Ilargi: EU – Controlled Demolition

Yves here. Ilargi provides a spare and clear-eyed account of the bizarre and distressing spectacle of EU leaders holding tenaciously to policies that are already doing fundamental damage to their productive sectors and communities. And far worse is obviously in store if they don’t relent. Yet they seem determined to keep harming their countries to hurt Russia, as if trying harder will finally cause Russia to buckle, as opposed to their societies.

Ilargi posits that this deranged elite behavior is the result of their disconnect from the lower orders. That might be true of the Davos crowd. But European officials read newspapers. They have to field questions at press conferences. They see data, particularly of spiking energy prices. They take meeting from members of important and presumably unhappy power blocs. So how can they keep convincing themselves, in the face of mounting evidence, that their present course is sound, when any objective observer would nominate them for a Wall of Shame of the worst leaders evah?

The only explanation I can come up with is that current Western leaders cannot grasp emotionally or practically that they no longer call the shots. Surely Russia will crack because Russia is a small economy (in their terms) with a lousy military and inferior people generally. Never mind the evidence in their faces of the reverse.

It may seem like a strained analogy, but in 1984 I was part of a team consulting to Citibank’s London Treasury, which among other things had the bank’s biggest foreign exchange trading operation. That Treasury had gone from being London’s biggest profit center to a money loser.

With the benefit of hindsight, the reason was simple. The bank’s top FX traders had grown up in a weak dollar environment. Their reflexes were all wrong when the dollar suddenly became super strong. But even if I as a young consultant had had the guts to state the problem that crisply, the client would have been very unhappy because there was no simple remedy. Fire once highly successful traders? Where could they find replacements who could be trusted to execute big transactions? Or at best, cut their limits until they retrained themselves?

This reading means, as others have suggested, that EU leaders need to be turfed out. But that won’t happen soon enough to forestall suffering and severe economic damage.

By Raúl Ilargi Meijer. Originally published at Automatic Earth

As I read through the multitude of daily news articles about Russia, Ukraine, NATO and EU, it’s getting ever harder to escape the idea that there is a controlled demolition of the continent happening. And that neither its “leaders”, and certainly not its people, have any say in this. All we get from those “leaders” are NATO or World Economic Forum talking points. The only independent voice is Victor Orban. Who is either silenced in western media or painted as fully insane.

But Orban’s Hungarians won’t freeze this coming winter. He just signed a new gas deal with Russia. The main reason that is provided for all the others not doing that is of course Russia’s Special Military Operation in Ukraine. Which is as insane as Orban is, and “totally unprovoked”, say the western media. Noam Chomsky summarized that best: “Of course it was provoked. Otherwise they wouldn’t refer to it all the time as an unprovoked invasion.”

And no, it wasn’t just Russia/Ukraine, way before that Europe had already screwed up its economies beyond recognition -if you cared to look under the hood. But why make it worse? I get a very strong feeling that those EU “leaders” have alienated themselves far too much from the people they purport to serve, and they’ll regret it. For now it’s obvious among farmers, for instance, but when people start freezing, they will want to know why. And if no answer is forthcoming that is both honest and satisfactory, many “leaders” will have it coming for them.

The entire energy and food crisis is being sold as “inevitable”, but it is nothing of the kind. They are the result of choices being made in Brussels, Berlin, Amsterdam etc., about which nobody has asked your opinion. Something I jotted down a few days ago:


Is the west using Ukraine as an excuse to commit mass economic suicide? And, you know, fulfill some WEF-related goals? Why else would they cut off all economic ties to Moscow, at a time when it’s obvious they have no alternative sources for much of what they import from Russia? Moreover, why does a country like Holland aim to close 10,000 of its farms when it’s crystal clear that that will exacerbate the coming global food crises?

If you don’t like Putin, that’s fine, but why should your own people suffer from what you like or not? And of course you can ask whether it’s a good idea that a country the size of a postage stamp is the world’s no. 2 food exporter. But it is. And if you try to change that by doing a 180º, also on a postage stamp, it is very obvious that is not going to go well. And all the so-called leaders know this. But they still do it.

Prices for heating, petrol, as well as food, are set to go much higher than they have already, mitigated only -perhaps- by the fact that ever fewer people will be able to afford the ever higher prices. But now it’s starting to look like this was all scripted. Because “we” could have kept communication channels with Russia open, “we” could have negotiated for peace for the past 6 months. Not doing that was a deliberate choice. A choice that you and me, another “we”- had no voice in whatsoever.

The Dutch could have negotiated with their farmers, and slowly addressed their perceived problems with nitrogen oxides, while keeping food production going. And we could have found a way to keep Russian and Ukrainian crops available on world markets too. But it doesn’t feel at all like “we” wanted that.

Someone made a list of what EU won’t get anymore with the Russia boycott.: “nat-gas, rare earths, inert gases, potash, sulfur, uranium, palladium, vanadium, cobalt, coke, titanium, nickel, lithium, plastics, glass, ceramics, pharmaceuticals, ships, inks, airplanes, polymers, medical and industrial gases, sealing rings & membranes, power transmission, transformer and lube oils, neon gas for microchip etching, etc., etc.”

And that’s not all. Fertilizer!! Why they do it, I don’t know. Do they WANT to kill their own economies? It makes no sense. And this will not be over soon.

Reuters of course seeks to blame Putin. But he’s not the one who introduced the sanctions. He’s offered to let the gas and oil exports continue.

Putin Bets Winter Gas Chokehold Will Yield Ukraine Peace – On His Terms

Cold winters helped Moscow defeat Napoleon and Hitler. President Vladimir Putin is now betting that sky-rocketing energy prices and possible shortages this winter will persuade Europe to strong arm Ukraine into a truce — on Russia’s terms. That, say two Russian sources familiar with Kremlin thinking, is the only path to peace that Moscow sees, given Kyiv says it will not negotiate until Russia leaves all of Ukraine

“We have time, we can wait,” said one source close to the Russian authorities, who declined to be named because they are not authorised to speak to the media. “It’s going to be a difficult winter for Europeans. We could see protests, unrest. Some European leaders might think twice about continuing to support Ukraine and think it’s time for a deal.”

EU foreign policy chief Josep Borrell wants Europeans to be obedient little critters, and take the punishment for the policies he and his ilk have carved out. Because “we” are destined to win. Mr. Borrell is planing to do just fine this winter, mind you. With the best steak your money can buy, real fine wine, to be consumed in comfortably heated homes, restaurants and offices. A picture of Marie Antoinette pops up in my brain.


‘Weary’ Europeans Must ‘Bear Consequences’ Of Ukraine War As Putin Will Eventually Blink: EU’s Borrell

EU high representative and foreign policy chief Josep Borrell gave a surprisingly blunt assessment of the Ukraine war and Europe’s precarious position in an AFP interview published Tuesday, admitting that Russian President Vladimir Putin is betting on fracturing a united EU response amid the current crisis situation of soaring prices and energy extreme uncertainty headed into a long winter. Borrell’s words seemed to come close to admitting that Putin’s tactic is working on some level, or at least will indeed chip away at European resolve in the short and long run, given he chose words like EU populations having to “endure” the deep economic pain and severe energy crunch. He cited the “weariness” of Europeans while calling on leadership as well as the common people to “bear the consequences” with continued resolve.

Borrell explained to AFP that Putin sees “the weariness of the Europeans and the reluctance of their citizens to bear the consequences of support for Ukraine.” But Borrell suggested that Europe will not back down no matter the leverage Moscow might have, particularly when it comes to ‘weaponization of energy’ – and called on citizens to continue to shoulder the cost. Who will blink first? …appears to be the subtext here. He urged: “We will have to endure, spread the costs within the EU,” Borrell told AFP, warning that keeping the 27 member states together was a task to be carried out “day by day.”

And yet, as some like Hungary’s Viktor Orbán have consistently argued since near the start of the Feb.24 invasion, it is inevitable that some will be forced to bear the “costs” much more than others. Already this is being seen with initiatives out of Brussels like rationing gas consumption, which has further led to scenarios like German towns and even residences being mandated to switch off lights or resources for designated periods at night. “More cold showers” – many are also being told. As we round the corner of fall and enter the more frigid months, we are likely to only see more headlines like this: “German cities impose cold showers and turn off lights amid Russian gas crisis.”

Talking of Marie Antoinette. Emmanuel Macron is the little man of grand vision. He foresees the ‘End Of Abundance’, a veritable “tipping point” in history. And he’s just the man to lead you through it. I’ll give him this: he’s got good speech writers. But speech writers don’t keep the people warm and fed.


Macron Warns Of ‘End Of Abundance’

France is headed toward the “end of abundance” and “sacrifices” have to be made during what is a time of great upheaval, President Emmanuel Macron told his cabinet on Wednesday upon returning from summer break. The country has faced multiple challenges lately, ranging from the ongoing conflict between Russia and Ukraine to the unprecedented drought that has battered the whole European continent this summer. Yet, Macron believes that the crisis is actually of a much bigger scale and that structural changes are imminent.“

Some could see our destiny as being to constantly manage crises or emergencies. I believe that we are living through a tipping point or great upheaval. Firstly, because we are living through… what could seem like the end of abundance,” he said. The country and its citizens must be ready to make “sacrifices” to meet and overcome the challenges they are facing, he continued. “Our system based on freedom in which we have become used to living, when we need to defend it sometimes that can entail making sacrifices,” Macron added.

“Faced with this, we have duties, the first of which is to speak frankly and very clearly without doom-mongering,” Macron stressed. The president called upon his cabinet to show unity, be “serious” and “credible” and urged ministers to avoid “demagogy.” “It’s easy to promise anything and everything, sometimes to say anything and everything. Do not give in to these temptations, it is demagoguery,” the president said, adding that such an approach “flourishes” today “in all democracies in a complex and frightening world.”

There is a pattern in the messages of today’s Marie Antoinettes. Borrell wants you to take it lying down, Macron wants you to do that for a long time (like the rest of your lives), and the Belgian PM makes it more concrete: you’ll be freezing for the next 10 years. After which, supposedly, renewables will have been built to keep your kids warm. Spoiler: they won’t be.


Belgian PM: “Next 5-10 Winters Will Be Difficult” As Energy Crisis Worsens

Belgian Prime Minister Alexander De Croo might have spilled the beans about the duration of Europe’s energy crisis. He told reporters Monday, “the next 5 to 10 winters will be difficult.” “The development of the situation is very difficult throughout Europe,” De Croo told Belgium broadcaster VRT. “In a number of sectors, it is really difficult to deal with those high energy prices. We are monitoring this closely, but we must be transparent: the coming months will be difficult, the coming winters will be difficult,” he said. The prime minister’s comments suggest replacing Russian natural gas imports could take years, exerting further economic doom on the region’s economy in the form of energy hyperinflation.

From Greece, even more concrete: energy subsidies. €1.9 billion in one month. To keep the hordes out of the streets. Wait, that Belgian guy said this will last 5-10 years. How is the country going to pay for that? One thing that comes to mind is Greeks will vote for anyone in the next election who vows to talk to Putin ASAP, restore the countries’ good relationships and sign a gas deal.


The Electricity Subsidy Shock

A significant rise in the price of electricity announced by state-controlled Public Power Corporation (PPC) for September forced the government to raise its electricity subsidy for September to 1.9 billion euros, from €1.1 billion in August. The subsidy level inevitably follows the PPC’s pricing policy, since it is the dominant player in the market, with 63% of consumers choosing it. While PPC had the lowest price of all electricity providers in August (€0.48 per kilowatt-hour) it raised its September price to €0.788 for those consuming up to 500kWh per month and €0.80 for heavier consumers. In order to stick to its commitment for an actual charge to consumers between €0.14-0.17 per kWh the government had to adjust its subsidy level accordingly, raising it by over 72%.

How long will this last, you said? Well, according to AP, “Washington expects Ukrainian forces “to fight for years to come.” “Included in the package are advanced weapons that are still in the development phase..”


‘Months Or Years’ Before US Arms Reach Ukraine – Media

Years could pass before some of the weapons in the upcoming “largest ever” package of US military assistance to Kiev actually reach Ukraine, according to Western media reports. On Tuesday, a number of mainstream media outlets cited anonymous US officials as describing the impending announcement of a $3 billion package of military aid to Ukraine. If confirmed, it would be the largest of its kind so far. Washington is by far the biggest supplier of military hardware to Ukraine as it fights against Russia. However, some of the promised equipment “will not be in the hands of Ukrainian fighters for months or years,” according to NBC News, one of the outlets that reported the upcoming package. Included in the package are advanced weapons that are still in the development phase, it explained.

The same caveat was cited by the Associated Press, which said that it may take “a year or two” for the arms to reach the battlefield, according to its sources. Washington expects Ukrainian forces “to fight for years to come,” US officials told the AP. The AeroVironment Switchblade 600 drone is an example of a weapon system that was promised to Ukraine months ago but has yet to be delivered. Defense News said this week that the Pentagon plans to sign the contract necessary for sending 10 of the so-called “kamikaze drones” within a month. Last month, Ukrainian Defense Minister Aleksey Reznikov called on foreign suppliers of arms to use his country as a testing ground for new weapons. He pledged to provide detailed reports about the experiences of Ukrainian soldiers with the prototypes provided to them.

This is not going to go well. Not for the European “leaders”, not for the EU, not for Ukraine, and not for Europeans. We could start a little bet as to how many leaders will still be in place by spring, and I bet you Zelensky won’t be one of them. Putin will. As for the rest, Rutte, Macron, we’ll see. But don’t underestimate the wrath of people with hungry and cold children. It feels like almost an alien image for 99% of Europeans, but it no longer will be.

And there is no logical reason for this, there is only the ideology of a few handfuls of little men with grand visions. Hate of everything Russia has kept the west going for 100 years or more. And these little men feed off of that. They can only do that by refusing to talk. Because that’s exactly what Russia does not refuse. Only, they want to talk as equals.

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  1. Colonel Smithers

    Thank you, Yves.

    Just one quibble: “Ilargi posits that this deranged elite behavior is the result of their disconnect from the lower orders. That might be true of the Davos crowd. But European officials read newspapers. They have to field questions at press conferences. They see data, particularly of spiking energy prices. They take meeting from members of important and presumably unhappy power blocs.”

    From my regular visits to Brussels as a bankster and trade lobbyist, between 2007 – 16, I reckon EU officialdom is equally detached from its populace. [Hopefully, David will pipe about Erasmus.] Press conferences are rarely challenging. Why? Few of the journalists based there understand the issues, risks, complexities etc. They are more like Johnson, a former Brussels correspondent, who rarely turned up and made up stories. Who do they meet? Producer interests are camped permanently around the area where the Commission, Parliament and related offices are located. In my time there, I rarely came across the representatives of workers, the public etc.

    I can’t think of any MEPs other than Irish couple Clare Daly and Mick Wallace, who PK may chime in about, and a Croat who ask awkward questions.

    With a few and honourable exceptions, most MEPs are second raters who can’t get selected / elected at home. Similarly, few bureaucrats see Brussels as a posting likely to advance their careers. Postings are very lucrative, though.

    I am working from home today and have the BBC rolling news on as background noise. There’s no mention of the cost of living crisis here, but there is a report from the Belgian riviera (sic) about the EU one. It was the same yesterday evening when I returned from work. France 2’s evening news led with the crisis, but there was no mention on the BBC and Channel 4.

    1. digi_owl

      Yep, the ongoing issue is that corporations can individually or as a group outspend just about anyone else on lobbying. Both in terms of money and time spent hounding the various people in power.

        1. podcastkid

          I have a question for you which may seem off topic. So first a rationalization: Suppose everything was worked out and the west could keep getting
          “nat-gas, rare earths, inert gases, potash, sulfur, uranium, palladium, vanadium, cobalt, coke, titanium, nickel…” etc. At such time these items might not then arrive in any kind of technically “demolished” state, but, if there’d been a melt down at Zaporizhzhia, maybe a whole slew of’em would be radioactive?? All these resources that the west could have used (adapting to climate disruption for one thing) would be out of the picture. This neocon path in truth heads for double jeopardy…if the west continues the opposition, or quite possibly afterwards when there’s peace.

          My request, Michaelmas, is could you possibly link that comment you did on methane/permafrost? I’ve spent a lot of time trying to re-find it.

      1. spud

        “Economic globalization has enabled the manic scouring of the world by TNCs for the most ‘liberal’ (read: unregulated) environments in which to locate production facilities – the places where expenses can be minimized and profits maximized.

        Since the biggest drags on corporate profiteering come from taxes, environmental regulations, and decent labor protections and wages, the global relocations of TNCs have largely been towards countries where those costs are lowest, or absent altogether.

        By increasing their economic power, globalization has also given TNCs the ability to capture governments, which then collude in further reshaping of the world through ‘free’ trade treaties, supra-national institutions like the IMF, WTO and World Bank, and subsidies and hand-outs to attract and retain big businesses.”

    2. Tinky

      “Press conferences are rarely challenging. Why? Few of the journalists based there understand the issues, risks, complexities etc.”

      When I read something along these lines, and it is an indisputable problem, I invariably think of one of the glorious exceptions, the Irish journalist Vincent Browne. I encourage readers to take five minutes of their time to watch Browne challenge Klaus Masuch, Principal Adviser in the Directorate General Economics of the European Central Bank, and in 2012 the head the ECB delegation involved in the negotiations and monitoring of the programme attached to the EFSF/IMF loan to Ireland, about the bank bailouts. It is both a shining example of real journalism, and a painful reminder of how rarely such challenges are even allowed to directly reach those in power these days.

        1. Geoffrey

          as an aside, IMO Vincent Browne was good at invective and robustly challenging interviewees. it was mostly showmanship and playing to his audience: I never heard him carry his questioning thru’ to any depth on any topic, and he frequently jumped to another angle of attack if the initial one angle wasn’t getting the results he hoped for.

  2. JohnA

    Apropos the ‘end of abundance’, this is nonsense. Firstly, the group that is going to suffer most from soaring heating and food costs, have never had anything in the way of abundance, they have lived hand to mouth for years. Secondly, there is no end to abundance for CEOs, bankers, shareholders etc., who have all received extremely generous pay and dividend increases, not to mention how much richer the multimillionaires and billionaires have become over the past few years. Sophism in spades from the EU elite.

    1. digi_owl

      Abundance is relative if one take a global perspective.

      Even a pauper in Europe is a king elsewhere.

      Years ago, when the Norwegian social services were digitizing their paperwork, someone went to the press with how he could buy a cheap ticket to Asia, file all his unemployment paperwork online from there, and then catch a cheap flight back if he was required to show up at their office.

      This allowed him to live like a “king” on what was deemed an existential minimum back home. And the instant response from the right wing upon this hitting the news, was to find some way to punish him and block anyone else from doing the same.

      But the irony is that if you are a “knowledge worker” you can uproot and keep working from just about anywhere in the world.

      I suspect much of the bally-ho about remote work these days is that corporations do not want their peons to exploit the kind of cross border arbitrage the corporations themselves have exploited for so long.

      1. Colonel Smithers

        Thank you.

        There was one such recipient, a German, exposed as living in Florida a decade or so ago. When asked by German TV why, he said living in Germany made him depressed.

          1. Michaelmas

            Maybe he liked the strip joints in Florida. And Miami in particular does have its charms, though I wouldn’t want to live there

    2. Robert Hahl

      It seems that Europe is planning to drive people out just like they did 100 years ago. I took my father to see Ellis Island again, shortly before he died. The whole facility is still there waiting to be reopened.

      1. digi_owl

        Nah, they will just be left to linger in legal limbo in airports.

        Also, if i was to up and leave Europe today USA would not be the first pick destination…

        1. chuck roast

          Perhaps, after the RF settles things in Ukraine, it might become a comparatively attractive destination.

    3. Mikel

      It’s BS because all of this mess is caused by the few like Macron who can’t imagine and end to their OWN abundance. They have an absolute total lack of imagination. Their view of the “end of the world” is the end of their power.
      Indeed. Let’s see how that rat continues to maintain his living standard with all of his calls for “sacrifice.”

    4. Delvigil

      Example: It would take ~20 Billion to end homelessness in America.
      We can’t afford that, yet “we” have sent three times that to the corrupt authoritarian in Ukraine to continue feeding his soldiers into the furnace of war. Zelensky and the Ukranian people are going to lose, we and our children and their children will be responsible to pay off that debt.
      Russia is not the enemy, the manipulators of U.S. foreign and fiscal policy are the enemy right here. Learn who they are.

    5. Peerke

      I think he should have used the term over-abundance (if that exists en francais as a concept?) and I wonder did he specify of what? If he meant material stuff then he is dead right and this is how it is going to be generally going forward. But if the bloke meant money/financial assets then his time is up.

    6. spud

      the day bill clinton signed the bill that deregulated commodities, i watch on t.v. live a wall street trader come out on the steps and shout out loud, “the era of scarcity is here”.

      macons writers simply took their script from wall street.

  3. Thuto

    When the aristocracy catches a cold, the working class die of pneumonia” – Jordan Peterson.

    The EU political aristocracy has caught a cold alright, their mental faculties have gone completely cold (like Kelvin scale 0° cold), and the lungs and airways of European economies are infected with what may be a terminal case of pneumonia. The smart money will be betting that guillotines will be on the comeback trail soon and stock pickers will be “going long” on pitchfork manufacturers.

    1. Colonel Smithers

      Thank you, Thuto.

      Don’t be so sure. I am keeping my emerging markets grade Sterling in my pocket.

      As I type this reply, the BBC is advertising a series of programmes about Ukrainian refugees.

      1. Thuto

        Thanks CS.

        Speaking of the BBC, and slightly off-topic, what’s your sense on who the British media is backing for the PM position between Truss and Sunak? Any scandal dossiers being dusted off to discredit any of the two?

        1. Colonel Smithers

          Thank you.

          I get the impression that the media is divided. Sunak gets more favourable coverage from the BBC, centrist and Murdoch press, but the Mail and Telegraph lean towards Truss.

          Scandal wise, apart from the corruption associated with covid contracts and Truss overriding concerns when negotiating post Brexit trade agreements, I can only think of Sunak’s role in the RBS take over of ABN AMRO and placing his former boss at the Bank of England, BBC and Royal Opera and Truss’ carnal relations with Tory HQ staff.

            1. Jams O'Donnell

              It’s a scandal that lame brains like these are going to be running what is probably by now only the tenth or fifteenth largest economy in the world.

        2. Norm de plume

          ‘scandal dossiers’

          This is my 2c for the answer to the apparent puzzle at the heart of Ilargi’s piece and Yves’ rejoinder – what can explain this lemming-like rush to the cliffs?

          There have always been such dossiers on leaders and potential leaders and even key staff -necessarily sketchy and sporadic up until the last decade or two, thanks to the (lack of) technology.

          Now certain elements have access to everything that everyone has done since the turn of the millennium. Do all or or at least most of the people who make it to the top of the greasy pole nowadays have game-changing skeletons in their closets?

          You only need to ask three questions: can such comprehensive information be gathered and stored in secret; could such information be useful in attaining goals, and would such elements hesitate to use it?

          1. Yves Smith Post author

            It didn’t work with Martin Luther King, and in Europe, sex scandals are not scandalous. And some political figures can’t be shamed, like BoJo and Berlusconi and Trump.

            I’m not saying it might not work in selective cases. But on a large scale basis, I doubt it.

          2. Geoffrey

            In addition the the blackmail and bribery of EU leaders angle, as well as appeals to their narcissism and base instincts for position and money, blogger Jack Rasmus suggests that the EU elite have – at some level and obliquely – been promised a share in the spoils in the new political-economy, albeit the EU economies will be totally subjugated to and preyed on by US. Perhaps an indicator of this is Macron, under who’s watch one of the jewels in France’s industrial crown, Alstom, (and an important part of France’s independent nuclear deterent thru its turbine technology) was taken over by GE, with plenty of dirty tricks involved, French banks and financial intermediaries were also all over the deal. Didn’t stop Macron’s political rise backed by the money of French neo-liberals…

    2. Harry Haller

      Just a quick “lol” at Jordan B. Peterson pretending he’s a principled champion of the working class.

      1. Kouros

        Hear! Hear! The guy is so enamored of the Paretto Principle and the 200 divide that it cannot see his head from his bum… By carrying water to the owners, he hopes to merchandize his brand and cash in….

  4. DJG, Reality Czar

    A disturbing post indeed. Worth every word, though.

    “Yet in the midst of all their prosperity, princes in this respect seem to me most unfortunate, because, having no one to tell them truth, they are forced to receive flatterers for friends.”
    ― Erasmus, Praise of Folly

    1. OIFVet

      Dunno if the current crop of EU princelings don’t have any friends to tell them the truth or they simply don’t care. I lean toward the latter conclusion, what with a number of studies having shown that to rise to such elite positions individuals need to possess rather pronounced sociopathic traits. Then there is the matter of many of them, at least in the Eastern parts, having been bought off or otherwise controlled through past indiscretions, mainly corruption. In any case, the EU is in for a very rough ride of social unrest, and not just through winter. I doubt that many governments will survive through the end of next spring.

      1. NotTimothyGeithner

        I tend to think this is very much the result of a mind set developed from colonizers and their cosplayer Eastern European neighbors not having faced retaliation for centuries of destruction and theft outside of their borders with no retaliation. If a country that was wrecked 30 years ago can beat their wonder weapons and has negated the fleets and air power, then every country enters into a new bargaining position especially with China and Russia joined agent the hip, offering alternatives.

        In an age of interconnectedness and an absence of ideological contest, the G7 propaganda standing as the world is a bit much especially when countries like India, Indonesia, and Brazil aren’t part of the group.

        Governments changing won’t matter as I think the mindset is so deep seated. They just will wallow in misery for a while before they move on regardless of who is running things that day.

        It’s not dissimilar to the “America is back” followed by the complaint that foreign countries want concessions before accepting US demands. The US elites may have convinced themselves the problems the empire was having were all due to TRUMP, but he was basically a lazy GOP type at the end of the day. Desantis, an elevated Harris, or a Team Blue primary winner will all produce similar results. America will be built back better to make America great again (it’s the same slogan), and they will blame an insufficiently supportive electorate and foreign enemies because they can’t conceive history didn’t end in 1991.

        1. marku52

          Yup. When the choice is between 2 neoliberals wearing different color culture war cloaks, as the man said “Nothing fundamental will change.

        2. Lodger

          Whats lazy about working extremely long hours and holding 3 or 4 rallies a day , often in different states, as
          Biden sat in his basement?
          I never heard his greatest haters call him lazy. They were disturbed at how active he was.

  5. Alex V

    Regarding the closing of a third of Dutch farms and the fact that they are the No. 2 food agricultural exporter (by value) – it’s important to look at what they actually export (and re-export):

    #1 is flowers. #2 is meat, #3 is dairy and eggs. The food products are high carbon and low calorie/euro, and high nitrogen emissions vs plant-based foods. The ethics of animal product consumption can of course be debated, but they are not vital to human survival. Vegetables are next – a majority of these are grown in natural gas warmed greenhouses – so the rest of northern Europe can have tomatoes in the dead of winter.

    The largest export destinations are immediately neighboring countries which could likely produce these products themselves (since they have nearly identical climates).

    These things are produced in the Netherlands for export because it’s national industrial policy, not because they have a natural competitive advantage due to geography or climate.

    30% of all food produced is wasted, this is also true in the Netherlands.

    The global system can withstand this reduction in farmers. The political process of how we get there is where things have gone quite wrong.

    1. juno mas

      Yes, excellent observation.

      The 10,000 farmers (in the article) are being asked to reduce nitrogen oxides (mostly from farm animals) 30% because these oxides are an element of global warming. Flower farmers don’t have the same issue as CAFO’s (concentrated animal farm operations).

      The Dutch have absolutely outstripped the capability of its land to mitigate the impacts of pollution from animal farms. It’s time for a reduction of animals or implementation of mechanized waste treatment operations.

      1. Dave in Austin

        The Netherlands hasn’t been able to feed itself since the 19th century. It lives on trade. My suspicion is the natural gas from the North Sea is now too valuable to be turned into tomatoes and this winter it will heat German homes. The Dutch knew it was too valuable to be used to make tomatoes all along and would have preferred to leave it in the ground. But the North Sea gas formation was split between the Dutch and the Germans and the Germans were pumping. It was use it or lose it.

        I wonder how many Dutch grandmas are still around who remember what the Dutch simply call “The Hunger Winter”- November, 1944 through March, 1945? I knew Dutch people who still remembered the formations of British Wellington bombers flying low and slow that spring at great risk, dropping food.

        In the 1950s the Dutch poldered half of the Zieder Zee and turned it into Flevoland… new farms and a new frontier. There is a wonderfully typically-Dutch memorial to the “Flevoland Pioneers”; the heroic father pointing out toward his new farm; the small children; and the wife, arms crossed and frowning. The new frontier to her meant at last they had a farm but it also meant drudgery and being away from her home village, family and friends. Even the Dutch monuments have few illusions.

        1. Yves Smith Post author

          Please don’t Make Shit Up. You keep doing that and I will have to blacklist you.

          It takes all of 30 seconds to find that it’s Norway and the UK that hold the biggest North Sea reserves. Its gas production has been in decline, as reflected in UK stats:

          Similar historical data is available for gas.[38] Natural gas production peaked at nearly 10 trillion cubic feet (280×109 m³) in 2001 representing some 1.2GWhr of energy; by 2018 UK production had declined to 1.4 trillion cubic feet, (41×109 m³).[39] Over a similar period energy from gas imports have risen by a factor of approximately 10, from 60GWh in 2001 to just over 500GWh in 2019.

          And most gas from Norway is sold abroad, including to Germany:

          Norway is the third largest exporter of natural gas in the world, behind Russia and Qatar only. In recent years, Norway has supplied between 20 and 25 per cent of the EU and United Kingdom gas demand…

          There are no “first delivery” gas points in the Netherlands. However, eyeballing the charts, Germany is the biggest taker and Denmark and France are meaningful. And the Netherlands is the biggest recipient of NGL liquids (other pipeline system), although I am not sure how they are used.

          Note a recent post said Iran is #2 in gas reserves, but given the sanctions, it hasn’t been much of an exporter.

          And again, contrary to your claims, Germany and the Netherlands plan to start new production in their bloc:

          The Netherlands and Germany will drill for gas in the North Sea together, with production expected to start in 2024, the Dutch government has announced.

          According to the Dutch government’s website, production will take place in the North Sea, about 19 kilometres north of Schiermonnikoog and Borkum. A pipeline is being constructed to get the gas onto the shore.

          To satisfy the concerns raised by environmentalists, the platform will be moved away from a local oyster project, and water released during production will be filtered.

          On the Dutch side, permits to start drilling were issued by State Secretary Johannes Alexander Vijlbrief on Wednesday (1 June).

          Since Gazprom announced it would stop supplying gas to the Netherlands on Tuesday (31 May) after Dutch wholesaler GasTerra refused to bow to the Kremlin’s demand to pay in roubles for fear of breaching EU sanctions, the Dutch want the process to speed up.

          However, on the German side, the state of Lower Saxony, which decided against issuing permits for the projects last year, “is now making a different decision because of the war in Ukraine”, the Dutch ministry said.

          Oh, and a recent study found that boreholes were causing lots of methane leaks:

          1. José Freitas

            I have been reading on the nitrogen pollution thing. Apparently (take with grain of salt) Brussels is the last approver on numerous big projects, by handing countries a “nitrogen” budget. If some big projecf needs to be built, some nitrogen pollution emission must be reduced somewhere else. The Netherlands have some big construction projects stalled, and have chosen to slash the farmer’s nitrogen emissions so the building can proceed. It’s a political choice.

    2. Scylla

      Late to the party, but I will just point out that there is this thing called the nutrient cycle. Large numbers of ruminants are necessary for successful agriculture (ESPECIALLY if you understand that we need to move away from chemical fertilizer inputs). Large numbers of ruminants require predation. We might be able to get away with eating less meat, but there will always be a need for meat consumption.
      And please do not take this as an endorsement for feedlots/CAFOs. See Allen Williams, Russ Wilson, Allan Savory.
      There is also a fundamental disconnect when people discuss food wastage. Most people advocate for the consumption of fresh/minimally processed food (and I agree), but these same people are the ones who tend to handwring the most about waste. If you want to minimize waste, that means shelf-stable and highly processed foods. I notice very few wish to grapple with this contradiction. If you want people to consume fresh foods, that means accepting a certain level of waste (compost it! It’s not waste then!)
      Oh, and as to the cow farts worriers (I see that one all the time too)- It’s odd that the truly gargantuan herds of Bison, Aurochs, water/cape buffaloes of prehistory did not send us into a climate catastrophe- The problem is the burnt carbon, but giving that up means giving up too much convenience, apparently.
      What we need is *more* farmers, and less mechanization. Get people out of their bullshit jobs and let them return to the land, where we belong.

  6. digi_owl

    Sadly these days the newspapers are written by the “Davos crowd”, or at the very least their “humanities crowd” fans that think food comes from some back room replicator at the store.

    1. Thuto

      In the era of access journalism (where access to people in power is granted only to those who don’t ruffle feathers) the role of journalists is to regurgitate press releases from governments and corporations.

      1. digi_owl

        And increasingly the government releases were written by some corporate lobbyist and rubber stamped by some office drone.

        These days the revolving door is looking more and more like a open door policy…

    2. hk

      Funny bit about “back room replicators.”. A fairly common story in econ textbooks (with some edits) is that some guy claimed to have invented a gadget that can produce stuff cheaply and he’s hailed as a hero. It turns out that he was importing the stuff from a country where the stuff is produced (and transported) just as cheaply and now, he’s condemned as a traitor–even though economically, the outcomes are identical. Of course, it’s not just economics, but how the process are going to the “wrong kinds of people.”. I guess the “replicator” that throws away the “inputs” into the ether is OK, but a trade that sends them to foreigners (esp the wrong kinds of foreigners) is different.

      1. Revenant

        But the outcomes are not identical, except to a globalist. In the domestic production example, internal demand for a good has been satisfied, productivity has improved and additional fiscal and real resource space for the demand and supply of other goods has been freed up.

        In the import example, demand has been exported, reducing domestic production and these effects are *not necessarily* outweighed by the potential increased demand from the real resource and fiscal space created because the knock-on effects of reduced domestic demand may include reduced domestic incomes etc.

        Only if you view a world without borders are the two equivalent overall and even then, their effects will be differently distributed and therefore different for different sectors of the population.

  7. Ignacio

    I think it should be clear first and foremost that this is a EU thing that they are trying to push as hard as they can but also that the underlying factors across EU countries are different. You can put von der Leyen and Borrell in the centre of European idiocy but run more slowly when analysing national leaders if you don’t know what is on their minds. Amongst these you can certainly include Macron and Scholz. Even when the EU Commission wants to show unity on this the underlying discrepancies, as they almost certainly occur, remain hidden.

    It is the case that the Commission was wanting EU countries to pledge to a plan in July that would save 15% of energy demand during next autumn and winter. A plan for a “safe winter” was called. At the end of the meeting by the end of July a statement was issued for an agreement on this but, it must be said, the agreement is not mandatory but voluntary. Yesterday, Germany unveiled a plan that, for now, will save 2%. Imagine. Lots of upcoming plans will have to be approved to reach the goals of the Commission only in Germany.

    Yesterday I watched a conversation at The Duran between Christoforou and Mercouris (EU Recession means more EU Authoritarianism ) precisely about this, and how different the outcomes would be in different EU countries. First in line to suffer the most are Baltic countries which are, with Poland, the core of anti-Russian sentiment. Then there is Germany, who could believe it, risking their powerful industries betting them in this game against Russia. The greek guys at the Duran had some fun arguing that it is difficult for Germany to identifiy their worst enemies: Poland? Baltic States? the German Green Party?

    1. digi_owl

      Germany has bet the farm, and then some, on maintaining a trade surplus.

      Except that over time it has shifted towards producing more and more “luxury” goods, or at least products that are not vital to survival.

      This is why EU and USA is all bark in this conflict. Sanctions only really work when the nation being sanction need what is being withheld.

    2. The Rev Kev

      That Duran page does not load up for me but here is the same video at YouTube- (17:52 mins)

      As to your last line, it may be that Germany may find that the Russians were their best friends all along. Also, I think that it was Alex Christoforou saying that the Poles have been putting the boot into Germany recently for whatever reasons.

      1. eg

        How long must Germany suffer the consequences of Kaiser Wilhelm II and successors’ follies and realize that Bismarck was right all along?

        1. dommage

          Bismarck was not right all along, at least not consistently. The Lombard-Verbot of November 1887 was contradictory to the Reinsurance Treaty, and led directly to the 1889 first haute banque underwritten Russian emprunt, that swelled into the flood that contributed in a very major way to…WWI.

        2. Mikel

          You mean they aren’t the Übermensch they think they are?
          Alas, exceptionalist claims are nothing new.

      2. Lodger

        The reason is Poland thinks Germany should be giving more money and weapons to con man Zelensky, who was given a TV show, named “Servant of the People” by the network’s bilionaire owner to groom his image. Zelensky has been given billions by this man. He has mansions on the Israeli riviera and in Miami. His offspring do not fight for Ukraine but joined the IDF! Zelensky won the presidency on a peace promise platform. Now he obediently follows the commands of the neocon cabal in DC/NYC who want still another Forever War. I wonder who controls the MSM who report none of this.

    3. hk

      The Danzig and the Corridor of 21st century, after all the dust (of today) has settled? Unlike in 1939, they can’t just take them at the point of the gun.

  8. TimD

    ROI – return on imperialism seems to be a lost measure now a days. The Romans had rules for distribution of the plunder from foreign operations than included the centurion, chain of command and right up to the state. I wonder what the ROI for Afghanistan was? Surely it was negative. How about the expansion into Eastern Europe? The west gained some less expensive labor, relatively cheap farmland, but that labor was also a factor in Brexit. And now this mess. The west was still making a lot of money in the Ukraine, I don’t see how this latest move makes economic sense. It seems to me that it is more about projecting power and showing the world who is boss than anything else – and that can be very expensive.

  9. Carolinian

    Marie Antoinette

    Hey they told us to eat cake and we got all testy instead so it’s really our fault.

    The guillotine is a very simple machine and you could probably build one in your back yard. If the ruling class wants to jump in the wayback machine they may get what they asked for. That we are still stuck in the late 18th cent says something about progress vs “nothing new under the sun.” We’ve changed our environment and our technology but not ourselves. That last is the whole to do list.

  10. David

    I think you have to take at least three factors into account in trying to understand what looks on the surface to be deliberately self-harming behaviour.
    First, the dynamics of international organisations, especially the EU. It has grown to a size and complexity, with differences of wealth, size and interest among its members that make it almost impossible to manage. It’s also an uncomfortable conjunction of supranational and multinational processes. Consensus is agonisingly difficult, and any consensus, no matter how imperfect or even stupid, is a prize to be held on to at all costs. The fact is that there is absolutely zero chance of a consensus within the EU for any other policy than the one in force, no matter how bizarre. Therefore you have complete deadlock. Moreover, such is the obsession with consensus and the difficulty of arriving at it, that no state wants to be the first to question the consensus, irrespective of the merits of what’s proposed.
    Second, the distance from reality. Many European leaders do generally seem to believe that the war will degenerate into a stalemate and the the Russians will inevitably have to compromise on something. Therefore the EU will have won, or at least be seen not to have lost. It’s true that the process of forcing concessions from Russia is taking much longer than expected, but if we only hang on a bit longer, things will magically come right.
    Finally, the political classes of EU states are absolutely brainwashed into acceptance of the Brussels ideology: post-culture, post-history, post-nations, post-identity, post-everything. Only “fringe” parties dare to question it, and it’s faithfully transcribed by think-tanks and the media, and fully shared by diplomats, civil servants and businessmen. The idea is to expand the Brussels norms as far as possible, and for several decades now, Ukraine has been seen as a promising opportunity to show that these norms are widely extendable to the East. So enormous effort has been lavished on Ukraine, and the EU has been prepared to overlook corruption, extremism etc. because the Ukrainian elites have been telling the EU what it wants to hear. Russia, on the other hand, is the civilisational enemy: nationalist, culturally distinct, religious, socially unreformed etc. From the EU’s perspective Russia is an existential threat just by being there, and either the EU or Russia has to go. Thus the violence of language and behaviour. But it’s worth noting also that sanctions, for all their stupidity, have the inestimable advantage that the EU knows how to do them, and that everyone can agree on them. The rest is detail.

    1. PlutoniumKun

      Thanks David, love your last two lines.

      One of the many striking features of the last 6 months is the absolutely determined attempt by all EU government officials to go entirely blind when visual evidence of, shall we say, certain right wing affiliations among senior Ukrainian military officers becomes apparent. Just this week Zelensky had a photo of an officer prominently wearing the insignia of the 14th Division of the Waffen-SS (1st Galician) on his instagram feed. The Germans in particular, for obvious reasons, have been almost hysterically sensitive to any such insignia up to…. well, 2021. Now they don’t see it even when its practically shoved into their face, or, as in one example, claims it was actually a Swedish airforce insignia. Weirdly, even the Poles have the same blindness, and they should know full well who the Galician divisions represented and what they actually did in Poland.

      I can’t help wondering what actually happens in internal meetings among EU or Nato officials when someone carelessly brings this topic up. Is there just silence as if someone loudly farted? Is the person shusshed? Surely, someone somewhere, maybe in HR, has a policy on what to say and do if a Ukrainian visitor carelessly exposes their Black Sun tattoos during a meeting.

      1. digi_owl

        Trump happened.

        He was a 4 year wildcard, negative to everything the MIC had built up.

        Thus the collective north Atlantic intelligentsia developed TDS, and though their Russiagate mantra projected their internal failure onto Putin.

        Orwell’s Oceania came to be, he just got the extent of it a bit wrong (for now at least).

    2. Thuto

      Thanks David, agree with much of what you say but I do have a minor quibble: Could the EU really be said to “know how to do sanctions”? From my far away perch it looks to me like what their doing is a text book case of people not knowing what they’re doing. One need look no further than the catastrophic blowback the sanctions are having on the EU itself as evidence of ideologues in the grip of ideology and completely out of their depth. They’ve used smaller nations like Zimbabwe and Venezuela as geopolitical punching bags to practice their sanctions imposition regime on but have now stumbled into the virgin territory of having to sanction a peer adversary on whom they very much depend, and the best response they can summon is to hurtle headlong towards a cliff clutching their vaunted European values that must be defended at such substantial cost? One thing this also tells me is that economists, much like the European business lobby, have been cowed into submission because ordinarily they’d be unfurling their charts and showing the politicians the headline metrics that matter:

      1. Inflation: the trendline is pointing dangerously upwards.

      2. Energy Availability: the trendline is pointing dangerously downwards.

      Through their moral posturing uber alles stance, these EU elites are unleashing their totalitarian instincts on the people of Europe.

      1. David

        Thuto, you are of course right. Let’s say “the EU considers that it knows how to do sanctions, so naturally turns to that option”

    3. Ignacio

      Yes David but, have you ever seen the EU leadership more detached from reality than in this precise moment? After 2014, in pre-war Ukraine, the EU has been pouring money there as hell (probably much of it unaccounted or unofficial) while Zelensky was not meeting any Brussels goal and even making the country more corrupt and distant to EU rules, while at the same time subjecting EU countries to endless financial surveillance plus the monetary ring to rule them all. There should be political payback when it is realised things are not going according to what Brussels promised. Brussels has doubled down after war erupted and it looks like this is not going to work and as a consequence Europeans will be (much) worse off. If I remember correctly, the well being of EU citizens was the main goal of the EU, not the geographical expansion of the model.

      This is proof that the EU was with the US from day 1 after Maidan. One playing in the military realm and the other in the economic but both tightly together. If one is surprised about European stances on Ukraine today it is because we weren’t paying enough attention and also because the EU was acting below the radar. This could end with an implosion of the EU.

      1. DJG, Reality Czar

        Ignacio: Thanks. Indeed: There’s more to this crisis than the iron law of institutions.

        At a certain level, as you write, the EU elites simply wanted the business (of looting Ukraine).

        As Plutonium Kun notes, the elites can’t be bothered with Ukraine’s very serious problems of right-wing militias and human-rights violations. Borrell is Catalan–and he doesn’t mind that use of Russian is banned in Ukraine?

        Their obsession with treating Ukraine as a full member of the EU is bizarre, and as you write, someone should be noting that the wellbeing of citizens of the EU is what Brussels is supposed to be about.

        These events aren’t just inability to come to consensus or stagnation of large institutions. As the Pope said, NATO was baying at the gates of Russia, and I’ll add that the EU elites decided that baying at the gates was a way of cashing in.

      2. David

        A lot of this can be explained by the Sunk Costs fallacy. Simply put, it’s easier to continue with a failed policy that you understand, than to invent a new one. The EU has always had an insufferably moral approach to foreign policy, and quite genuinely believes that it does good, and only supports good and worthy causes, democratic states etc. So we can see how a false syllogism can easily establish itself in the EU’s collective skull:

        – All countries supported by the EU must be democracies that respect human rights.
        – Ukraine is supported by the EU.
        – Therefore ….

        You see the problem. In addition, neither the EU nor its member states would have seen post-2014 Ukraine as a single entity. Rather, the talk would have been of “strengthening the moderates”, of playing favourites and try to push and pull Ukraine in the direction Europeans wanted it to go. Imagine saying in, oh, 2019, “OK guys, we failed. Let’s get out of Ukraine.” That was simply impossible. It would have been a “victory for Putin” and a humiliation for Europe. It was never going to happen. So ignore the evidence, cross your fingers and hope for the best.

        1. Polar Socialist

          If only we’d still have this thing called fourth estate. If we only had competing narratives in the MSM, a few editorials telling what a failure Ukraine was – and Afghanistan before it – we might have an actual debate.
          And the could be room in the public sphere for people to call Borrell the idiot he is.

        2. britzklieg

          “When you’re dead you don’t know you’re dead. The pain is felt by others. The same thing happens when you’re stupid.” – Ricky Gervais

          1. Irrational

            Great quote. The problem is when they are many and you are few.
            That’s why I seek sanity on this blog. ;-)

  11. Matthew G. Saroff

    The issues with current EU leadership come down to a number of things.

    The first is that the Germans are in charge, and the consensus of the polity there is that the hyperinflation of the Weimar Republic damaged the social order and led to the rise of that unpleasant man with the Charlie Chaplin mustache.

    IMNSHO, this is wrong. It was the austerity that the Reichsbank enforced in the face of the Great Depression which damaged the social order and led to the rise of that unpleasant man with the Charlie Chaplin mustache.

    The second issue is that the European Union has been a profoundly anti-Democratic institution since its days as the Coal and Steel Community, and so is run by elite economists who see inflicting pain through austerity as brave and virtuous.

    The problem with the EU, and the Euro Zone, can largely be resolved by removing Germany from the Euro/

    1. drumlin woodchuckles

      And since the Germans are too powerful for the EU and/or the Euro Zone to remove them, or even challenge them, the only recourse that every other EUropean country has is to all leave the EU and the Euro Zone themselves; thereby leaving Germany as the sole and only EU member left.

      Sound silly? I suppose. But it is more possible than the other EU countries removing Germany from the EU or the Eurozone.

      1. Yves Smith Post author

        That’s not accurate. Germany was getting more and more acceptance in the international financial markets. It had started running a trade surplus. See further:

        But more than just the favorable trend in the balance of payments reassured observers of Germany in early 1931. Other good news also trickled in. Widely reported indices of German industrial production rose slightly.(Table 1) Unemployment began to trend very slightly down. In an age that venerated gold movements as the ultimate test of economic sustainability, the Reichsbank’s holdings of gold and foreign exchange rose slowly but steadily from January to April. Bankruptcies — even now esteemed as one of the few clear external indicators of possible bank lending difficulties — started falling in
        February, rose slightly in March, and then fell sharply in April and May (Table 1). Indeed, almost every indicator that subsequent analysts have suggested might herald a banking or currency crisis improved modestly in the early months of 1931. The German stock market also rose for four months, while the bond market – including, notably, the internationally
        traded Young Plan bonds (Table 4) – rallied sharply.

        Inevitably, some optimistic commentators hailed these small upticks as evidence that the invisible hand was at last beckoning the German economy on. It is not necessary to share this touching faith – or its corollary that only subsequent political disaster aborted recovery – to acknowledge that in the early months of 1931 “authoritative banking opinion” held that “the Reich will be able to borrow sufficient funds to meet her domestic and international obligations” for the coming year…

        Economic conditions in the early months of 1931 therefore did not give much hint of the crisis to come. Conditions were not good in these harsh economic times, but there was little anticipation that they were about to get a lot worse. Expectations appeared to argue the opposite, that conditions were on the mend, as suggested by the slight improvement in the economic data shown in Table 1.

        Critically, the French (one of the biggest foreign lenders then) looked to be about to reverse their opposition to buying German bonds.

        The very short version of what happened is the Brüning government was still pretty fragile and the economic measures, even if bearing some signs of getting the German economy off a ventilator, were harsh. But the proposal to form a customs union with Austria led to a capital strike by foreign lenders, most importantly France, and produced a currency crisis which then kicked off a banking crisis.

    2. JBird4049

      IMNSHO, this is wrong. It was the austerity that the Reichsbank enforced in the face of the Great Depression which damaged the social order and led to the rise of that unpleasant man with the Charlie Chaplin mustache.

      Austerity is what they want. If they actually acknowledged the true reason why the Nazis finally got the chance, it would weaken the arguments for imposing austerity today. So, the facts go into the memory hole.

  12. The Rev Kev

    I have been having a hard time trying to understand how the EU countries never saw the catastrophic consequences of trying to embargo Russia and all its commodities. I eventually came to the conclusion that the calculation was that under the initial onslaught, that Russia would economically implode in only weeks with regime change following so that any supply problems would only be brief – until the western countries could go in and pick up the pieces. There has been plans for this for a long time now to break Russia up and they have even worked out what the new nations will look like and gave them their own flags and everything-

    But then yesterday there was that article “Is There Enough Metal to Replace Oil?” in which this guy worked out that there will be no real transition out of fossil fuels because there are not the metals being mined to meet the potential needs. So-

    ‘When Michaux presented basic information to EU analysts, it was a shock to them. To his dismay, they had not put together the various mineral/metal data requirements to phase out fossil fuels and replaced by renewables. They assumed, using guesstimates, the metals would be available.’

    And if this is true, then maybe those same EU analysts never bothered finding out what commodities Russia produced and how vital some of them were in the world, especially the west. Funny thing happened earlier by the way. Readers may remember that map which show who was really in the west and that there were only a few. But I realized that if you took out the satraps in the Pacific – Australia, New Zealand, Japan, South Korea & Taiwan – then the western world is really just those countries in NATO or the EU or both. And if you join the EU, you are on the path to joining NATO. So soon, will the western nations be just NATO?

    1. digi_owl

      EU has swallowed US/NATO propaganda about Putin as a Saddam Hussein style dictator, rather than actually look at what Russians think about him.

      Thus they fully expected that cutting the population off from French and German luxury goods would rile them up enough to pull a color revolution.

      It is the epitome of ahistorical hubris.

    2. Henry Moon Pie

      You’ve drawn a very helpful parallel, Rev. It’s really about what they think they can sell rather than reality. NATO-ites may have realized that sanctions would not be sufficient to bring Russia down, but stronger measures–boots, no-flies–would be impossible to sell to the public. They definitely did show their lack of experience with sanctioning somebody more essential to world production than Iran or Venezuela by thinking these sanctions would be painless for their own people, but initially, Westerners hear “sanctions on country X” and think, “So what? Won’t affect me.” Still, “we’ll sanction ourselves to victory” was a lot more palatable initially than “let’s crank up the draft and send an army over there.”

      The climate crisis is along the same lines. Is your civilization filling the air with Greenhouse Gases that are warming the climate to a point where it will be impossible for that civilization to survive? Want to try a Jimmy Carter and tell WEIRD country middle and upper class citizens they’ll have to cool their heels on the consumption? Didn’t think so. Well, how about just claiming we can continue Business As Usual with no ill effects? That’s getting tougher given the increasingly bizarre behavior of the planet in the context of the Holocene and, certainly, historical memory. So here’s the deal. We’ll tell them we’re all going to live with the Jetsons: flying electric cars; abundant power from carbon-less sources; supermarkets filled with organically grown food from all over the world; etc. That’s an easy sell as long as nobody checks the numbers.

      I guess the question is while they are busy selling us patently false BS, what are they really doing about the situation?

      1. digi_owl

        A draft to fuel foreign adventurism will not happen, not after Vietnam showed them the impossibility of maintaining it long term.

        Instead there will be an ever growing use of contractors (the other kind of PMC) and recruitment drives aimed at the margins of society (gang colors or army uniform, free choice).

  13. Stephen

    Thanks for posting this and for the commentary. The bank analogy works well for me and I wonder if these behaviours happen fully at the rational level too.

    With respect to European elites, the behaviour no longer feels rational in any form of conventional sense. At a rational level, they would have to realise that they are stoking up trouble and that the smart move is to figure out an exit ramp. But they do not. They just double down on what has already failed. Perhaps there is some psychology going on.

    For example, this can potentially be explained simply in Cialdini terms (“The Psychology of Persuasion”) by recognizing that we all like to be consistent and to continue down a path once we have started it. There may be truth in that or there might be more to it.

    The Belgian psychologist Mattias Desmet has alternatively described the Ukraine episode as a “mass formation” that has affected the “elite” plus seemingly a large group of European / US populations.

    A mass formation is said to arise when many people feel isolated, atomized and have free floating anxiety (as in much modern western society). They then see a specific issue (eg Putin’s “invasion”) as a cause for the free floating anxiety to latch on to and then to a specific answer (eg stop Putin) anchored in an ideology (eg west virtuous, Russia not). Pursuing this common “answer” then creates a form of togetherness (eg memes and Ukraine flags) which is not humanist but is purely an alignment in the name of the ideology. To people caught up in the mass formation, nothing else matters (eg people going hungry or getting cold matters not). It all seems to work as a form of mass hypnosis and in history has been used to explain witch trials and suicide type sects. Typically, leaders are as en thrall to the ideology of the mass formation as the population and the internal logic means that the measures to advance the ideology just keep being escalated. Familiar?

    Very similar too to how Hannah Arendt describes the workings of totalitarian “movements”, which similarly constantly ratchet up what they are doing and inevitably lead to destruction if unchecked. The people do not matter at all. Only the ideology. Think the end game in Germany in 1945.

    I think we are in the midst of a mass formation that has the potential to become full on totalitarianism. According to Desmet, the only way to stop this is for dissidents to continue to speak out and seek to snap as many people out of the psychosis or hypnosis as possible. Hence, sites like this one matter!

    By the way, Desmet also argues that many of the behaviours associated with Covid have had large elements of mass formation around them. His book “The Psychology of Totalitarianism” is interesting. Hannah Arendt’s work “The Origins of Totalitarianism” is probably one that many commenters are aware of or have read. Super tricky (and long) book.

    There may be other explanations of what is going on right now but I have not found them!

    1. digi_owl

      The European “intelligentsia” seem to focus far too much of their attention on what USA is doing and saying, rather than what is actually going on around them.

      Just look at how quickly George Floyd related protests cropped up all over Europe, copying everything down the the slogans from USA (some glaringly out of place given the stark difference in policing).

    2. hk

      Interesting. I’ll have to read Desmet’s book. One thing that this makes me wonder, though, is that this “mass formation” is hardly unique to a “totalitarian” society, but fairly universal in any human society facing some sort of crisis. It provides opportunities for good political operatives, some of whom may be inclined towards more totalitarian politics, but with a huge potential variability in possible outcomes. Associating it too explicitly with “totalitarianism” seems dangerous.

      1. Stephen

        I see that. The witch trials of the seventeenth century were mass formations but did not create totalitarian regimes, of course.

        I think the point here is that a mass formation is a supporting and even necessary condition for enabling totalitarianism. But it may not always lead to that. However, the possibility to get there is always present. The reason is that the all embracing solution can acquire an overwhelming momentum based on a mechanical logic that brushes aside all other considerations. At the extreme, beating Russia (for example) could become the sole purpose of society. Dissidents and the mass formation burning itself out seem to be the reasons for why this might not happen.

        Hannah Arendt (writing in the 50s) was far less into the psychology but stressed the importance of isolation, rootlessness and metaphorical homelessness to enable totalitarianism. These are exactly the elements that are seen as the causes of a mass formation. Hence, the interdependency.

        1. Stephen

          Also worth noting that the inhumanity of much of the reaction to events such as the assassination of Darya Dugina and the apparent lack of concern at Ukrainian casualties on the part of western leaders are symptomatic of a mass formation. Only the cause matters. People do not.

        2. digi_owl

          Mass formation sounds like schoolyard cliques brought into the adult world. Or maybe modern life has infantilized us?

          It sure seems like college these days is an extension is of high school, grade school and kindergarten antics.

          And increasingly those antics continue well into professional life, by the looks of it.

          1. Stephen

            It sounds that way.

            It’s a theory, of course. Not sure that the mechanism is “proven” but it seems a reasonable way to explain behaviour.

            M6 understanding is that this happened in the past too. But modern society has created more isolation, as arguably has the decline of organised religion. At the same time, communications technology makes it possible for mass formation to occur on a grander scale.

            The witch scares of the seventeenth century though are often seen as mass formations; albeit highly localised.

            The whole BLM thing can I think be seen as a mass formation too!

            1. digi_owl

              Now you got me thinking about a term that i picked up from an anime series of all places, Stand Alone Complex. individuals behaving as a group, thinking they are all following the ideals of some leader that do not exist.

              In the end i think we are underestimating how much we are still group animals deep down, and being shunned by one’s group is one of the oldest non-corporeal punishments we have.

              Thus we should not underestimate the length some will go in order to signal their adherence to group strictures and thus avoid being shunned.

    3. JW

      Desmet extends this to ‘climate change’ as well.
      Its the deliberate creation and maintenance of anxiety by the media and politicians that creates the ideal breeding ground for mass formation.

      1. Stephen

        He does.

        Of course, that is not inconsistent with believing that the environment needs protecting too, in a sensible, rational and humanist way.

        Arendt describes Bolshevism as totalitarian and it rests on the dialectic of class struggle that has an iron logic if you accept the premise. Just as with man made climate change arising from carbon. Mass formation is associated with these beliefs. But one can, for example, still be a traditional socialist, believe that more equality is a good thing and not be a totalitarian who is in the grips of a mass formation! Or one can be a traditional environmentalist in similar vein.

        However, our modern society seems to be more and more prone to these mass free floating anxieties and then to following deeply irrational, seemingly scientific and logical but disastrous policies to “address” them. Very consistent with what Desmet argues, I believe.

  14. Mikel

    “And no, it wasn’t just Russia/Ukraine, way before that Europe had already screwed up its economies beyond recognition -if you cared to look under the hood.”

    Back in the 2008 crisis, when banksters showed up with that three page ransom note at Congress and saying “it’s the end in a matter of months” (or something to that effect), I thought: If it’s (the financial system) at a point where there are just mere months left, it’s probably already over.
    The establishment knew their version of globalization had @#$% a brick back then. It was all a bunch of vapor and fraud. All they could do was spend the next 10 – 12 years fattening up the coffers of the elite for the finale. They are all nice and flush with cash just in time for this global crisis…funny, how that timing all worked out!

    Even then I was noticing historically that recoveries where recoveries of diminishing return or the masses of people after each recession/depression.

    1. Joe Renter

      You are right. After 2008 in Seattle is when homelessness really picked up a notch and now it’s at 11.
      The house of cards will come crashing down. Let’s hope WW3 doesn’t get started in the process of the downfall.

    2. spud

      “Neoliberal politicians like Bill Clinton presented globalization as “the economic equivalent of a force of nature, like wind or water” that it would be stupid to try to reverse.”

      “Barack Obama in 2016 framed it in similar terms as “a fact of nature.” Politics was presented as the management of the necessity of globalization, with economic decisions limited to those acceptable to international investors, with some sections of the moderate and soft left broadly accepting these ideological premises.”

  15. Glossolalia

    Mr. Borrell is planing to do just fine this winter, mind you. With the best steak your money can buy, real fine wine, to be consumed in comfortably heated homes, restaurants and offices. A picture of Marie Antoinette pops up in my brain.

    I guess that stories of European elites enjoying comfortably heated homes, restaurants and offices will be the 2022/2023 version of elites enjoying big boozy, maskless get-togethers in 2022/2021.

  16. eg

    If Michael Hudson is to be believed, European leaders are deeply corrupt and are all bought and paid for.

    1. Keith Newman

      Indeed eg.
      I am unconvinced by the main arguments put forward: incompetence (Yves), disconnect from the population (llargi), and bureaucratic paralysis (David). Granted all of these do exist in great quantities. And certainly stupidity must never be underestimated.
      But really, is it conceivable that all EU countries (except Hungary) + the UK would simultaneously decide to seriously damage their economies, even permanently destroy parts of them, and impoverish much of their respective populations? For what? To stop Ukraine from becoming neutral like Austria and prevent the Russian parts of the country having the same rights Quebeckers do inside Canada? Then all simultaneously persist when the evidence of failure is overwhelming?
      Sorry, I don’t believe it. As Michael Hudson has described, European leaders are bought and paid for by the US. They do as they are told regardless of the consequences for their own populations. That is what we are seeing today. In spades. Sadly Europeans do vote these people into power.

      1. Yves Smith Post author

        Your theory is not plausible. What is the mechanism for payoff? There are no book deals, NGO board seats, US board seats, or lavish speaking gigs And there are too many people to buy off not to have word leak out. All of the Tory leadership group. All national leaders, their foreign ministers, and their sherpas too, since it’s the sherpas that do the policy heavy lifting. Oh, and a lot of MEPs.

        And my theory is not incompetence, although that’s a factor. It’s intellectual blindness. The same syndrome is well known in other fields, hence the Max Planck observation: “Science advances one funeral at a time.”

        1. Keith Newman

          OK, fair enough.
          Still, I find the level of intellectual blindness, incompetence, disconnect, bureaucratic entropy, stupidity, disregard for reality, etc., in all those countries all at once hard to believe. Maybe Michael Hudson would have something to say about this.
          I take your point though. If the non-plausible is not the answer then we are living through a period similar to the start of World Wars 1 and 2 where unparalleled disaster was clearly on the horizon, predicted by many, yet it happened. This is the ”persistence of error” described by Barbara Tuchman in the March of Folly to a staggering degree.

          1. JBird4049

            The persistence of error is often a persistence of arrogance, which becomes folly. The popes’ increasingly running the church as a corrupt, power and wealth hungry, warmongering secular state with increasingly less attention paid to the actual responsibilities of a church or the British ignoring and then treating with contempt, insults, and incompetence the American Colonies are two examples.

            Much of Europe and later the colonies and the British empire were very aware of what was happening, were vociferous in their warnings, and tried to get reforms put through or at least have more competent governance, but failed. At least there was a Catholic Church and a British Empire left to do the reforms needed that enough people finally agreed were necessary. But the Wars of Religion and the American War of Independence were both completely foreseeable and unnecessary.

            Our current elites are very, very arrogant, I think, and the costs of fixing their folly is going to be very high as they seem to insist on increasing their chastisement of the whole world with each warning, complaint, or even very real crises.

            1. Jams O'Donnell

              This is the explanation that does it for me (although all the others very probably contribute too).

              An extreme arrogance plus the fact that most of these people who are in ‘control’ live in a bubble – well off, pampered, out of touch with reality and surrounded by ‘yes’ people.

              The good thing about people who are out of touch with reality is that they cannot continue to function in this way indefinitely. Sooner or later reality catches up. Unfortunately they can do a lot of damage before that.

        2. Anon

          Respectfully, Yves, we are headed for the weeds re: mechanisms. The Agency seems to motivate people to fall in line easily enough… money is their first stick, but certainly not the last.

          Hard to argue blindness when what’s at stake is openly admitted to be existential, on a timescale of right now to months, not even years. The scientists tend to take their contradictions to their deathbeds, not announce them.

  17. truly

    Margaret’s daughter TINA looks great in her new outfit, nyet? Seems the Euros are going to get to know her quite well this winter.

    Maybe Sardonia could write a nice song for us? Based off of L-O-L-A Lola?

    There is no alternative.

    1. digi_owl

      I’m glad i was done with my latest mug, because otherwise i would have gotten a caffeinated rinse of the nasal cavities. Glorious, just glorious.

  18. Samuel Conner

    Are the Gilets Jaunes responding to these problems?

    I had the impression that social protest movements were still pretty strong in Europe. There is very little news about this lately.

    1. Susan the Other

      That was my first thought. I actually think Macron is being far more sincere this time than back then. The Yellow Vests had a justified beef with his approach of raising prices and letting the struggling middle class eat it. That was the Imperial Macron. This time he is being truthful. The world is in deep shit and there’s no way to fix it but to conserve. Immediately. We are looking at radical conservation. I actually like it. I don’t like the idea of shivering through every winter, but I’ll find a blanket. The end of abundance is what it is. But, there are solutions out there to everything, and now, if we all get serious, we’ll find them. I do think that people will no longer put up with ostentatious living; or pretenses of social superiority or inequitable social policies. I’m pretty sure that crap is over.

      1. JW

        Macron is never truthful, he says what is expeditious at the time.
        Feel free to wear your hair shirt, I want to stop this engineered deprivation.

    2. Acacia

      I would be curious to hear somebody in France weigh in on this, but when I last visited just before the pandemic, it seemed the gilets jaunes had largely faded from attention. I went to one manif that was surrounded by the police, gassed, and dispersed.

      There’s a very large bobo contingent in the cities — mostly voted for Macron — who never aligned with the gilet jaunes and have dismissed them from the very beginning. This is a separate subject, but my impression is that France has become too fragmented to really come together against Macron-style neoliberal reforms, unless things get far worse.

      1. JW

        I can only speak as a Brit in France. Giles Jaunes were successful in getting Macron to reverse policies when those policies affected their standard of living directly. They were mainly silent during lockdowns when you might have expected them to object to reduction in civil liberties.
        Now the government is increasing debt rather than expose the populace to the worst of energy and food price increases. Its borrowing to offset inflation. Macron will find it difficult to get much in the way of neoliberal policies through senate given the structure after the elections.

  19. ChrisRUEcon

    > The only explanation I can come up with is that current Western leaders cannot grasp emotionally or practically that they no longer call the shots.

    Exactly this. It makes the title of the article more ironic. If the demolition is controlled, then who is controlling it? It’s not Western leaders.

  20. elkern

    Once upon a time, I had great hopes for the EU. As a somewhat Europhilic USAmerican, I thought they were taking an important step into the future, building Continental-scale institutions to supersede Nation-States. Sadly, the financial crisis in Greece – or rather, the German Banksters “solution” – forced me to see that they had made a huge mistake by unifying the Currency before/without political systems. (Krugman was right about this, belatedly).

    I now view the EU as a failed experiment: the ECB has all the real power (which they use to best advantage of their “constituency”, the Banksters); the EP has no power, which doesn’t matter because they could never agree on how to use it if they did; and the EuroBureaucracy has just enough power to annoy everybody (see: Brexit).

    Since 2014, EuroBanksters have made big loans to Ukraine, so now Europeans – and Ukrainians – will have to suffer to make sure that those loans get repaid.

  21. flora

    Thanks so much for this post. I think Ilargi is in Greece and has seen first hand the neoliberal nonsense beginning with the Greek debt crisis, which NC covered better than any other financial paper at the time, imo.

  22. chris

    I wonder if there is a way to question some of the underlying assumptions which support the craziness we’re seeing? For example, many people who I have talked to scoff at the idea that Russia could be systemically important to the EU, and that Russia will ultimately be unable to withstand the effects of sanctions, is because Russian GDP is less than Italy’s. I remember colleagues explaining to me years ago that post Soviet Russia was Mexico with nukes. Now that clearly isn’t true given the wealth of issues the world is having from the current situation. But many western leaders are operating as if it is true. There have been some alternative descriptions of GDP discussed on NC. For example, “real” GDP which excludes the service industry and accounts for only production of real goods and materials and processing materials into real products. No software, consulting, or other ephemeral stuff included. I wonder what would happen if we took that approach, and also weighted production of essential inputs like copper or iron or rare earths, or oil, to represent their importance? I suspect what we’d find is most of the developed countries in the west are significantly out of balance in terms of their political and economic leverage compared to the real stuff they need to operate. I think what we’d see is that Russia, China, Venezuela, and others are a great deal richer than we’ve been lead to believe.

    Perhaps, if we had that kind of a number to show around, it would help to break through the brain fog of these leaders. Because the only reason I can think of to balance their current mania is that they think they have supporting evidence for two contradictory beliefs:

    (1) we can sanction Russia indefinitely because it is not an important country and will fail if we maintain economic pressure on it.

    (2) Putin is evil and is using his outsized control of essential resources to immiserate our citizens.

    But if we had “respected” evidence that, in fact, Europe acted from a position of weakness and Putin hasn’t used all of his leverage over the EU, then perhaps we’d get the negotiations started. As it is currently I think we’ll see piecemeal negotiations soon and then an EU wide collapse of the sanctions come January. Ice and cold are cruel masters and they don’t care who’s on the right side of history. The EU might be able to limp into yuletide with the current approach but come a real freeze, with real ice, and bone chilling cold, the citizens may decide to throw their parliament on the fire to keep warm until Spring. Perhaps we can save ourselves a lot of chaos and pain if we give the McKinsey types a different metric to drive behavior?

    1. digi_owl

      GDP do seem to have some of the same issues as loanable funds theory, and may ultimately come down to a stock-flow confusion that economists are so apt at making.

    2. flora

      If you read a history book like Barbara Tuchman’s “The Proud Tower”, about the more than 25 year’s “belle epoch” preceding WWI, and particularly about the 10 year’s period of EU Western govt’s thinking about the RU “threat” to EU civilization before WWI, you might think “everything old is new again.” / ;)

      1. britzklieg

        I believe Tuchman self described as a “progressive Republican” (I could be wrong about that) but whatever, she was a brilliant writer of history (without ever having earned a degree in the subject). “The Proud Tower” and “The Guns of August” are both revelatory. So too, “A Distant Mirror” a personal favorite.

        1. Joe Renter

          Agree about Tuchman as a good writer. I just finished her book about General Stilwell’s years in China. I will read more from her in the future.

        2. eg

          I’m rather partial to “The March of Folly” myself (though “The Guns of August” was my first encounter with her work over 40 years ago) and certainly current events suggest that its premise is alive and well and fully operative among our “betters” …

        3. Soredemos

          Guns of August is a monument to the ‘blame the filthy Germans for everything’ narrative, which I’m pretty sure NC has explored and dismissed in the past.

    3. Maxwell Johnston

      GDP/GNP are relatively new concepts dating from the 1930s and WW2, and they have serious limitations. The economist regarded as the inventor of GDP, Simon Kuznets, warned against over-using GDP as a measure of an economy’s size and strength (or of well-being generally). As an example of how silly these numbers have become, a few years ago the EU decided to include the black or shadow economy into its measures of EU countries’ GDP (as a way to make debt/GDP ratios look healthier), and much hilarity ensued:

      Using PPP-adjusted GDP corrects at least some of the distortions which make high-cost western economies look bigger than they really are (not unlike how a Mercator projection distorts maps). In a PPP world, China is number 1, India is number 3, and Germany and Russia are in a dead heat for number 5. And of course this too ignores the reality that much measured economic activity in western economies is worthless, whereas China-India-Russia actually produce things that humans need as opposed to merely want.

      Statistics can be useful, but they are no substitute for careful analysis and critical thinking.

  23. .Tom

    Regarding the derangement Yves considers in the intro, “The only explanation I can come up with is that current Western leaders cannot grasp emotionally or practically that they no longer call the shots.” That may be true but I think there’s something deeper.

    Who, among that consensus crowd, the EU political elite, wants to lead the big chorus singing the king is in the altogether? The answer is clear because Orban already did it. I guess the rest don’t want to be tarred and feathered as Putin-Nazis.

  24. Cynical Engineer

    The problem I have with articles like this is that they seem to assume that a Russian victory is inevitable. And by the numbers, it should be.

    BUT…if you just look at the number of soldiers, amount of military equipment and the relative sizes of the countries, then that would lead to the conclusion that Russia should have been able to wrap up the war in the Ukraine within a matter of days. Yet, six months later, the fighting continues with Russia controlling barely 20% of Ukraine’s territory. This is not the military of the U.S.S.R. that managed to invade and control multiple Eastern European countries in a matter of days each time.

    Announcements like “137,000” new soldiers are impressive. But are these 137,000 fully trained soldiers who are ready to fight using complex equipment in a highly technical battle? Or are these 137,000 new recruits who will need 12 to 24 months training before they become fully effective soldiers? If the latter, then it will be quite a while before they have a measurable impact on the war.

    The flaws and weakness of Europe in general and Ukraine specifically are on full display and we know them well. We have a LOT less information about the true state of the Russian military. This is something that even Putin may not understand because people are afraid to bring him bad news.

    Can Russia still win this war? Yes. However Ukraine is doing a very good job of attacking Russia’s weak points at minimum cost to the Ukraine military. Soldiers without food are not an effective fighting force. Tanks without ammo are merely targets. Tanks without fuel are stationary targets. If Ukraine continues to effectively attack Russian logistics, then the sheer size of the Russian military may not matter.

    1. Jams O'Donnell

      You won’t get a correct picture of the war from western media. Russia is proceeding as it is to reduce losses to 1) its own soldiers and 2) Ukranian civilians, while maximising damage and costs to the Ukranian government and military. Russia is using only a small proportion of its forces – much of the fighting is being done by recruits from Donbass. If Russia were to use all its available force, and disregard civilian casualties and infrastructure damage, in the same way that the US did in Iraq, the war would be over within a month.

  25. Keith Newman

    You should read some of the Ukraine related posts here by Yves as well as posts by non-US influenced sources, both here and elsewhere. Alexander Mercouris (Aug 26 link at NC for example) comes to mind but there are others.

  26. Anon

    Glad to see someone ‘important’ taking the conspiracy angle. Only place I’ve been published is the comments at NC.

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