In "Insatiable" the Economist says "The cost of stopping the Russian bear now is high—but it will only get higher if the West does nothing".
Economist: Mr Putin has used the Ukrainian crisis to establish some dangerous precedents. He has claimed a duty to intervene to protect Russian-speakers wherever they are. He has staged a referendum and annexation, in defiance of Ukrainian law. And he has abrogated a commitment to respect Ukraine’s borders, which Russia signed in 1994 when Ukraine gave up nuclear weapons. Throughout, Mr Putin has shown that truth and the law are whatever happens to suit him at the time.
Mish: What a bunch of one-sided hypocritical nonsense. The US and EU have shown the that truth and the law are whatever happens to suit them at the time. The US has a drone policy that has killed or injured thousands of innocent victims, including children. The US had no pretext for invading Iraq but did so anyway. Warmongers now sabre-rattle Iran. The EU removed elected leaders in Greece and Italy and replaced them with technocrats. The US fomented events in Ukraine by helping overthrow Viktor Yanukovych. President Ronald Reagan promised Russia NATO would stay away from Eastern Europe. Apparently it's OK for citizens to overthrow the elected government in Ukraine in violation of the constitution, but it's not OK for citizens in Crimea to do the same. Russia did not take a bite out of Ukraine as depicted by the Economist. Rather, a section of Ukraine voted overwhelmingly to return to Russia. Once again, I am not proposing two wrongs make a right, rather I am proposing this is none of our business.
Economist: The West needs to show Mr Putin that further action will be costly. So far, its rhetoric has marched far ahead of its willingness to act—only adding to the aura of weakness. Not enough is at stake in Ukraine to risk war with a nuclear-armed Russia. And European voters will not put up with gas shortages, so an embargo is not plausible. But the West has other cards to play. One is military. NATO should announce that it will hold exercises in central and eastern Europe, strengthen air and cyber defences there and immediately send some troops, missiles and aircraft to the Baltics and Poland. NATO members should pledge to increase military spending.
Economist: Another card is sanctions, so far imposed on only a few people close to Mr Putin. It is time for a broad visa ban on powerful Russians and their families. France should cancel the sale of warships to Russia. A more devastating punishment would be to cut Russia off from dollars, euros and sterling. Such financial sanctions, like those that led Iran to negotiate over its nuclear programme, would deprive Russia of revenues from oil and gas exports, priced in dollars, and force it to draw on reserves to pay for most of its imports. They would be costly to the West, especially the City of London, but worth it. Impose them now, and give Mr Putin reason to pause. Do any less and the price next time will be even higher.
Not Our Battle
For starters, this is not our battle. Moreover, Europe is tired of our heavy meddling in it. (see European Countries Resent US Hectoring Tone).
If Crimea prefers to associate with Russia rather than the Ukraine, it is absolutely none of our business. Let the people involved, sort it out for themselves.
Warmongers Can't Think
France cutting off military sales to Russia would hurt France and help Russia - No one needs any more military junk. Pray tell tell what does Russia need warships for? Indeed, the idea is so silly, Russia should cancel the orders right now.
Putting missiles in Poland and Baltics is counterproductive. Precisely what problem would that address?
Here's the irony: The Economist says "Not enough is at stake in Ukraine to risk war with a nuclear-armed Russia." OK. Then what are the missiles for?
At best, the proposal is waste of money all around. And who is going to pay for it?
Further proving that warmongers cannot think, The Economist notes "European voters will not put up with gas shortages, so an embargo is not plausible." Amusingly, the Economist then continues with proposals to cut Russia off from dollars, euros and sterling, as if Russia would not retaliate.
If extreme sanctions are put on Russia, then Russia will cut off all gas to Europe and likely default on all foreign denominated bonds.
How come idiots cannot see consequences of their proposals? Because they are idiots, that's why. No one wins from idiocy. Unfortunately, idiocy abounds.
Mike "Mish" Shedlock
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 1st, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 31st, 2014 | John Ransom