Sunday, March 2, 2014

The Ukrainian Iceberg

Ethnic Division in Ukraine - Red is Russian
We had only just returned from one of the more remote places we go to teach permaculture, the Maya Mountains on the Belize side of Guatemala’s southern border. Passing through airports, we started hearing the media drumbeat and listened to what the rhythms were saying. There were three competing beats — Ukraine, Bridgegate, and the winter weather, including California’s drought. 

It is nice to see climate getting more column inches, even if the analysis is pretty lame. Political corruption in New Jersey, while cinematic, hardly qualifies as news. The Ukraine, however, is an iceberg drifting towards shipping lanes that seemed worth looking at more closely.

CNN-International’s headlines this morning read: Kerry: 'All option are on the table' ; Graham: Obama 'weak, indecisive' ; How Putin carries out power grab; Obama: Russia, stay out.

So, the first thing one must to do is learn what to ignore. Ignore CNN, and Fox, and MSNBC.

Coming to the situation completely cold, within a few minutes of surfing we learned that:

Victoria Nuland
·      Assistant Secretary of State Victoria Nuland, wife of prominent neocon Robert Kagan, made clear in a speech last December and in the leaked recording of her January 28 telephone conversation with the US ambassador in Kiev that Washington spent $5 billion of US taxpayer dollars engineering the coup in Ukraine. We don’t know how much of that was devoted to planning the post-coup golden toilet PR exhibition at the Yanukovych palace.

·      On February 23, moderates in Kiev ceded power, under duress, to neo-nazis who captured Parliament and introduced legislation banning any official use of the Russian language. One of the coup leaders announced that, “Ukraine will not be ruled by Negroes, Jews or Russians.” Gangs of thugs have been roaming the streets painting “Jews live here” on Jewish homes, and a prominent Rabbi has advised Jews to leave Kiev.

·      In the Russian-speaking provinces to the east, citizens took over local governments and appealed to Russia for help, which Russia was quick to offer, moving troops into the historically Russian Crimean peninsula, current site of three Russian military bases, and handing out Russian passports to anyone who wanted one.

Any qualifying Ukrainian would be well advised to take that offer. As Dmitry Orlov points out, both Washington and Brussels, and the media, ignored Putin's suggestion last fall of a bail-out to avoid Ukrainian bankruptcy, and that is now all but assured. Left holding the bag are the EU and Russia, since the US 911’d its assets by shorting Ukraine well before February, and China, which probably reads the State Department wire traffic before Susan Rice does, also cut its exposure in a timely fashion.

“Financial reserves are down to a few days, federal structures are being dismantled throughout the country, regional governors are fleeing, and a default on some €60 billion of Ukrainian bonds, many held by Russian banks, seems likely. Could this be just the kind of financial contagion needed to finally pop the ridiculous US equities bubble?” Orlov asks.

Also at risk are five nuclear power plants — we are interested to see how skinheads will run those — and the winter natural gas supply that crosses Ukraine on its way to Europe.

Andrey Tymofeiuk, a Kiev resident posted to his Facebook page, quoted by Orlov, “The passive population of Kiev is still quietly drinking beer and poking around with social networking apps. They don't understand what's happening yet. But if the unofficial state of emergency (including limitations on access to the city) last a few more days — and food and drink running out — then they will end up in a state of shock more serious than anything they have ever experienced.”

Russian special forces dropped into Sevastopol this weekend to bolster the military bases, especially the Black Sea Fleet’s Crimean base. The Red Army is massing on the border, ready if necessary to defend ethnic Russians and threatened military assets. This move prompted President Obama to make a sudden appearance in the White House press room, rattle his sabre, and warn Putin that the US would not stand for interference in Ukraine’s internal affairs. The irony appeared to go unnoticed.

Division of candidate votes cast in the last presidential election
Another unremarked irony was President Obama’s reference to Ukraine’s “territorial integrity.” US and its NATO allies gave little credence to that when creating an independent Kosovo or by supporting the separation of South Sudan from Sudan, Eritrea from Ethiopia, East Timor from Indonesia, and North and South Vietnam. If you care to go back pre-NATO, the seizure of northern Mexico, the Kingdom of Hawaii, the Philippines, Cuba, Puerto Rico, the partition of Palestine and the creation of Israel are lingering lessons in the kind of blowback that comes from dividing territory united by history and heritage.

For the past couple of days the US and UK news cycles have been swept up in the Obama talking points being parroted by administration hacks, further obscuring the facts on the ground.

Putin need not rise to NATO’s bait. His options include cutting Ukrainian economic assistance ($15 billion last December, not counting heating fuel discounts); embargoing Ukrainian goods at Russian customs; imposing travel visas; reopening Catherine the Great’s prior claim on Crimea; or mounting his own PR black op to encourage Russian reunification in the eastern and southern provinces.

“Obama’s ‘warning’ to Putin was ill-advised. Whatever slim hope that Moscow might avoid overt military intervention in Ukraine disappeared when Obama in effect threw down a gauntlet and challenged him. This was not just a mistake of political judgment—it was a failure to understand human psychology — unless, of course, he actually wanted a Russian intervention, which is hard for me to believe.”

Robert Gates described the US foreign policy in his new memoir, Duty, tracing a line from Ukraine back to Dick Cheney: “When the Soviet Union was collapsing in late 1991, Dick wanted to see the dismantlement not only of the Soviet Union and the Russian empire but of Russia itself, so it could never again be a threat to the rest of the world.

I want to stay out of another war for very practical reasons:
·       War is horrible for our economy
·       “Humanitarian war” is a scam
This isn’t our fight … and the downside of getting involved are gigantic.

It is left to Vladimir Putin now to be the statesman here. There is a void of leadership everywhere else.

That the US and Russia will get into a shooting war in Ukraine seems unlikely, but you can bet that Republicans will challenge Democrats to a sabre-rattling contest nonetheless.

The drift of the iceberg is towards the economy of Europe — another €60 billion default and/or German bailout, assuming the Germans will want anything at all to do with Ukraine’s new leaders.



David Herron said...

It seems to me a key to this particular thing is - not just the geopolitical tug of war you describe - but the wave of fracking being pushed by the US State Department around the world. Ukraine happens to have two large segments of shale gas deposits, for which Chevron and Shell have concessions to begin fracking operations. The about-face Yanukovych did, turning to Russia, came immediately after Ukraine signed a fracking deal with Chevron.

Eddie Tennison said...

History (if there is such a thing as recorded history in a few years) will not be kind with regards to the U.S.foreign policy meddling and covert operations on the sovereign soil of foreign nations. Such a long line of stupid blunders, going back to before we were born.

Future generations (I hope) will wonder how the powers that be sold it to the citizens so successfully when the rhetoric is so obviously bogus and the results are always so overwhelmingly bad in the long run.

The U.S. has little leverage here to make Putin do anything, other than to try to kill their currency. Putin, on the other hand holds a nice hand of cards, including the oil the EU needs to avoid freezing in the dark next winter.


Albert Bates said...

I agree with Eddie Tennison that Putin has all the cards and every one else should dust off their Sun Tzu. This is why the #Ukraine is not about #fracking or other snake oil:
Gail Tyerberg looks at this chart and comments: "The above slide shows that conventional oil production peaked in 2005. The top line is total conventional oil production (calculated as world oil production, less natural gas liquids, and less US shale and other unconventional, and less Canadian oil sands). To get his estimate of “Crude Oil Normal Decline,” Kopits uses the mirror image of the rise in conventional oil production prior to 2005. He also shows a separate item for the rise in oil production from Iraq since 2005. The yellow portion called “crude production forward” is then the top line, less the other two items. It has taken $2.5 trillion to add this new yellow block. Now this strategy has run its course (based on the bad results companies are reporting from recent drilling), so what will oil companies do now?" The answer is, they will stop fracking. Big Oil is already doing this; Russia will likely also. Every dollar or ruble spent is half a dollar or ruble lost.




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