U.S. Sanctions on Russia & The EU Market for Liquified Natural Gas

Russia's undersea Nord Stream pipeline, which carries LNG (liquified natural gas) to north European markets. The Nord Stream opening ceremony in November 2011 featured Angela Merkel, Dmitry Medvedev, Mark Rutte and François Fillon. Nord Stream 2, an expansion project that would double Nord Stream's original capacity, was agreed to and signed in June 2015 (source; click to enlarge).

by Gaius Publius

Are the U.S. sanctions on Russia just another pipeline war?

Like all large developed regions, the nations of the European Union are hungry for energy. Like all resource-rich countries, the Russian Federation is hungry for markets. One of the resources Russia is most rich in is oil and natural gas. Thanks in part to the Paris climate agreement, but also to the existing desire of Western European nations to transition from coal and oil to the so-called "bridge fuel" — methane or "natural gas" — there is an obvious interest in both parties, Russia and the EU, in reaching agreements for the sale of Russian natural gas to the west, and also agreements on funding and building pipelines to deliver it.

The graphic below shows the extent of those pipelines, both built and proposed, for delivery of LNG (liquified natural gas, its most transportable form) to European markets.

Major existing and planned natural gas pipelines supplying Russian gas to Europe (source; click to enlarge)

Three things are clear from looking at the map above. First, Russia is Western Europe's nearest neighbor, and energy purchases from Russia would by nature be less costly than purchases from farther way, from North America, for instance. LNG purchased from North America would have to be shipped by tanker.

Second, all pipelines from Russia to Western Europe go though NATO territory — except Nord Stream. Thus Nord Stream frees Russia from worrying about NATO threats to its land-based pipelines. Note also that if tensions between NATO (a U.S. proxy) and Russia heat up, Nord Stream gives Russia an alternate source of LNG revenue from Western Europe should the status of pipelines to and through Eastern Europe fall into dispute.

Third, Russia is almost completely surrounded by NATO nations on its western border, the two exceptions being Belarus and Ukraine. NATO has been steadily moving east since the breakup of the Soviet Union, and Ukraine, an ethnically divided nation with a large Russian minority population, is strongly considering joining the NATO alliance. The U.S. is currently considering arming Ukraine with U.S.-made anti-tank and anti-aircraft weapons, so tensions are clearly escalating, and the U.S. is a player in those escalations.

Is Nord Stream 2 the Target of the Latest Anti-Russia Sanctions?

One of the outcomes of the recently enacted sanctions on Russia is the closing off of Western funding and penalization of support for a major expansion of the Nord Stream pipeline (all emphasis mine):

Nord Stream (former names: North Transgas and North European Gas Pipeline; Russian: Северный поток, Severny potok) is an offshore natural gas pipeline from Vyborg in the Russian Federation to Greifswald in Germany that is owned and operated by Nord Stream AG. The project includes two parallel lines. The first line was laid by May 2011 and was inaugurated on 8 November 2011. The second line was laid in 2011–2012 and was inaugurated on 8 October 2012. At 1,222 kilometres (759 mi) in length, it is the longest sub-sea pipeline in the world, surpassing the Langeled pipeline. It has an annual capacity of 55 billion cubic metres (1.9 trillion cubic feet), but its capacity is planned to be doubled to 110 billion cubic metres (3.9 trillion cubic feet) by 2019, by laying two additional lines.

The expansion mentioned above has been labeled "Nord Stream 2," and the latest sanctions threaten to shut down further work on it. From the Financial Times (paywalled; quoted here):

Brussels [EU headquarters] has stepped up its diplomatic offensive against the US moves, warning that several oil and gas projects involving Shell, Eni and BP are at risk.

On Tuesday, officials said Brussels was “activating all diplomatic channels” in an effort to persuade lawmakers to dilute the bill’s impact on European companies and the continent’s energy security.

Note that Shell, Eni and BP are Dutch, Italian and British companies, respectively.

EU officials are concerned that the sanctions could damage multibillion-euro pipeline and infrastructure projects straddling Russian territory and beyond in areas as far apart as the Baltic and Black seas.

A list prepared for EU commissioners shows that projects at risk include the proposed Baltic liquefied natural gas plant on the Gulf of Finland of the Baltic Sea, in which the Anglo-Dutch group Shell has a stake alongside Russia’s Gazprom. The list also includes Blue Stream, the gas export pipeline linking Russia with Turkey in which Eni of Italy has a 50 per cent. The threat to this pipeline centres on penalties against the maintenance and repair of pipelines on Russian land or waters.

Documents seen by the Financial Times also state that BP “would not be able to engage” in its activities with Rosneft if the US penalties hit operations by European companies to maintain, repair or expand pipelines in Russia.

The last point is important. U.S. sanctions would penalize European companies that engage in projects to "maintain, repair or expand pipelines in Russia." This includes financing as well as construction:

The text of the Senate amendment, which was passed with 97 votes to 2 against, requires the imposition of sanctions against those who make an investment or sell, lease or provide "goods, services, technology, information, or support" to projects for the export of energy from Russia.

"It sanctions those who . . . invest or support the construction of Russian energy export pipelines," Mike Crapo, a senator from Idaho who co-authored the amendment, told the Senate.

Needless to say, more than just the Russians are upset about these sanctions. European foreign ministers are opposed as well (h/t Naked Capitalism for the link).

Germany issues stinging rebuke of US sanctions against Russia
By Johannes Stern
17 June 2017

Germany’s Foreign Ministry published a sharply-worded press release Thursday from Foreign Minister Sigmar Gabriel (Social Democrats, SPD) and Austrian Chancellor Christian Kern (Social Democrats, SPÖ) denouncing the United States’ foreign and economic policies.

Note the American stated justification in the paragraph below, then the German and Austrian foreign ministers' rejection of that justification as describing what the bill was "really about":

Republicans and Democrats agreed almost unanimously, by 97 votes to 2, to impose new sanctions on Russia in the Senate on Wednesday. The Senate justified the measure as a punishment for Moscow’s alleged meddling in the US presidential election, the annexation of Crimea and its support for Syrian President Bashar al-Assad. ...

Gabriel and Kern brusquely rejected the US Senate’s measure. The bill was really about “the sale of American liquefied gas and the sidelining of Russian gas supplies in the European market,” according to the two social democratic politicians. That emerges from the text “particularly explicitly.” The goal was “to secure jobs in the American oil and gas industries.”

Angela Merkel stands behind her foreign ministry's statements: "German Chancellor Angela Merkel explicitly backed her Foreign Minister on Friday. There was 'very strong agreement in terms of content with Gabriel’s statement,' stated government spokesman Stefan Seibert. 'It is, to put it mildly, an unconventional action by the US Senate.' It was troubling that European businesses were being targeted by sanctions to punish Russian behaviour. 'That cannot be allowed,' added Seibert."

"Europeans Targeted to Punish Russia"

Whichever way the (sorry to say it, but highly propagandized) U.S. public sees the sanctions bill, European leaders — including Angela Merkel — see it quite differently. For them it's not only an economic attack on Europe by the U.S. It's also a cynical attempt to prop up a struggling U.S. sector of the U.S. energy industry at Europe's expense. That sector, of course, is the inventory-swollen, over-leveraged U.S. oil and gas sector involved in the recent fracking boom.

(A note about the "heavy propagandization of the U.S. public": Consider that, after all the screaming in the U.S. press about how Russia "hacked the DNC" to steal the election from Hillary Clinton, forensics on that supposed "hack" now show it to have been a leak after all. For more, read this definitive and completely underpublicized piece in The Nation by Patrick Lawrence. It's one thing to get rid of Trump; it's another to falsify the trail of evidence to do it.)

There's More Here Than Meets the Eye

The bottom line in all this isn't simple, since as usual with U.S.-Russia relations, there's much more here than meets the eye.

On the U.S. side, the attempt to punish Russia may play well in the national press, but it's driving a wedge between American and European leaders. Already in the articles about European reactions, one can hear strains of "we did what you asked in your other fights with Russia — like Ukraine and Crimea — so why are you hurting us now?"

In fact the conflict with Russia over the Ukraine and Crimea was never black-and-white to begin with. One aspect of the Ukraine story is that, unlike what was reported in the U.S. press, the U.S. was a major instigator of the internal conflict, and the EU had to be dragged to support it.

Amy Goodman in 2014 (emphasis mine)

A New Cold War? Ukraine Violence Escalates, Leaked Tape Suggests US Was Plotting Coup

A short-lived truce has broken down in Ukraine as street battles have erupted between anti-government protesters and police. ... At least 50 people have died since Tuesday in the bloodiest period of Ukraine’s 22-year post-Soviet history. While President Obama has vowed to "continue to engage all sides," a recently leaked audio recording between two top U.S. officials reveal the Obama administration has been secretly plotting with the opposition....

The top State Department official has apologized to her European counterparts after she was caught cursing the European Union, the EU, in a leaked audio recording that was posted to YouTube. The recording captured an intercepted phone conversation between the U.S. ambassador to Ukraine, Geoffrey Pyatt, and Victoria Nuland, the top U.S. diplomat for Europe. Nuland expresses frustration over Europe’s response to the political crisis in Ukraine, using frank terms.

VICTORIA NULAND [on tape]: "So that would be great, I think, to help glue this thing and have the U.N. help glue it. And, you know, [bleep] the EU."

Victoria Nuland, Hillary Clinton's Assistant Secretary of State for Europe, is a well-known neocon who during the campaign "figure[d] prominently among her current advisers" and is well known for her strong anti-Russian views. Her husband is Robert Kagan, another strong Clinton supporter during the campaign and co-founder of the Project for a New American Century, the neocon think tank that strongly advocated for the 2003 Iraq War.

The U.S. was a major player fomenting or adding to the conflict in Ukraine. However strongly the EU was in their public support, this current attack on Russia via the sanctions is too much even for them. Quoting the German Foreign Minister again:

the threat to impose extraterritorial sanctions which violate international law on European companies participating in the expansion of European energy supplies” could not be tolerated. Europe’s energy provision was “a European affair, and not one for the United States of America!”

It sounds like he means it.

The Players and the Game

As this evolves, keep the players and their interests in mind. The major players are:

• The U.S. foreign policy establishment, many of them Democrat-supporting neocons, most of them hardliners on Russia for decades

• Democratic Party leaders, eager to tar Donald Trump with the blackest brush they can find, in hopes that this will absolve them of the 2016 loss without having to make substantive policy changes going into 2018 and 2020

• The U.S. natural gas industry, desperate to open markets for product they are vastly oversupplied with

• The mainstream U.S. press, eager help the U.S. ruling establishment be rid of Trump, but also eager to cash in on the ratings that a years-long slow-motion Mueller-fueled train wreck will provide

• European leaders, turning away from U.S. international leadership as each day goes by — the Paris climate agreement and Trump's childish bellicosity toward North Korea are just two example of many — just as the U.S. is threatening Europe's right to make its own energy decisions

• Russia, which seems willing to patiently let all of this play out, knowing it doesn't need to drive a wedge between the U.S. and EU if the U.S. foreign policy establishment will drive that wedge for them

It's unlikely the U.S.-Russia conflict in Europe will end well. All of the American players listed above will continue to benefit from a ratcheting up of conflict with Russia over these sanctions, including the profit-hungry U.S. press.

Democratic Party leaders in particular will find an additional benefit to strong anti-Russia rhetoric and action — they can use it to further damage their strongest and most hated domestic opponent, Sen. Bernie Sanders, who was one of just two senators to vote against the sanctions bill. The mainstream Democratic Party, it seems, is determined to give just lip service, if that, to progressive policies while trying to position themselves as the only policy alternative to the Trump regime.

(In my view, their latest attempt at triangulation will fail in 2018, just as it did in 2016. There is more than one policy alternative to the Trump regime — the "Sanders wing" alternative — and the public knows it. If the Party won't offer that alternative, the public may just vote with their feet, by not voting.)

In the U.S. press, one hears a doubling down on worries that increased Russian LNG sales to Europe will make Western Europe "dependent" and vulnerable to Russia. Clearly the Europeans define independence differently than the U.S. establishment does. With Trump in the White House and both Merkel and Macron openly distrustful of U.S. world leadership, I don't see either side backing down.

The irony is that even if the U.S. foreign policy establishment succeeds in forcing Europe to buy LNG from American companies, the price is unlikely to rise enough to save those companies — though the added revenue may buy them a bit more time before the next round of bankruptcies. Stay tuned.

GP
  

U.S and U.K. Sending Planes, Troops to Romania and Poland

Reversing our initial promise to Gorbachev not to advance NATO to the east, we now have Russia almost completely surrounded. What do they think we're planning to do? (Source)

by Gaius Publius

Before you read this piece, ask yourself, how likely is it that Russia would invade, with tanks and troops, the Baltic states of Latvia, Lithuania and Estonia. Would that not be the start of World War III? Yet that's the fear that's being passed around as an excuse for what you're about to read.

Reuters (emphasis mine throughout):

Britain, U.S. sending planes, troops to deter Russia in the east

Britain said on Wednesday it will send fighter jets to Romania next year and the United States promised troops, tanks and artillery to Poland in NATO's biggest military build-up on Russia's borders since the Cold War.

Germany, Canada and other NATO allies also pledged forces at a defense ministers meeting in Brussels on the same day two Russian warships armed with cruise missiles entered the Baltic Sea between Sweden and Denmark, underscoring East-West tensions.

One, the U.S. is much more a threat to bomb or invade another nation than Russia is. Two, why shouldn't armed Russian ships sail in international waters? Ours do all the time. Three, again, do you really think Russia would be crazy enough to invade a first-world (read, ethnically Caucasian) country on Europe's eastern doorstep? First-world countries only consider moves like this in third-world (read, ethnically darker) countries, like Syria, or Iraq, or ... you name it, there are plenty of examples.

Speaking of Syria, this may be a reason for the latest threatening moves. From the same article:

In Madrid, the foreign ministry said Russia had withdrawn a request to refuel three warships in Spain's North African enclave of Ceuta after NATO allies said they could be used to target civilians in Syria.

The ships were part of an eight-ship carrier battle group - including Russia's sole aircraft carrier Admiral Kuznetsov - that is expected to join around 10 other Russian vessels already off the Syrian coast, diplomats said.

(Did you catch that? Russia has one aircraft carrier, just one. One in its whole navy. Some military threat.)

This Baltic invasion stuff is nonsense. The article continues to announce even more Western military build-ups, including troops to be sent to Estonia — as "deterrence." The only thing I see being deterred is (a) Russian intervention in Syria, and (b) the sale of Russian natural gas to Europe, a market the U.S. wants to secure for U.S. companies.

Ginning Up Fear of a Baltic Invasion

The context, or excuse, for all this was laid down after the Russians retaliated for U.S. interference in Ukraine (for more on that, see here and here). And while we're on the subject of U.S. interference and Ukraine, watch for the name Victoria Nuland, the wife of neocon and Iraq War architect Robert Kagan, as the next administration's appointees are announced. Nuland was deeply involved in our Ukrainian adventurism and is expected to get a high-level appointment in the next Democratic administration, perhaps as Secretary of State or National Security Adviser.

Russia retaliated to Western interference in Ukraine by promoting a referendum in ethnically Russian Crimea that ended in Russian annexation. The West retaliated to Russian annexation of Crimea by ginning up fear of a Russian invasion in the Baltics.

Not kidding. Fears of a Russian invasion in Europe were widely circulated and carried for months in Western journals and papers. Newsweek, for example, from January 2016:

Counting Down to a Russian Invasion of the Baltics

Although Russia's economy is reeling and its military forces are increasingly engaged in Syria and Ukraine, NATO commanders, governments and analysts are concerned that Russian President Vladimir Putin's adventurism has not run its course. Most anxieties focus on the Baltic states as Russia's next potential military target.

Russia has many advantages in the Baltics. The situation of Russians there, particularly in Estonia and Latvia where many Russians remain non-citizens, provides Moscow with an issue with which to stoke tensions. ...

Furthermore, Russia's conventional and nuclear deployments cover the entire Baltic Sea area. From its fortified base at Kaliningrad, Russia can project power not only into the Baltic Sea but also to Poland and even Germany.

By all accounts, Russia enjoys a wide margin of conventional superiority over NATO. Indeed, NATO commanders publicly and privately profess that given the strength of Russia's capabilities on land, sea and air, NATO would suffer enormous casualties in any effort to defend the Baltic states from attack.

And given the publicly discussed defects in NATO and individual Western intelligence cited in Western media, it would be relatively easy for Moscow to launch an invasion during one of its vaunted "snap exercises" without the United States detecting it in time.

"Counting down"? It reads as if it were dictated from the State Department.

This will not end well. The U.S. wants the Russians out of Syria, wants Western natural gas to flow to Europe, and is apparently willing to rattle many sabres to do it. Also cages. Some of those cages contain bears.

This will not end well.

GP
 

Who's More A Hawk-- Trumpy-the-Clown Or Hillary?

Are values-driven Democrats supposed to celebrate because Republicans are flocking to Hillary's banner? Well, sure. There aren't enough Democrats in the country to elect someone president and her appeal to independents is... shaky, at best. The problems with Republicans, of course, is that they're reading the whole lesser-of-two evils thing in such a way that makes their own party's candidate anathema, and that's a good thing, but if Hillary's building any kind of an enduring transpartisan coalition, Democrats ought to wonder what the basis of it is apart of Trumpophobia.

At heart she's always been a moderate Republican and getting her to take progressive stands has rarely been easy or natural. When Alexander Burns reported in the NYTimes yesterday that she's moved "to recast the 2016 race not as a conventional battle between left and right but as a national emergency that requires voters of all stripes to band together against a singularly menacing candidate," he was explaining her latest outreach to Republicans. Burns reported that Cato Institute executive David Boaz said Democrats' attacks on "Trump as an autocrat had the potential to resonate outside the Democratic base. 'I really don’t think that’s too over the top,' Mr. Boaz said. 'We have one candidate who’s not even pretending-- he is promising to be a one-man ruler.'"

Democrats recruited respected figures from outside the party to amplify their appeal: Michael R. Bloomberg, the billionaire former New York City mayor, who is a political independent, warned sternly that non-Democrats must rally with Mrs. Clinton to stop a “dangerous demagogue.”

John Allen, a retired four-star Marine general, thundered into an arena dotted with American flags that voters faced a choice between Mrs. Clinton and “a dark place of discord and fear.”

There is no recent precedent in American politics for such unrelenting and direct attacks on a presidential nominee’s commitment to the basic institutions of democracy.

...Jennifer Palmieri, the communications director for Mrs. Clinton, said the campaign would hammer the message that Mr. Trump is “not a normal Republican.”

“He has an incredibly disturbing theory that at its core rejects the American values of both self-reliance, and the value of community,” Ms. Palmieri said.

Geoff Garin, a pollster for Priorities USA Action, the main pro-Clinton super PAC, said the race had entered a new phase. A defining goal for the group now, he said, was to ensure that voters “reckon with what it would mean to have a dangerous demagogue like Trump as president.”

OK, but on foreign policy, Hillary is still an utter nightmare for anyone looking for a peace candidate. No one has any idea where Trump would be on foreign policy issues-- no doubt, including Trump, although we have good reason to fear the worst. We do know where Hillary is-- and it isn't good. She's way to the right of Obama, let alone actual doves, when it comes to foreign policy. The foreign policy "experts" she closest with are already planning the wars they want to fight other peoples' kids to fight. First comes comes Syria. One of her top prospects for Secretary of Defense, Michele Flournoy, is calling for strikes against Assad, proveing, beyond doubt, no one has learned anything about the regime-change screw-up in Libya. Why not just make it official and have Netanyahu be Secretary of State?

Rana Khalek, writing for The Intercept a couple of days ago looked at some of the better known Republicans who are backing Clinton, hardcore neocons, not anyone she would be clueless enough to trot out on the stage.

As Hillary Clinton puts together what she hopes will be a winning coalition in November, many progressives remain wary — but she has the war hawks firmly behind her.

“I would say all Republican foreign policy professionals are anti-Trump,” leading neoconservative Robert Kagan told a group gathered around him, groupie-style, at a “foreign policy professionals for Hillary” fundraiser I attended last week. “I would say that a majority of people in my circle will vote for Hillary.”

As the co-founder of the neoconservative think tank Project for the New American Century, Kagan played a leading role in pushing for America’s unilateral invasion of Iraq and insisted for years afterward that it had turned out great.

Despite the catastrophic effects of that war, Kagan insisted at last week’s fundraiser that U.S. foreign policy over the last 25 years has been “an extraordinary success.”

Republican presidential nominee Donald Trump’s know-nothing isolationism has led many neocons to flee the Republican ticket. And some, like Kagan, are actively helping Clinton, whose hawkishness in many ways resembles their own.

The event raised $25,000 for Clinton. Two rising stars in the Democratic foreign policy establishment, Amanda Sloat and Julianne Smith, also spoke.

The way they described Clinton’s foreign policy vision suggested that if elected president in November, she will escalate tensions with Russia, double down on military belligerence in the Middle East, and generally ignore the American public’s growing hostility to intervention.

Sloat, the former deputy assistant secretary of state in the Bureau of European and Eurasian Affairs, boasted that Clinton will be “more interventionist and forward-leaning than Obama’s been” in Syria. She also applauded Clinton for doing intervention the right way, through coalitions instead of the unilateral aggression that defined the Bush years.

“Nothing that [Clinton] did was more clear than the NATO coalition that she built to defend civilians in Libya,” said Sloat, referencing the Obama administration’s overthrow of Libyan dictator Muammar Gaddafi. That policy, spearheaded by Clinton, has transformed a once-stable state into a lawless haven for extremist groups from across the region, including ISIS.

Kagan has advocated for muscular American intervention in Syria; Clinton’s likely pick for Pentagon chief, Michelle Flournoy, has similarly agitated for redirecting U.S. airstrikes in Syria toward ousting Syrian President Bashar al-Assad.

Smith told the audience that unlike Trump, Clinton “understands the importance of deterring Russian aggression,” which is why “I’ll sleep better with her in the chair.” She is a former deputy national security adviser to Vice President Joe Biden.

Smith left the government to become senior vice president of Beacon Global Strategies, a high-powered bipartisan consulting group founded by former high-ranking national security officials.

When Robbie Martin, a filmmaker who recently produced a three-part documentary on the neoconservative movement, asked how Clinton plans to deal with Ukraine, Kagan responded enthusiastically.

“I know Hillary cares more about Ukraine than the current president does,” Kagan replied. “[Obama] said to me [that he wouldn’t arm Ukraine because] he doesn’t want a nuclear war with Russia,” he added, rolling his eyes dismissively. “I don’t think Obama cares about Putin anymore at all. I think he’s hopeless.”

Kagan is married to Victoria Nuland, the Obama administration’s hardline assistant secretary of state for European and Eurasian Affairs. Nuland, who would likely serve in a senior position in a Clinton administration, supports shipping weapons to Ukraine despite major opposition from European countries and concerns about the neo-Nazi elements those weapons would empower.

Another thing neoconservatives and liberal hawks have in common is confidence that the foreign policy establishment is right, and the growing populist hostility to military intervention is naïve and uninformed.

Kagan complained that Americans are “so focused on the things that have gone wrong in recent years, they miss the sort of basic underlying unusual quality of the international order that we’ve been living in.

“It’s not just Donald Trump,” Kagan said. “I think you can find in both parties a very strong sense that we don’t need to be out there anymore.”

“If, as I hope, Hillary Clinton is elected, she is going to immediately be confronting a country that is not where she is,” he said. “She is a believer in this world order. But a great section of the country is not and is going to require persuasion and education.”

Sloat agreed, arguing that “it’s dangerous” for people to draw anti-interventionist lessons from Libya and Iraq.

The Clinton-neocon partnership was solidified by Trump becoming the Republican nominee. But their affinity for each other has grown steadily over time.

The neoconservative Weekly Standard celebrated Clinton’s 2008 appointment as secretary of state as a victory for the right, hailing her transformation from “First Feminist” to “Warrior Queen, more Margaret Thatcher than Gloria Steinem.”

But the fundraiser was perhaps the most outward manifestation yet of the convergence between the Democratic foreign policy establishment and the neoconservative movement.

Hannah Morris of the liberal pro-Israel lobbying group J Street celebrated this bipartisanship as a “momentous occasion.”

“We could not be more proud to have [Kagan] here today,” she said.

Leaving Trump out of the equation for a moment, which side are you on, dear reader?

How Dangerous Is NATO's Economic Purpose?

by Gaius Publius

I'm going to break the rule normally applied when one asks a question in a title ... by answering it immediately. Using NATO for economic purposes is very dangerous indeed, since it could, and perhaps will, lead to war.

The stated purpose of NATO is "defense," yet it seems to exist for a different purpose — (a) to bring money into the coffers of U.S. corporations by strangling European trade with Russia as an economic competitor to the U.S., and (b) to guarantee billions of dollars in armament sales for U.S. weapons manufacturers such as Raytheon, Grumman and Lockheed.

To expand that point, let's examine the excellent brief interview with economist Michael Hudson above (h/t Naked Capitalism). We start where the interview starts, with a recent speech by Barack Obama re-emphasizing the importance of NATO for U.S. policy-makers.

Obama said (my emphasis everywhere):

"In this challenging moment, I want to take this opportunity to state clearly what will never change. And that is the unwavering commitment of the United States to the security and defense of Europe, to our transatlantic relationship, to our commitment to our common defense. ... The United States has increased our presence here in Europe. NATO is as strong, as nimble, and as ready as ever."

Since 2014, people have been calling this new NATO posture a "reset," a reformulation of the alliance in a way that "assumes Russia is not [and will not be] a partner," according to Supreme Allied Commander Gen. Philip Breedlove. Guess for yourself what that makes Russia, vis-à-vis NATO? But don't take too much time; the Russians have already figured it out.

Keep in mind that NATO is America's army in Europe, to be used as America chooses — which gives most ordinary Americans the kind of tingle that bypasses thought — yet NATO wouldn't exist without its member nations. Keep that last in mind as you listen to what Michael Hudson says.

Defense? Against What?

First, from the transcript, Hudson on the idea that NATO's purpose is defense:

One of Russia’s leading military strategists said, here’s what the problem is: NATO wants to move bombers and atomic weapons right up to the border of Russia. That means that if they launch a missile over us, we have only a few seconds to retaliate. President Putin a little while ago had given a speech saying that Russia doesn’t really have a land army. In fact, today, no country in the world – in the Northern Hemisphere, at least – has a land army that can invade anywhere.

Try to imagine America being invaded by Canada, or by Mexico on its borders. You can’t imagine it. Impossible. No democracy can afford a land army anymore because the costs are so high that the costs of mounting a land war will just impoverish the economy.

As a matter of fact, what NATO is trying to do is to goad Russia into building up an army so the US can undercut its economy by diverting more and more resources away from the economy towards the military. Russia’s not falling for it. Putin said that Russia has no intention of mounting a land army. It is unthinkable that it could even want to invade the Baltics or Poland.

Putin is relying on his nuclear arsenal for Russia's defense rather than pouring money into building the kind of army that can take on NATO. If so, what is NATO defending Europe against?

Europeans Want Trade with Russia, Not Defense Against Them

Which brings us to the real purpose of NATO, to force European purchasers — not just of arms, but of oil and gas, not to mention consumer products — to buy from the U.S. instead of from Russia. Hudson:

Europe is saying, well we really don’t need defense. We’d rather have an economic relationship with Russia. Especially the Germans say they don’t want the sanctions. The Italians say they don’t want the sanctions. The Americans say, we don’t want you to make money off Russia. Buy from us, not from Russia. Buy your agricultural goods and your other goods from us, or at least from countries in the dollar orbit, not from the Russian orbit.

That, essentially, is what Obama meant by the reset. It meant a new Cold War. But the essence of this new Cold War is to fight in the new way, which is a financial war. The military are now only a catalyst for the financial warfare by the United States.

We shouldn't lose sight of the arms trade and its value to the multi-billion-dollar U.S. armament industry:

[O]ne of the points made at the NATO meetings was NATO urged countries not to rely on Russian weaponry. There was an insistence by Obama that the NATO countries spend 2 percent of their GDP on NATO, on arms, mainly by buying arms from American military manufacturers, Raytheon, Boeing and the others.

Now, look at what’s happening in Europe. It’s not even growing 2 percent, because of the austerity that’s being imposed on it. So 2 percent is the entire annual economic growth in Europe. This large amount has to be spent on American arms. So it turns out that this sabre-rattling to Russia is a means of obliging the European countries to pay the United States arms manufacturers for goods, and to basically hold Europe up for ransom, saying if you don’t be a part of this, we’re not going to defend you.

According to an early 2000s study at Stanford University:

The three largest defense companies in the world are all United States companies. With a combined total revenue in 2001 of $100 billion and employing 400,000 people, Lockheed Martin, Northrop Grumman and Boeing are three powerhouses of American business.[i] Their combined revenues account for 1% of the United States' $10 trillion GDP.[ii] Each company is on each of the Fortune lists: America’s Most Admired Companies, Global Most Admired Companies, Fortune 500 and Global 500.[iii] Lockheed Martin, Northrop Grumman and Boeing are also the three top arms-producing companies in the world.

As part of this "pivot" the U.S. has gotten the government of Poland to place a Patriot missile installation within its borders:

Poland to buy US Patriot missiles amid Russia tensions

President Bronislaw Komorowski said Poland would start talks with the US to finalise the multibillion contract.

The move follows reports that Russia has deployed missiles in its exclave of Kaliningrad, which borders Poland.

You can read the rest — it's very U.S. friendly. But note, first, that the response is to a Russian missile deployment within its own borders, not outside of them, and second, this "multibillion" dollar contract will go entirely to the corporations, like Raytheon, that produce and support the Patriot missile.

And not to put too fine a point on it: "Poland also plans to buy helicopters, submarines and armoured personnel carriers." Sounds like money to me.

What Does Russia Want? What Will We End Up With?

Finally, take note of this exchange from the interview:

DESVARIEUX: Michael, what about on the Russian side? There are interests that are encouraging this reset?

HUDSON: They [the Russians] had hoped that the reset would mean a winding down of military spending. Russia and almost every country would like to use more of its resources for the domestic economy, not for military overhead. America is trying to force Russia to spend more on overhead as part of its economic warfare with Russia.

This was Brzezinski’s plan in Afghanistan, you know, under the Carter administration. The idea was that if you could force Russia to pay more for its military to defend Afghanistan, then its economy would buckle and discontent would spread. This is the essence of American strategy: to spread chaos. Then the Americans can come in and promote nationalist and other localist breakups, and try to break up Russia just as America is trying to push a breakup of China as a long-term strategy.

And:

There’s no way that this cannot backfire on the United States.

He's right. There's no way at all this cannot backfire. In blood.

There's No Need for NATO

The good news is that the Germans and French may not go along with it. Early days yet, but still. The solution, of course, is simple. As Hudson put it, "Essentially to dissolve NATO, which France has been pushing now for many years. There’s no need for NATO now that there’s no threat of any military invasion anymore."

Nor should we be blind to that lack of need, despite the guilty testosterone tingle that having a trans-European army at our beck and call offers us.

What Would Hillary Do?

Trouble is, the news these days is filled with items like this, from The Guardian:

Potential Hillary Clinton Pentagon chief calls for increased action against Isis

A security specialist tipped as the potential defence secretary in a Hillary Clinton administration has set out an agenda that confidently asserts American leadership in the world, backed by strong military force.

Michèle Flournoy, cofounder and chief executive of the Center for a New American Security (CNAS) thinktank, launched a report on Monday that some in Washington might be tempted to mischievously characterise as an 18-page job application....

The 55-year-old told the Guardian on Monday: “I don’t want to speak for her, but what I will say is I think the policies she’s already articulated in a series of speeches and in her record as secretary of state suggest that she understands the importance of American leadership in the world, that she is in the bipartisan consensus that has supported a smart approach to US engagement as the best way to protect our interests and also underwrite the global order. ...

The CNAS published its report, Extending American Power[pdf], after a yearlong series of dinner discussions with experts and ex-officials co-chaired by Robert Kagan [a major Bush-era proponent of the Iraq War], who sits on the secretary of state’s foreign affairs policy board, and James Rubin, who was assistant secretary of state and chief spokesman for the state department during the Bill Clinton administration. Its conclusions are endorsed by Flournoy and others.

In a tantalising glimpse of a possible Hillary Clinton foreign policy agenda, the report recommends increased US military action against Islamic State in Iraq and Syria.

If you go to that report (pdf) and search on "NATO" you find sections like these, regarding Europe:

Many policymakers tend to forget the centrality of the transatlantic world, strategically, politically, and economically, because for so long the story in Europe had been one of remarkable success. Through the Cold War and then in the two decades that followed the collapse of the Soviet Empire, Europe has been a region of expanding peace and security, growing prosperity, and increasing democracy.

To a greater extent than many realize, this success is being threatened now. Strategically it is threatened by growing Russian ambition and willingness to use force, including the invasion of neighboring countries. It is also threatened by British strategic retrenchment, French economic weakness, and historic German strategic ambivalence in the security sphere.

On NATO specifically from just the introduction:

Underwrite credible security guarantees to NATO allies on the frontlines with Russia. Given recent Russian behavior, it is no longer possible to ignore the possible challenge to NATO countries that border Russia. The Baltics in particular are vulnerable to both direct attack and the more complicated “hybrid” warfare that Russia has displayed in Ukraine. To provide reassurance to U.S. allies and also to deter Russian efforts to destabilize these nations, it is necessary to build upon the European Reassurance Initiative and establish a more robust U.S. force presence in appropriate central and eastern Europe countries, which should include a mix of permanently stationed forces, rotationally deployed forces, prepositioned equipment, access arrangements and a more robust schedule of military training and exercises. Such measures should not be seen as inconsistent with international law. On the contrary, they should be regarded as a fully justified, appropriate, and proportionate response to Russia’s violation of the purpose of the NATO-Russia Founding Act. The United States should also work with both NATO and the EU to counter Russian influence-peddling and subversion using corruption and illegal financial manipulation.

And this telling paragraph about the true economic goal of the NATO alliance (note the apparent Freudian typo):

Strengthen and modernize economic and resource cooperation. For all of Europe, west, east, and south, it is essential to pursue greater transatlantic economic integration and cooperation. Europe’s continuing energy dependence on Russia is a particular vulnerability. It will take time to reduce that independence [sic, but quite a tell], but that is all the more reason serious efforts should begin now.

"Reduce that [European] independence" indeed.

Again, building NATO forces outside the U.S. and positioned in countries on Russia's borders, as a response to Russia's internal deployment of its own forces. All to establish American "leadership" and support its corporations' lust for more money. (The section I quoted just above pivots smoothly to making the case for TTIP, the TTP of the Atlantic.)

Kiss Kiss Kill Kill

I get the argument against Trump; I really do. It's just that I don't want Clinton anywhere near U.S. foreign policy.

Kiss kiss, kill kill. They've actually been friends for a very long time.

No, I really don't. Maybe the French, with their resistance to NATO, can save us one more time.

GP
 

Cheney, Wolfowitz, Kagan And Other Of America's Enemies Are Emboldened And On The March

I don't know anyone who was a Saddam Hussein fan… but I've never been to Iraq. In fact, I always avoided the place. Even in the '60s and '70s when I traveled a lot in that part of the world, I did all I could to avoid Iraq, spending my time lolling around Trabzon, Ezurum and Van in Turkey (much of it, without any real paved roads, having just been opened to foreigners for the first time since 1925) and Tabriz and Zanjan in Iran, to avoid the dubious allure of Baghdad (where the Ba'athists had just taken over). When I was traveling in the area, Ahmed Hassan al-Bakr was in charge of Iraq and the Shah was still firmly on the Peacock Throne in Iran. Saddam didn't really take power until 1979, the same year Iran finally booted out the Shah and the parasites around him (who moved, en masse, to Beverly Hills).

Still, in 2006, when Rauf Rashid Abd al-Rahman, the chief judge for the kangaroo court the U.S. set up to execute Saddam, sentenced the Iraqi president to death, I felt a little queasy. There was just something about the U.S. invading a sovereign state under false pretexts and murdering the president (on the eve of the main Muslim religious festival Eid) and his sons that seemed a little on the barbaric and primitive side to me.

Last week, in northern Iraq, ISIS rebels and Ba'athists captured al-Rahman, who had recently served as Minister of Justice for Kurdistan. They executed him two days later. When I get a barbaric and primitive urge myself, I wonder what they would do to Dick Cheney-- and I wonder if I would be as reticent about it as I was about the murder of Saddam.

In the must-see video up top, Bill Moyers interviews respected military historian Andrew Bacevich about the war hysteria being drummed up again by sleazy neocon, Robert Kagan, a former advisor to 3 hawkish politicians who were all wrong about Iraq and have all earned the distrust of the American people: John McCain, Mitt Romney and Hillary Clinton. Moyers wanted to discuss a recent article he wrote for Commonweal, The Duplicity of the Ideologues which was, in effect, a response to the deceitful warmongering Kagan was spouting last week at the neocon publication the New Republic, Superpowers Don't Get To Retire. Bacevich reminded his readers what Kagan does for a living: propaganda. He also told Moyers that "the most important thing the President has learned from his predecessor is that invading and occupying countries in the Islamic world is a pretty dumb idea. It leads to complications and enormous costs." Nice that Obama and Chuck Hagel have learned that lesson. Cheney and Kagan certainly haven't. Have Hillary and Kerry?

[B]ack in the late 1960s and early ’70s, the intellectual forebears of Robert Kagan decried this decision to cut American losses. Leaving implied the acceptance of failure. Such a failure, they insisted, would hand the Communists a great victory. U.S. credibility would suffer permanent damage. The Soviets would seize the initiative. Dominoes would topple. The United States would find itself isolated and alone.

None of those gloomy predictions-- similar in tone to Kagan’s own forecast of “increasing conflict, increasing wars over territory, greater ethnic and sectarian violence, and a shrinking world of democracies” as the inevitable price for any lapse in American globalism-- turned out to be accurate, of course.

Instead, the nation that Kagan describes as committed to doing “what no nation had ever been able to do” actually did what every great power does when it loses a war.  It licked its wounds and left it to others to lick their own. That the United States made next to no effort to aid the Vietnamese and others adversely affected by the war speaks volumes about the definition of “global responsibility” that actually prevailed in Washington. But however cynical, leaving-- more accurately abandoning-- South Vietnam turned out to be a smart move. Doing so facilitated this nation’s military, economic, and political recovery.

With the end of the Cold War, according to Kagan, Washington’s commitment to promoting a liberal world order reached new heights. The signature of U.S. foreign policy during the 1990s was renewed activism. A series of armed interventions ensued. “All aimed at defending and extending the liberal world order,” Kagan writes, “by toppling dictators, reversing coups, and attempting to restore democracies.”

As Hemingway’s Jake Barnes might put it, “Isn’t it pretty to think so?” In fact, during the post-Cold War decade, with the Persian Gulf now the epicenter of U.S. military activity, “extending the liberal world order” lagged well behind other, more pressing considerations. Priority number one was to ensure the safety and well-being of the distinctly illiberal Saudi monarchy. Priority number two was to contain Shiite-majority Iran. Fear of delivering Sunni-controlled Iraq into the hands of its own Shiite majority muted U.S. enthusiasm for democratizing that country. If the choice was between stability and democracy, Washington preferred the former.

Still, if as Kagan regretfully notes (and recent polls affirm), Americans today show signs of being “world weary,” it’s not the events of the 1990s that have induced this weariness. No, if Americans appear disinclined to have a go at overthrowing Syria’s Assad or at restoring the Crimea to Ukrainian control, it’s due to their common-sense assessment of what U.S. policy in very recent years has produced.

…Back in 1996, in a famous Foreign Affairs article co-authored with William Kristol, Kagan identified “benign global hegemony” as the proper basis for U. S. policy. It was incumbent upon the United States to exploit its Cold War victory. Armed with a combination of “military supremacy and moral confidence,” Washington needed to put existing and potential adversaries in their place. The idea was “to make clear that it is futile to compete with American power.” Permanent dominion was the goal. To settle for anything less, Kagan and Kristol wrote, was to embrace “a policy of cowardice and dishonor.”

Even before September 11, 2001, Kagan was among those fixing their sights on Saddam Hussein’s Iraq as the place to validate this approach. The events of 9/11 reinforced his determination along with his sense of self-assurance. Writing with Kristol in April 2002, he declared flatly that “the road that leads to real security and peace” is “the road that runs through Baghdad.”

George W. Bush took that road. Yet much to his considerable chagrin, Bush discovered that it led to rather considerable unpleasantness. As it dragged on, the Iraq War exposed as hollow any American aspirations to global hegemony. Left behind when U.S. troops finally withdrew was their reputation for military supremacy. Meanwhile as reports of prisoner abuse, torture, and the killing of noncombatants mounted, American moral confidence lost its luster. As for the Iraqis themselves, although few Americans are inclined to take notice, today they enjoy neither security nor peace.

On all of these matters, Kagan chooses to stay mum. That is his privilege, of course. Yet in exercising that privilege he forfeits any claim to be taken seriously. As with members of the Catholic hierarchy who hoped that the clergy sex abuse scandal would just blow over or investment bankers who shrug off the economic collapse of 2008 as just one of those things, without accountability there can be no credibility.

William Buckley once remarked that the country would be better off governed by the first two thousand names in the Boston phone book than by the faculty of Harvard University. Here’s a corollary: When it comes to foreign policy, the president of the United States would be better served to consult a few reasonably informed citizens from Muncie, Indiana, than to take seriously advice offered by seers such as Robert Kagan.

If experience has brought President Obama to share in this view-- as his recent ruminations on foreign policy appear to suggest-- then more power to him.

I have serious doubts that Hillary Clinton has learned anything at all, and I hope Democrats will demand she prove she has before handing her their party's presidential nomination. Her natural inclinations have always been more in line with Kagan's than Bacevich's. "My reading [of history] is of course there is evil in the world that needs to be taken into account and some time must be confronted," Bacevich told Moyers. "But let’s not kid ourselves: In somehow imagining that the United States represents all that is good and virtuous, we, ourselves, have committed many sins. And we ought to be cognizant of those sins before we go pronouncing about how the world ought to be run."

McCain And His NeoCon Allies On The Warpath... Again

McCain & his supporters want to attack Russia?

The NeoCons are out in force today. I finished putting on my socks just as McCain started making his speech from Erie, PA on the Russian-Georgia conflict. I turned off the TV before he had finished shuffling his papers and tried collecting his thoughts. Today's Wall Street Journal features a mournful plea from Georgian President Mikheil Saakashvili who had been encouraged by DC NeoCons to play a terminally weak hand against the Russians and is now up the creeks without the paddle. He claims he didn't chose war but he's either lying or delusional. He frames his pleas in the NeoCon propaganda all over the media:

Ostensibly, this war is about an unresolved separatist conflict. Yet in reality, it is a war about the independence and the future of Georgia. And above all, it is a war over the kind of Europe our children will live in. Let us be frank: This conflict is about the future of freedom in Europe.

Let's be even franker: Georgia, despite its desires, isn't in Europe. It is wedged between eastern (Asian) Turkey and Azerbaijan. Saakashvili claims Russia wants to crush his country because it has made great strides towards consolidating democracy (questionable), eradicating corruption (more questionable) and building an independent foreign policy (well, if "independent" means tied to American priorities, that at least is true). Although Georgia is thousands of miles from the Atlantic-- and has been, for good reasons, rejected for the NATO membership it hoped to gain by helping the U.S. occupy Iraq-- Saakashvili appeals to "our common trans-Atlantic values of liberty and democracy."

Give me a break. The values he holds in common are with hysterical NeoCon war criminals like Cheney, Bill Kristol, slimy Georgia lobbyist/McCain campaign manager Rick Davis, slimy Georgia lobbyist/McCain campaign advisor Randy Scheunemann, and Robert Kagan. Foolishly, Saakashvili, who, encouraged by the NeoCons, sent his forces in to attack South Ossetia on Thursday doesn't see how the war is his fault. "The Kremlin designed this war," he claims in the Journal. Over at the Washington Post Robert Kagan, one of the "inspirations" for the attack on Iraq is singing a similar tune: "This war did not begin because of a miscalculation by Georgian President Mikheil Saakashvili. It is a war that Moscow has been attempting to provoke for some time... Armed with wealth from oil and gas; holding a near-monopoly over the energy supply to Europe; with a million soldiers, thousands of nuclear warheads and the world's third-largest military budget, Vladimir Putin believes that now is the time to make his move." So why did Kagan, Cheney and their friends goad Saakashvili on to attack?

As we mentioned the other day, this reminded me of Bush's father encouraging the Shi'a and Kurds to rise up against Saddam and then leaving them to their own miserable fates after they did. Russia isn't interested in having an American satellite with high tech American bases and weapons systems on it's southern border any more than the U.S. has ever been interested in having Russian bases in Cuba or Grenada or anywhere else near the U.S. mainland. Tenth rate little countries like Georgia-- and Grenada-- need, first and foremost, to learn to get along with the giant superpowers on their doorsteps. But for McCain and his camp, the war in Georgia is only one thing-- an opportunity to make irresponsible political hay and attack Obama. Obama has been careful to acknowledge that until January there is only one Commander in Chief, George Bush. McCain, on the other hand... is plum insane. Does he want to attack Russia and start a nuclear war?

“Today, many are dead and Georgia is in crisis, yet the Obama campaign has offered nothing more than cheap and petty political attacks that are echoed only by the Kremlin,” said McCain aide Tucker Bounds in the statement. “The reaction of the Obama campaign to this crisis, so at odds with our democratic allies and yet so bizarrely in sync with Moscow, doesn’t merely raise questions about Sen. Obama’s judgment -- it answers them.”

Obama, the Bush Regime (minus Cheney) and the entire State Department are all on the same page. Only the hot-headed, calculating and blustering McCain camp is advocating escalating this into a conflict between the U.S. and Russia. I wonder what troops he proposes using.

The media keeps proclaiming that the Russia-Georgia conflict should tell us something about the two candidates. OK, it tells us that Obama understands the constitution and that whether we like it or not, Bush is still the president and makes foreign policy, not lobbyist driven campaigns supporting their clients. It also tells us that if we hate life and want civilization to end in a blaze of glory, John McCain is the right man to vote for.