTFaraday

        That said, Putin surely sees that the US neocons are throwing their weight around disordering the entire middle east, exporting the resultant Islamic jihadi threat** to Europe, destabilizing it indirectly from abroad as well as directly in the historic bloodlands that border Europe and Russia.

        Much like that Slavic population, Europe as a whole is caught between neocon promoters of violence and their neoliberal bureaucrats on one hand and Russia on the other. The neocons with whom Europe is technically aligned are no friend to any part of Europe whether Europe realizes it yet or not.

        And probably not because the neocons are yanking European puppet strings pretty good so far– Je suis Charlie!, etc. But if we need Putin to defeat the neocons, that is not a good a thing. What the f*ck is wrong with us?

        I think we should all be reading The Origins of Totalitarianism. In the general spirit of history repeating itself, the first time as tragedy, the second time as farce. You have move the cast around a bit of course.

        **This makes some neocons and their liberal war hawk doppelgangers look positively prescient, until you recall that Karl Rove stated that the US is an Empire now and that it creates its own reality.

  5. Steve H.

    Russia has far too much investment in corrupt European politicians to want a war with Europe (see Gerhard Schröder). The taking of Crimea at U.S. expense (see Nuland) was a strategic opportunity that would have been foolish to disregard. Russia is placing itself in the middleman position for the transport of commodities, the link between Asia and Europe, and has made the point in the past (during the Georgia uprising) that the infrastructure for European needs is tremendously vulnerable.

    Russia without Putin would likely still pursue these goals. The steppes are like the huge big brother at their back, such that there is no existential threat to the existence of Russia. He is making the point that Europe has far more to lose, if necessary Russia can cut them off and turn to Asia.

    Please review this article for insight into the internal processes of Russian governance:

      1. Pearl

        Thank you so very much, Steve H.!

        I am only a few paragraphs into your link, but it is providing the background and texture for which I wanted and needed to overlay the information in the Michael Hudson interview.

        (I didn’t want you to have wait an hour or two for me to thank you–so I’m going to get back to reading that which you sent. Thanks again, so much.)

    1. Pearl

      Wow. That website to which you linked is amazingly thought-provoking. (Dare I say….addictive!) :-0 I’m hooked. The comments are really interesting, as well.

      It’s fascinating to me that we have these two great powers, Russia and the United States; one currently being led by a President who has been been nicknamed “No Drama Obama,” and the other country being led by a seemingly 180-degree opposite personality–an “all drama,” or if you will, a “Tooten’ Putin.”

      Indeed, this in itself would tend to set the stage for some very interesting and very complex geo-politics.

      Have you read much about the (subset?) of Nash Equilibrium/Game Theory that is referred to as “Drama Theory?” I wonder how “Drama Theory” would fit into this conflict. It’s older work, but interesting:

      http://www.gametheory.net/News/Items/092.html (“Don’t Get Even, Get Mad: When it looks like you just can’t win, what’s the most rational thing to do? Try going completely crazy,” suggests Robert Matthews.)

      Anyway, thanks again for the link.

      1. Jef

        Pearl – It sounds like you are insinuating that putin is playing the part of “…completely crazy…” in your reference? Are you serious? The US has made it amply clear that we will go crazy on your ass if you even look sideways at us. “Bomb you back into the stone age”, even drop nuclear bombs on your innocent populations ( the only one who ever has btw).

        Not sure why I respond to you as it seems pretty clear you are a paid propagandist.

        1. Chris

          What was your first clue? Her over-the-top child-like wonderment or the phony, sugary-sweet “I’m just a simple housewife with some questions..” routine?

        2. Lambert Strether

          Actually, that’s a pretty serious charge that takes a lot more evidence than I’ve seen. Watch it.

          (No response from anybody on this expected or in fact desired. As you were, and carry on.)

    2. OIFVet

      “Russia has far too much investment in corrupt European politicians…” Not nearly as much as the US. See all “liberul” Euro politicians both in the East and in the West, eagerly selling their countries’ interests for a few silver dollars.

  6. lolcar

    Russia’s military budget is exceeded by France and the UK alone, let alone the EU as a whole, let alone the entire NATO alliance. Not sure how you get to Russia being in any position to “bully” Europe. Parking a fleet of battleships in Russia’s backyard or, more useful in this day and age, a fleet of ballistic missiles on Russia’s border would of course in no way be “bullying” because we in the West are such special snowflakes who only engage in violence reluctantly and for the highest of moral purposes.

    1. NotTimothyGeithner

      How much goes to the military and how much goes to hookers and blow is a huge deal. The U.S. has captive markets and can force F-35 contracts. The Russian planes need to work to be sold, and they don’t have oceans protecting them.

      NATO trained and equipped soldiers haven’t been fairing too well without overwhelming air power. See Iraq and Georgia. In the case of Georgia, the ex-President currently hiding out from trial in the now NATO ally here in the U.S. started the hostilities.

      1. lolcar

        Actually meant as a reply to Pearl’s interpretation of

        “Putin told Europe, look, you have two choices before you. Choice one: Europe, Germany and Russia can be a very prosperous area. With Russia’s raw materials and European technology, we can be one of the most prosperous areas in the world. Or, Choice two: You can go to war with us and you can be wiped out”

        as some kind of Russian threat of complete domination of Europe. But of course, you’re right – the actual fighting power per dollar spent may well be a lot lower in the NATO alliance.

    2. Pearl

      @lolcar regarding your reply to my comment:

      “Not sure how you get to Russia being in any position to “bully” Europe.”

      I’m not sure that they are–I guess I just assumed it was possible because of Russia’s nuclear capability and because of Russia’s sheer size? I dunno.

      But I really was just trying to have clarified if that is how the two choices given by Putin (per Michael Hudson) were intended to be taken. I really wasn’t sure–and that’s why I was asking.

      Btw, and thank you for bringing to my attention, the following information–which I did not know:

      “Russia’s military budget is exceeded by France and the UK alone, let alone the EU as a whole, let alone the entire NATO alliance.”

      I really didn’t realize that.

      And, btw, I agree that the U.S. is not a special snowflake that does not ever provoke war. Ironically (predictably) the Bush/Cheney/Rumsfeld misguided invasion of Iraq just made the United States more “hated,” less respected, and less trusted. So in a way, it just seems like we have to be more “on guard” now because we’re more hated/disrespected/distrusted (understandably) than we were before we (ever-so-thoughtfully) invaded a country that had nothing to do with 9/11 and helped to further destabilize an entire region of the world. It was the gift that keeps on giving, no?

      Anyway, I appreciate your insight. It’s difficult to keep up with geo-politics, and I was actually caught fairly off guard as to the Ukraine situation when it all exploded, and I’m trying to catch up in getting a grasp on it.

      (Although, now I’m thinking of giving up on ever being able to grasp it, as my brain seems ready to explode just in scratching the surface here!) :-)

  7. Pension60

    The EU is waging war on Russia for parts of eastern Europe that historically were Russian and have Russians living in them. And who cares about bits of the Ukraine, when the EU will starve to death the Ukrainians with the help of the IMF just as they did in Greece.

    At least with Russia, Ukraine people would eat.

    As Gandhi observed, People’s Politics Are Their Daily Bread.

    The UK has no EU debt, but starves its poor to such an extent that after the general election in May that the poor will not bother to come out and vote and leave a hung parliament of twiddledee and twiddledum parties, the UN will return to continue its investigation into early deaths and suicides caused by UK’s welfare reform.

    There is a way to get rid of the big neo-liberal parties altogether in this UK general election.
    See how on:

    I belong to no political member. I am a voter suffering our political class stuck 1000 years into the past, educated in an ancient feudal mindset of past aristocracy in public schools (elite private schools) and Oxford and Cambridge universities.

  8. MartyH

    Michael Hudson graced us at the last NY NC Meet-Up. He’s as blunt and brilliant in person. While I am sure his analysis on this is as accurate as is usual for him, I just wonder how the IMF expects to plunder what has already been strip-mined by the oligarchs and the other vultures for the past decade or more. I guess their specialty is extracting blood from stones.

    1. susan the other

      I think the objective is political control. It has worked quite well for decades. An impoverished country that is forced to privatize its most valuable resources is being reduced to a political non-entity. It’s the sovereignty question all over again.

    2. cassandra

      Au contraire, in some ways, a broken country is ideal for extraction. Privatised assets can be had on the cheap, and with declining living standards, labor costs plunge as well. True, birth rates fall and suicides rise, but managed correctly, the resulting social malaise ensures political docility, and drives those with the intelligence and energy to resist, to emigrate instead. What’s not to like? And in Ukraine, there’s even more to like. We have farmland (coveted by Cargill et al.), well-known iron ore and coal deposits, and less-frequently discussed strategic metals (guess who’s been the worldwide exporter of titanium sponge?). One report on such connections can be found at https://consortiumnews.com/2014/03/16/corporate-interests-behind-ukraine-putsch/, but a targeted internet search uncovers a lot more roaches hiding under these stones. Imposing such an austerity package is, after all, what the IMF is for.

    3. cassandra

      Au contraire, in some ways, a broken country is ideal for extraction. Privatised assets can be had on the cheap, and with declining living standards, labor costs plunge as well. True, birth rates fall and suicides rise, but managed correctly, the resulting social malaise ensures political docility, and drives those with the intelligence and energy to resist, to emigrate instead. What’s not to like? And, in Ukraine specifically, there’s even more to like: farmland (coveted by Cargill et al.), well-known iron ore and coal deposits, and less-frequently discussed strategic metals (guess who’s been the worldwide exporter of titanium sponge?). Previously-resisted fracking becomes possible; check out Burisma Holdings, where Joe Biden’s son Hunter plays footsie with Igor Kolomoisky. An excellent report can be found at Corporate Interests Behind Ukraine Putsch . IMF job creation in action.

      1. bob

        That’s also probably what pissed Putin off the most, re cargill. They were probably buying food from Ukraine with Roubles, not anymore? I haven’t been able to find any numbers that I trust on either russian imports of food, or Ukrainian exports. Even less on the denomination of the trades.

        It’s been some time since I looked. Maybe worth another look now.

        Food can really screw with the balance of payments. In this case, russia may now have to cough up dollars for food it might have been buying with roubles. Effectively, a double hit.

        Big deal.

  9. susan the other

    Back when Rummy was dismissing the EU as “Old Europe” and pushing all of eastern Europe to join NATO – that was 2001 – we were overwhelmed with news from Afghanistan and Iraq. Now that Middle East oil has been secured everything is fine. Oh wait. I must have missed something. As Bremmer cryptically informed us, Ukraine is part of the larger plan. Rummy wanted to call it a crusade – since those guys fought each other for centuries. But it was tactless so he settled on “Odyssey Dawn.” How poetic. Good thing he didn’t call it the Siege of Troy. Because the Achilles heel of NATO is – ta da! – oil. It is all about oil and NATO doesn’t have any. We shouldn’t be distracted with idiotic news reports about ISIL. That is until ISIL decides to take the Caspian. Then we will start to see what is really going on. In the meantime we will worm and weasel our way into a position in Ukraine to attack from the north. Maybe.

    1. NotTimothyGeithner

      The goal was never to attack Ukraine or Russia. The goal was to isolate Russia from both China and the EU and the International arms/tech market.

      The U.S. shale and natural gas industry wants to export to Europe, but they aren’t close to ready. If Russia develops, they will export, and between Russia and green energy, there goes that plan.

      As far as arms, would a country rather have a pos F-22/35 or a much cheaper S-400. F-35s aren’t needed to put down local thugs. They are a tool of shock and awe. Countries not interested in invasion don’t need them when cheaper alternatives to air defense exist. The U.S. controls it’s hemisphere. We don’t invest in air defense, just supremacy. It’s a market we just don’t compete in.

      1. Jack

        The F-22 isn’t a POS. It does exactly what it was designed to do. The problem is that what it was designed to do is largely superfluous, and it’s too expensive. We aren’t exporting it anyway, and since its chief selling point, the stealth, is almost certainly utterly worthless, potential buyers would be better off buying any of a number of other planes even if we were exporting it. Of course the constant slashing of military budgets as part of austerity means that most of Europe can’t even afford their own natively developed alternative, the Eurofighter Typhoon. You’re correct though that cheap and effective AA systems mean any air war isn’t likely to last long. And Russia would be playing defensive in any conflict. They’d just sit back and snipe the skies clear.

          1. Jack

            Air-superiority. Its job is to outfight anything in the sky and keep it clear so bombers and other aircraft can do their jobs. The F-35 by contrast is supposed to be a jack-of-all-trades that can both bomb and dogfight and be competent, though not exceptional, at both. It’s an evolution of the Cold War ‘high-low’ doctrine where the F-15 was the expensive super-fighter that would be sparingly deployed to dominate the skies while the F-16 was the cheap grunt plane that would be deployed in the hundreds. Only the F-16 turned out to be disproportionately effective for such a cheap plane and was adapted into a large variety of roles, including ground-attack. So the ‘low’ part of the doctrine changed and the F-35 was intended to be a continuation of that multi-purpose legacy.

            This is all on paper of course. The F-22 is the worlds first operational fifth-generation fighter, but because of all the design compromises made to maximize its stealth there are previous generation craft that are just as, and sometimes more, agile than it. The Typhoon has managed to score dogfight kills on the F-22 in real-world mock engagements, and there are multiple in-service and in-development Russian planes (MiG-29M, Su-35S, PAK FA/T-50) that have superior thrust-vectoring and can probably outmaneuver it.

            And the F-35 of course is an utter joke. It’s overweight, slow, maneuvers like a brick, can’t carry many weapons, likes to spontaneously burst into flame and, in the newest revelation, can’t fire its cannon because no one bothered to give it the software drivers to enable that feature. The F-18 may be showing its age and performs poorly in simulations against Chinese jets, but at least all of its parts work.

            1. John Jones

              Thanks for the overview Jack. I had thought it was air-superiority cause that is what I heard before. Just didn’t know if that is what you meant it was mainly designed to do. And was wondering how good it is supposed to be at it. Or how it fairs against other air-superiority fighters.

              I read the typhoon is good if it can get close to it though.

              1. Jack

                The design banks a lot on the stealth factor. Since stealth is almost certainly useless against low-band radar, which we’ve known since the Serbians shot down an F-117 over Kosovo, any war with Russia is going to be very bloody indeed. Aside from that gimmick it can pull some impressive maneuvers, but so can a number of other thrust-nozzle equipped planes.Oh, and it’s new oxygen system doesn’t work properly and pilots keep getting knocked unconscious during high-Gs.

  10. susan the other

    Hudson’s new book sounds great. “Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global Economy.” Excerpts please, lots of them.

    1. susan the other

      I hope there is a long chapter in it about the mind-boggling expenses of today’s modern military.

  11. Chief Bromden

    “Shock Doctrine” is alive and well… and I thought for sure Ukraine was another U.S. humanitarian exercise.

    “By encouraging reforms such as the deregulation of seed and fertiliser markets, the country’s agricultural sector is being forced open to foreign corporations such as Dupont and Monsanto.
    The Bank’s activities and its loan and reform programmes in Ukraine seem to be working toward the expansion of large industrial holdings in Ukrainian agriculture owned by foreign entities.”


  12. Jim Haygood

    Time limitations may have precluded Michael Hudson from mentioning Ukraine’s devaluation of the hyrvnia. WSJ, Aug. 2014:

    ‘[In late April] the IMF said Ukraine might need to inject the equivalent of 5% of the country’s gross domestic product, roughly $6 billion, into its banks to stabilize the financial sector if the exchange rate rose above 12.5 hryvnia to the dollar.’


    Bloomberg, Feb. 2015:

    ‘Ukraine’s foreign-debt costs ballooned after the central bank let the hryvnia depreciate by 31 percent on Feb. 5 to bring the exchange rate closer to black-market levels [of around 24 hryvnia per dollar], a move backed by the IMF.’


    Classically, IMF programs urged devaluation to boost export competitiveness. Last April the IMF said a hryvnia exchange rate below 12.5 would weaken the banks; now it’s about 26.3 hryvnia per dollar.

    Ukraine FinMin Natalie Jaresko seems to be ‘letting the hryvnia slide’ to get in the IMF’s good graces for the next tranche, even as the prospects for defaulting on foreign currency debt rise. This suggests a modified version of Michael Hudson’s IMF modus operandi:

    ‘Don’t pay your bondholders, so that you’re now in selective default to them and owing us, the IMF, to whom you can’t write down debts. ‘

  13. gordon

    There is a very simple solution to the problems of the Ukraine, one that should be familiar to any European statesperson: partition.

    I’m thinking a 3-way division between Russia, Germany and the US (which would act as the representative of Monsanto, Cargill and the other agribusiness giants). I’m sure the OSCE could form the basis for a Partition Commission which could meet (maybe in Vienna, for historical reasons) to supervise the negotiations over boundaries and set up an agreed framework for investment in the ex-Ukrainian territories and the marketing of their products. A continuing Commission of the Partitioning Powers might be required to oversee and if necessary adjust the operation of such arrangements. Obviously, no Ukrainian representatives would be required for this work. I think the partition should be complete, ie. there should be no remaining independent “Ukrainian” territory, because this would only be a platform for tiresome and destabilising Ukrainian irredentism.

    Such a solution along good old 18th Century lines would leave only the problem of outstanding Ukrainian debts. Perhaps the best solution here would be the formation of an international Sinking Fund to which workers in ex-Ukrainian territories would be required to contribute a proportion of their earnings. Setting up such a Fund could be another part of the work of the continuing Commission.

    I’m sure there’s much more to be said about partition arrangements once people get their heads around the basic idea and realise that moving Back To The Future in this way offers the best hope for a peaceful solution to the Ukrainian problem. After all, the problem is not new; it is a problem that has confronted European powers many times in the past and has often been solved in this way. Ask any Pole.

    1. fairleft

      Germany, the U.S. and Russia could set up regional administrators, former oligarchs or bureaucrats who demonstrated loyalty to one outside power or another during Ukraine’s ‘dark days’. Nicknamed ‘princes’, the regional administrators would commandeer regional city halls and fortify them into something resembling castles, and be supplied with adequate security or ‘palace guards’, so to speak. Those security forces would help to collect taxes or tribute, most of which would then be transferred to the banks of the intervening power. The children and spouses of ‘Princes’ would be required to spend most of the year in the capital of the supervisory power, to assure loyalty.

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