Our So-Called Foreign Policy: U.S. Ukraine Policy Dangerously Flunks the Logic Test

Tags

alliances, deterrence, Nancy Pelosi, NATO, North Atlantic treaty Organization, nuclear weapons, Our So-Called Foreign Policy, Russia, Ukraine, Ukraine War, vital interests, Vladimir Putin

There must be some kind of psychic connection between my good buddy Ace (so nicknamed because he’s actually flown in U.S. Air Force fighters), and Nancy Pelosi.

Just the other day, he made what I thought was the genuine genius point that the most important question surrounding U.S. policy toward Ukraine is one that’s never, ever, been asked: If Ukraine has indeed become a vital interest of the United States (a category into which, as I’ve repeatedly stated, e.g. here, it was never placed even during the depths of the Cold War), why wasn’t it admitted into the North Atlantic Treaty Organization (NATO) long ago? Even stranger, why the continuing NATO cold feet of so many U.S. leaders who are so fond of claiming the vital importance of ensuring Ukraine’s success?

And hot on the heels of Ace’s questions, the House Speaker on Friday declined to endorse Ukraine’s request not just for inclusion in the decades-old Atlantic alliance, but for “accelerated accession” that would speed up a process that’s normally pretty complicated in normal times.

Yes, that’s the same Speaker Pelosi who had previously sounded pretty adamant about the need to stand with Ukraine “until the fight is done” because its fight for freedom ”is a fight for everyone.”

But as pointed out in the same news report that quoted Pelosi’s more temperate later remarks, even though these are anything but normal times in Europe, there’s no shortage of reasonable-sounding reasons for continuing caution. Specifically:

“The West fears that Ukraine’s immediate entry into NATO — which requires the unanimous approval of all 30 member-nations — would put the U.S. and Russia at war due to Moscow’s invasion of Ukraine as well as its forced annexations announced Friday.”

I wrote “reasonable-sounding, ”however, very deliberately. Because if you give the matter even a little serious thought (as Ace has), it becomes clear that such rationales make no sense at all.

In the first place, even though Ukraine remains outside NATO, the Western aid that’s helped Kyiv’s forces resist Russia so effectively has created a powder keg situation in Ukraine’s neighborhood (by stationing large numbers of U.S. troops right next door) that could all too easily ignite war between the two aforementioned nuclear superpowers anyway.

It’s true that the decision of the United States and Ukraine’s other allies to combine these deployments with hemming and hawing on NATO membership has so far produced a favorable outcome: Moscow’s been frustrated without nuclear weapons being used, much less a world-wide conflagration resulting.

At the same time, this needle-threading act could fail at any minute – which surely explains President Biden’s oft-stated declarations from the get-go that U.S. troops will not be sent into combat in Ukraine. He’s obviously determined minimize that dreadful possibility.

But all this prudence becomes completely inexplicable – at least if you value coherent thought – upon remembering what the word “vital” means in this instance. It’s describing an objective so important (Ukraine’s survival in its current form) that failure to achieve it would (at least at some point down the line) end America’s very existence, either as a physical entity or as an independent country. Even those who aren’t literalists presumably fear that failure to protect a vital interest will leave the United States only the most nightmarish shell of its present self.

To their credit, U.S. leaders who spearheaded the creation of the nation’s major alliances and supported their maintenance have put the country’s money where its mouth is. They have not only promised to use nuclear weapons against nuclear-armed adversaries to protect alliance members whose security is seen as vital. As I’ve often explained (e.g., here), they’ve deployed U.S. forces in “tripwire” configurations aimed at practically forcing Washington to push the fatal buttons and risk America’s nuclear destruction if non-nuclear defenses crumble.

Those policies have aimed above all to deter aggression, and despite the apocalyptic dangers they’ve raised, have been eminently sensible because a thoroughly respectable case ca be made, based on specific, concrete considerations, for the paramount importance of these allies.

For example, it is wholly plausible that the subjugation by hostile powers of places like Germany and Japan and Taiwan could produce intolerable consequences for the United States. In particular, each of those countries possesses technological and industrial prowess and assets that a country like China or Russia could harness to exercise control over the main dimensions of American life.

The point is not whether you or I personally agree or not. Rather, it’s that such fears are anything but crazy.

By contrast, there’s nothing specific and concrete that Ukraine boasts that I can think of – or, more revealingly, that any of its supposed champions have brought up – that Russia could use to achieve anything like the above results.

And this observation leads directly to the second logically loony flaw in America’s Ukraine policy – the one identified by Ace: If in the minds of U.S. leaders Ukraine actually was so all-fired important to begin with, or became so at some point before the Russian invasion (which the President has just declared must be resisted “unwaveringly”), why wasn’t it admitted to NATO right then and there, complete with the nuclear defense guarantee?

Not that any such move would have guaranteed that Russia would have kept hands off. But given that dictator Vladimir Putin hasn’t yet attacked any NATO members in Ukraine’s immediate vicinity or anywhere else, and that Mr. Biden’s vow throughout the entire crisis that the alliance will defend “every inch” of its members’ territory, surely is one reason why, wouldn’t admitting Ukraine before Moscow moved been a no-brainer?

Instead, the United States and the West have danced around this question for more than thirty years – and counting – practically from the moment Ukraine declared its independence from the collapsing Soviet Union in August, 1991. What’s been the problem during this entire period?

I mean, the place is supposed to be vital! In other such instances, that’s why the United States has even contemplated using nuclear weapons at all. And yet so far, Mr. Biden’s clear bottom line, even during the invasion’s early days, when his own administration assumed Zelensky’s government to be doomed, has been that U.S. forces will stay out as long as the combat stays inside Ukraine. In other words, he’s wavered. And almost inevitably, this position has sent Putin the message that Washington and the West ultimately don’t view that country as worth accepting the risk of national suicide.

So thanks to Ace, it must by now be evident that the United States has long believed that it could secure a vital interest with half measures (never a good habit to fall into) or that America should expose itself to an existential threat on behalf of an interest that’s short of vital.

And the folks who believe in either position are supposed to be the post-Trump adults in the room? And will be in charge of Ukraine strategy and the rest of American foreign policy for at least two more years?

Our So-Called Foreign Policy: The Other Scary Ukraine War Threat

Tags

energy, energy prices, global financial crisis, globalism, hunger, Lehman Brothers, Lehman moment, Our So-Called Foreign Policy, Russia, Taiwan, Ukraine, Ukraine War, Vietnam War, vital interests, Western Europe

Take it from me – the words “Lehman” and “moment” are words that no one should ever want to see in the same sentence ever again. Yet they’ve been making a collective comeback lately (see, e.g., here, here, and here), signaling in the process that the determination of the United States and other countries to help Ukraine achieve its goal of expelling Russia from the territory it’s lost could backfire disastrously.

This specific risk has emerged not because the conflict could spread beyond Ukraine’s borders and embroil the big new concentrations of U.S. and other NATO military forces right next door – and therefore all too easily escalate to the nuclear level. It’s also emerged because of the growing economic hardship and potential political instability in major world regions created by the disruption of global energy and food trade triggered by Russia’s invasion and the sanctions it’s triggered.  

The phrase “Lehman moment” refers to the time when the national and global financial systems and economies nearly collapsed because so many of the world’s major banks and other lenders had engaged in such reckless practices, and because they were so interconnected that the failure of one – America’s Lehman Brothers – threatened to topple the whole house of cards that had been created.

Today’s Lehman moment is feared to be coming in Europe’s energy sector – also dominated by huge, closely connected institutions and also endangered by contagion. But this time the culprit hasn’t been greedy executives or asleep-at-the-switch regulators. It’s been the price of natural gas. The Russian invasion of Ukraine itself, the duration of the fighting, Russian supply curbs and threats of cut-offs have pushed it so high that many European utilities have been forced to buy the increasingly scarce fuel on the very expensive spot market and sell it to customers at the much lower prices stipulated by the contracts they’ve signed. (See here for a useful explanation of all of the above.)

As with the original Lehman moment, government bailouts are likely to save the day – at least for the foreseeable future. But the costs are shaping up to be astronomical, and even if they’re paid by all of the continent’s well- and less well-off countries alike, enormous national debts are sure to grow. Moreover, Europe’s near-term energy, and overall economic, future looks so grim because major shortages and towering prices this winter seem both inevitable and bound to bring on a serious recession and all the suffering and anxiety that accompany such downturns.

That sure sounds like a formula for even more political instability than Europe has already seen lately, including a loss of public faith in national and regional establishments and institutions of all kinds, and a further strengthening of the sort of political movements – on the right end of the political spectrum in particular – that globalists keep warning are grave dangers to the democracy and even the peace the continent has enjoyed until Russia’s attack on Ukraine.

Nor is Ukraine War-rooted turmoil confined to Europe. As the Biden administration has just warned, “protracted conflicts – including Russia’s invasion of Ukraine” have been developments that have “disrupted global supply chains and dramatically increased global food prices.” As a result, “world leaders [need] to act with urgency and at scale to respond…and avert extreme hunger for hundreds of millions of people around the world.”

Sub-Saharan Africa, one of the areas of greatest risk, has (rightly) never been seen as a high U.S. foreign policy priority. The other area, though, is the Middle East, which has become much less important even to America’s economic well-being because of the energy production revolution at home, but which continues to attract considerable attention from globalist U.S. leaders.

Hence the backfire risk – and a gigantic irony. Globalist backers of the current Ukraine strategy justify it as necessary to protect what they call a “rules-based international order” they believe has been essential for preventing great power conflict, as well as for promoting impressive degrees of prosperity and democracy around the globe. I’d give far more credit to the balance of nuclear terror that’s prevailed for nearly all of that period, but that’s not the main point.  The main point is that, along with great power conflict, the widespread international turbulence being fueled by the duration of the Ukraine War per se is another major geopolitical nightmare that globalism has striven to avert.  

It’s true that incurring great risks to protect specific, concrete interests the U.S. considers vital – like the security of Western Europe and, more recently, Taiwan (because of its leadership in manufacturing the world’s most advanced semiconductors) – by definition are worth running. This logic also holds for objectives like fostering and maximizing stability the world over, even though they’ve always been more dubious because they’re so much gauzier and less realistic. For whatever the damage possible from attempting to safeguard any of these interests, the term “vital” means that failure can generate even greater dangers – particularly national survival and independence.

But running such risks on behalf of Ukraine’s independence – which was never seen as remotely vital U.S. interest even at the height of the Cold War, which was habitually described as a Manichean struggle for the entire world’s future – is a different matter altogether, and indeed makes no sense at all.

During the Vietnam War, a U.S. Army officer is supposed to have told a reporter after one battle that “It became necessary to destroy the town to save it.” The Lehman moment references and mounting signs of tumult in several major regions long seen by Washington as bearing at least significantly and even vitally on America’s safety and well-being indicates how close U.S. Ukraine policy – even if it simply prolongs heavy but geographically contained fighting – is moving toward achieving that absurdly self-destructive goal.

Our So-Called Foreign Policy: Could the West Blink First on the Anti-Russia Sanctions?

Tags

energy, fossil fuels, G7 Summit, Group of 7, inflation, NATO, North Atlantic treaty Organization, Our So-Called Foreign Policy, Russia, sanctions, Ukraine, Ukraine-Russia war, Vladimir Putin

Quite a few years ago, I fretted here that one big obstacle could appear before too long to any U.S. government ambitions to squelch cyber attacks from rogue states with cyber retaliation of its own: Some of the main rogue states (like Iran and North Korea) and larger aggressors (like Russia and China) were likely to have a higher pain threshhold than America’s because they were so much poorer and their populations so much more used to hardship. So in any prolonged cyber duel, Washington could well be forced to cry “Uncle” before its adversaries.

Fast forward to today, and this very problem seems to be plaguing the U.S. and  overall free world/western policy of punishing Russia for its invasion of Ukraine with various kinds of economic sanctions.

It’s not that Russia’s economy hasn’t suffered from these measures. But headlines and news developments like this have become awfully common in recent weeks:

>”U.S.-Led Alliance Faces Frustration, and Pain of its Own, Over Russia Sanctions”;

>”Pressed by domestic economic challenges and a desire to see European nations contribute more to Ukraine’s defense, U.S. lawmakers appear more wary of committing further military aid for Ukraine or slapping new sanctions on Russia”;

>”French energy giants tell households to ration supplies ahead of looming winter shortage”; and

>”Japan tells business and public to save power to avert Tokyo blackout”

And accompanying these reports have been news items and findings like:

>”Russia’s economy is weathering sanctions, but tough times are ahead”;

>“Why Russia’s Economy Is Holding On”;

>”Russia’s ruble hit its strongest level in 7 years despite massive sanctions”; and

>Revenue from Russia’s fossil fuel exports “exceeded the cost of the Ukraine war during the first 100 days….”

As indicated, Russian stoicism isn’t all that’s at work. The country’s immense fossil fuel deposits, the world economy’s continued crying need for them (preventing the sanctions from being global in scope), and the high prices oil in particular has been fetching ironically because sanctions have crimped overall global supply, have enabled Moscow to keep its economy a going concern. Russian dictator Vladimir Putin, clearly certain that he’d antagonize many foreign powers with his expansionism plans, has also been working for years to insulate his country from just these punitive measures. (See, e.g., here.)

But by the same token, for many years, Putin’s imperial ambitions, the massive amounts of resources they’ve commanded, the curbs on personal spending required to build a fortress economy, and the pervasive corruption he’s needed to tolerate (and even encourage) to keep potential rivals placated (and of course feather his own nest) have produced a dismal failure of an economy by virtually every important non-security-related measure. (See here and here for two especially insightful analyses.) And yet there’s absolutely no sign that conditions that western populations would find completely unacceptable have remotely immiserated the Russian people enough to spark any kind of revolt.

Moreover, considering this situation in light of the recent statement by Jens Stoltenberg, head of the North Atlantic Treaty Organization (NATO) that the Ukraine conflict could last for “years,” it’s easy to see why the mounting energy shortages and historic inflation they’ve helped feed could tip the odds surrounding the current economic conflict of wills in Moscow’s favor.

And it’s no discredit to the American character to venture that U.S. resolve seems particularly vulnerable precisely because economic sacrifices continue to be demanded on behalf of a country whose fate has never been and is not now a vital security or economic interest.

To me, there’s an obvious message being sent by these trends and circumstances – along with the steady transformation of Eastern Europe into a genuine powderkeg that could all too easily explode into a nuclear World War Three: It’s becoming more important than ever to end this conflict and its clearly unforeseen, tremendous collateral damage ASAP, even if the outcome isn’t ideal from Ukraine’s standpoint.

But that’s not what the heads of government of the Group of Seven (G7) major industrial powers think.  They’ve just declared at their current summit in Germany, “We will continue to provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes” – even though before too long these leaders may start running out of followers.   

Our So-Called Foreign Policy: The Ukraine War Has Entered a New Phase. Will U.S. Policy?

Tags

Antony J. Blinken, Biden, diplomacy, Lloyd Austin, Our So-Called Foreign Policy, Russia, Ukraine, Ukraine-Russia war, Volodymyr Zelenskyy

Remember the wonderful opening lines of the first installment of Peter Jackson’s masterful film adaptation of The Lord of the Rings trilogy? In case you’re not a fan of J.R.R. Tolkein’s Middle Earth writings, they went like this: “The world is changed:  I feel it in the water, I feel it in the earth, I smell it in the air.”

They came to mind to me today upon reading some of the big national media headlines on the course of the Ukaine war.

Like this from The New York Times: “As Russia Forges Ahead, Europe Recaluclates.”

And this from The Wall Street Journal: “Ukraine Fears Defeat in East Without Surge in Military Aid.”

And this plea from a Washington Post opinion column: “We can’t let Ukraine lose. It needs a lot more aid, starting with artillery.”

In fact, this theme began appearing even before this morning.

Like the Los Angeles Times’ claim that “Momentum shifts in Ukraine war as Russia advances in the Donbas.”

And then there’s the news that’s been dribbling out from Kyiv on Ukrainian casualties – numbers that had been very closely held. But on May 31, President Volodymyr Zelenskyy stated that his country’s military was losing up to 100 killed and 5oo wounded each day. Just over a week later, Zelenskyy aide Mykhalo Podolyak pegged the daily battlefield deaths at between 100 and 200 – which presumably means a higher wounded count, too.

Don’t get me wrong: None of this means that Ukraine is doomed to defeat at the Russian invaders’ hands. But it sure looks like we’re a long way away from the heady days of just one and two months ago, when

>U.S. Defense Secretary Lloyd Austin was declaring that the Biden administration and most of the rest of the world believed that Ukraine “can win” the struggle;

>when Secretary of State Antony J. Blinken endorsed the goal of ensuring that the Ukraine invasion turned into a “strategic defeat” for Russia; and

>when Defense Department spokesman John Kirby stated that “We want Ukraine to win this fight [with Russia] and we are doing everything we can here, at the Department of Defense, to make sure they have the capabilities to do that.”

And the apparent shift in the war’s momentum, especially in Ukraine’s east, adds urgency to questions that understandably receded in importance when a victory by Kyiv seemed much more plausible.

Principally, President Biden recently stated that his goal was moving “to send Ukraine a significant amount of weaponry and ammunition so it can fight on the battlefield and be in the strongest possible position at the negotiating table.” Yet how will he reconcile the likelihood that the continued heavy combat bound to result from these efforts on the one hand, with the determination he expressed on the other hand — in the same article — to keep the war within Ukraine’s borders and thereby avoid a direct U.S.-Russia military confrontation that could all too easily escalate to the nuclear level?

How will he decide when Ukraine is armed well enough to negotiate successfully? And how does the President’s reference to arming Ukraine to maximize its chances in peace talks dovetail with his position that his “principle throughout this crisis has been ‘Nothing about Ukraine without Ukraine.’ I will not pressure the Ukrainian government — in private or public — to make any territorial concessions. It would be wrong and contrary to well-settled principles to do so”?

From a purely tactical standpoint, if Ukraine continues refusing even to consider compromises on territory or on sovereignty, (which could include the issues of membership in the North Atlantic Treaty Organization or the European Union) then how important — let alone successful — could any negotiations be?

From a broader standpoint, does Mr. Biden really believe that Ukraine should call all the shots related to this crisis once the conflict enters the diplomatic phase? And why would he keep deferring to Ukraine even though he’s implicitly acknowledged that the United States has its own crucial interests – chiefly avoiding a wider war and direct superpower conflict – that aren’t necessarily identical with Ukraine’s goals? 

At the same time, it’s possible that the President doesn’t believe that the war is in a new phase at all.  And he may be right. If that’s the case, though, he’d be well advised to level with the American public, because the kind of lengthy stalemate and lack of an exit strategy this conclusion implies means that there’s no exit strategy for the surging oil and gasoline prices, consequently worsening overall inflation, and higher federal spending brought on by the conflict, either.      

Our So-Called Foreign Policy: Glimmers of Hope on Ukraine?

Tags

Biden, Blob, chemical weapons, cyber-war, David Ignatius, Donbas, EU, European Union, NATO, North Atlantic treaty Organization, nuclear war, Our So-Called Foreign Policy, Russia, Ukraine, Ukraine-Russia war, Vladimir Putin, Volodymyr Zelensky

As known by long-time readers of RealityChek (see, e.g., here and here), I’m no fan of David Ignatius. Literally for decades, the Washington Post pundit has veritably personified the Blob – that mainly New York City- and really mainly Washington, D.C.-based mutually reenforcing network of current political leaders and senior bureaucrats, Congressional staff, former officials, other hangers-on of various kinds, consultants, think tankers, academics, and journalists who have long championed globalist U.S. foreign policies despite the needless national security and economic damage they’ve caused.

Not so incidentally, they keep moving in an out of public service so continuously that they’ve not only blurred the crucial lines between these spheres, but they’ve more than earned the term “permanent (and of course unelected) government.”

So imagine my surprise when I opened my Washington Post Thursday morning and discovered that Ignatius had written what may be the most important American commentary yet on the Ukraine War. His main argument is that President Biden and Russian dictator Vladimir Putin have each decided on a set of goals that could reduce the chances of the conflict spilling across Ukraine’s borders, and especially into the territory of neighbors that enjoy a strong U.S. defense guarantee. This chain of events could all-too-easily lead to direct U.S.-Russia military conflict that could just as easily escalate to the all-out nuclear war level.

But the goals identified by Ignatius are encouraging because they indicate that both Mr. Biden and Putin have retreated from dangerously ambitious objectives they’ve referred to throughout the war and its prelude. For the U.S. President, this means a climb-down from his administation’s declarations that Russia can’t be allowed to establish anything close to a sphere of influence that includes Ukraine, and that would prevent it and potentially any country in Eastern Europe from setting its own defense and foreign economic policies.

For Putin, this means confining his aims to controlling the eastern Ukraine provinces with large Russian-speaking populations, not the entire country

Ignatius’ most convincing evidence regarding the American position is Mr. Biden’s statement on Thursday that with its growing military support for Ukraine, the entire western alliance was  “sending an unmistakable message to Putin: He will never succeed in dominating and occupying all of Ukraine. He will not — that will not happen.” As Ignatius pointed out, this statement, “though resolute in tone, left open the possibility that Putin might occupy some of Ukraine, in the southeastern region where Russian attacks are now concentrated.”

Moreover, this Ignatius observation matters considerably in large measure precisely because the author is so well plugged in to the staunchly globalist Biden administration. If he’s putting points like this in print, the odds are good that it’s because he’s heard them from genuinely reliable sources, and even because those sources are using him as a vehicle for trial balloon floating.

Ignatius’ most convincing evidence regarding the Kremlin’s position is Putin’s statement the same day that the Russian forces that have virtually destroyed the southern Ukrainian city of Mariupol have “sacrificed their lives so that our people in Donbas [the aforementioned eastern Ukraine region] live in peace and to enable Russia, our country, to live in peace.”

Those last words in particular suggest that Putin now believes a Russia-dominated Donbas can serve as an acceptable buffer between Russian territory and the North Atlantic Treaty Organization (NATO) that expanded its membership in the 1990s and early 2000s to countries directly bordering Russia.

On this issue, though, big questions remain: Would Putin permit what’s left of Ukraine join NATO (in which President Volodymyr Zelensky has said he no longer interested) or the European Union (which Ukraine still wants)? Or would Moscow let a rump Ukraine do what it wished on these defense and economic fronts? At the same time, the very uncertainty created by these Russian and Ukrainian (and now U.S.) statements makes clear there’s a deal that can be struck before Ukraine experiences much more suffering.

But as Ignatius himself notes, this week’s Biden and Putin positions are anything but guarantees against disastrous escalation. The reason? As I’ve written, the longer the fighting lasts and especially the more intense it becomes, the likelier spillover gets – whether from air raids to artillery strikes to the spread of toxic clouds from exploded chemical or even nuclear weapons, to cyber attacks (e.g., by Russia against U.S. or other western computer systems intended to interfere with the Ukraine weapons supply effort or with the West’s intelligence sharing with Kyiv).

So the Biden and Putin statements may be necessary developments for securing a non-disastrous end to the Ukraine war, but they’re hardly sufficient. Some serious form of outside pressure looks to be essential — either President Biden on Zelensky, or (seemingly less likely) China on Putin. Without it, Americans — and Ukrainians — arguably are left with hoping for the best, a strategy with an historically unimpressive record of success.        

Our So-Called Foreign Policy: U.S. Allies are Standing (A Tiny Bit) with Ukraine

Tags

alliances, allies, burden sharing, EU, Europe, European Union, free-riding, Kiel Institute for the World Economy, North Atlantic treaty Organization, Our So-Called Foreign Policy, Russia, Ukraine, Ukraine-Russia war

Even a long-standing critic like me of the record of U.S. allies in Europe in sharing the burden of their own defense found the graphic below to be quite the stunner. It makes clear that, so far, countries that for decades have been deadbeats and free-riders when it comes to fielding armed forces capable of defeating first Soviet and then post-Soviet Russian aggression, are behaving just as selfishly and miserly in supporting Ukraine’s resistance to the Kremlin’s invasion – and presumably keeping themselves safe from attack or bullying by Moscow.

The graphic comes from a leading German think tank – the Kiel Institute for the World Economy – and it shows that between the February 24 start of the invasion of Ukaine through March 27, the United States, in the words of the Institute’s research director, “is giving significantly more than the entire [European Union], in whose immediate neighborhood the war is raging.”

The specific amounts of combined financial, humanitarian, and military assistance (in euros) , according to Kiel: the United States, 7.6 billion; all European Union countries combined, 2.9 billion; EU institutions (like the European Investment Bank, 3.4 billion. Adding the United Kingdom (not an EU member) increases the European total by $712 million euros – and would still leave this figure below that of U.S. aid in all forms.

True to RealityChek‘s long-time insistence that data be presented in context, the Europeans come off somewhat better when these aid figures are presented as percentages of total economic output. After all, it’s completely unrealistic to expect even the most vigilant very small economy to donate as much in absolute terms as a much larger economy, all else equal.

But as the Kiel graph beow shows, most of the Europeans don’t come off that much better.

In fact, except for Estonia, Poland, Lithuania, Slovakia, and Sweden, the United States holds the lead according to this measure, too. And remember: Poland and Slovakia are right next door to Ukraine, Estonia and Lithuania border Russia, and Sweden is located just across the Baltic Sea to them. As for the rest of Europe, I’ll just circle back to the point made by the Kiel Institute research director: It’s their “immediate neighborhood”! So their relative efforts should be exponentially greater than America’s, as should those of the countries even closer to the fighting.

Moreover, it’s easy to understand why European military aid has been so modest. These countries have been skimping on their militaries for decades. But as a result, they should be compensating by providing much greater amounts of economic and humanitarian assistance.

These figures are damning enough as examples of continued European fecklessness. But they’re even more important because the continent’s free-riding means that for the foreseeable future, American military forces will keep playing a predominant role in any response to the Ukraine invasion. And even if President Biden sticks with his pledge to keep U.S. troops out of the fighting in Ukraine, their very presence in the vicinity of a conflict could expose the U.S. homeland literally to mortal danger. 

For as I’ve noted, if the war spills over borders into the countries where the American units are based, and that enjoy a legally ironclad promise of protection by the United States and the rest of the North Atlantic Treaty Organization (NATO), U.S. and Russian forces will almost surely wind up shooting at each other, and the prospect of escalation to the all-out nuclear war level becomes terrifyingly real. 

A Europe willing and therefore at some point able to defend itself would reduce this danger to acceptable levels. But as the Kiel data show, because the Europeans remain protectorates much more than genuine allies, this point looks as far off in the future as ever.                     

 

 

Those Stubborn Facts: Is the European Union Really Standing with Ukraine?

Tags

energy, European Union, military aid, natural gas, oil, Russia, Those Stiubborn Facts, Ukraine invasion, Ukraine-Russia war

Amount of European Union payments to Russia for

energy supplies since it invaded Ukraine: $38

billion

 

Amount of European Union aid to Ukraine to help

it resist the Russian invasion: $1.09 billion

 

(Source: “The EU is paying 35 times as much for Russian fuel as it’s given Ukraine for defense, chief diplomat says,” by Sinead Baker, Business Insider India, April 6, 2022, https://www.businessinsider.in/politics/world/news/the-eu-is-paying-35-times-as-much-for-russian-fuel-as-its-given-ukraine-for-defense-chief-diplomat-says/articleshow/90686530.cms)

(What’s Left of) Our Economy: U.S. Manufacturing Employment Powers Through Ukraine Jitters, Too

Tags

aerospace, aircraft, aircraft engines, aircraft parts, appliances, automotive, CCP Virus, chemicals, China, coronavirus, COVID 19, electrical equipment, Employment, Federal Reserve, inflation, interest rates, Jobs, lockdowns, machinery, medicines, metals, monetary policy, non-farm employment, non-farm jobs, personal protective equipment, pharmaceuticals, PPE, recession, Russia, semiconductor shortage, semiconductors, supply chains, surgical equipment, tariffs, transportation equipment, Ukraine-Russia war, vaccines, Wuhan virus, {What's Left of) Our Economy

The Ukraine war looks like the latest disastrous development that’s failed to stop the impressive growth in U.S. domestic manufacturing employment – just as has been the case recently with the Omicron variant of the CCP Virus and surging inflation. And let’s not forget that the Federal Reserve has begun raising interest rates and signaled that steeper hikes are on the way – steps of course designed to cool off the economy, including the demand for manufactured goods.

U.S.-based industry added a strong 38,000 net new jobs on month in March, according to this morning’s monthly employment report from the Labor Department, and revisions were positive. February’s initially reported 36,000 sequential improvement was upgraded to 38,000, and January’s already upwardly revised 16,000 advance is now judged to have been 26,000.

In fact, domestic industry slightly outperformed the rest of the non-farm economy (the Labor Department’s definition of the U.S. jobs universe) job-wise in March, with its share of non-farm employment inching up from 8.38 percent to 8.39 percent. These results, moreover, show that manufacturing jobs have grown a bit faster than the overall economy’s throughout the pandemic period. In February, 2020, the last data month before the virus and related lockdowns and behavioral curbs began roiling and distorting the economy, manufacturing accounted for 8.38 percent of total non-farm jobs.

The comparison with the private sector isn’t quite as impressive, but satisfactory all the same. Manufacturing’s share of those jobs as of March was 9.83 percent – exactly the same as it was in February, 2020. And some context is essential here: U.S. manufacturing payrolls have held their own and then some even though the massive, sweeping Trump tariffs on imports from China – which were supposed to cripple domestic industry – are still almost entirely in place, as are many of the former president’s tariffs and other trade curbs on metals.

From another vantage point, manufacturing has now replaced 1.244 million (90.60 percent) of the 1.362 million jobs it shed in March and April, 2020 – the peak of the CCP Virus’ first wave.

That trails the 92.82 percent of non-farm workers and 95.46 percent of private sector workers hired back during this period. But the gap isn’t big at all, and manufacturers shrunk their headcounts proportionately less than the rest of the economy during that horrendous spring of 2020. So they didn’t have as much ground to make up.

February’s biggest manufacturing jobs winners among the major sectors tracked by the Labor Department were:

>transport equipment, where payrolls in March advances by 10,800 – their best such performance since last August’s 19,000. At the same time, this increase followed a 19,800 February jobs plunge that was the sector’s worst such performance since the automotive sub-sector’s semiconductor shortage woes led to a nosedive of 48,100 in April, 2021. All this volatility left this sector’s employment levels 4.05 percent below those in that final pre-pandemic data month of Februay, 2020 – versus the one percent decrease since then by manufacturing overall;

>chemicals, whose 7,200 monthly jobs jump was its best ever (or at least since figures began being tracked in 1990). The previous all-time high was the 6,600 gain of January, 2021. This huge industry’s headcount is now up 4.49 percent since February, 2020;

>electrical equipment and appliances, where employment rose sequentially by 3,800 for its strongest increase since March, 2021’s 4,200. Jobs-wise, these industries are now 2.82 percent larger than in Febuary, 2020;

>and automotive. This industry, a sub-sector of transportation equipment, boosted employment by 6,400 in March, the most in a month since last October’s 34,200 burst. But underscoring the volatility among vehicle and parts makers, This March increase followed a 16,000 drop-off in February that was the biggest decrease since the 49,100 jobs lost in April, 2021. These ups and downs still have left automotive employment 1.32 percent their February, 2020 levels.

Machinery’s 1,700 monthly jobs gain in March wasn’t exceptional by the above standards. But RealityChek regulars know it’s of special importance because its products are so widely used throughout manufacturing and the rest of the economy. And in a somewhat discouraging development, this sector’s initially reported 8,300 jobs growth was revised down to 6,600. And its payrolls are still 2.89 percent smaller than in February, 2020.

The only significant jobs loser in March was non-metallic mineral products, where employment sank by 4,500 on month. That was the sector’s worst such perforance since last May’s 5,300 decline, but the March downturn snapped a string of good gains for these companies, and their workforces are 2.81 percent above their February, 2020 levels.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and as with the rest of domestic industry for February, their employment picture showed improvement overall.

In that shortages-plagued semiconductor and related devices sector, employment dipped by 100 on month, but January’s initially reported 200 increase was revised up to 300– its best such performance since October’s 1,000 advance. Since February, 2020, its headcount has climbed by only 0.86 percent, but these companies actually added jobs during the very steep CCP Virus-induced recession of spring, 2020.

Surgical appliances and supplies makers – whose products include personal protective equipment and similar medical goods – boosted employment by 800 in February. January’s initially reported 1,700 jobs increase was downgraded to 1,300, and December’s results were unrevised at 1,100. These health security-related companies have expanded their workforces by 3.79 percent since February, 2020.

The employment news was particularly good in the very big pharmaceuticals and medicines industry. Its February monthly employment increase of 1,300 was the best since September’s 1,600, and January’s initially reported dip of 100 now stands as an increase of 1,100. December’s downwardly revised 900 jobs gain remained the same, and these companies have now increased their employee numbers by 9.04 percent since February, 2020.

The medicines subsector containing vaccines didn’t perform nearly as robustly in February, but still grew jobs by 800. January’s initially reported 500 employment increase and December’s downwardly revised 2,000 expansion remained the same. The vaccine industry workforce is now 23.05 percent larger than in February, 2020.

The aviation cluster enjoyed a good hiring month in February, too. Jobs in the aircaft industry, dominated by Boeing and companies in its supply chain, rose by 500 – the best since the identical total in November. January’s initially reported downturn of 800 and December’s decrease of 400 remained unrevised. Aircraft employment is still off by 11.57 percent since February, 2020.

Makers of aircraft engines and engine parts expanded their workforces by 900 during February, and although January’s initially reported hiring figures were downgraded, the estimate went only from 1,000 to 900. December’s upwardly revised employment increase of 700 was unrevised, all of which helped these companies bring their payrolls to within 13.20 percent of their February, 2020 levels.

Jobs prospects in the deeply depressed non-engine aircraft parts and equipment sector keep looking up, too. Employment improved by 200 in February, and January’s initially reported job growth of 500 was revised all the way up to 1,500. December’s jobs losses stayed at 900, and although these industries’ headcounts are still 16.35 percent below February, 2020’s, that’s better than the 17.30 percent shortfall calculable last month.

Continuing headwinds are still imaginable for domestic manufacturing – like a dramatic escalation of the fighting in Ukraine (which could greatly heat up inflationary pressures and foster even greater Federal Reserve efforts to slow economic growth); a new CCP Virus variant that’s not only more infectious but more deadly; and more big China lockdowns that could further screw up global supply chains. But given the recent actual record, it’s even easier to imagine manufacturing employment continuing to improve.

Our So-Called Foreign Policy: The Ukraine War is Creating Entirely New Nuclear Strategy Risks

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Biden, biological weapons, chemical weapons, deterrence, NATO, North Atlantic treaty Organization, nuclear war, nuclear weapons, Our So-Called Foreign Policy, red line, Russia, Ukraine, Ukraine invasion, Ukraine-Russia war, Vladimir Putin

The increasingly blustery way leading American politicians and chattering class members (mainly conservatives) have been talking about nuclear weapons and the Ukraine war is getting scary enough for me, and should be for you. (See, e.g., here.) Unless it’s OK that a major American city (or ten) may wind up looking like besieged and decimated Mariupol because playing chicken more boldly (but so far mainly verbally) with Moscow pushes above zero the odds of them getting hit by Russian warheads?

But something that worries me even more about these cataclysmic possibilities: For two main sets of reasons, the war could well create possibilities for nuclear weapons use that differ markedly from the scenarios that have dominated American planning for decades – and all the evidence indicates still dominates it today.

The first entails both Vladimir Putin’s invasion of Ukraine itself and the Russian dictator’s apparent decision to react to Ukraine’s stunning success to date in fighting back by raining maximum destruction on that country’s population. The second entails expansion of the North Atlantic Treaty Organization’s (NATO) membership right up to Russia’s borders after the Cold War ended and the old Soviet Union’s satellites became truly independent states and sought to join.

Simply put, the longstanding and existing scenarios have gone something like this: The Soviet Union (and now Russia) thinks about invading a NATO member (almost always the former West Germany) with its vastly superior conventional forces, but is deterred paradoxically by the very weakness of NATO’s conventional forces. The likelihood of these NATO forces getting overwhelmed and destroyed (along with all the NATO civilian personnel located nearby), would supposedly leave an American President no choice but to try to repel the attackers with nuclear weapons. The prospect that this escalation would turn into an all-out, world-destroying conflagration would be enough to prevent Moscow from attacking in the first place.

Today, however, the situation and possible nuclear scenarios are vastly different. After all, Putin has invaded not a NATO member – that is, a country whose security has been guaranteed by the alliance – but a country that hasn’t been permitted to join NATO. On the one hand, that’s comforting (except for the Ukrainians) because President Biden and other NATO leaders have ruled out the idea of direct military intervention in the conflict – precisely for fear that Russia could respond by attacking NATO units in Ukraine with nukes, or by attacking NATO forces and bases in members bordering Ukraine, or elsewhere in NATO-Europe, or even by striking the United States.

On the other hand, the very fact of heavy fighting in a country right next door to NATO members raises the possibility of the conflict spreading into those countries. This spillover could occur either by accident, or because Putin decides to attack the alliance’s extensive efforts to supply Ukraine. In turn, either such Russian operations could kill or wound NATO personnel who might be accompanying the weapons and other aid shipments as they travel through Ukraine, or Putin could decide to take out the facilities in Poland and other NATO countries from which these supplies are being sent into the war zone.

And don’t forget the spillover possibilities even from Russian attacks on Ukrainian forces inside Ukraine. Because Ukrainian resistance has been so effective (an outcome that so far was not only totally unexpected to the U.S. national security apparatus, but that contrasts strikingly with the longstanding assumption of Russian conventional military superiority that still underlies the alliance’s deterrence strategy), Moscow might need chemical or biological or nuclear weapons to regain the initiative. If these threshholds are crossed, the effects could, as noted here, easily blow beyond Ukraine’s borders and into NATO territory. And if NATO territory is affected, wouldn’t that qualify as an attack on a NATO member, or members, that would activate the alliance’s Article Five obligation that members view such a development as “an attack on all” – the core of the NATO treaty and the ultimate key to whatever deterrence power it’s assumed to have created?

Much more than the violations of international agreements that would result from these Russian moves, that’s why Mr. Biden and other NATO leaders have been warning Putin about “red lines” that he mustn’t cross by using these weapons of mass destruction. Yet the vague terms NATO has used to describe its promised responses so far make clear that alliance leaders haven’t yet decided how they actually would respond, and how to convey that message convincingly to Moscow. And yes, a Russian cyber-attack on a NATO member would trigger the same kinds of questions, uncertainties, and outright dangers.

As I’ve written repeatedly (notably here), the U.S. military doctrine that resulted and still prevails never deserved high marks for prudence, common sense, or even the basic test of a healthy sense of self-preservation. So it’s not like there’s a compelling case that Washington’s strategists today will come up with anything more sensible to handle these radically different challenges. And that’s all the more reason to try to put much more energy into stopping the fighting ASAP by cutting a deal that will surely fail to satisfy either Ukraine or Russia, but that ends, at least for the time being, the kind of reckless nuclear weapons talk that could all too easily lead to catastrophic nuclear weapons use – even if neither the United States nor its allies are actually attacked.     

(What’s Left of) Our Economy: Russia Sanctions May Be Sending a Crucial Message About U.S. China Policy

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Adam Posen, Antony J. Blinken, Biden, Biden administration, Bloomberg.com, Chad Bown, China, dollar, Donald Trump, finance, Foreign Affairs, foreign policy establishment, Mainstream Media, multilateralism, Qin Gang, reserve currency, Russia, sanctions, tariffs, Trade, trade war, Ukraine, Ukraine-Russia war, unilateralism, Wang Yi, {What's Left of) Our Economy

The Russian invasion of Ukraine has produced a genuinely strange – and potentially crucial – turn in the way American leaders and the political class of pundits and think tankers and the rest of the countrys influential chattering class are viewing and even conducting China policy. Because China could in theory significantly help Vladimir Putin’s never-impressive economy evade the full impact of global sanctions, they’re not only talking of only punishing the People’s Republic if it follows this course. They’re exuding confidence that Beijing could be cowed into backing down.

In other words, the conventional wisdom throughout the U.S. foreign policy,  economic policy, and media establishments now holds that Washington can bend China to its will because the Chinese ultimately need the United States much more economically than vice versa. Because this position looks like such a total reversal of what these folks insisted during the trade war supposedly started by Donald Trump with China, it raises these questions: If America’s leverage is great enough to change Chinese behavior that would mainly threaten another country’s security, isn’t it also great enough to change Chinese behavior that for decades has increasingly damaged America’s own economy, and also to pursue decoupling from the Chinese economy more energetically?

The Biden administration certainly is acting like it holds all the cards over China on anti-Russia sanctions. As a “senior administration official” told reporters in an – official – White House briefing last Friday, the President in his virtual meeting with Chinese dictator Xi Jinping that morning “made clear the implication and consequences of China providing material support — if China were to provide material support — to Russia as it prosecutes its brutal war in Ukraine, not just for China’s relationship with the United States but for the wider world.”

The day before, previewing the Biden-Xi call, Secretary of State Antony J. Blinken said  “President Biden will be speaking to President Xi tomorrow and will make clear that China will bear responsibility for any actions it takes to support Russia’s aggression, and we will not hesitate to impose costs.”

And the national policy establishments are giving these statements their Good Housekeeping Seal of Approval. According to Chad Bown of the Peterson Institute for International Economics, who emerged as the Mainstream Media’s go-to critic of the Trump trade wars, “On the pure economic question, if China were to have to make the choice – Russia versus everyone else – I mean, it’s a no-brainer for China because it’s so integrated with all of these Western economies,”

His views, moreover, came in a Reuters article whose main thrust was “China’s economic interests remain heavily skewed to Western democracies….”

A Bloomberg.com analysis posted a week ago similarly asserted that China “needs good relations with the U.S. and its partners to meet its economic goals, particularly as growth slows to the slowest pace in in more than three decades.”

And although that point was keyed to the current state of China’s economic health – as opposed to the situation during the Trump years, the article also noted that Beijing has “resisted taking retaliatory measures that would hurt its own economy even when the U.S. has directly targeted Beijing. During the height of the trade war, China threatened but never implemented an ‘unreliable entities’ list, and even state-run banks have complied with U.S. sanctions on Hong Kong. It also delayed imposing an anti-sanctions law on the financial hub after businesses expressed concern.”

In all, it’s a stark contrast with the days during that Trump period when the Mainstream Media – relying heavily on analysts like Bown, who work for think tanks heavily funded by Offshoring Lobby interests – routinely ran stories headlined “Why the US would never win a trade war with China.”

Now sharp-eyed readers will notice one big difference between then and now: The Trump China and other tariffs were unilateral. It’s assumed – quite reasonably – that any Biden China sanctions would be undertaken jointly, along with many and possibly most other major national economies.

At the same time, no less than Peterson Institute President Adam Posen has just written in (no less than) Foreign Affairs that it’s the strength of the West’s financial services industries that “are what has truly advantaged the West over Russia in implementing effective sanctions, and what has deterred Chinese businesses from bailing Russia out.”

But these advantages are overwhelmingly the product of the dollar’s reserve currency status and the dominance of U.S. finance in that dominant Western finance sector. So even he’s indirectly admitted that U.S. power specifically has been the key. As a result, wielding the finance cudgel could have pushed the Europeans and Japanese to join in with the Trump China tariffs.

Some other consequential conclusions could flow from this new confidence about China. Maybe even without putting other big economies in the finance cross-hairs, Trump should have threatened – and if need be, imposed – the same kinds of financial sanctions on China instead of tariffs to try to force Beijing to end its predatory trade practices, and/or to press China to accept more U.S. imports. Or maybe a combination of the two would have been best. Maybe President Biden should add the finance sanctions to his decision to maintain most of the Trump tariffs. And if the United States enjoys this kind of leverage over China, wouldn’t the same hold for other troublesome trade partners, even big economies?

But perhaps the most convincing signs of the U.S.’ paramount leverage are coming from China itself. Last Tuesday, Foreign Minister Wang Yi asserted that Beijing would “safeguard its legitimate rights and interests” if hit by punitive U.S. and broader measures. But this language was pretty vague – and he also expressed China’s hope that it would avoid these sanctions to begin with. Moreover, yesterday, Beijing’s ambassador to Washington Qin Gang made clear that Beijing had rejected the option of sending Russia military aid – though he added that China would maintain its “normal trade, economic, financial, energy cooperation with Russia.”

Moreover, there’s no need to go all-in on the tariff, or other China specific sanctions (e.g., on tech entities) fronts yet.  Especially since China is facing mounting economic troubles at home (notably in its gigantic and thoroughly bubble-ized real estate sector) a string of increasingly aggressive “poke the dragon” measures could yield lots of useful information about how Beijing perceives its vulnerabilities without risking noteworthy countermeasures – and about the real extent of America’s capacity to deal with the China challenge.