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Trump should leverage Arctic for Ukraine peace – analyst

RT | December 23, 2024

US President-elect Donald Trump would succeed in talks with Russia to end the Ukraine conflict by offering to lift sanctions on the Northern Sea Route and invite Western carriers to utilize Moscow’s project in the Arctic, an opinion piece in Responsible Statecraft magazine has suggested.

Trump’s campaign promise to swiftly stop the fighting between Moscow and Kiev “seemed increasingly out of reach,” Lyle J. Goldstein, a research professor at the China Maritime Studies Institute (CMSI) at the US Naval War College wrote in his article on Friday.

As the Russian military “continues its slow but steady advance,” Putin could have decided “to push for a more complete Russian military victory and defy any near-term Western peace overtures,” he said.

“It is hard to imagine that dispatching more arms to Ukraine and slapping more sanctions on Russia will be successful at achieving peace,” Goldstein stressed.

However, Trump still has a chance “to break from the status quo and entice Russia to end the war” by making the situation in the Arctic – where a struggle for dominance between world powers has been intensifying in recent years – part of the negotiations, he wrote.

According to the analyst, the issue is “guaranteed to capture… Putin’s attention” because Moscow is interested in the effective functioning of the Northern Sea Route (NSR), which runs from the Barents Sea near Russia’s border with Norway to the Bering Strait between Chukotka and Alaska, and “holds the key to unlocking major development in the country’s vast, resource-rich interior and more broadly for Siberia.”

In order to see Russia making concessions, “the US would need to lift sanctions that have been applied against NSR projects… [and] facilitate major European shipping companies like Hapag Lloyd and Maersk to green light the route.” Another step to “sweeten the pot” for Moscow could be “the encouragement and even incentives for Western investment along the NSR” by Washington and Brussels, Goldstein stressed.

“By appending peace proposals with a carrot guaranteed to catch Putin’s attention, negotiations having a substantial Arctic component could gain Trump’s favor and find success,” he insisted.

Trump said on Sunday that he wants to resolve the Ukraine conflict through direct talks with Putin. “We must end that war,” he stressed.

During his end-of-year press conference last week, the Russian leader said that he is “ready to talk [to Trump] anytime; I will be ready to meet with him if he wishes.”

At the same event, Putin reiterated that Moscow is open to negotiating with Kiev without any preconditions, except for those previously agreed upon in Istanbul in 2022. These agreements include a neutral, non-aligned status for Ukraine and certain restrictions on the deployment of foreign weaponry. He also emphasized that any negotiations must take into account the current situation on the ground.

December 23, 2024 Posted by | Economics, Militarism | , , | Leave a comment

Panama responds to Trump’s threat to retake vital waterway

RT | December 23, 2024

President Jose Raul Mulino has addressed the nation in response to US President-elect Donald Trump’s threat to retake control of the Panama Canal, a vital waterway that contributes billions of dollars to the Panamanian economy annually and serves as a crucial artery for global trade.

In his video address on Sunday, Mulino emphasized that the sovereignty and independence of the country are “non-negotiable” and underscored the canal’s significance as part of the “history of struggle and an irreversible conquest.”

“Every square meter of the Panama Canal and its adjacent area belongs to Panama, and it will continue to be so,” Mulino declared.

Over the weekend, Trump expressed outrage on Truth Social and during a speech at the AmericaFest conference over what he called “exorbitant” fees charged for the passage of American vessels through the canal, accusing Panama of exploiting the United States with excessive fees.

“We’re being ripped off at the Panama Canal, just like everywhere else,” despite the “extraordinary generosity that has been bestowed on Panama,” he told supporters in Arizona on Sunday.

“If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to the United States of America. In full. Quickly and without question,” Trump proclaimed, warning officials in Panama to “please be guided accordingly.”

Trump also declared that he would never allow the canal to fall into “the wrong hands,” namely China’s, emphasizing that a “secure Panama Canal is crucial for US commerce and the rapid deployment of the Navy from the Atlantic all the way to the Pacific.”

Trump further emphasized his statements by sharing an image on Truth Social of an American flag over a narrow waterway with the caption, “Welcome to the United States Canal!”

Mulino strongly rejected these claims, stating that the canal’s rates are set publicly and transparently, considering market conditions, international competition, operating costs and maintenance needs. He highlighted that since the transfer of the canal from the United States to Panama on December 31, 1999, as per the Torrijos-Carter Treaties signed in 1977, there have been no objections or complaints regarding Panama’s control.

“These treaties also established the permanent neutrality of the canal, guaranteeing its open and secure operation for all nations,” he said, calling it the best tribute to the martyrs who fought for Panama’s sovereignty and dignity during the 1964 anti-American riots. Mulino rejected any notion that China, the European Union, or any other power has direct or indirect control over the canal.

The canal has become a source of strong national pride, managed by qualified Panamanian professionals who ensure its safe, continuous, efficient, and profitable operation, the president added. It also contributes billions of dollars to the Panamanian economy annually and serves as a crucial artery for global trade.

“Panama respects other nations and demands respect,” the president concluded, stating that he aspires to preserve good relations with the incoming US government on issues such as drug trafficking, terrorism, organized crime, and illegal migration, but the neutrality of the canal is “non-negotiable.”

December 23, 2024 Posted by | Economics, Sinophobia | , | Leave a comment

Geopolitical auto-asphyxiation: Here’s why Germany is heading for irreversible decline

Berlin is unable or unwilling to finally abandon a pernicious groupthink that subordinates its interests to Washington’s misguided political agenda

By Tarik Cyril Amar | RT | December 22, 2024

Oops, he’s done it again: Tech mogul, richest man in the world, and also now new bestie of American President-elect Donald Trump, Elon Musk has used his massive social media clout – as owner of X and a personal account with more than 200 million followers – to post about politics. And here we don’t mean his unhelpful recent intervention in how Americans – barely – keep their rickety government contraption from stuttering to a halt for lack of cash.

Nope, this is about Germany: With regard to Europe’s Sick Man on the Spree (there is another one on the Seine, of course), in his first post Musk waltzed in, guns blazing to support the right-wing AfD (Alternative for Germany) party in the run-up to the snap elections on February 23.

Only the AfD, he pronounced with typical modesty, can “save Germany.” In a second post, a few days later, Musk reacted to a murderous attack on a German Christmas market in the city of Magdeburg. This time, he called Germany’s lame-duck Chancellor Olaf Scholz “an incompetent fool” who should resign forthwith.

Some Germans are aghast. How dare Musk, an American, intervene in our elections? Deeply unpopular German minister of health Karl Lauterbach, for instance, went almost comically Victorian with his performance of righteous ire for public display, calling Musk’s statements “undignified and highly problematic.” Shocking, shocking indeed!

Interestingly enough, most of the same Germans still have no problem with Joe Biden, also an American, having helped Ukraine blow up their vital energy infrastructure and then mightily promoting the de-industrialization of Germany and the EU as a whole by subsidizing companies which move to produce in the US. Others think it’s totally normal that German politicians, such as Michael Roth – head of the German parliament’s Foreign Affairs Committee, no less – massively interfere in the politics of, say, Georgia, not only by messing with its elections but also trying to literally instigate a coup. Judge not, lest ye be judged…

So, let’s cut out the daft pearl-clutching: I am German, and I find it very objectionable when Musk fails to post about the genocide in Gaza, instead taking the side of the Israeli perpetrators. But I could not be less concerned about him stating his opinion – it’s not more than that – about what party would be best for Germany, even thought I do not agree at all. As to calling Scholz what he actually is, go ahead Elon. There, I am even on your side.

Once we dispense with the huffy-puffy theatrics, what is really at stake here? And why would it even matter so much to some Germans what Musk has to say about their politics?

It’s not complicated: Musk has hit a very sore spot. And the name of that very sore spot is Germany. Yes, all of it, or at least, everything that has to do with its tanking economy and, frankly, delusional politics. Here’s how:

On December 16, German Chancellor Olaf Scholz lost a confidence vote in the German parliament. That was no surprise but the plan from the beginning. Or to be precise, since November 6, when the former governing coalition of Greens, Free Democrat market liberals, and Scholz’s own Social Democrats imploded with a nasty bang. After that, the no-confidence vote – even if it came with some predictable yet pretty fake drama and backbiting – was merely a formality on the way to snap elections, scheduled for February 23.

On the face of it, the above may look like a minor politics-as-usual hiccup: Sometimes coalitions don’t work out and a country needs new elections to – hopefully – start over with a new government. In postwar Germany (the Cold War Western version and the post-unification one together), this procedure – based on article 68 of the constitution – is not unprecedented; it has been used 5 times before.

But this is not that sort of case. Rather, the snap elections are only one small symptom of a much deeper, all-pervasive malaise: By regularly reading the news about Germany, you could easily come to feel that Europe’s former economic locomotive and political first-among-not-so-equals is now a very unhappy country, economically in severe, persistent decline and politically – to put it kindly – badly disoriented. And you would be right. Except things are even worse, and I write that, let me remind you, as a German.

For what’s really gloomy – indeed, quite literally hopeless – about the current German doom is that no one with even a remote chance at political power in Berlin is prepared to honestly face the root causes of the country’s misery. Germany is not merely in a mess; it also has a dysfunctional non-elite that is in total denial about how to fix that mess. But before we get to that elephant in the misery room that almost all German politicians fail to acknowledge, with stereotypical thoroughness, let’s look at the wasteland their failure has made.

Take a few highlights. There are 84 million Germans. According to a major research institute in the country, a quarter of them have found out that their income is insufficient to make ends meet. In a similar vein, another new study based on official government data pays special attention to the cost of having a roof, any roof, over your head. It has just found that 17.5 million Germans are living in poverty. That is 5.4 million more than previously assumed. The reason they had escaped the traditional statistics is that the cost of their abodes had simply not been factored in. Once you, realistically, do so, a whopping 20 percent of Germans fall under the official definition of “poor.”

No wonder then that ever more Germans need soup kitchens – in German “Tafeln” – to simply have enough to eat. Indeed, demand for housing has grown so much that they even have to ration the food they are doling out.

More and more Germans have to abandon their pets because they simply can’t afford them anymore: cats and dogs are becoming a “luxury item,” and keep people in a “poverty trap.” Germany’s business mood, meanwhile, is “slumping,” according to Bloomberg.

We could go on, but the picture should be clear enough: Germans may be a little on the “Angst” side in terms of temperament, but this time, they are really in trouble. How did that happen to the industrial powerhouse and export champion? The core of the problem is, of course, the economy. It takes not a grain of alarmism – ask Bloomberg again – to observe that its very future is in danger: It is “ravaged” by an energy crisis; Chinese competitors squeeze it, while Chinese markets are being lost; and then there is US President-elect Donald Trump and his threats of brutal tariffs. And all of that on top of persistent stagnation entering its fifth year.

Indeed, for two years already the German economy has simply “flatlined,” and business is (not) looking forward to yet another year of no growth. Germany, a long report has just summed it up, is “reaching a point of no return,” on a “path of decline that threatens to become irreversible.”

Here is the crux: The mainstream parties now contesting the snap elections recognize that the situation is dire. How could they not without being laughed out of the room? They all offer suggestions, as you would expect, for what to do about it. Let’s set aside that such suggestions look a little silly when coming from the parties that made up the last government coalition. Why didn’t they implement their ideas then, after all?

Let’s just note that everything is rather predictable: The Social Democrats stress public spending and infrastructure and make unfounded promises to protect ordinary Germans from social decline, as if that process were not well underway already.

The mainstream Conservatives (CDU-CSU) emphasize lower taxes, budget cuts, less bureaucracy and red tape, and the magic powers of the market to unleash new growth. The market liberals from the Free Democrats do the same, just more extremely. And the Greens promise everything somehow, and then some, while making no sense at all. Everything as usual, in other words.

And yet, none of the above even dare name the one key issue that a new government could resolve quickly and that would have a decisive and fast impact on the German economy: namely the cause of that energy crisis that has hit crucial “energy-intensive” sectors the hardest but is, of course, affecting every single business and all the households, that is, consumers, one way or the other. The reason for that odd blindness is purely political, because that cause is very easy to identify. It’s the “structural blow” of “the loss of cheap Russian energy,” as even Bloomberg acknowledges.

It is true: Germany has an abundance of problems, some long predating the war in and over Ukraine: demography, under-digitalization, the infamous “debt brake,” a public debt limit so primitively designed it makes reasonable deficits impossible, and so on. And yet, the politically produced and self-imposed (Russia did not cut off the cheap energy, the West did, including via violent sabotage as in the Nord Stream attacks) energy crisis is decisive.

Imagine Germany, if you wish, as a past-their-prime, somewhat out-of-shape middle-class type. In principle, there is no reason such a person cannot rebuild by pursuing a healthy diet and decent exercise. Except, of course, you also cut off their oxygen supply by strangling them.

The added irony: Germany – with plenty of help from its big brother “ally” America and its dependent sponger Ukraine – is strangling itself. Auto-asphyxiation is, of course, a well-known and potentially lethal perversion, but usually it’s associated with aging rock stars in lonely hotel rooms. Seeing a whole country do it is peculiar.

In the current German party system, only two parties show signs of being willing to address this core issue instead of avoiding it: The far-right/right-wing AfD under Alice Weidel and the left-conservative BSW under Sarah Wagenknecht. What do they have in common apart from that? Nothing. Except, they both won’t be able to influence German government policy, at least not soon, and not after the February elections. The AfD is, actually, the second-strongest political party after the CDU-CSU Conservatives, according to current polls. Think what you will about Musk’s political tastes (absolutely not mine), but it’s a fact that he has spoken up for a party that almost a fifth of German voters prefer.

However, the mainstream parties swear that they will not allow it into a governing coalition. The BSW is doing reasonably well for a newcomer but may even be struggling to clear the five-percent barrier to gain seats in the new parliament, and it is certainly far from gathering the amount of votes that would make it indispensable for coalition building.

Here’s the final irony: Germany’s fundamental problem is not actually economic. The economy is in catastrophic shape, make no mistake. But the reason for that is political and even intellectual and moral: The inability or unwillingness to finally abandon a pernicious group think that subordinates obvious and vital German interests to the misguided political agenda of, ultimately, Washington and does not allow for what is obviously needed urgently: re-establishing and repairing a rational relationship with Russia.

Tarik Cyril Amar is a historian from Germany working at Koç University, Istanbul, on Russia, Ukraine, and Eastern Europe, the history of World War II, the cultural Cold War, and the politics of memory.

December 22, 2024 Posted by | Economics, Malthusian Ideology, Phony Scarcity, Russophobia | | Leave a comment

Western Aid Covers Nearly 90% of Ukraine’s Spending in 2022-2024 – Analysis

By Oleg Burunov – Sputnik – 22.12.2024

Russia has repeatedly warned that the US and its Western sponsors’ assistance to the Kiev regime will only prolong the Ukraine conflict.

Western financing of Ukraine reached a whopping $238.5 billion from February 2022 to the beginning of December 2024, which approximately corresponds to 87% of the country’s budget expenses, Sputnik’s research based on information from the Ukrainian Finance Ministry, the University of Kiel, and open data has shown.

The expenses of the Ukrainian budget in 2022-2023 amounted to $193.3 billion, while in 2024 the figure is expected to stand at $81.3 billion. It means that over the past three years, the expenses have increased to $274.6 billion, according to the analyzed data.

Aid Breakdown

The volume of financial aid sent by Western countries to Ukraine amounted to $106 billion, whereas the West’s military assistance reached $132.5 billion within the aforementioned period. At the same time, the total volume of Western aid is 43% less than the $416 billion the West promised to Kiev, per the analysis.

The US remains Ukraine’s largest donor, having sent $95.2 billion to the Kiev regime in the past three years. Two-thirds of the sum was military aid, while one-third went towards budget financing.

EU member states transferred financial and military aid to Ukraine worth $94.2 billion, with Germany, Denmark, and the Netherlands being the bloc’s largest donors with $11.9 billion, $7.5 billion, and $6.3 billion, respectively. The UK sent $13.4 billion, Canada $7.8 billion, and Japan $6.7 billion.

During the December 19 Direct Line and year­-end press conference, Russian President Vladimir Putin stressed that Ukraine can fight and exist only with the support of its Western donors.

The statement came after Kremlin spokesman Dmitry Peskov said that Washington’s financial aid to Kiev will not change the situation on the battlefield and will lead to “new victims among Ukrainians.”

Russian Foreign Minister Sergey Lavrov, for his part, recalled earlier that US Secretary of State Antony Blinken emphasizes that continued aid to Ukraine is a guarantee of creating new jobs in the United States.

“As if he is not speaking about financing a war that has claimed hundreds of thousands of lives in Ukraine, but a lucrative business project,” Lavrov stressed.

This followed Peskov warning that the EU’s hefty sums to Ukraine are “allocated to the detriment of EU economies which are already going through difficult times.” For example, Germany, Europe’s largest economy, is facing a second year of zero growth, in what comes as more Germans oppose Berlin’s excessive financial assistance to the Kiev regime, according to a recent opinion poll conducted by the ARD news channel.

December 22, 2024 Posted by | Economics | , , , | Leave a comment

Zelensky’s testing our patience – Slovak MEP

RT | December 21, 2024

Vladimir Zelensky has “gone too far” in its dispute with Slovakia over natural gas, let alone turning Ukraine into a “zombie state” that’s entirely dependent on the West, Slovakian MEP Milan Uhrik has told RT.

Bratislava and Kiev have ended up in a bitter row over supplies of Russian natural gas across Ukraine. The country has refused to extend its gas-transit deal with Russia, on which Slovakia depends for energy supply, and which is set to expire at the end of the year.

While the country, which borders western Ukraine, has enough gas in storage to make it through the winter, the impending end of transit likely spells trouble for Bratislava in the near future, Uhrik is suggesting.

“We have a valid contract with Gazprom which we want to fulfill but Zelensky is preventing us from doing so simply because he wants to harm our economy and simply because he wants more, I don’t know, finance or more weapons from our country, and this is what we do not agree with,” the MEP said.

With a recession “coming to the European Union,” it would be “very unwise to completely cut off from Russian cheap energy sources,” Uhrik also warned.

People are getting angry [at] Zelensky because this has gone too far. He is simply testing our patience, because we did nothing wrong and yet he decides to destroy or continue with destruction, not only of Ukraine but also of our country.

The Slovakian lawmaker questioned the legitimacy of Zelensky’s “very sensitive and serious” decisions, pointing at the cancellation of presidential elections in the country, and to dwindling “support among Ukrainian people.”

Ukraine has long turned into a “zombie state” that is fully dependent on the collective West as a whole and the EU in particular, Uhrik pointed out. While the EU has helped Kiev “with more than €130 billion” (over $135 billion), in return it has been getting “even more and more demands” and “more and more insults,” with the latest row able to “easily raise a bigger conflict between Slovakia and Ukraine,” the MEP added.

December 22, 2024 Posted by | Economics | , , | Leave a comment

West has pumped over $300 billion into Ukraine – Orban

RT | December 20, 2024

The US and the EU have provided over $300 billion in financial aid and military assistance to Kiev since the escalation of the Ukraine conflict in 2022, Hungarian Prime Minister Viktor Orban has said.

Such a huge amount of money “could have done wonders” had it been spent to improve the lives of people within the EU, he said in an interview with Kossuth radio on Friday.

Orban highlighted the evolving military situation, noting that “the balance of power on the frontlines is shifting day by day” in Russia’s favor. He also pointed out the political changes expected in the US following Donald Trump’s return to the White House next month.

These developments call for leaders in EU capitals to embrace a more pragmatic approach to ensuring stability and economic resilience within the bloc, Orban believes. However, the prime minister argued that Brussels remains out of touch with global realities, pointing to a recent European Parliament decision to continue sending substantial funds to Kiev – a move he described as a clear example of misplaced priorities.

“During the negotiation with the Americans, I received the figure that Europe and America together have spent €310 billion so far. Those are huge numbers!” the Hungarian prime minister stressed.

He argued that the hundreds of billions of euros already spent to fund the conflict could have been used to bolster European infrastructure, to develop countries in Western Balkans to the level of the EU, or beef up military capabilities. This “enormous” amount of money could have been given to Europeans to make people’s lives much better, the Hungarian leader concluded.

Russia has repeatedly warned that no amount of Western aid will stop its troops from achieving the goals of the military operation or change the ultimate outcome of the conflict. By backing Kiev, they only prolong the conflict, Moscow has argued.

Earlier this month, Orban proposed a Christmas ceasefire between Ukraine and Russia, describing it as a last-ditch attempt to mediate a diplomatic resolution of the conflict. He floated the idea to Kiev and Moscow, as well as to Trump, who he personally met at his residence in Florida.

The Kremlin spokesperson, Dmitry Peskov said that Moscow “fully supports Orban’s efforts aimed at finding a peaceful settlement and resolving humanitarian issues related to the exchange of prisoners.”

However, Ukrainian leader Vladimir Zelensky rejected Budapest’s offer.

December 20, 2024 Posted by | Economics, Militarism | , | Leave a comment

Slovakia warns of ‘serious conflict’ with Kiev

RT | December 20, 2024

Slovakia is considering retaliation against Ukraine over its refusal to continue transit of Russian gas to the EU nation, according to Prime Minister Robert Fico.

Kiev is determined not to renew a multi-year transit contract with Russia, which allowed the fuel to flow across its territory despite the armed conflict between the two nations. Slovakia is one of the recipients of the gas, which Ukraine intends to halt next year.

A “serious conflict” is possible if Ukrainian leader Vladimir Zelensky “doesn’t release our gas,” Fico wrote on Facebook on Friday. He included excerpts from his press conference in Brussels on Thursday, after he and Zelensky discussed the issue at a meeting held behind closed doors in the Belgian capital.

Bratislava is sympathetic towards Kiev’s situation and Zelensky’s predicament, the prime minister said, but Slovakia is “not at any war” either with Russia or Ukraine, and the Slovaks are not servants doing the bidding of Zelensky. Kiev is “losing decisively,” while Zelensky “absolutely rejects any ceasefire,” he said.

Fico said the proposals regarding the gas situation, which Zelensky outlined to him at a European Council meeting, seemed “absurd.” One idea was to allow the flow to continue on condition that Russia would not receive any payment until the end of the Ukraine conflict.

“What fool will give us gas for free?” Fico asked journalists.

Slovakia is helping Ukraine by providing non-military assistance, including by transferring electricity to its capacity-starved power grid, the prime minister said. Relations between the two nations cannot be a one-way street, Fico asserted, adding: “I cannot completely rule out reciprocal measures.” His government will consider its options over the next week, he said.

Kiev previously floated the idea of letting gas that is not Russian in origin to be pumped through the Soviet-built pipelines on Ukrainian territory. Azerbaijan could be the source of such supplies, according to officials.

On Tuesday, European buyers of Russian pipeline gas, including Slovakia’s SPP, warned the European Commission that the looming termination of Ukrainian transit posed significant risks to members of the EU, and urged Brussels to act.

The escalating row has been caused by Kiev, Russian President Vladimir Putin said on Thursday, during his annual Q&A marathon. Russian gas giant Gazprom “can live” without the transit, he insisted.

December 20, 2024 Posted by | Economics, Militarism | , , | Leave a comment

No, Spending on the Ukraine War is Not Benefitting Americans at Home

Military Keynesianism, creating humanitarian disasters to stimulate economic activity, is fruitless and dangerous.

By Zachary Yost | The Daily Economy |

Since Russia invaded Ukraine in early 2022, those in favor of ever-increasing US involvement in the war have tossed around numerous justifications for their dangerous and escalatory policy that is detached from American national interest. We are of course served the normal pablum about defending freedom, that the Ukrainians are fighting “them over there, so we don’t have to fight them over here,” and that if not stopped the Russian army will soon be marching down the Champs-Élysées (although the Russian army, we are told, is also simultaneously full of starving demoralized conscripts forced to fight with shovels.)

Yet among the many flimsy excuses for continuing to risk nuclear escalation with Russia, few surpass the foolish argument that many billions of dollars of military aid to Ukraine are actually being spent here in the US, so it doesn’t even count as foreign aid and is therefore great for the economy.

The loudest institution promoting this line of thinking has been the American Enterprise Institute, and especially Iraq War cheerleader and Bush administration speechwriter, Marc Thiessen. The Biden administration has echoed this talking point as well.

Their logic runs as follows. We have to spend money to build and/or replace the weapons we are sending to Ukraine. That money is spent at American factories employing American workers. This helps to generate prosperity and economic growth and happy American families who can pay their bills and go on vacation.

These arguments are little more than military Keynesianism, and their reasoning falls to pieces if one thinks about it for more than 30 seconds.

As the nineteenth century French political economist Frédéric Bastiat succinctly put it, “Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee.”

Thiessen and others are being very bad economists (assuming they are not knowingly spreading propaganda and hoping it sticks), and repeating an age-old mistake that Bastiat identified as the broken window fallacy. In short, Bastiat reflects on a hypothetical broken window at a bakery and how at first one might say that this is good, since it will stimulate demand and lead to money being spent in the glass industry. But that is merely the visible effect. The unseen effect is that now the baker will no longer be able to invest that money into improving his business by acquiring more capital goods, or even spending it on personal consumption at a restaurant, hairdresser, or shoe shop.

A broken window does not result in an increase in wealth for society and leaves the victim poorer than before.

If this were not true, then we should pray for powerful and destructive hurricanes to wreak havoc every year since they generate so much economic activity in their wake. Similarly, its proponents would have to admit that the war is great for the Russian economy, as well. Look at all the jobs and productivity generated by the conflict!

Such thinking is nonsensical.

Yet, somehow this same line of thinking can pass muster for usually economically literate people who want to justify America’s fruitless and dangerous involvement in the Ukraine War.

We are told not to fret, since many tens of billions of dollars are being spent in America. But that is merely the seen effect. What are the unseen effects? There are many.

The US is running trillion dollar deficits and at risk of a debt trap with over a trillion dollars in interest payments. All this money being spent is either being borrowed from the capital markets, meaning the government is crowding out other borrowers, or is being financed by the Federal Reserve creating money to purchase bonds, therefore fueling further inflation.

But the effects do not stop there. Even if the US was not drowning in debt, building Javelin missiles (2023 estimated cost of $197,884 a pop), 155mm artillery rounds ($3,000 a shell), and Patriot air defense missiles ($4 million per missile) requires the use of labor, time, capital goods, and resources.

These resources obviously cannot be used to supply the other wants and needs that Americans have. Someone working at the bomb factory can’t be working at the car factory. Steel used to build an artillery shell can’t be used to make girders for buildings.

As Dwight Eisenhower noted back in 1963

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone.

It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.

The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities…

We pay for a single fighter plane with a half million bushels of wheat.

We pay for a single destroyer with new homes that could have housed more than 8,000 people…

Under the cloud of threatening war, it is humanity hanging from a cross of iron.

The cost of supplying weapons to Ukraine is not limited to money alone, but also the many and myriad things that we either will not have, or will have at more expense, than we did before.

The core logic put forward by military Keynsians is essentially no different from arguing that it is great for the economy to invest billions of dollars in building luxury cars and then dropping them down the Marianas Trench. (You don’t oppose money going to hard-working auto workers do you!)

At least with that plan there is little risk of stumbling into a great power war (unless Cthulhu gets annoyed at all the Cadillacs disturbing his slumber), unlike the current proxy war in Ukraine where the Biden administration has escalated the conflict even further in the wake of his defeat in November.

People are free to argue that America should be waging a proxy war in Ukraine and risking nuclear escalation. But don’t tell us that doing so will somehow make Americans more wealthy.

December 20, 2024 Posted by | Economics, Militarism | | Leave a comment

US chip suppression won’t stop Chinese industries’ development, will only make them stronger: China chip trade group

By Zhang Yiyi and Wang Cong | Global Times | December 13, 2024

On December 3, one day after the US government announced yet another round of restrictions on chip sales to Chinese firms, four Chinese industry associations, including the China Semiconductor Industry Association (CSIA) and the Internet Society of China (ISC), issued firmly worded statements declaring that US chip products are no longer safe and reliable.

Behind the strongly-worded statements are the profound indignation among Chinese industries over the US government’s relentless campaign to target an ever-growing number of Chinese companies, and the determination to ensure safe and reliable chip supplies for relevant Chinese industries, according to Wei Shaojun, vice chairman of the CSIA.

“The US government has repeatedly suppressed Chinese semiconductor companies, and CSIA members have been very outraged about this. So, it is the CSIA’s responsibility to speak out,” Wei told the Global Times in an interview on Thursday, noting that more than 240 Chinese semiconductor companies have been added to the US’ so-called Entity List so far, accounting for one-quarter of the CSIA members, or one-third, if affected foreign CSIA members are included.

In the statement on December 3, the CSIA blasted the US government’s latest move of adding more than 140 Chinese firms to its so-called Entity List, saying the US arbitrary export control measures against Chinese firms have affected the stable supply of US chip products. “US chip products are no longer safe and reliable and relevant Chinese industries will have to be cautious in purchasing US chips,” it said.

Also making the same determination are three other Chinese industry associations that represent the main buyers of chips – the ISC, the China Association of Communications Enterprises, and the China Association of Automobile Manufacturers. Relevant Chinese ministries, including the Ministry of Commerce, also slammed the US move and vowed to take “necessary” measures to resolutely safeguard its legitimate rights and interests.

China’s innovation edge

The statements from the Chinese industry associations showed a “stronger-than-before attitude” and “they expressed our strong indignation,” Tu Xinquan, dean of China Institute for WTO Studies at the University of International Business and Economics and a consultant for the CSIA, told the Global Times.

As the US government is bent on escalating the crackdown measures, “we must take some necessary measures to firmly safeguard our legitimate rights and interests,” Tu said, “we must accordingly encourage and support the purchase of reliable and safe products, whether they are made by Chinese companies or in other countries or regions.”

For domestic internet companies, they need to “promptly adjust their foreign cooperation and development strategies,” Pei Wei, Deputy Secretary General of the ISC, told the Global Times in an interview. “They need to diversify the supply chain layout, especially for the procurement of key technologies and components, to reduce the reliance on a single source.”

Chinese internet companies should establish partnerships with chip manufacturers in countries and regions outside the US, strengthen support for domestic and locally produced chips, so as to diversify risks and enhance supply chain security and stability, Pei further noted.

“At the same time, we must also improve our internal capabilities and continue to build independent research and development, production and manufacturing capabilities,” Pei said.

Wei also urged support for reliable chip supplies in the face of the US’ relentless crackdown campaign.

“We call on the Chinese government to support the stable development of reliable semiconductor suppliers; we also call on semiconductor companies in relevant countries and regions to strive to become reliable semiconductor industry suppliers,” he said. “Suppression will not stop us from development. Chinese industries will become stronger and more confident in our development.”

Broader cooperation needed

In response to the US government’s relentless crackdown campaign, Chinese industries should also remain open for cooperation with their foreign counterparts, the leaders of the industries also said.

“The current success and achievement of the semiconductor industry are the result of global competition and cooperation. Closed development is not conducive to technological progresses and breakthroughs in the industry, and will harm the interests of global consumers,” Wei said, urging the US to return to the stage for fair competition.

Tu noted that it is the US government’s policies, not US companies, that make US chip products unsafe and unreliable. “The restrictions are on exports, so they are actually restrictions on US companies,” he said.

Pei of the ISC also called for principles of openness, inclusiveness and win-win results for international cooperation. “Chinese and foreign industries can conduct deep cooperation in areas such as research and development, market exploration and talent training to share the development results,” Pei said.

December 17, 2024 Posted by | Economics, Sinophobia | , | Leave a comment

Brussels further damages European industry by approving 15th sanctions package on Russia

By Ahmed Adel | December 17, 2024

The Council of the European Union announced the approval of the 15th round of sanctions against Russia on December 16. Clearly, by imposing a new package of sanctions, the EU is willing to continue destroying its own industries by persisting on a policy of economic warfare despite the boomerang effects.

“This package of sanctions is part of our response to weaken Russia’s war machine and those who are enabling this war, also including Chinese companies. It shows the unity of EU member states in our continued support to Ukraine,” said Kaja Kallas, the EU’s High Representative for Foreign Affairs and Security Policy.

“Our immediate priority is to put Ukraine in the strongest possible position. We will stand by the Ukrainian people on all fronts: humanitarian, economic, political, diplomatic and military. There can be no doubt that Ukraine will win,” she added.

The new package includes, in particular, a list of personal sanctions against 54 individuals and 30 organizations that, according to the Council’s announcement, are “responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.”

The restrictions are intended to “address the circumvention of EU sanctions through targeting” Russia’s so-called “shadow fleet” and weaken the country’s military industry.

Specifically, 52 third-country vessels were sanctioned, which the bloc claims are involved in oil imports from Russia, the delivery of war material to this country, and/or “the transport of stolen Ukrainian grain.”

The new economic restrictions also target Russian defence companies, chemical plants, and civilian airlines. For the first time, sanctions are fully applied to several Chinese entities for cooperating with Russia.

Since the start of the special military operation in Ukraine on 24 February 2024, the EU has adopted numerous restrictive measures against Russia. According to the Castellum.AI database, more than 19,500 individual and sectoral sanctions have been triggered against Russia since the start of the military operation.

However, despite Russia becoming the most sanctioned country in the world, Russian President Vladimir Putin said at the 22nd Congress of the United Russia Party that the Russian economy continues to develop despite the unprecedented Western sanctions.

“Russia is developing, the economy is growing and this is amid sanctions, literally unprecedented in world history, against the background of gross interference and pressure on the part of the governing elites of some countries,” the president said on December 14, adding that foreign blackmail and attempts to stop Moscow will come to nothing.

“Russia is confident, it is conscious of its righteousness and its strength, and this is why all objectives set for the short and long term will certainly be met,” Putin said.

The Russian president’s comments followed the EU’s announcement on December 11 that member states had agreed to the 15th EU sanctions package against Russia. Now, even as European companies more openly express their interest in returning to the Russian market, the EU acts against the interests of citizens and the business community alike as prices escalate and the cost of living gets out of hand.

Moscow has repeatedly stated that the country will stand up to the pressure of sanctions that the West began imposing on Russia several years ago and continues to intensify because they lack the courage to admit the failure of such punitive measures.

Rising costs, driven partly by a rejection of Russian energy, are causing Europe to lose its global competitive advantage. Although Europe has maintained energy supply security, prices on the European market are now much higher than before. Some analysts predict a further rise in energy prices and the danger this poses to the European industry.

It is worth remembering that current gas prices in the European Union are almost five times higher than those in the United States. As a September report on European competitiveness points out, EU companies continue to face electricity prices between two and three times higher than the US.

A separate study by the German Chamber of Commerce and Industry (Deutsche Industrie und Handelskammer or DIHK) finds that high energy costs and a lack of reliable supplies are holding back industrial production, while “the risk of deindustrialization,” according to Siegfried Russwurm, chief executive of the industrial conglomerate Thyssenkrupp, “continues to increase.”

The energy crisis and the resulting economic recession in Europe are partly due to the EU’s refusal to accept cheap and reliable energy supplies from Russia. With these economically suicidal measures, Brussels wanted to force Moscow into capitulation. However, Russia has reoriented its export flows, particularly towards Asia.

Meanwhile, European buyers have been forced to purchase energy sources from alternative suppliers at higher prices, which obviously affected the competitiveness of European producers and hit the continent’s major economies. In effect, the anti-Russia sanctions have boomeranged, but Europe continues to insist on this economically suicidal policy.

Ahmed Adel is a Cairo-based geopolitics and political economy researcher.

December 17, 2024 Posted by | Economics, Russophobia | , | Leave a comment

Calls in Slovakia for referendum on lifting Russia sanctions

RT | December 17, 2024

Two Slovak political parties have organized a conference to promote calls for a referendum on lifting sanctions against Russia, and have collected more than 160,000 signatures for a petition.

The initiative was organized by the left-wing Party of Slovak Revival and the right-wing Homeland Party, which held an event in Bratislava on Monday, attended by former justice minister Stefan Harabin, as well as representatives of the NGO Free Zone and the Association of Slovak Intellectuals.

Speaking at the event, Harabin described relations with Russia as “an existential question,” adding that, without Moscow’s support, Slovakia “may not preserve our statehood.” He spoke out against what he called “provoking the Russians with sanctions,” adding that these restrictions violate the law.

He also pointed out that the sanctions were harming the national economy. “Almost a million Slovaks live below the poverty line or in poverty. At the same time, sanctions are introduced, and we import the same Russian gas, but at a price four times higher. And people have nothing to eat. What kind of representatives of the state are these?” he asked, referring to the Slovak government.

According to Pavol Slota, the leader of the Homeland Party, more than 160,000 people have signed a petition saying “Russia is not my enemy.” “Let’s stop the anti-Russian sanctions together, Slovaks FORWARD!!” he wrote on Facebook.

The petition calls for a referendum to be held, posing the question: “Do you agree that the Slovak Republic should not apply sanctions against the Russian Federation, which harm Slovak citizens, tradesmen and entrepreneurs?” At least 350,000 signatures are needed for a referendum to be held.

Slota described the petition as “a civic action,” while blasting mainstream media for what he claimed were attempts to downplay the idea. “I believe that there is still a sufficient number of sane people in Slovakia,” he said.

Under far-right Prime Minister Robert Fico, Slovakia has been critical of the Western approach to the Ukraine conflict, cutting off state military aid to Kiev. He has also repeatedly urged the EU to drop restrictions on Russia, insisting that the bloc must resume dialogue with Moscow once the conflict is over.

December 17, 2024 Posted by | Economics, Russophobia | | Leave a comment

Scholz loses confidence vote in German parliament, worsening Berlin’s political crisis

By Lucas Leiroz | December 17, 2024

The political crisis in Germany is deepening. Chancellor Olaf Scholz lost a confidence vote in parliament on December 16, effectively dismantling his government. With the collapse of the coalition and the need for early elections, it seems clear that the irresponsible policies of support for Ukraine have been a “death sentence” for the Scholz government.

Scholz lost with a total of 394 votes against him, while only 207 parliamentarians voted in his favor. As a result, early elections will have to be called, and are expected to be scheduled for February 23. For now, Scholz remains in office, but will have to deal with the situation of a minority government. This means that the prime minister does not have the necessary majority of supporters to pass laws of his interest in parliament, in effect being a kind of “symbolic government”.

This situation was expected, considering that his political alliance had already collapsed recently. The pro-government coalition was dismantled after the chancellor fired then Finance Minister Christian Lindner due to disagreements on issues such as the military budget and support for Kiev. Along with Lindner, other ministers and officials who disagreed with Scholz were also dismissed or resigned, which was seen by the coalition as an attempt at a “purge” to eliminate partners who disagreed with the chancellor’s projects.

It is important to remember that Scholz publicly acknowledged the Ukrainian issue as responsible for the crisis in the coalition. Germany is going through a time of great economic and budgetary difficulties. The economic and energy crisis and the large public spending to reverse the “side effects” of the anti-Russian sanctions have harmed various sectors of German society. In parallel to all this, the pro-Scholz wing maintains a policy of support for Ukraine that further expands expenses, creating a worrying budget imbalance.

Having seen the devastating effects of supporting Ukraine on German domestic politics, Scholz desperately tried to reverse this situation by “softening” his Ukrainian policy. He refused to send long-range weapons to the Kiev regime, despite the international pressure to do so and the recent wave of “deep strikes” with direct NATO participation. In addition, he had a direct conversation with Russian President Vladimir Putin in a telephone call, which caused outrage among his Western and Ukrainian partners. More than that, Scholz promised to call Putin more often, arguing that it is vital that European politicians participate more actively in the diplomatic process.

Not even this “change” in stance was enough to improve the public image of the German prime minister, who continued to face strong opposition in parliament, in addition to growing unpopularity. The growth of the German political right, both with the conservative nationalists of the AfD and the “moderate” Christian Democrats of the CDU, shows that Scholz’s political image is already exhausted, with the people and parliament demanding changes that he has proven incapable of achieving.

The problem is that Scholz will remain in office until the next election, which raises concerns for all sides of German politics. Scholz is expected to run again, representing the Social Democratic Party (SPD). His main rival will be the Christian Democrat Friedrich Merz, whose popularity seems to be growing in parallel with Scholz’s decline.

There are two possibilities: either Scholz will adopt an even more moderate stance on Ukraine until the election, in an attempt to gain support from the wing that wants to reduce German war spending; or he will adopt a kind of “suicide stance” and engage in a wave of all-out escalation, similar to what Biden is doing in his final days in the White House, since his chances of re-election are slim.

Scholz’s case is just one more in the great political crisis in the West since 2022. The special military operation had a profound effect on the West, indirectly causing the fall of several political leaders who proved incapable of dealing with the reality of the conflict. The more bellicose and active in the war in favor of Ukraine, the more unpopular Western leaders become and lose the trust of their own voters and supporters, becoming weak and vulnerable politicians.

Indeed, it is currently impossible for a Western leader to pursue a policy of full support for Ukraine. The fact that, unlike the pro-war countries, states like Hungary and Slovakia remain strong and stable, with their leaders enjoying broad popular support, is proof that Kiev is a destabilizing factor for the West. Scholz realized this too late and could not prevent his own collapse.

Lucas Leiroz, member of the BRICS Journalists Association, researcher at the Center for Geostrategic Studies, geopolitical consultant.

You can follow Lucas on X (formerly Twitter) and Telegram.

December 17, 2024 Posted by | Economics, Militarism | | Leave a comment

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