America Defeats Germany for the Third Time in a Century: The MIC, BARE and OGAM Conquer NATO

Yves here. Michael Hudson expands on his theme on how the conflict in Ukraine is the result of much bigger forces at work, and not necessarily the ones you have top of mind. He argues that preventing European countries, particularly Germany, from developing deeper economic ties with China and Russia is what’s really at stake.

Here, Hudson describes the hold key US interests have on foreign policy and how they see conflict as a way to hold off a possible fall in their status and power.

One small addition: Hudson ties the outsized political influence of his three foreign policy oligarchies, the oil and gas industry, the arms merchants, and the financiers, to Citizens United. While it is true that decision turbo-charged the role of money in politics, corporate interests have long determined the results of elections, as documented in Tom Ferguson’s classic, The Golden Rule. For instance, FDR had the support of the then-forward thinking enterprises, the large international players.

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “and forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year

My old boss Herman Kahn, with whom I worked at the Hudson Institute in the 1970s, had a set speech that he would give at public meetings. He said that back in high school in Los Angeles, his teachers would say what most liberals were saying in the 1940s and 50s: “Wars never solved anything.” It was as if they never changed anything – and therefore shouldn’t be fought.

Herman disagreed, and made lists of all sorts of things that wars had solved, in world history or at least changed. He was right, and of course that is the aim of both sides in today’s New Cold War confrontation in Ukraine.

The question to ask is what today’s New Cold War is trying to change or “solve.” To answer this question, it helps to ask who initiates the war. There always are two sides – the attacker and the attacked. The attacker intends certain consequences, and the attacked looks for unintended consequences. In this case, both sides have their dueling sets of intended consequences and special interests.

The active military force since 1991 has been the United States. Rejecting mutual disarmament of the Warsaw Pact countries and NATO, there was no “peace dividend.” Instead, the U.S. policy by the Clinton administration to wage a new military expansion via NATO has paid a 30-year dividend in the form of shifting the foreign policy of Western Europe and other American allies out of their domestic political sphere into their own “national security” blob (the word for special rentier interests that must not be named). NATO has become Europe’s foreign-policy-making body, even to the point of dominating domestic economic interests.

The recent prodding of Russia by expanding Ukrainian anti-Russian ethnic violence by Ukraine’s neo-Nazi post-2014 Maiden regime aims at forcing a showdown. It comes in response to the fear by U.S. interests that they are losing their economic and political hold on their NATO allies and other Dollar Area satellites as these countries have seen their major opportunities for gain to lie in increasing trade and investment with China and Russia.

To understand just what U.S. aims are threatened, it is necessary to understand U.S. politics and “the blob,” that is, the government central planning that cannot be explained by looking at ostensibly democratic politics. This is not the politics of U.S. senators and representatives represent their congressional voting districts or states.

America’s Three Oligarchies in Control of U.S. Foreign Policy

It is more realistic to view U.S. economic and foreign policy in terms of the military-industrial complex, the oil and gas (and mining) complex, and the banking and real estate complex than in terms of political policy of Republicans and Democrats. The key senators and congressional representatives do not represent their states and districts as much as the industrial interests of their major political campaign contributors. A Venn diagram would show that in today’s post-Citizens United world, U.S. politicians represent their campaign contributors, not voters. And these contributors fall basically into three main blocs.

Three main oligarchic groups that have bought control of the Senate and Congress to put their own policy makers in the State Department and Defense Department. First is the Military-Industrial Complex (MIC) – companies such as Raytheon, Boeing and other arms manufacturers, have broadly diversified their factories and employment in nearly every state, and especially in the Congressional districts where key Congressional committee heads are elected. Their economic base is monopoly rent, obtained above all from its arms sales to NATO, to Near Eastern oil exporters and to other countries with a balance-of-payments surplus. Stocks for these companies soared immediately upon news of the Russian attack, leading a two-day stock-market surge as investors recognized that war in a world of cost-plus “Pentagon capitalism” (as Seymour Melman described it) provided a national security umbrella. Senators and Congressional representatives from California and Washington traditionally have represented the MIC, along with the Solid pro-military South. The past week’s military escalation promises soaring arms sales to NATO and other U.S. allies. Germany quickly agreed to raise is arms spending to 2% of GDP.

The second major oligarchic bloc is the rent-extracting oil and gas sector, joined by mining (OGAM) riding America’s special tax favoritism granted to companies emptying natural resources out of the ground and putting them into the atmosphere. Like banking and real estate, the aim of this OGAM sector is to maximize the price of its energy and raw materials so as to maximize its natural-resource rent. Monopolizing the Dollar Area’s oil market and isolating it from Russian oil and gas has been a major U.S. priority for over a year now, as the Nord Stream 2 pipeline threatened to link the Western European and Russian economies together.

If oil, gas and mining operations are not situated in every voting district, at least their investors are. Senators from Texas and other Western oil-producing and mining states are the leading lobbyists, and the State Department has a heavy oil-sector influence providing a national-security umbrella for its special tax breaks. The ancillary political aim is to ignore and reject environmental drives to replace oil, gas and coal with alternative sources of energy. The Biden administration accordingly has backed the expansion of offshore drilling, supported the Canadian pipeline to the world’s dirtiest petroleum source in the Athabasca tar sands, and celebrated the revival of U.S. fracking.

The foreign-policy extension is to prevent foreign countries not leaving control of their oil, gas and mining to U.S. OGAM companies from competing in world markets with U.S. suppliers. Isolating Russia (and Iran) from western markets will reduce the supply of oil and gas, pushing prices and corporate profits up accordingly.

The third major oligarchic group is the symbiotic Finance, Insurance and Real Estate (FIRE) sector is the counterpart to Europe ‘s old post-feudal landed aristocracy living by land rents. With most housing in today’s world having become owner-occupied (with sharply rising rates of absentee ownership rising since 2008 and the wave of Obama evictions, to be sure), land rent is paid largely to the banking sector. About 80 percent of U.S. and British bank loans are to the real estate sector, inflating land prices to create capital gains – which are effectively tax-exempt for absentee owners.

This Wall Street-centered banking and real estate bloc is even more broadly based on a district-by-district basis than MIC. Its New York senator from Wall Street, Chuck Schumer, heads the Senate, long supported by Delaware’s former Senator from the credit-card industry Joe Biden, and Connecticut’s senators from the insurance sector centered in that state.  Domestically, the aim of this sector is to maximize land rent and the “capital’ gains resulting from rising land rent. Internationally, the FIRE sector’s aim is to privatize foreign economies, above all to secure the privilege of credit creation in U.S. hands, so as to turn government infrastructure and public utilities into rent-seeking monopolies to providing basic services at maximum prices (health care, education, transportation, communications and information technology) instead of at subsidized prices to voters.

Wall Street always has been closely aligned with the oil and gas industry, back to the days of Standard Oil. These are the three rentier sectors that dominate today’s post-industrial finance capitalism. Their mutual fortunes have soared as MIC and OGAM stocks have increased. And moves to exclude Russia from the Western financial system (and partially now from SWIFT), coupled with the adverse effects of isolating European economies from Russian energy, promise to spur an inflow into dollarized financial securities

It is more helpful to view U.S. economic and foreign policy in terms of the military-industrial complex, the oil and gas (and mining) complex, and the banking and real estate complex than in terms of political policy of Republicans and Democrats. The key senators and congressional representatives do not represent their states and districts as much as the industrial interests of their major political campaign contributors. That is why neither manufacturing nor agriculture play the dominant role in U.S. foreign policy. The convergence of policy aims of America’s three rentiergroups overwhelms that of labor and even of industrial capital. That convergence is the defining characteristic of today’s post-industrial finance capitalism. It is basically a reversion to economic rent-seeking, which is independent of the politics of labor and capital.

The dynamic that needs to be traced today is why this oligarchic blob has found its interest in prodding Russia into what Putin evidently viewed as a do-or-die stance to resist the increasingly violent attacks on Ukraine’s eastern Russian-speaking provinces of Luhansk and Donetsk.

The Rentier “Blob’s” Expected Consequences of the New Cold War

As President Biden explained, the current military escalation (“Prodding the Bear”) is not really about Ukraine. Biden promised at the outset that no U.S. troops would be involved. But he has been demanding for over a year that Germany prevent the Nord Stream 2 pipeline from supplying its industry and housing with low-priced gas and turn to the much higher-priced U.S. suppliers.

U.S. officials first tried to stop construction of the pipeline from being completed. Firms aiding in its construction were sanctioned, but finally Russia itself completed the pipeline construction. U.S. pressure then turned on the traditionally pliant German politicians, claiming that Germany and the rest of Europe faced a National Security threat of Russia turning off the gas, presumably to extract some political or economic concessions. No such demands could be thought up, and so were left obscure and blob-like.

Germany refused to authorize Nord Stream 2 from officially going into operation, and a major aim of today’s New Cold War is to monopolize the market for U.S. shipments of liquified natural gas (LNG). Already under Donald Trump’s administration, Angela Merkel was bullied into promising to spend $1 billion building new port facilities for U.S. tanker ships to unload natural gas for German use. The Democratic election victory in November 2020, followed by Ms. Merkel’s retirement from Germany’s political scene, led to cancellation of this port investment, leaving Germany really without much alternative to importing Russian gas to heat its homes, power its electric utilities, and to provide raw material for its fertilizer industry and hence maintenance of its farm productivity.

So the most pressing U.S. strategic aim of NATO confrontation with Russia is soaring oil and gas prices. In addition to creating profits and stock-market gains for U.S. companies, higher energy prices will take much of the steam out of the German economy.

Higher gasoline, heating and other energy prices also will hurt U.S. consumers and leave less  in family budgets for spending on domestic goods and services. This could squeeze marginalized homeowners and investors, leading to concentration of absentee ownership of housing and commercial property in the United States, along with buyouts of distressed real estate owners faced with soaring heating and energy costs in other countries. But that is deemed collateral damage to the post-industrial blob.

Food prices also will rise, headed by wheat. (Russia and Ukraine account for 25 percent of world wheat exports.) This will squeeze many near Eastern and Global South food-deficit countries, worsening their balance of payments and threatening foreign debt defaults.

Russian raw-materials exports may be blocked by the currency and SWIFT sanctions. This threatens to cause breaks in supply chains for key materials, including cobalt, palladium, nickel, aluminum (made largely from electricity). If China decides to see itself as the next nation being threatened and joins Russia in a common protest against the U.S. trade and financial warfare, the Western economies are in for a serious shock.

The long-term dream of U.S. New Cold Warriors is to break up Russia, or at least to restore its managerial kleptocracy seeking to cash in their privatizations in Western stock markets. OGAM still dreams of buying majority control of Yukos and Gazprom.

Wall Street would love to recreate a Russian stock market boom.

Russia’s Intentions to Benefit from America’s Unintended Consequences

What does Russia want? Most immediately, to remove the neo-Nazi anti-Russian core that the Maidan massacre and coup put in place in 2014. Ukraine is to be neutralized, which to Putin means basically pro-Russian, dominated by Donetsk, Luhansk and Crimea. The aim is to prevent Ukraine from becoming a staging ground of anti-Russian moves a la Chechnya and Georgia.

Putin’s longer-term aim is to pry Europe away from NATO and U.S. dominance – and in the process, create a new multipolar world order. The aim is to dissolve NATO altogether, and then to promote the broad disarmament and denuclearization policies that Russia has been pushing for. Not only will this cut back foreign purchases of U.S. arms, but it may end up leading to sanctions against future U.S. military adventurism.

Now that it is obvious that (1) NATO’s purpose is aggression, not defense, and (2) there is no further territory for it to conquer from the remains of the old Soviet Union, what does Europe get out of continued membership? It is obvious (despite the many claims otherwise) that Russia has no desire to or interest in again invading Europe. It has no upside – as it had nothing to gain by fighting Ukraine, except to roll back the NATO-backed attacks on Novorossiya.

Will European nationalist leaders (the left are largely pro-US) ask why their countries should pay for U.S. arms that only put them in danger, pay higher for U.S. LNG and energy, pay more for grain and Russian-produced raw materials, all while losing the option of making export sales and profits on peaceful investment in Russia – and perhaps losing China as well?

The U.S. confiscation of Russian monetary reserves, following that of Afghanistan’s reserves (and England’s seizure of Venezuela’s gold stocks held there) threaten every country’s adherence to the Dollar Standard, and hence the dollar’s role as the vehicle for foreign-exchange savings by the world’s central banks, mutual holdings of each other’s currencies.

On a more long-term level, Russia is likely to join China in forming an alternative to the U.S.-dominated IMF and World Bank. Putin’s announcement that he wants to arrest the Ukrainian Nazis to hold a war crimes trial seems likely to imply an alternative to the Hague court. Only a new international court could try war criminals extending from Ukraine’s neo-Nazi leadership all the way up to U.S. officials responsible for crimes against humanity as defined by the Nuremberg laws.

Did the American Blob Actually Think Through the Consequences of NATO’s Provocation?

It is almost black humor to look at U.S. attempts to convince China that it should join the United States in denouncing Russia’s moves into Ukraine. The most enormous unintended consequence of U.S. foreign policy has been to drive Russia and China together, along with Iran, Central Asia and countries along the Belt and Road initiative.

Russia dreamed of creating a new world order, but it was U.S. adventurism that has driven the world into an entirely new order – one that looks to be dominated by China as the default winner now that the European economy is essentially torn apart and America is left with what it has grabbed from Russia and Afghanistan, but without the ability to gain future support.

And everything that I have written above may already be obsolete as Russia and the U.S. have gone on atomic alert.

With such talk I’m brought back to my discussions with Herman Kahn 50 years ago. He became quite unpopular for writing Thinking about the Unthinkable, meaning atomic war. As he was parodied in Dr. Strangelove, he did indeed say that there would indeed be survivors. But he added that for himself, he hoped to be right under the atom bomb, because it was not a world in which he wanted to survive.


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    1. The Rev Kev

      Well for a start, there is this-

      They actually use SS signage from WW2. And before you say that this is only one battalion, they are only the tip of a very long spear of ultra-nationalism in the Ukraine that has adopted the methods and insignia of the German Nasties from WW2 and for whom their grandfathers fought. Man, they even do the salutes from that era and have torchlight parades. When somebody shows you who they are, believe them. Seriously.

      1. John Mc

        I think there is merit to both points here.

        The Ukrainian nationalist movement, and many of the people doing the actual fighting, including many political leaders have ties to or are overtly Azov Battalion creepy crawlies from a regional perspective that claim many of the nazi precepts (from eastern Poland to Belarus/Romania and well into Ukraine). So, the evidence is pretty clear in picture, basic regional history, and arming of this area of the world – there is a great deal of anti-semitic, anti-immigrant and white supremacist public rhetoric.

        Now, how does this related to ordinary Ukrainian (not involved in color revolutions, not trained by US or NATO forces, and have lived in this area for decades without this kind of attention or conflict (prior to 2010)? Well, I am not so sure that the label of fascist or nazi’s characterizes these people, and in fact it may be that Ukraine is such a dependent nation on it allies after its independence that they (and many of its people) see the nazi’s as the only ones who are fighting on their behalf. Does this make them neo-Nazis?

        And what about the strains of authoritarianism and fascism within the Russian power structure (I am sure they have their warmongers too – of which has become harder and harder to keep at bay for Putin). So, this region, in its entirety imo contains a great deal of fascist thinking – but I am not convinced we can paint ordinary citizens in Ukraine as belonging to the most strident and abhorrent parts of nazi warfare culture.

        Then again, I could be wrong. I am not on the ground in Ukraine, Russia or the regional areas.

        1. juno mas

          …but polls in the US show that 50% of voters don’t support our governments involvement in Ukraine. Is the US government truly democratic?. There were major protests throughout the US protesting any invasion of Iraq in 2003. What happened?

          My point is that Michael Hudson is dead-on with his assessment.

        2. Sergey P

          It seems to me that Michael Hudson does not paint ordinary citizens of Ukraine as nazi. Neither does, in fact, mr. Putin. Rather, he might feel he needs to liberate the people of Ukraine from nazi elements. Though by now I would assume people of Ukraine would disagree any liberation is going on.

      2. Liu Zeyuan

        There are also neo-nazi elements fighting in the volunteer batallions of the DNR and LHR, google it. Do you think that means the Russian government by extension must necessarily be Nazi from top to bottom? Not at all- and it’s exactly the same with the government of Ukraine.

        There are certainly Neo-nazi elements in Ukraine, and it is arguable that they play an outsize role in politics in relation to their actual size- but that still doesn’t justify baldly asserting that the Ukrainian government is neo-nazi from top to bottom.

        Ask yourself what is the ethno-religious background of Ukraine’s president (Jewish), is that something you would expect to see in a neo nazi polity? What is the actual size of neo nazi parties in Ukraine’s legislature (something like 2%), does that justify glossing the entire country as neo nazi?

        There is an extraordinary amount of woolly thinking going around currently about this conflict and James E Keenan is very right to question it.

        1. Yves Smith Post author

          The neo Nazi are only 1-2% in the Ukraine population but right after the Maidan coup, they were heavily overrepresented in the government, meaning the executive, not the legislature, at ~15% of the positions, most importantly, the ones in charge of domestic security.

          As for Zelensky, as we have said elsewhere, he won with 75% of the vote and one of his key campaign promises was to improve relations with Russia. Apparently the US changed his mind on that.

          And even if Zelensky didn’t actively promote them, the Azov Battalion went from being irregulars that aided the Ukrainian army to an official unit with considerable clout. This happened after the coup and continues on Zelensky’s watch.

          1. PDC

            Please Yves, provide evidence that Zelensky or the government are controlled by US. Otherwise this is just another US-centric theory that overestimates the power of US, albeit in a sort of “dark” way.

            1. Yves Smith Post author

              1. Zelensky was elected to improve relations with Russia. He campaigned on that and got 75% of the vote. He proceed to support escalation against Russia in Donbass (accepting and using US Javelin missiles).

              2. Zelensky about 48 hours ago agreed to negotiate with Russia and then reversed himself. That was widely believed to be the result of US pressure. I infer the talks are now back on.

              1. michael hudson

                Zelensky’s bodyguards are Right Sector guys, which makes him afraid to “sell them out” by agreeing to let Russia capture them and put them on war-crimes trial.
                Putin’s insistence on a war crimes trial should provide all the evidence. Johnsons’s Russia List has been documenting how the Maidan massacre was done by the Right Sector and the neo-Nazis, and the fighting in Mariupol right now is against the Azov Battalion’s center.
                The Saker and other sites have been providing the background, along with JRL. it’s a reply of Pinochet in Chile.

                1. Hopelb

                  I love you.
                  Absent from your analysis is the fact that Putin was in Klaus’ (WEF) Young World Leaders program. Is it possibly that both your analysis, and the WEF’s goals’ align? That the end point is obscured by the war, which does indeed benefit monopolists(and isn’t that always the point?)?

              2. PDC

                Yves, in reverse order
                2 Sorry, this can be interpreted in 10 different ways.
                1 Deserves discussion. The situation in Donbass did spin rapidly out of control already in 2014, under the presidency of the questionable Poroschenko. The same year, Russia proceeded to the annexation of Crimea and started to send military aid, including military personnel, to the separatist region of Donbass.
                Several attempts to find a peaceful solution, based on the integrity of Ukrainian borders and “self-rule” of the rebel regions, failed. To which extent the responsibility of this failure can be attributed to a) the intolerance and aggressiveness of the local population (on both sides), b) to the repression ordered by Ukrainian government (possibly to some extent under US influence) and c) to the Russian policy of destabilization… well, it depends on the sources that one trusts.
                Speaking of Javelin missiles, to my knowledge they were delivered to Ukraine already in 2018 (Zelensky became president in 2019) but the Russians denounced their use against their troops in 2021, so he can be considered responsible of this decision. I have found no conclusive evidence that Zelensky did “support escalation”, but one can argue that, lacking vision and experience, and fearing to follow the fate of Czechoslovakia in 1938, he refused a “federalization” of Ukraine, failing in providing a realistic way out of an already compromised situation, where opposite nationalism had been cemented by years of violence. US pressures and promises? For sure, but were they decisive?
                A German analysis of his conundrum, dating back to 2019, can be found here:

            2. Duke of Prunes

              You can also reference the leaked Vicky Neuland call from 2014? with the infamous “family blog the EU” quote. This quote got all the attention, but the topic of the call was US State Dept folks discussing who should get which positions in the new Zelensky government. Now, would the US support placing people in high government places who they felt they couldn’t control? Why should the US even have a say in who got which positions?

              1. JohnA

                Zelensky was not on the political scene at the time of the Maidan coup. The Nuland choice ‘Yats is the guy’ became prime minister but was ousted and ran off to America. Poroshenko later became president and pushed a strong anti donbass line (the breakaway republics were not allowed to vote) until he lost to Zelensky who was elected, as Yves says, on a platform to get on better with Russia. But he soon pretty much followed the Poroshenko line and very recently upped the anti in the east and ‘forced’ Putin to say ‘no mas’ and play the Clintonesque R2P card. This upping the anti was likely due to pressure from Biden, Nuland and Blinkie.

            3. Predrag

              If the US embassy in a country is a workplace of just under 900 people it’s probably safe to assume that the country is not so much controlled as literally run by the US.

          2. Liu Zeyuan

            I am pro- raising the alarm about the Azov battalion, and also acknowledge that neonazis play an outsize role in Ukrainian politics relative to their actual size.

            However, I do not think this means that Ukraine=nazi or that one can so glibly throw around assertions about ‘Ukraine’s neonazi government’ like they’re fascist Italy or the Third Reich or something, it’s just factually incorrect. Not only that but I think it’s irresponsible to do so when ‘denazification’ is being used as a key casus belli by Russia, a country which in fact also has a massive Neo nazi problem.

            Incidentally, Yves- I was actually arguing with you in the comments section a while ago about the rightness of supporting Taiwanese sovereignty. Seeing what is happening to Ukraine has made me re-evaluate my position on this somewhat so I do apologise for that.

            I’m now realising that Taiwan/Ukraine’s status as a US client aside, the population of these countries are entitled to security and not to live in fear of invasion. But I’m still unsure about the position of the anti-war left should be in balancing conflicting priorities of opposing US expansionism vs. respecting the wishes of client state populations that genuinely believe their interests are served by standing with the US against Russia or China as the case may be.

            1. The Rev Kev

              When a government has its military shell and bomb a population of its own citizens for eight long years causing thousands of deaths and a President of that country boast that their children will go to school while those of the separatists will be huddled in cellars, I am going to say that that is a pretty good indication of what sort of government that this is. ‘When they show you who they are, believe them.’

              1. Liu Zeyuan

                You’re describing the civil war between Ukraine and the Eastern separatists in a very selective way. You only need to briefly look through the OCSE website to realise that there were extensive ceasefire violations on both sides.

                But putting that aside, the Ukrainian government are bad but does that make them neo-nazi? The Syrian government in their efforts to end the ongoing civil war have also extensively shelled rebel held areas that were densely populated with civilians (e.g. Aleppo). Does this make them ruthless? Arguably. Does this make them neo-nazis? No.

                ‘When they show you who they are, believe them.’

                If we apply this to Russia, what does it seem they are showing us? Honest question. I ask because I like many other people here prior to the invasion was extremely assured that Russia was a cautious actor simply trying to ensure its security. Does this reckless military adventurism fit with that understanding? I would argue no, but happy to be proven wrong.

                1. Yves Smith Post author

                  Um, how about the 1.5 to 2 million refugees that have fled to Russia? It was 1 to 1.5 million as of 2016 depending on who was counting. The government has barred the use of Russian and there are reports of other forms of persecution of ethnic Russian, which are hard to dismiss wholesale in light of the exodus.

                  1. Liu Zeyuan

                    It would be bad if I were dismissing the violence on the Ukrainian side but I’m not. I’m questioning whether the Ukranian government can be classified wholesale as ‘Neonazi’ and in particular whether pointing to ceasefire violations or the human costs thereof as being enough to substantiate the claim that Ukraine is a neonazi government.

                    Again, the Syrian government’s actions in their civil war have directly caused large numbers of casualties and displacement of refugees. This is bad but it doesn’t justify classifying them as Nazis. And similarly to the Ukranian case, the Syrian government are fighting rebels who are also causing large numbers of civilian deaths and displacement. So just pointing to the actions of the Syrian government would be selective, the same is true for the case of Ukraine.

                    I’m pushing back on this because I believe accepting generalisations of Ukraine as being a Nazi state, a Nazi society, rather than just one which (like a lot of Post-soviet countries,including Russia) has a small but not inconsiderable Neonazi presence, is conceptually dangerous. Accepting the wholesale generalisation of a country as ‘nazi’ or ‘terrorist’ or ‘totalitarian’ or anything like that (thinking of Afghanistan and China respectively here) is the first step to dehumanizing a people, to compartmentalising the suffering of civilians in Kyev or Kharkiv or wherever else that have never had a Nazi thought in their life and just want the bombing to end and to be safe.

                    Such dehumanisation of the enemy is a very well established tactic of war and I think this is what’s really driving Russia’s claims about ‘de-nazifying’ the country (while ignoring their neonazi problem at home). If there is even a chance of that being the case I want no part of it, hence my pushing back on this.

                    1. Xiaolei Mu

                      Ukraine has a neonazi problem. Russia has a neonazi problem. But the size of their respective neonazi problems are different by orders of magnitudes.


                      This article by the “Bundesanstalt für politische Bildung” (German Federal Agency for Civic Education) goes in-depth about the recent history of Russian neonazism. It’s in German of course, but I’m sure DeepL helps. Besides listing several atrocities committed by the Russian neonazis though, the article notes that there has been a systematic governmental crackdown on them since 2008, which pushed their organizational structures into the Russian underground. It also makes clear that despite their danger and readiness for wanton violence, they have always been at best a political fringe group. As for the Russians allowing their own neonazis to fight in the Donbass, the article notes that the issue of Maiden 2014 politically fractured their ranks, which resulted in Russian neonazis facing each other either as part of the Ukrainian or the seperatist forces.

                      Or to put in other words, it seems the Russian government found an elegant solution in deposing/weakening their neonazis, whom they clearly see as deplorables, by providing them a battleground to kill each other. This should also make clear that Putin’s mission statement of ‘denazification’ isn’t rooted in any kind of double standard.

                      Compare this to the state of neonazis in the Ukraine. Their Azov battalion is a genuinly recognized part of their military forces. As the above comments stated, they also make up a significant part of Ukrainian executive and the racist laws show their opinions are heard and considered. So let me pose a question: How far should this state of affairs continue until intervention is deemed morally acceptable? Sure, I agree that Ukraine isn’t a full-on nazi state like Third Reich Germany yet. But that’s the point. Yet. How long is this systemic racism supposed to fester? Until the Svoboda party gets even more seats in parliament? Until they start to appoint judges and prosecutors from their own ranks? Until their influence in the executive increases even more? Until they are allowed to oversee their own state-sanctioned concentration camps?

                      I’m speaking in hypotheticals, but considering the trajectory of where things were heading, can this scenario be dismissed? Especially in face of the most heineous act of all: the collective silence of the West and their MSM. If Uko-nazis were part of the headlines on the same scale as the Russian invasion is right now, pressure and outrage from Western citizens would’ve forced politics to eradicate this problem at the root. It would have also thrown several wrenches into the USA’s plan to forge Ukraine into a weapon against Russia, making the current invasion a moot point. That’s exactly the reason the media was either silent or downplayed the issue – and as a result, the people of the Donbass were deemed ‘unworthy victims’.

                    2. Ellery O'Farrell

                      If I understand you, you’re saying that you disagree with calling Ukraine a Nazi state while acknowledging that they (most likely pushed or at least encouraged by the US) have in fact been actively persecuting ethnic Russians, including by shelling them with resulting and intended civilian casualties. So they are bad, but not Nazis.
                      Your point is that calling them Nazis is “the first step to dehumanizing” them. Humans can be (and often have been and continue to be) bad, but calling them Nazis is to put them into a different category of inhuman bad. This recategorization requires more evidence than has been produced.
                      If that’s what you mean, I agree. You can be bad without being a Nazi.

                2. lyman alpha blob

                  If a foreign country from half way around the world were sending hundreds of millions in arms every year to the borders of Canada and Mexico to be pointed directly at the US, all for “defensive” purposes of course, how do you think the US would react?

                  Russia did not go into this unprovoked – the Russians showed far more patience for thirty years of broken promises and broken treaties than the US would have.

                  1. John Mc

                    Exactly, besides Dr.’s Mearsheimer, Hudson, and NC – there is very little discussion about why US interests are being served by war.

                    The resources I have been reading this week have offered at least 5 reasons why the US might want this war and why it may extend it or be allowed to continue:

                    1. Miring Russia in another Afghanistan (distracting, forcing Russian resources to be deployed, and trying to oust Putin’s hold on power) as a means of Brzezinski’s 2.0 plan for Russia

                    2. As Dr. Hudson has been quite prescient about – the arm-twisting of US allies in NATO (Germany, France, et al) to avoid trade/resource deals with Russia (explicitly) and China (Implicitly) when the US can service that market for them. Ally bullying around LNG or getting Nord Stream 2 put on hold at the moment.

                    3. Acting now means that Russia-China are unprepared (possibly) for the US counterrevolution of Unipolar view of World Order. The US can test Russian and Chinese responsesc to this in an effort to get a grip on the wave of recent multipolar sentiments arising out of trade deals, the Olympics, and obvious US Foreign policy blunders of the past 30 years that would now have real consequences. SWIFT is a good example of this. I think if the US state department thinks if they do not act now, then it might too late (multipolar ‘tension’ theory and response testing).

                    4. Also it is a great excuse for the continued existence of NATO, if we have the big bad Rooskies invading “sovereign” lands on their borders (although no mention of the Lubansk or Donetsk region violence often perpetrated in the Donbas region. As NATO has evolved, it really has been the US blunt instrument to use whenever they want (and also a fine department of defense funding justification – mostly for weapons manufacturers to sell arms). So if there is no NATO or no communist-Putin threat, the budgets start to die on the vine and the US cannot have that.

                    5. Change of thinking in the State Department – Blinkin, Nuland and Kagan types are running the foreign policy which signals peace was not really on the table – unless they use it as a weapon to help Biden with impoverished numbers for re-election – call the parlementarian on that one or at least read your George Kennan.

                    *** These are not my ideas but consolidation of the work of Dr. John Mearsheimer, Dr. Michael Hudson, Dr. Aaron Good, Mark Ames, Abby Martin with Brian Becker, Dan Cohen with Scott Ritter, Chris Hedges, Aaron Mate and Max Blumenthal.

                3. jsn

                  “If we apply this to Russia, what does it seem they are showing us?”

                  In the environment of psychological warfare waged on social media, it’s safe to say we have very, very little idea of what is actually going on in Ukraine as yet. There is a US narrative, there is a Russian one and there is a pitiful few third parties providing accurate information on the ground. Hot takes are part of the psy ops, whether wittingly or unwittingly.

            2. Darius

              I saw a report over the weekend that a US Navy ship has navigated the strait between mainland China and Taiwan. Today, I see that a US delegation is going to Taipei to advise over preparing to defend against a mainland invasion. The White House is just itching to kick this hornet’s nest, too.

              1. JBird4049

                The United States has lost 2.5 wars in the last two decades and is supporting the militaries of Israel, Saudi Arabia and ISIS (or whatever it is in Syria) keeping an apartheid regime, a theocracy’s invasion, and a civil war/invasion all going all the while creating the right conditions for another war that’s just started, and finally is trying to start another war involving the other world military power. That takes genius, it does. The genius of the Joker perhaps, but still.

                Now that the system of food distribution is being threatened, perhaps all those countries reluctant to import American food because of inferior quality standards will change their minds. Not to mention that food costs inside the United States is almost certainly go ballistic. But those slackers and disposables all need to stop gaming and get jobs. Now why did all of North Africa, Egypt, and Syria erupt into mass protests and civil war? It couldn’t be rising food prices? But those weapon sales beckon as do as does all the spyware. And Taiwan will probably be panic buying weapons by the shipload.

                Like I said, our elites are geniuses just like the Joker.

              2. JBird4049

                The United States has lost 2.5 wars in the last two decades and is supporting the militaries of Israel, Saudi Arabia and ISIS (or whatever it is in Syria) keeping an apartheid regime, a theocracy’s invasion, and a civil war/invasion all going all the while creating the right conditions for another war that’s just started, and finally is trying to start another war involving the other world military power. That takes genius, it does. The genius of the Joker perhaps, but still.

                Now that the system of food distribution is being threatened, perhaps all those countries reluctant to import American food because of inferior quality standards will change their minds. Not to mention that food costs inside the United States is almost certainly go ballistic. But those slackers and disposables all need to stop gaming and get jobs. Now why did all of North Africa, Egypt, and Syria erupt into mass protests and civil war? It couldn’t be rising food prices? But those weapon sales beckon as do as does all the spyware. And Taiwan will probably be panic buying weapons by the shipload.

                Like I said, our elites are geniuses just like the Joker.

        2. OnceWereVirologist

          There are also neo-nazi elements fighting in the volunteer batallions of the DNR and LHR, google it.

          I did google it and all that comes up is “Russian mercenaries in the Donbas” from Euromaidan Press. And all that article does is identify eleven individual Russian soldiers who might personally have Nazi sympathies based on what they post on their personal webpages (allegedly in all but 2 of the cases). Only eleven. The Azov battalion alone had 900 volunteers circa 2015.

        3. djrichard

          I’m assuming the neo-nazi dimension wasn’t on the table when Putin was trying to come to a deal with US/NATO. Was it? But I’m guessing no NATO membership and no nukes was on the table.

          Then Zelenksy started poking the bear, wanting an acceleration on NATO membership and talking pursuing nuclear weapons. Who put him up to that? Whoever it was, it had the desire result.

          Before Zelensky’s statements, I’m guessing Russia was deliberating their black box options: simply “wreck” Ukraine with respect to the Donbas, to use Mearsheimer’s language. Or go more full tilt. US opened its black box with Zelensky’s talking points, which in my mind motivated the “go big or go home” for Russia.

          Now that they’re all in, they’re in for regime change. Could Putin have hung his hat on something better than denazification for regime change? Perhaps, but he needs something that yields something where he can exit stage left. I imagine leaving the die-hards in place is a non-starter, whatever you want to call them. Compare to our debathification in Iraq, which wasn’t simply focused on taking out die-hards, it took out an entire sect.

          1. begob

            I wonder if it’s right to characterize the strategy as “go big or go home.” Seems to me, so long as Crimea and its hinterland are secure, the Russians may be content to keep their thumb on certain pressure points to set off a collapse in state authority, perhaps leading to a carve-up of western Urkraine. And while that’s happening Putin fronts up with an emphasis on nuclear deterrence and cuts to food and energy supply, measuring the blowback on his European adversaries from their overreaction. Perhaps a pressure-points strategy will prove effective beyond Ukraine. If the banking sanctions in particular prove hollow, then he’s gained a great deal – one gunshot in the rookery, with several rounds still in the chamber.

            1. lemele

              You mean the cruise missile ‘pressure’ in the city square ‘point’? What a fine subtle strategy! A delicate application of terror in just the right dosage.

        4. Trisha

          “Ask yourself what is the ethno-religious background of Ukraine’s president (Jewish), is that something you would expect to see in a neo nazi polity?”

          Actually, yes. Start from the position that Nazis thought of slavs as sub-humans, and then take into account Ze’s referring to the people of the Donbas as “specimens”, and supporting ethnic cleansing of Russian language and culture from Ukraine, including 14,000 civilians killed in Donbas by Ukronazi shelling.

          The apartheid state of Israel is full of Jews who – beyond irony – use Nazi techniques in their ethnic cleansing of Palestinians. Same white supremacist colonialist attitudes as Nazi hold.

        5. Cat Burglar

          Exiled Russian journalist Leonid Ragozin says that while a relatively small group, the ultra-nationalists also have a disproportionate influence because of their links with the Ukrainian security services {Radio War Nerd}. Various forces (oligarch paramilitaries, the ultra-right, and the US-favored former presidential candidate Poroshenko) have posed a serious coup risk to Zelensky, according to Ragozin.

      3. Alex

        > When somebody shows you who they are, believe them. Seriously.

        On the subject of believing people when they show you who they are, what are your thoughts on this part of Putin’s speech:

        > Since time immemorial, the people living in the southwest of what has historically been Russian land have called themselves Russians and Orthodox Christians.

        > So, I will start with the fact that modern Ukraine was entirely created by Russia or, to be more precise, by Bolshevik, Communist Russia. This process started practically right after the 1917 revolution, and Lenin and his associates did it in a way that was extremely harsh on Russia — by separating, severing what is historically Russian land.

        He is literally saying that Ukraine has no right to exist as a sovereign country. How is this not, at best, a Neo-colonial justification for invasion? Or, at worst, a fascist one?

        1. Yves Smith Post author

          You need to read his entire speech. This has absolutely nothing to do with the invasion. That speech was two days later. This was to justify/explain the recognition of Donbass.

          The speech about the invasion focused on the West refusing to give security guarantees to Russia. Different issue.

          The areas from the Dnieper to the Don has historically been Russia and that part is dominated by ethnic Russians that the Ukraine government has been harassing/persecuting (witness large scale emigration to Russia, which was at 1.0-1.5 million as of 2016, depending on who was doing the counting, and has increased since then, so as high as 2 million.

    2. Hickory

      Do an image search for “azov battalion”, an official part of Ukraine’s military. Swastikas abound, and they’ve treated the Russian speaking population about as you’d expect.

    3. Qufuness

      Also please take a look at the Links 2/27 for a Twitter clip in which Yasha Levine tells Katie Halper about this very subject. What he says dovetails with a lot of reports from 2014 on that have linked the Euromaidan uprising and conflict in the eastern region with Neo-Nazi groups. In her 2014 call with Ambassador Pyatt, Under Secretary Nuland rejected Klitschko as a potential replacement for Yanukovich because of his well-known ties to the Svoboda party and other ultra-rightwing nationalist groups. So the charge that the coup d’etat and the governments that followed are linked to Neo-Nazi groups is hardly a recent brainchild of Putin’s. It’s been an open secret for the past eight years, even finding its way into mainstream media reporting.

      That the US, including the CIA, played a key role in overthrowing Yanukovich, is another well-known fact, even if ignored by critics of Russia; but of course such activity requires a cadre of Ukrainian coworkers on the ground. It’s a common pattern for the CIA to link with criminal and/or military elements to overthrow democratically elected governments. “The Jakarta Method” and “The Devil’s Chessboard” are two very good books among the vast literature on the subject.

    4. PDC

      Every Eastern-Europe country has a minority of Nazi fanatics, so that if the government “leans to west” it can be easily accused of being Nazi. In the specific case, the neo-nazi party (called Svoboda) did reach 10.45% of the vote in the 2012 parliamentary election and then dropped to 6.71% in 2014, 2.5% in 2019.
      Of course, the civil war in the eastern part of the country has kept alive the militarised branch… as is always the case with civil wars (think of northern irland).

    5. PlutoniumKun

      Its a strong claim, and I’m not sure its really backed by the evidence. There is certainly a neo-nazi element in the national guard (the Azov Brigade), but in elections they neo-nazi vote was well under 5% and have little direct role in the government. The Azov brigade is really quite small, although of outsize combat influence due to their ruthlessness and effectiveness. There is some evidence that some oligarchs fund the Azovs and others, but its an open question as to how much influence they really have over the government. As so often in these things, its hard to know who are the puppets and who are the puppet masters.

      1. Harold

        There is a lot of evidence that Ukrainian nationalists are in complete denial and brazenly unrepentant about their amply documented collaboration in perpetrating the holocaust by bullets which killed almost two million Jews during World War 2.

    6. lyman alpha blob

      Others have covered it well already – I wouldn’t characterize the entire government as neo-nazi but there is definitely a presence. The one thing I would add is that the NBC featured them on the news in the last week or two in a report on the Ukrainian military training grandmas to fight against the Russians. If you find that clip – can’t put my finger on it but it was posted here – you will see one of the soldiers roll over and flash the Azov battalion logo which practically screams “Nazi”. You can compare what you see in the clip to the logo in Rev Kev’s wiki link above.

      1. michael hudson

        Well, let’s put it this way. The One Percent run the U.S. Government. But they are only 1%. Does that mean that America is run by the 99%?
        The Right Sector and its allied groups identify themselves as Nazis, and celebrate Bandera, who fought for the German Nazis. Simply read the many news sites that cover all this. Quite frankly, I never dreamed that this would be controversial on the NC list.
        As Yves points out, why do you think that millions of refugees from Donetsk and Luhansk have fled to Russia?

        And I have never called Syria Nazi or fascist. That’s a red (or black) herring.

        1. lyman alpha blob

          I’m definitely not disagreeing with you. It’s quite clear to me that there are nazis in the Ukrainian military, and they wouldn’t be there without support in the government itself. A few days ago I ran across a link that listed the actual names of nazi sympathizeres who held government posts shortly after the Maidan coup, but I wasn’t sure of the accuracy of the info since I couldn’t vet the source and had never heard of the individuals mentioned, so didn’t post it here.

          Just ran across this one from The Nation which I would consider reputable since the publisher Katrina vanden Heuvel was married to Stephen Cohen for many years. It also names names and the nazi sympathizers are in high levels of the Ukrainian government –

          The article is very comprehensive and well worth reading in full. Here’s a small sample –

          “Speaker of Parliament Andriy Parubiy cofounded and led two neo-Nazi organizations: the Social-National Party of Ukraine (later renamed Svoboda), and Patriot of Ukraine, whose members would eventually form the core of Azov.

          Although Parubiy left the far right in the early 2000’s, he hasn’t rejected his past. When asked about it in a 2016 interview, Parubiy replied that his “values” haven’t changed. Parubiy, whose autobiography shows him marching with the neo-Nazi wolfsangel symbol used by Aryan Nations, regularly meets with Washington think tanks and politicians; his neo-Nazi background is ignored or outright denied.

          Even more disturbing is the far right’s penetration of law enforcement. Shortly after Maidan, the US equipped and trained the newly founded National Police, in what was intended to be a hallmark program buttressing Ukrainian democracy.

          The deputy minister of the Interior—which controls the National Police—is Vadim Troyan, a veteran of Azov and Patriot of Ukraine. In 2014, when Troyan was being considered for police chief of Kiev, Ukrainian Jewish leaders were appalled by his neo-Nazi background. Today, he’s deputy of the department running US-trained law enforcement in the entire nation.”

    7. Sausage Factory

      also check out Right Sector (Pravy Sektor) of a similar bent to the Azov. The national hero of ukraine is a man called Stepan Bandera who worked with The Waffen SS during WWII, he was responsible for rounding up 10s of 1000s of ukrainian jews who were then executed or sent to concentration camps. There are statues of this person in Ukraine and they had a national holiday for him, that was introduced only in the last 10 years when democracy came to Ukraine. This rabid nationalism is most prevalent in the western parts of Ukraine, Galicia but is around the country too. These are the groups that the US have funded, armed and trained and who sit at the base of the power structure to keep the western backed junta in power. Initially just militias they became fully integrated into the Ukrainian military and also were in the process of being integrated into NATO structures, already going abroad on NATO exercises (so putting to bed the lie about Ukraine not being incorporated into NATO – it was de facto already happening) The UN investigated Azov battalion and accused them of torture, rape, murder, war crimes and human rights abuses during the civil war in 2014. They often wear the Wolfsangel insignia on their uniform, this is an old SS insignia. Think the Americans re-branded them a bit (like they did al qaeda in Syria) but you will recognise them on current videos wearing a yellow armband.
      They will fight to the death rather than be taken alive, some of them are dug in at Mariupol, they have mined the city and refuse to let civilians leave – human shield style. There are videos of them shooting citizens dead for trying to leave. Can’t verify it, I think 99% of all the videos out there are bs so pointless watching them to be honest. Putin wants some of them alive to go on trial for war crimes against the ethnic Russians in the East (Donbass)
      There are two sides to every story, this has been going on for 8 years not 8 weeks. For me war is always a failure of diplomacy, not excusing what is going on of course but it is likely to get worse in some areas before the end.

  1. DJG, Reality Czar

    Thanks for this essay, which lays out the economic and class interests at work. At the same time, I am seeing among U.S. upper-middle-class white liberals, particularly women, a remarkable love of war. There is much psychobabble and demonizing going on among them, with occasional descents into McCarthyism. This is going to be fun, so long as the missiles don’t fly.

    To support Hudson’s ideas, I will note that LaStampa, which is normally somewhat skeptical, being part of a long tradition of skepticism about power cultivated here in Turin, has gone into full propaganda mode–the first ten pages of the paper for the several days.

    Recently, LaStampa published an interview with foreign-policy barnacle Ian Bremmer in which he said he was disappointed that prime minister Draghi wasn’t moving fast enough on sanctions. As is the case with Germany, Italy is likely to be devastated by these new rounds of sanctions. So add Italy to the headline.

    LaStampa also published an egregious interview with econ “Nobelist” Michael Spence, who went on about how Europe had to stop buying Russian gas and go with LNG imports.

    It’s all about the benjamins.

    1. super extra

      At the same time, I am seeing among U.S. upper-middle-class white liberals, particularly women, a remarkable love of war. There is much psychobabble and demonizing going on among them, with occasional descents into McCarthyism.

      I caught a bit of NBC’s nightly news program last night while passing through a room with a tv on, and it was a segment on Ukrainian moms making molotov cocktails in the kid’s room while waiting for the Russians to arrive. The Ukranian woman was present via Zoom and sounded drunk as she giggled about using the kid’s room, like how surreal, how crazy! She had similar hair and clothing to the women I’ve worked with in tech; that she was interacting via Zoom made me realize how much of this is about the PMC, who also spend a lot of time cooped up and interacting deeply with colleagues via Zoom, seeing themselves in the place of the Ukrainians. I am horrified. I now expect to see Azov creeps repatriated to US police and versions of this in north america within the decade

      1. Colonel Smithers

        Thank you, both.

        I would add their British counterparts, too.

        With regard to Italy, that is an odd one. There has been focus on Draghi trying to get Italian luxury goods exempt, but Italy is also at risk with regard to trains / railway infrastructure, agriculture and banking. Some of these ventures have French investors, too.

        La Stampa is part owned by the Agnelli family, who have business links with Russia going back to the 1960s. One would think the family would be more cautious, but over the past two decades, especially as the Elkann branch of the family took over management, the family have reduced exposure to their country of origin, including moving layers of management overseas, and increased their financial exposure to the anglosphere.

  2. Joec100

    Michael H has nailed this. And it would be worth reading the Xi/Putin statement after their meeting a few months ago – they are definitely foreseeing their own new world order.

    If the EU persists in shifting to non-Russian energy it may take down Germany’s economy not leaving much of value in Europe.

  3. PDC

    M. Hudson is probably too blinded by his eagerness to expose the great American-capitalistic complot, to realize that he is actually creating a story which is perfectly US-centric – i.e. it overestimates the actual power that US actually have on world´s events; this independently from the merit of the story itself, which is moderate at best.
    I will simply state the following: the only force responsible for the estrangement of Germany and Russia is Mr. Putin, who has squandered the opportunity of a political and economical victory in exchange of a militaristic adventure.
    And a further comment: the sentence “NATO’s purpose is aggression, not defense” should be corrected into “US tend to use NATO as a tool or political disguise for aggressions”. Actually, NATO is seen by the OTHER members (with the possible partial exception of UK) essentially as a defensive organization, as can be easily understood considering size and geographical position of the said allies.

    1. TimmyB

      Hudson is spot on when he sees the current situation in Ukraine through a US centric lens. NATO expansion was US centric. The overthrow of the elected Ukraine government was US centric. The pressure on Germany to stop Nordstream 2 is US centric.

      What NATO members “believe” is of little consequence. Delusion exists everywhere. However, NATO’s bombing of Libya and Yugoslavia cannot reasonably be called defensive measures.

    2. Amateur Socialist

      If Germany is estranged from Russia I think Nordstream 2 would be cancelled. Not paused. The US proposal to replace Russian gas with LNG shipped by tankers is more expensive and more likely to be disrupted by supply chain issues.

    3. lyman alpha blob

      How was it defensive for the other NATO states to bomb the civilian infrastructure of Libya?!?! Last I checked Libya was not a NATO member nor were they attacking France.

      Besides the standard boilerplate excuse that Qaddafi was “an evil dictator killing his own people” (as if government forces don’t kill thousands in the US), he was also trying to start a pan-African currency from what I understand, meaning African countries would be less dependent on the US$.

      Same thing here – the US wants Europe to be dependent on the US and wants to dictate what other countries the EU can trade with, and the crazies in the US state department are willing to start WW3 over it, while using Ukraine as cannon fodder.

    4. Zamfir

      As they say, no one believes in American empire as much as American anti-imperialists. The hawks worry about holes in that power, and they worry about foreigners with nefarious plans.

      For people like Hudson, the opposition with nefarious plans is itself American, so there is no reason left to think about the intentions or actions of foreigners. Just game-pieces, pressured or misled or goaded by Americans. Sometimes saved by good Americans.

  4. Liu Zeyuan

    I normally like Michael’s stuff but the section ‘Russia’s Intentions to Benefit from America’s Unintended Consequences’ is absolutely fanciful stuff.

    If Russia’s ‘ longer-term aim is to pry Europe away from NATO and U.S. dominance – and in the process, create a new multipolar world order’ then this is the dumbest way imaginably of trying to do that. By illegally invading Ukraine, Russia has driven eastern europe, indeed Europe as a whole, further into the arms of the US, and has taken any possibility of an independent European foreign policy off the map completely. NS2 is dead for good, and Macron has been made a total fool of in making independent diplomatic overtures to the Kremlin.

    Try to get in the head of European policymakers for a second- the public are scared, the media are braying. What politician in his right mind would stick their neck out and try to argue that they need less defense spending, need to move further away from the ally that is apparently sheltering them from a seemingly unpredictable and aggressive Russia? In fact multipolarity- if only from a European perspective- has been taken off the table basically for good it seems.

    Not only was that stupid, but the following is bad as well

    What does Russia want? Most immediately, to remove the neo-Nazi anti-Russian core that the Maidan massacre and coup put in place in 2014. Ukraine is to be neutralized, which to Putin means basically pro-Russian, dominated by Donetsk, Luhansk and Crimea. The aim is to prevent Ukraine from becoming a staging ground of anti-Russian moves a la Chechnya and Georgia.

    Okay Michael but how? Are you saying they will occupy Ukraine indefinitely? Because that’s nuts- the USSR was sunk by the strain of trying to subdue Afghanistan. the USA has repeatedly shown that even the most powerful superpower the world has ever seen can’t hold occupied territory against a protracted insurgency. In the grand scheme of things Russia’s economy is piddling, and it’s shrinking further with sanctions. So please do explain how they will accomplish this, and properly this time.

    If they don’t intend on occupying Ukraine then the idea that the country they just abruptly invaded and pillaged will calmly consent to permenant de-millitarisation and neutrality is if anything even more insane. Like wtf!?

    Bad, bad analysis. Which makes me doubt the veracity of the other sections focussing on the US.

    1. jsn

      “By illegally invading Ukraine, Russia has driven eastern europe, indeed Europe as a whole, further into the arms of the US, and has taken any possibility of an independent European foreign policy off the map completely. Russia has crafted their actions in Ukraine to the prototype created by the break up of Yugoslavia. Eastern European nations were already fully aligned against Russia, from the experience of living memory.

      “NS2 is dead for good”, is a very early call. The repercussions of OPEC embargo are likely to pale in comparison to the cold turkey end of Russian natural gas that has not yet happened but is fully within Moscow’s control.

      “In fact multipolarity- if only from a European perspective- has been taken off the table basically for good it seems.” Again, a very early call. There are many consequences to manifest yet that could materially change the leadership profile in Europe generally.

      “Okay Michael but how? Are you saying they will occupy Ukraine indefinitely?” From today’s links, IIRC.

      1. michael hudson

        I’ll leave Putin’s and Lavrov’s speeches to lay out the legality.
        I expect Russia to withdraw this week. I can’t imagine that it has any intention of expending resources and lives on occupation. Its first task was to stop the attack on the Russian-speaking eastern provinces and to protect Crimea. Its second task was to wipe out the neo-Nazi military forces, capturing their leaders if possible and bringing them to trial for war crimes — and then proceeding up the ladder to their U.S. sponsors, NED etc.
        It is of course possible that Europe will break away. In that case, Russia will turn toward China and its fellow SCO members. Europe will suffer severe supply chain issues, commodity-price inflation, and budget squeezes for its population and governments.

        1. Liu Zeyuan

          Thanks Michael, I appreciate response and sorry for coming in so hot on my earlier post. I’m sure I’m not the only one who has found the events of the past week stressful and as a result I am finding myself being less measured than usual with takes with which I disagree.

          I expect Russia to withdraw this week. I can’t imagine that it has any intention of expending resources and lives on occupation. Its first task was to stop the attack on the Russian-speaking eastern provinces and to protect Crimea.

          Just to push back on this- seeing as Ukraine has a practically infinite supply of weapons and financial support coming the US, wouldn’t it just be the case that Ukraine would be able to immediately re-arm and resupply upon Russian withdrawal? I’m sure the Ukrainian army will have no shortage of willing recruits for anti-Russian forces wanting to stick it to Russia for what’s being done to them, and that these recruits would probably have been immeasurably radicalised in their outlook and ideology by the experience of being invaded.

          What then? It seems that in every case Russia has made its Ukraine problem 100x more intractable.

          1. OnceWereVirologist

            The median age in Ukraine is north of 35. This is not Afghanistan where the median age is south of 20 and even after decades of constant conflict there’s no shortage of young men coming into their fighting years. I think it’s actually quite doubtful that there’ll be no shortage of recruits particularly if the EU is generous in taking in refugees.

        2. juliania

          That’s a lovely answer, Professor Hudson! I would recommend to everyone that they take the time to read those speeches. We do not see the like from other current leaders.

          Thank you for this fresh look at the economics of the situation, and thanks greatly to Yves and those commenting here. I’m no economist, but I always gain clarity from your expositions, and this really helps.

        3. David in Santa Cruz

          I expect Russia to withdraw this week.


          The government of the Russian Federation appears to be motivated by “revanchism” — a quaint term that has fallen out of fashion in Friedman-land where no one has “feelings” and are coldly presumed to be “homo economicus” solely motivated by “markets.”

          Men such as Putin and Lavrov are quite evidently butt-hurt by the humiliations inflicted on Russia during the collapse of the USSR, and are motivated to restore both personal and national pride. The invasion maps in the media suggest that the Russian intent is to recover Kiev, Kharkov, and Mariupol and to re-establish the Dnieper River as Russia’s southwestern frontier.

          The MIC, Oil, and FIRE interests do not care a whit about the nation. The U.S. seizure of Afghan and Russian assets is foolish, as it signals to China that our banks and currency are not to be trusted. Chinese social media is allegedly off-the-charts with anti-American and pro-Russian sentiment. America’s dependence on Chinese manufacturing has the potential to cause a complete economic collapse in America — with social chaos to follow…

        4. Yves Smith Post author


          Huh? Russia needs to produce regime change in Ukraine. No way, no how will this get done in a week.

          I think Russia does not want to “own” Urkaine but to capture it, clean it up (as Putin said, denazify and demilitarize it) and have it be not hostile to Russia. Russia would be content with a Switzerland type state but the West won’t accept neutrality. So the fact that it can’t fence sit means Russia will want/need a friendly regime. We’ll call it a puppet regime, which would be technically accurate, but puppet regime has the taint of being installed v. popular will, while Russia wants one that the public will accept since the last thing it wants is more civil war. Just gives the West an easy point of entre.

          This is a very tall order.

          1. PlutoniumKun

            I’ve been trying to work out what the Russian endgame in this could be. As you say, a puppet regime would require an enormous long term commitment – its difficult to think the Russians would be foolish enough to think they could put one in place and maintain it without an unsustainable short and long term cost.

            I can only think of two possibilities:

            1. A simple division of Ukraine along the Dnieper. Russia will declare the existence of a new ethnically Russian buffer state which will be in permanent alliance with it as a fait accompli. The remainder of Ukraine can then do whatever it wants. Without its most important ports and coal reserves it will be a perpetual liability to the EU and whoever else is left with it.

            2. What might be termed the Finnish solution from 1939. This is to inflict such damage to persuade the government that throwing in its lot with anyone else is simply not worth the risk. Finland remained independent and fought the Russians later on, but never felt able to throw in its lot entirely with either the Nazis or the West for fear of incurring the full wrath of Stalin. In other words, accept Ukraine as a hostile state on their border, but one that is sufficiently cowed that it will never be able to join Nato fully.

          2. Richard


            You are so right. This is a long haul, and even if they successfuly ‘siege’ Kviv in short order, and install a new government of their liking, there will be many ‘sores’ that will take time to heal.

            I think all of this is so very very sad. There was a while back, when Putin wanted to be European in practice, that a BIG HUG from the EU would have cured him of his intemperance. But that’s too late now.

            Sad, but I fervently hope it doesn’t lead to MAD.

            As for madness, I think Shakespeare’s Macbeth is instructive. The smart cripple, who felt he had been badly treated by those he thought should be his friends, but who did not. So he lamented his misfortune, and sought revenge.

            It’s so Putin.

          3. Sibiryak

            I agree with Yves. Russia is not going to be withdrawing in a week. The Russian goals are exactly as stated: demilitarization, denazification and the creation of a neutral rump Ukrainian state. Russia will NOT back down on those goals, and I don’t see how they can possibly achieved (if they can be achieved at all) without a lengthy occupation.

            Just to focus on denazification. That needs to be taken seriously and literally. The intention is to annihilate all manifestations of neo-Nazism and anti-Russian racism in Ukraine. Full stop.

            Now let’s just look at the situation Mariupol. Azov battalion folks are holed up there. The city is surrounded, but the Russian forces are not going into full destruction mode ala Mosul or Raqqa because they don’t want to massacre the civilian population. But for sure they are not going withdraw and just let the Azov folks walk away unscathed, The siege is going to take quite a long time.

            All this is being openly discussed and debated in the Russian MSM right now, which I watch daily.

            Michael Hudson: “Putin’s announcement that he wants to arrest the Ukrainian Nazis to hold a war crimes trial seems likely to imply an alternative to the Hague court. Only a new international court could try war criminals extending from Ukraine’s neo-Nazi leadership all the way up to U.S. officials responsible for crimes against humanity as defined by the Nuremberg laws.”

            What’s being openly declared in the pro-government Russian media is 1) the Russian state intends to haul neo-Nazis and war criminals back to Russia for trial there (not any international court) and 2) the juridical basis for this action has been in preparation for quite some time.

    2. DataHog

      You give away your game in your first sentence. If it was true that you actually liked Hudson’s analyses in the past, you wouldn’t be attempting to disparage this analysis… because it is entirely consistent with Hudson’s past analyses…that you say you liked.
      You’re commenting in the wrong blog. We see through stuff like you’re offering.
      Your comments read like what I’d expect from a paid troll.
      I take your comment as a left-handed complement that this blog is worth your perversely entertaining efforts.

    3. Thuto

      Try to get in the head of a Russian policymaker for a second – You’ve been waiting for decades for security guarantees that Nato’s missiles won’t be stationed on your borders, meanwhile false pretext after false pretext is fabricated to justify an eastward expansion of this “defensive alliance”, a 20 year propaganda campaign has been raging on in the west about how your leader is a mad, irrational actor with dreams of restoring the USSR to its former glory, and this campaign has been so successful it has scrambled the brains of many in the west and they convulse at the mere mention that Putin might have legitimate security concers.

      Meanwhile, you’d hoped that the puppet strings hooked into EU leaders and pulled by Washington would snap in half and these bureaucrats would for once start acting in the interests of Europe instead of those of their master, and realise that a multipolar world, broadly speaking, is to everyone’s benefit. Instead the leader of your most immediate neighbour gives a speech mulling a return to nuclear power status and is greeted with rapturous applause at the Munich Security Conference. What to do? Wait in the vain hope that an epiphany will befall EU leaders and they’ll be beating a path to your door wanting to strengthen relations and provide the security guarantees you’ve waited decades for, c’mon. Russia is short on viable options here, and I’m surprised you don’t see it.

      1. PlutoniumKun

        This may well have been their thinking, but I don’t think an invasion (unless there is something the Russians know about that we don’t) passes any reasonable cost benefit analysis.

        Up to crossing the border last week, Russia was in a very strong position. Its continual build up had much of Europe rattled, and made Nato and the US look like a paper tiger in the eyes of many East Europeans. There is no way Ukraine could economically withstand the continuous pressure in the east. There was plenty of scope to ratchet up this pressure without an invasion. By, for example, buzzing Kviv with Su-57’s, or more actively and openly providing weaponry to rebels in the Donbass. It could also have put more pressure on Europe earlier in the winter by slowing down gas deliveries.

        If anything, it was the US/Nato that had run out of options. Ukraine was falling apart economically, and the opening of Nordstream II made Germany even more vulnerable to Russian pressure. All the available sanctions were already in place and hadn’t worked. There is plenty of evidence that many east European countries have been rethinking their Nato/EU alliance. Pretty much all independent observers, including many BTL here had concluded that Russia had played this game very well. I certainly thought so.

        But in invading, Russia has succeeded in uniting most of Europe behind NATO. Even if Russia makes significant tactical advances in the Ukraine, this has been enormously costly in strategic terms. I find it very hard to see any scenarios where Russia comes out of this better in the longer term. It has united its enemies against it, and its economy will take a major hit. This will spur all European countries away from their dependency on Russian energy and resources and will greatly encourage more military spending (Germany has already announced this). And China seems to see this as an opportunity to strengthen itself in its alliance with Russia, rather than do anything that would directly benefit Russia. Expect them to extract a stiff price for helping Russia out.

        This all seems to me to be an extremely high risk gambit from Russia, and one which was not in any way justified by their strategic position. It seems to me to be extraordinarily out of character from Putin to gamble in this way.

        1. Pate

          Plutonium: “But in invading, Russia has succeeded in uniting most of Europe behind NATO”

          As I succinctly said the other day (paraphrasing Randolf Bourne) “war is the health of NATO”. I think Hudson makes the same point in today’s read.

        2. michael hudson

          Right, PK. there is no gain in cost-benefit analysis that I can see — or that anyone else saw (judging from the pretty thorough coverage on Johnson’s Russia List).
          So Russia wasn’t looking at cost benefits — at least as usually understood.
          i think its leaders felt that they had no choice but to fight back, even if it was like a country being defeated and fighting like Vietnam died at Dien ben Phi, with enormous losses.
          On the other hand, if you watched the triad meeting at which Mr. Shoigu said, “Let’s do it,” it seems that there was a plan all along to go BEYOND Ukraine — after first securing it (or securing as much as it felt it needed to before moving on).
          Whatever the plan, its logic and long-term strategy has eluded everyone.

          1. cobo

            “extraordinarily out of character from Putin to gamble in this way” Russia recognizing the breakaway provinces and covering them with the umbrella of Russian defense seemed a very calculated and brilliant move, more in line with the moves we’ve been seeing from Mr. Putin. After putting up with eight years of stalement in the provinces, it’s hard to see the need to stretch so far with an invasion, now, bringing condemnation and rallying NATO.

            So, perhaps this will be a theory too far – oh well

            Antony Sutton clearly detailed how the financial elites in the West supported the rise of both National Socialism in the West and Communism in the East, both Technocratic regimes. Vladimir Putin was proclaimed by Klaus Schwab a participant of the World Economic Forum’s Young Global Leaders academy. You can see for yourself at the link, below.

            I’ve seen this debunked because the academy began in 2004, and Vladimir Putin was already the leader of his country by then. But the workings of the program may have been under way before it became formalized, as the long time horizon of the WEF, I’ll suggest, would support.

            The game being played is multi-dimensional. Everything happening would then seem more like a well-choreographed process to destroy the independence of the strongest nation states. Western countries are already deeply influenced by the WEF and bringing forward their agenda. It seems like the US and Western Europe have been systematically deconstructing their cultures and societies for decades. If the mid to long-term outcome of this war leads Eastern Europe to more closely align with the Western regimes, and if this causes any rupturing of the Russian regime, it would seem to be… well.. there are a lot of future scenarios being gamed out. I’m keeping this open as a possibility.

            Klaus Schwab himself mentioned Putin as one of his YGLs, “even Vladimir Putin.”
            -at 6 seconds:

            1. flora

              Indeed. There’s an interesting post at the Whitney Web site “vagabond”. And yet, I’m reminded that the then great European aristocratic powers pre-WWI were all or mostly all related by birth or by marriage to the UK’s Queen Victoria, and so were all on the same page, were all one great family – it was thought – about the place of empires and the empires common causes above the “petty fights”. It didn’t work out that way when push came to shove in the trenches, as they say.

          2. lance ringquist

            unless of course the russians understood that decades of having no soveriegnty, europe would go along with everything we desired no matter what the lunacy is.

            so let them, even switzerland is getting in on the act.

            i would not want to get in on the act, i would grab my sovereignty, and stay neutral, because now the west is united, without enough resources to keep this free trade mess afloat.

            russia maybe using shock doctrine on us, and still have a functioning economy with asia, who looks to be having had enough of nafta billy clintons rules based economy.

            russia and china are only interested in a new world order, with the de-industrialized hollowed out u.s.a. as a blubbering mess imploding on itself, unable to even make a loaf of bread or a aspirin.

            so far i have not seen any mass pouring outs for the ukraine, like free iraq crap signs everywhere. americans are tired, poor, hungry and desperate to be free of this free trade mess.

          3. peter Buchan

            HI Michael,

            Love your (very important) work and analysis. First time I post here, but I’ll offer the following: your sense that “Russia wasn’t looking at cost benefits — at least as usually understood” captures the essence both of what has transpired, and what likely shores up their decision. Russian history indicates that, as a nation and as a culture, they possess a unique perspective on issues such as war and, more specifically, defensive war. And this is a defensive war; any failure to apprehend this plain fact says more about the inexperience and illiteracy – or perhaps obtuseness – of the observer than of ultimate Russian intentions.

            It seems evident that Russia came to first understand, then to accept and finally to fully internalize the fact a) that the Washington beltway, anchored by USD hegemony, had no intention to EVER let up until the Russian state was broken or balkanized; b) that the EU elites have abandoned their history and principles in favour of higher (globalist and other decadent) ideals and lastly c) that there were no pragmatic, let alone rational, actors left on the other end of the phone. Game theoretically this left them with only one way – the harder, longer way – out, and they have taken it.

            What Emergent phenomena and non-linearities arise from here on in remain to be seen and/or discovered, and then responded to in due course. Very recently Lavrov, in his last pre-invasion press conference, made what seemed like an offhand – but now clearly trenchant – comment in reply to a question from a Russian journalist by stating (I paraphrase): “As you know, we have a saying in Russia that goes: ‘we are ready to go on a Journey'”. The decision had been long-made.

            The question now is whether the “moral West” and it’s “values” are ready for such a journey.


            Peter Buchan

        3. Thuto

          I agree that the gambit looks to be an incredibly risky move as things stand. That said, I’m reminded of the time I happened to be in the room with the Dubai chief of police, who was friends with the Egyptian father of a friend of mine from Munich. He regaled us with tales of how a company once approached the security cluster of the UAE with an “intelligence system” that, on close inspection, was revealed to be merely a contraption of various technologies already available to the civilian market. He politely advised the sales reps of said company that real intelligence tech is usually years ahead of what civilians already use. He went on to say something that is germane to the subject at hand I.e. the information accesible to civilians on any issue is less than one-tenth of what governments have at their disposal.

          We may all be scratching our heads wondering about the calculus that led Putin to invade and usher in a radical geopolitical paradigm shift that is unlikely to ever be reversed. My own counsel to myself when I’m wondering of such matters is that for a normally calculating and strategically renowned leader as Putin to pull the proverbial trigger on an invasion, the timing of which when weighed against the positions of all the geopolitical chess pieces you mention, looks absolutely crazy, must be the result of some top level information that a failure to do so would permanently imperil Russia’s security interests.

          I’d also like to add that much of the moral outrage against this invasion is largely a Western phenomenon and has laid bare, at least for people in the global south, the hypocrisy of the west which for decades has mustered little more than perfunctory condemnation of all the other wars waged by the US and its allies against the darker skin peoples of the world. We don’t know where the chips are going to fall when the dust finally settles on this, but one thing that is clear is that the west will have lost the moral high ground to lecture we who live in the developing world on “values” when we see property rights, the bedrock of western civilization, being dispensed with (slap someone with the label “russian oligarch” and their assets in the west are frozen without due process) and media freedom, for so long apparently sacrosanct in the west, also being dispensed with a blanket on russian news channels and websites. The soft power of the west is going to erode substantially after this.

          1. PlutoniumKun

            It is of course possible that the Russian high command know something that we don’t. Its been speculated on this site a few times in the past that Russia is very worried about its own long term projections for oil and gas production. Essentially, they have about 10 years worth before they will see a dramatic drop-off. And Russia has little else to sell. There may well be a feeling within Moscow that this is a ‘now or never’ time. This doesn’t mean they are right.

            Its true that governments can know a lot more than us. But history is also full of examples of very smart, very informed people making very stupid decisions. We only need look at the gigantic miscalculations over Iraq and Iran and Syria and Afghanistan and any number of other recent blunders. Going further back, my favourite example is the Japanese government in the 1930’s – they had many opportunities to consolidate their gains and strategic positions around Asia, but instead kept over reaching and ended up pretty much declaring war on the entire world. It was an utterly idiotic and suicidal policy, carried out by very smart, very astute leaders, many of whom had lived and studied in Europe and the US and other Asian countries.

            We tend to see the malignancy and stupidity of our own governments, because we know them the best. But there is no reason to think that the Russians, Chinese, or anyone else for that matter, don’t have their own problems with bureaucratic infighting, corrupt power cliques, idiots who gain power through luck or connections, or deep cultural misunderstandings. One issue with the Russians I’ve noticed is that they genuinely think that other Slavs are their brothers and really like them, whereas if you talk to any of the Russian ‘little brothers’ in a belt around Europe, you better be prepared for a stream of foul language when the subject of Russia comes up. Most Russians in my experience are happily oblivious to this. Its not impossible that this type of bias has distorted their decision making (it should be said, Russia is not alone in this – its a common misconception among many powerful cultures).

            There is also another thing that could be considered. The neocons in Washington and London can’t contain their delight at this. It can’t be ruled out that the Russians have simply walked into an intelligence trap. Washington tried this and failed in Syria. It doesn’t mean they will fail every time. Putin wouldn’t be the first leader to start to fail when he began believing his own propaganda.

            1. Thuto

              I think the question of why a leader like Putin, having shown staggering amounts of forbearance (literally decades) would act now will remain an open one. The timing, at least from the outside looking in, looks like an incredibly risky gambit, but I suspect the answer/s are to be found on a probability distribution rather than an either/or binary I.e. it’s likely a combination of factors that made this a “now or never” moment. In such times when history defining decisions have to be made, the old adage “only the king knows the weight of the crown” defines the moment perfectly.

        4. Bazarov

          Perhaps Russia resolved, in consultation with their Chinese allies, that cold war with the West is unavoidable.

          In that case, the Russians and Chinese may have decided that they were fine with “losing” Europe if it means security for Russia (which in turn means “defense in depth” for the Chinese, as their northern hinterlands will be secure and will prove a reliable source of certain essential raw materials when it’s China’s turn in the meat grinder).

          By supporting the Russians, the Chinese can expect total support in return if they decide to take Taiwan, which seeing as the international situation is becoming very unstable–with the world perhaps separating once again into two blocks–such an invasion is for the first time in my life truly conceivable in the near term.

    4. Kouros

      While the long term objective of Russia might be to have NATO dismantled, the pressing need now was to stop the continuous encroachment and entrenchment of the US military in Ukraine, even though Ukraine is not in NATO. The US has been shopping throughout East Asia to find willing collaborators to contain China, so they can stage bases with INF systems and menace China, on a one to one relation. Do you think the US will stop trying to collaborate with Ukraine and even establish bases there, whether or not Ukraine is in NATO.

      So it is likely that the Russian military has assessed that the build up in Ukraine was reaching very dangerous levels and the threat to Russia was becoming palpable. It is not about dismantling NATO at this point, but about making Russia secure. What will be next, who knows. Stopping US/NATO is the first step on the agenda.

  5. Amateur Socialist

    I don’t believe the architects of NATO ever imagined a world where the former soviet union would be able to trade with the rest of the world in what used to be called “hard currency” (i.e. something other than Rubles in the old definition). Which means it has been obsolete for at least 20 years.

    Watching Biden try to solve the problems of the 80s has been discouraging at best. It has only confirmed my long held belief that he was not equipped to lead this world in this era. I do not enjoy imagining the domestic political consequences of this major foreign policy failure.

    1. flora

      Last June (2021) RU said it would remove US dollar assets from its national wealth fund.

      In December 2021 it agreed a deal with China to create an alternative to SWIFT.

      If this succeeds over time (it won’t happen immediately) it will put pressure on the US $ as a world reserve currency, imo. (Does anyone in DC think more than 2 steps ahead? )

  6. Amateur Socialist

    Rereading this piece I realized that there is one major domestic constituency that desperately needs Biden to succeed with this gambit: US Natgas frackers. They’re all basically broke and unable to borrow. Without the EU market for fracked gas the domestic industry is financially dead.

  7. lance ringquist

    to understand the mind of a free trader, is to understand the mind of a rabid dog, they have none, they lost it.

    “An organizing framework for the community option was succinctly outlined in 1933 by economist John Maynard Keynes: “I sympathize, therefore, with those who would minimize, rather than with those who would maximize, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel—these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.”

    “If nations can learn to provide themselves with full employment by their domestic policy, … there would no longer be a pressing motive why one country need force its wares on another or repulse the offerings of its neighbour. . . . International trade would cease to be what it is, namely, a desperate expedient to maintain employment at home by forcing sales on foreign markets and restricting purchases, which, if successful, will merely shift the problem of unemployment to the neighbour which is worsted in the struggle, but a willing and unimpeded exchange of goods and services in conditions of mutual advantage.”

    This pretty much covers what clinton did to us: Every country has been convinced that globalism is imperative and that not to be part of the global economy means economic death. In fact, to be part of the global economy means death
    Whatever Became of Economists and the American Economy
    By Paul Craig Roberts

  8. Brooklin Bridge

    I don’t think the insanely dangerous state we are entering can be explained by any one motivation such as money, or power, or war-lust. All three seem to be acting together in a sort of deadly ratchet effect keeping us going in one direction only against all sane judgement; potential and ever more likely actual confrontation with Russia. Putin may well have made a mistake in being goaded, but it would be a mistake that seems fated; unavoidable sooner or later given the inexorable US guided encroachment of Nato and the forces of greed, war lust, and struggle to maintain historically elusive power and sphere of influence. Not a good place for nuclear weapons to be available.

  9. Anthony G Stegman

    I contend that if the people want peace they will get peace. If they want war they will get war. Who is the biggest enabler of war in this world? The United States, of course. If the American people wanted peace there would be far less war in this world. The United States is a warrior nation, and has been since its inception. The United States is a violent nation as its rates of homicide and other violent crimes lead the world. Americans support wars as long as the bombs and missiles aren’t falling on them. Unless and until the American people demand peace in very large numbers there will be very little peace in this world. All Americans have a big responsibility in this regard.

      1. Anthony G Stegman

        Because the United States is the largest exporter of arms in the world, and maintains by far the largest military force in the world, without agreement from the United States there can never be lasting world peace. In fact, it is not in the interests of the US government for there to be a peaceful world. In theory, the American people can change this reality, but they appear to have little interest in doing so.

        1. juno mas

          Your last sentence is my point: the American public is too distracted by social media, reality TeeVee, and time spent making rent payments to understand the concepts being debated here by the Commentariat. Hell, wasn’t it Sec. State Pompeo who couldn’t find Ukraine on a world map?

    1. Richard


      First rule in a street fight – punch him in the mouth first. It’s a shock – ask Mike Tyson.
      Second rule – don’t give him a chance to think about the first rule, just do it again.
      Third rule – pick him up off the floor and tell him it’s all right for him, as next time you’ll go for the jugular. End Of! “You got off lightly, this time, now let’s go for a beer – you’re buying.”

      Yes America, you have fighting in your genes and they have been very well expressed. But you’ve got to find a place for a kiss on the cheek too.

      As for your national vulnerability, may I remind you all that you don’t need to worry about Cuba anymore. These pesky Ruskies have got nasties that they can send round the world in a flash, bunches of them at any time, and before you’ve figured out where the first punch came from – here’s the second.

      What’s more, we British who are your poodles so it is said, may have to take the first punch – “You go first!” However, let’s imagine for a moment, that the mercenaries in Russia decide that we’re not bothering with that first off blow, that they might as well go for the jugular?

      It would be ‘bloody’ funny watching your population berating your leaders as their skin fell off their bodies, saying painfully “But, but, you told us the Europeans were going to take the first punch”.

      Mike Tyson had a good point. Watch a Soviet Heavyweight boxing champion in action. Measure your enemy.

      Dark humour – I hope you take it that way.
      With regards, Ricardo The Terrible

      1. Richard

        And for the rest of you all, no one in particular, I think Putin has a whole lot of Shakespeare’s Macbeth in him – you know, powerful yet crippled and put upon, bitter, and with revenge in his heart.

        Perhaps it’s all our fault. Maybe we should have given him a Big Hug long ago while it was still on the cards and worth the gesture.

        Too late now, me thinks.

  10. Carolinian

    Great stuff as always. Much has been written on these pages about Boeing but very little about their weapons. Things they make

    –the B-52 (a long time ago–still in use)
    –Apache gunship helicopter
    –B1 bomber
    –F-18 fighter
    –F-15 fighter

    Also various support aircraft and some missiles. It’s likely that Boeing weapons have killed a lot more people than their airliners, however bad that may have been. And while airlines pay for the airliners we all pay for the weapons used to project power for the rentiers.

  11. Kouros

    I would have a question for Professor Hudson. In the light of the total financial and economic war unleashed by the combined west on Russia, why is Russia not stopping, at least temporarily, the flow of gas and oil to the west and particularly to Germany?

    1. Anthony G Stegman

      It may be that Russia is hoping to achieve its military and political objectives on the cheap. Rather than using its full military capabilities to subdue Ukraine it has so far deployed just a bit more than a token force. Rather than inflicting real economic pain on Germany and others by cutting off oil and natural gas Russia is arm wrestling with the West. It remains to be seen if this strategy works out for Russia ultimately.

      1. NotTimothyGeithner

        The Russians have half the Ukranian Army pinned down and are preventing any kind of counter offensive. Ukraine, west of the Dnieper is just that endless void, people who invaded Russia griped about. Then the most Western third is significantly more rugged country. The Russians would have to commit everything to deal with that. The cauldron being formed is manageable and being done with a river. You go West, then things get dicey. Lieutenants are carrying missions out.

        Don’t get involved in a land war in Asia applies to Asian (Eurasian in this case) countries too.

    2. TMR

      Because that would be a dangerous escalation that Europe might interpret as an act of war. The Russians don’t want to be nuked, either.

    3. RobertC

      Russia wants to retain its hard-earned reputation for reliable contract fulfillment. Just recently it increased natural gas exports to Germany under the expansion clauses of the long-term contracts.

      Russian military forces will be leaving Ukraine soon because, as Putin repeatedly stated, a costly occupation is not an objective. The Ukraine they will be leaving behind will be an economic basket-case for Europe to repair…again. Except it will be a poorer, commodity-short, emigrant-and refugee-overrun Europe this time. Which is Putin’s (and Xi’s) objective.

    4. Oh

      If Russia does that it would make the Germans and the rest of Europe play straight into the hands of the US Gas lobby who would only be to glad to supply them with LNG, perhaps at a higher price than what they charge now!

  12. Ignacio

    I have no idea how the ‘rationale’ has gone to the current situation (apart from suspicions and speculation) but I am very sympathetic to the idea that some lobbyists (or oligarchs) already have an outsized influence in politics and I have seen examples of the same in particular with the power energy sector in my country with measures taken often against the interests of the citizens in general and designed with very complex arrangements to obscure the reality. The same with the banking ‘industry’. Many of these measures were taken by both, the two main political parties governing in Spain.

  13. Dave in Austin

    “Neo-Nazi”… What would we do if twe didn’t have the Nazis to talk about?

    Neo-Nazi panic is the QAnon “Clinton-loving pedophile pizza delivery service” of the left; a way to tar your enemies by acting as if the far, nut-ball end of thier believers’ spectrum is growing in strenght and coming to get all right-thinking people.

  14. Brick

    The concept that there are corporate players involved in the Ukraine conflict seems right but different to what is outlined here. Equally there are other parties involved especially Turkey , the Taliban and Israel. What is so dangerous is that game theory strategists at the Kremlin may have ignored some key parties involved.

    I cannot guess at all the moving parts, but for me the seeds of the conflict stem back to the OKK (Turkish Special Forces) training the Ukrainian Army and from there the provision of Bayraktar TB2 drones by Turkey. The initial escalation seems to have been last year in a little village called Hranitne when a coronavirus induced restriction lead to a grocery shopping upset resulting in the shelling of the village by separatists. This resulted in a TB2 drone being used for the first time to destroy Russian provided heavy armour. As a result we see GPS signal jamming escalating in OSCE Monitoring reports blocking drone usage during April last year. The US then provides Javelin anti tank missiles to the Ukrainian Army which negates the effects of GPS Jamming. You might get the idea that both Turkey and the US caused the conflict by arms escalation yet this may not be the entirely correct narrative.

    The Russian narrative is that Eastern Ukraine is Russian speaking and people are naturally allied with Russia with the corrupt Nazi government in Ukraine trying to force Eastern Ukrainians against their will. There are elements of truth in this narrative yet the Minsk 2 protocol seems to have been slowly working based on reductions violations last year.

    The post here argues that the oil industry is driving policy yet in the past the industry has hedged its bets and dealt with all administrations. Recent news from BP, Shell and others suggest the oil industry is being forced to cut ties with Russian based Oil company’s which is hitting profit outlooks. The post also argues that the US arms industry is driving policy yet it seems the big winner is likely to be the German arms industry at the expense of US arms industry.

    US policy may however be influenced by American firms being the largest consumers of Ukraine’s IT services with over one hundred Fortune 500 firms using Ukrainian IT. More than one hundred international R&D centers already operate in Ukraine including Boeing, Siemens, HP, Oracle, Cisco, Apple, Samsung, Microsoft, Deutsche Bank, Skype, eBay, IBM, and Huawei. In 2019, Ukraine’s IT sector attracted over USD 544 million in investments, with US venture capital firms well-represented among investors.

    I really don’t understand all the drivers here and I don’t see how any strategist can and that seriously concerns me. It seems like the West has too much invested in Western Ukraine and Russia and Turkey are in a tussle about who controls the Black Sea. The key is what happens to Odessa and the Western Ukraine ports and this might determine NATO strategy. In the mean time the Coronavirus disaster in Russia has been side lined and some very unpredictable US CEO’s will be bending Biden’s ears. The most recent Freedom House report suggests that far right groups have poor political representation in Ukraine but authorities have been reluctant to tackle groups like C-14 and there are separate issues with the Ukrainian Judiciary.

    It is all smoke and mirrors and about the only consistent thing is the poor performance of news media on both sides to reveal the real issues.

  15. paul

    But he added that for himself, he hoped to be right under the atom bomb, because it was not a world in which he wanted to survive

    I have endured that notion for far to long.

  16. Alex

    This analysis requires that “the American Blob” is both strong and crafty enough to exert significant control over several European countries, but also too weak and ineffectual to subdue Afghanistan or keep a reality TV star out of office domestically.

    1. c_heale

      I think Scott Ritter’s analysis of this covers some of these points. Basically in return for being in NATO, Western Europe gets free military security.

      Why should a reality TV star be denied office. Reagan was an actor. I don’t see this as relevant. And they have tried to deny Trump power, by claiming he lost the election, and by Russiagate.

      Afganistan is known as the “graveyard of empires” for a reason.

  17. Werther

    First…thanks for the content and discussions! I started checking in during the financial crisis, the banking crisis in Europe, reading in on climate change, Brexit, covid and whatever it was to broaden my limited comprehension.
    Without saying I have anything close to clearvoyance, I voted against the EU-Ukraine association treaty during a Dutch advisory referendum in ’16. Not that I liked to deny a community it’s sovereignty. It was the uneasy feeling that there was messing going on in a geopolitical very tense situation.
    I feel in no way attracted to the style of government as I have understood it to be in Russia. To me, it seems there are recurring properties, whether these define the Czar empire, the Soviet Union or present day Russian Federation.
    Nevertheless, not in the least in case of the latter, it makes sense to listen to that government, co-operate where possible, discuss where it is thought appropriate. And to assess thoroughly what are it’s paramount interests. I think there were and still are workable solutions for co-existency, although it might not come in the form of complete freedom of choice (as if that would be possible anyway).
    You understand and probably feel comparable when I confess that the whole situation makes me miserable. I don’t want to be taken as a Putin-fan. I feel a mixture of disgust and pity when I submerge myself in the constant MSM prejudices that fly around here in the Netherlands. I suffer because I have believed since I was young in the founding ideals of the US of A. But I can also imagine what drives the Russian government (and probably with support from a considerable part of the Russian population) to draw the line…

  18. Susan the other

    Is a sovereign nation still sovereign if it contracts out its military obligations to private mercenaries; if it contracts out its health care obligations to privateers; if it contracts out its sovereign money and spending obligations to privateers; if it sells off natural resources at a bargain in order to make a select profit; if it refuses to educate its population and refuses to create jobs; if it allows private equity to siphon money from pension funds; if it simply fails to provide the basic necessities to its population unless they can produce a profit for mega-polluters; if it refuses to clean up the environment; if it refuses to safeguard food and drugs; if it contracts for NGOs to run foreign affairs in their own self interest; and on and on?

    1. RobertC

      Your succinct insights are awesome and strike at the heart of the social contract. Should be required reading for all citizens. Thank you.

    2. Eclair

      Gah, Susan! You think that the concept of ‘sovereign nation’ is so last millennium? We’re moving towards a corporate world structure? Rentiers focused not on the ‘good of the ‘citizens’ (an obsolete concept) but on the bottom line? Humans divided into two classes: corporate executives and fodder. We must have the same nightmares!

  19. Steven

    Savvy real estate speculators should perhaps grab all the property in the immediate vicinity of known Russian targets. Particularly if you are an old geezer (like me) being vaporized in a hydrogen bomb explosion might not be a bad way to go. I’ve often wondered if the process wouldn’t happen so fast there would not be time for the pain from incineration to reach the brain.

  20. Fernando Agüero

    The trouble with American anti-imperialists is that they only attack US imperialism and keep mum about other imperialisms. Russia and China too have military-industrial complexes that are every bit as pernicious as the American one. China is currently in a stage that can fairly be described as “manifest destiny with Chinese characteristics”.
    “China’s demand for commodities and its role as an investor and creditor in the global periphery are closely connected. In the past two decades, China’s outward activities have perpetuated commodity-based development models in the Global South, which are linked with negative socio-ecological effects. … risks for continued extractivism remain high.”
    “China has exacerbated commodity dependence in many countries in Sub-Saharan Africa and Latin America and the Caribbean.”
    Source: Shifting the Course? The Impact of Chinese Finance on Extractivism in Latin America and Sub-Saharan Africa, by Bernhard Tröster and Karin Küblböck, Journal für Entwicklungspolitik [Journal of Development Policy], vol. XXXVI 4-2020, Vienna, Jan 2021
    Latin Americans harmed by American mining and petroleum interests get a lot of support from NGOs and activists in the US, and they can hire American lawyers and seek redress in American courts, which are often impartial. In the US anti-imperialism has a long and honorable tradition, starting with Mark Twain, who vigorously protested the annexation of the Philippines around the year 1900. To whom can Latin Americans and Africans turn in China when a Chinese mining company rips them off? Chinese anti-imperialists, if there are any, are busy hiding from the police and have no time or resources to devote to helping the victims of Chinese firms abroad.
    Europe has good reason to avoid importing Russian gas, since Russia has an established track record of using its gas exports as a geopolitical tool and wouldn’t hesitate for an instant to cut off supplies if it found it useful to do so, despite any binding long-term contracts it may have signed.
    China’s foreign commercial expansion is strongly influenced by geopolitical calculation. In a way it is the opposite of American foreign business dealings, where the State Department does the bidding of monopoly capital.
    I don’t deny Michael Hudson’s complaint that the US wants to prevent Europe from doing business with Russia and China. But he doesn’t mention the issue of whether or not it is in Europe’s interest to do business with them.

    1. RobertC

      Putin and Xi deeply accept the ramifications of rapid climate change and are acting to protect their populations.

      Last November for the first time ever, China’s national security strategy cited “food security” as a primary objective.

      Perhaps you heard of China’s “Clean your plate” initiative for children.

      As you look at the Russia-China map you realize China is achieving agricultural security.

      For seafood security, China created a three prong fleet: hundreds of thousands of fishing ships; the world’s largest coast guard; and the world’s second largest navy. And it has developed, trained and demonstrated global integrated coercive grayzone fishery operations with that fleet.

      They’re coming for your fish and they ain’t saying Thank You.

      1. Susan the other

        All the more reason to create a global inventory audit. And a set of laws and rights with obligations we can all agree to live by. Since we are already fighting for resources, literally, the time has come. We’ve got good statistics about all this stuff. Rights and obligations could be determined on a reciprocal basis and contingent on population control. Which always sounds draconian but it’s a subject that needs to be opened up because the denial of all this will only serve to allow overconsumption, terminal pollution and endless war.

  21. Mikel

    Let’s see how the PMC of the Western EU and European countries use this squeeze for austerity.
    Those with the same ideology as the PMC of the USA have been aching to chip away (even more) at the European social benefits systemes.

  22. Robin Kash

    I’m curious why more discuss/exploration of the Biden’s connection to Ukrainian gas interests hasn’t resurfaced.
    As I understand, most of Germany’s natural gas comes via the pipeline that runs through Ukraine. Other pipelines–including Nord Stream 2–are in complete control of Russia. If the Ukraine pipeline stops transmission for any reason, then Russia has Europe by the proverbial short hair.
    Biden’s not sanction petroleum or gas. US control of the Ukrainian pipeline would support Michael Hudson’s view that the US is really focused on keeping the present EU market.
    I’m puzzling through the connection of Germany’s sudden interest in becoming a two-percenter. This also supports Hudson’s notions. You know, arms sales. The idea of Germany re-arming makes me tremble.

  23. Martin Davis

    Interesting piece of editing, intentional or a mistake? What Hudson’s penultimate para in Counterpunch states was “And everything that I have written above may already be obsolete as Russia and the U.S. have gone on atomic alert. My only hope is that Putin and Biden can agree that if Russia hydrogen bombs Britain and Brussels, that there will be a devil’s (not gentleman’s) agreement not to bomb each other.” Well, isn’t that nice – a little local atomic war. What could possibly go wrong?

    In another portion not included here he opines that Putin will surely withdraw from the Ukraine once the security needs of the separatist republics are addressed and the neo-nazis are eradicated. Unlikely in the extreme, I should say. Putin needs control of the Ukraine up to the border with Nato. That means political control. And thus, to the extent that Ukrainians are not to be trusted, tough love sometimes having perverse results, he the needs a reliable strong man and an apparatus of repression behind him. Think Lukashenko.

  24. Bets are on

    How about some betting. Prize: Bragging rights!

    Who’s next to be fleeced?

    Finland was first to buy F-35
    Germany has committed to buy F-35. Funny that! Their current decreipt army is to be rebuilt with an occasionally functioning and flying dustbin?

    So whose taxpayers are about to eat more austerity because their vasall governments buy non-functional military equipment from their overlords?

    Place, your bets, folks!!!

  25. mikeyoe

    I agree with Dr. Hudson that the MIC have sited operations around the US. Besides many bases, there are corporations and manufacturing around the country. The locations are even in such “Blue” states as NY and California. This is why the US military budget is so high; the MIC is in both Republican and Democratic districts. But since the US is the main military power in NATO could it be said that the MIC is also so large because it not only covering US but Europe as well?

  26. Steven

    If I was Dr. Hudson, I would have titled this one “The Poison Fruit of Super Imperialism”. I suppose there is a little geopolitics in the mix. But I have to wonder if the reason so many of the EU’s ‘leaders’ bought off on this doesn’t have more to do with their banks and governments being allowed to participate in the racket of exchanging government and financially-engineered debt for the rest of the world’s wealth.

  27. Keith McClary

    Biden “supported the Canadian pipeline” ???
    Last I heard, he shut down the Keystone XL. There is also the Trans Mountain Pipeline, but I don’t think he had anything to do with that. Maybe you mean that he did not try to shut down Line 5 ?

  28. doug

    Thanks for this. I donated what I can based for the head line alone. Should be required reading. Great comments and replies. This place is special.

  29. Scott1

    The simplest motives for the people of either Russia or Ukraine are nationalist, or just nationalism. I recognize that my survival is dependent on the survival of my nation. I am poor because leaders, the wealthy of the state I live in and the nation I live in want me to be in a compromised situation. I am locked into a side. The last greatest thing is free speech. Most of the time we are segregated so we sing to the choir. Still it is way better than not being able to sing at all.
    My definition of the Nazis and fascists requires a fight against them whether I am murdered or not. “I don’t fight fascists because I will win. I fight fascists because they are fascists.” I see oligarchs as fascists who have ended up in control of the international corporations who want my labor for the very least. If someone somewhere will satisfy their schedule for less, they hire them. Nationalism means nothing to them. What ought nationalism mean to me?
    Out around the planet falls the International Space Station. The astronauts and cosmonauts will all die together when Chinese Communist nuts and bolts puncture their escape vehicle and the rest of the Space Station is torn apart. Nationalism as loyalty to nations on the surface of the planet does them no good, to the point where they must join together as their own nation.
    It is pretty interesting how what is happening on the planet affects their loyalty. Without a vote about what they must live with they are helpless.
    It is those who have no property, who had no property, the sailors of Athens who won the battle of Salamis won for all of us to this day our vote. Rentiers be damned, but it is nice to leave deeds to your ancestor families so they don’t have to drown or die in pieces on some shit covered battlefield.
    Rewards can go too far same as punishments.

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