Errors, Both Tactical, and of Strategic Consequence

The most likely outcome is Russia’s economy will not collapse (even were the EU to go the whole hog on energy and ‘everything’ else).

U.S. and European NATO hawks and liberal interventionists want above all else, to see Putin, humiliated and repudiated. Many in the West want Putin’s blood-soaked head atop a pike towering above the ‘city gate’, visible to all as a resounding warning to those who challenge their ‘rules-based international order’. Their mark is not just Pakistan or India, but China, primordially.

Yet the hawks see that they dare not – cannot – go the ‘whole hog’. Despite the belligerence and posturing, they want the kinetic aspect to the conflict confined within the borders of Ukraine: No U.S. boots on the ground (though those whose very existence cannot pass our lips are already there, and have been ‘calling the shots’).

The Pentagon, for one (at least), does not relish risking a war with Russia that escalates badly, and could evolve to the use of nuclear weapons. (This stance however, is now being challenged by leading neo-cons who argue that fears of Russia’s resort to nuclear capabilities are exaggerated, and should be placed to one side).

So, to accomplish these grand agendas, the West has restricted itself (since 2015) to training and arming élite cadres (such as the Azov regiment), and ensuring that they are plugged-in at all levels (including at the top) of the Ukrainian political and military leadership.

The objective here has been to sustain the conflict (since winning outright is not an option): The longer the war continues, the U.S. narrative went, the more those 5,000 sanctions imposed on Russia would hurt the Russian economy, and insidiously undermine Russian public support for the war.

Experience gained from Syria permeates the battlespace: For Russian forces, the experience of cleansing Aleppo of jihadi extremists has been formative. And, for U.S. Special Operations Command training these Ukrainian élite units, the qualities of sheer ruthlessness and of false flag disruptions (honed by their earlier Idlib protégés) seem to have impressed on their erstwhile western instructors sufficiently to warrant it being passed along to a putative Azov-led insurgency, albeit operating from the opposite pole of insurgency ideology.

There are grounds to think that the FSB (Russia’s Security Service) may have underestimated how the resort to Idlib-style population management tactics could leave even a majority pro-Russian civilian population too cowed to push back effectively against Azov-style domination. As a consequence, Russian forces have had to slug it out – more than anticipated. This may have been a tactical error, but It was not a strategic one.

There is indeed a major strategic error – that is the decision taken by the West primordially to fight a financial war against Russia – which may well prove to be the undoing of the western war agenda. (The Ukrainian insurgency, in practice, has been restricted largely to giving sanctions and the super-sized PSYOPS war more time, particularly for the PSYOPS war to bite on the Russian domestic psyche).

Well, here’s the rub: In March President Biden stood before Congress and crowed that the Russian rouble had fallen by 30% and the Russian stock market by 40%. The Russian economy, he said, was on its way to collapse; the Mission was on its’ way to completion.

Yet, contrary to the G7’s expectation that western sanctions would collapse the Russian economy, the FT is acknowledging: “Whisper it quietly … But Russia’s financial system seems [today] to be recovering from the initial sanction shock”; Russia’s “financial sector is finding its feet after the initial barrage from the sanctions”. And Russia’s oil and gas sales – at more than $1b a day in March – mean that it continues to accumulate big foreign earnings. It has the largest Current Account surplus since 1994, as energy and commodity prices have surged.

Ironically, Russia’s economic prospects today, in many respects, look better than those of the West. Like Russia, Europe either already has – or soon will have – double digit inflation. The big difference being that Russian inflation is falling, whereas Europe’s is spiking to the point (notably with food and energy prices) where these hikes likely will trigger popular outrage and protest.

Well … the G7 having got that wrong (the political crisis, after all, was pencilled-in for Russia – not Europe), EU states now seem intent on doubling down: ‘If Russia hasn’t collapsed as expected, then Europe must go ‘the full Monty’: Just strip everything’. No Russian ships entering EU ports; no trucks crossing EU frontiers; no coal; no gas – and no oil. ‘Not an euro reaching Russia’ is the cry.

Ambrose Evans-Pritchard writes in the Telegraph, ‘Olaf Scholz must choose between an energy embargo on Russia, or a moral embargo on Germany’:

“ … western Europe’s refusal to cut off funding for Vladimir Putin’s war machine is untenable. The moral and political damage to the EU itself is becoming prohibitive. The policy is already a diplomatic trainwreck for Germany, stunned to discover that President Frank-Walter Steinmeier is a pariah – the Kurt Waldheim of our era? – so sullied by two decades as the dark lord of Kremlin collusion that Ukraine won’t have him in the country. The foot-dragging does not do justice to the German people, who overwhelmingly support a response that rises to the existential threat now facing Europe’s liberal order”.

Here clearly is the revised grand agenda, Mark II: Russia is surviving the Treasury War because the EU still buys gas and energy from Russia. The EU – and Germany more specifically – is financing Putin’s ‘grotesque unprovoked war’ – the meme goes. ‘Not a Euro for Putin!’.

The second strategic error is the failure to understand that Russia’s economic resilience does not stem alone from the EU continuing to purchase gas from Russia. But rather, it is by Russia playing both sides of the equation – i.e. linking the rouble to gold, and then linking energy payments to the rouble – that its currency has risen.

In this way, the Bank of Russia is fundamentally altering the entire working assumptions of the global trade system – (i.e. by replacing evanescent dollar trading by solid commodity-backed, currency trading) – whilst at the same time triggering a shift to the role of gold back to being a bulwark underpinning the monetary system.

Paradoxically, the U.S. itself prepared the ground for this shift to trading in local currency by its unprecedented seizure of Russia’s reserves, and the threat to Russia’s gold (if it could only lay its hands on it). This spooked other states who feared that they might be next in line, incurring Washington’s whimsical ‘displeasure’. More than ever, the non-West now is open to local currency trading.

This ‘boycott-Russian-energy’ strategy is ‘curtains for Europe’, of course. There is no way for Europe to replace Russian energy from other sources in coming years: Not from America; nor from Qatar, nor Norway. But the European leadership, consumed by a frenzy of ‘moral outrage’ at a flood of atrocity images from Ukraine, and a sense that the “liberal order” at any cost must prevent a loss in the Ukraine conflict, seems ready to go ‘whole hog’.

Ambrose Evans-Pritchard continues:

“The political dam is bursting in Germany. Die Welt captured the exasperated mood of the media, calling Germany’s love affair with Putin’s Russia the “greatest and most dangerous miscalculation in the history of the Federal Republic”. The chairmen of the foreign relations, defence, and Europe committees in the Bundestag – spanning all three coalition parties – all called for an oil embargo on Thursday. “We must finally give Ukraine what it needs, and that includes heavy weapons. A complete energy embargo is doable,” said Anton Hofreiter, the Green chairman on Europe”.

The higher energy costs implicit in stripping out Russian energy simply will eviscerate what remains of EU competitiveness, and usher in hyper-inflation and political unrest. Is this a part of the original NATO agenda of keeping America ‘in’; Russia ‘out’; and Germany ‘down’?

There are serious fault-lines radiating out from this EU-U.S. attempt to reassert its’ ‘liberalism’ – one which insists it will tolerate no ‘otherness.’ On issues such as the agenda of a scientific-technological élite and on ‘winning’ in Ukraine, there can be no other perspective. We are at war.

So what will happen? The most likely outcome is Russia’s economy will not collapse (even were the EU to go the whole hog on energy and ‘everything’ else). China will stand with Russia, and China is the ‘global economy’. It cannot be sanctioned into capitulation.

Checkmate? Well, what might the West’s Plan III be? The war frenzy; the visceral hatred; the language which seems designed to exclude a ‘coming to political terms’ with Putin, or the Moscow leadership is still there, and the Neo-cons are smelling opportunity:

“Neoconservative intellectual, former Reagan speechwriter, John Podhoretz recently penned a triumphant column entitled, Neoconservatism: A Vindication. The Commentary piece declared that architects of the War on Terror like himself are now ‘back on top’, world events having proven them correct about everything – from community policing to war”.

Not only are they back on top, Podhoretz asserts, but the Neo-cons have conquered their primary intellectual foes when it comes to the moral frame of deterrence. This represents the new inside ‘play’ in the Ukraine issue: Neo-conservatives think they’ve been vindicated by Ukraine.

Of course, when the Iraq invasion ended with a monumental débacle, the Neo-cons were universally derided, with Podhoretz sputtering excuses. Unsurprisingly, in its wake, the original validation of military U.S. intervention entered a steep decline, and Treasury sanctions war stepped into its shoes as the intervention requiring ‘no boots on the ground’.

Hence the misjudgement that Treasury war, coupled by extreme PSYOPS, could cut Putin ‘down to size’ is shared by the Neo-cons.

The Neo-cons are cock-a-hoop that financial war is failing. From their perspective it puts military action back on the table, with a new ‘front’ opening: An attack on the original key premise that a nuclear exchange with Russia must be avoided, and the kinetic element to the conflict, carefully circumscribed to avoid this possibility.

“It is true that acting firmly in 2008 or 2014 would have meant risking conflict,” Robert Kagan wrote in the latest issue of Foreign Affairs, lamenting the U.S. refusal to militarily confront Russia earlier:

“But Washington is risking conflict now; Russia’s ambitions have created an inherently dangerous situation. It is better for the United States to risk confrontation with belligerent powers when they are in the early stages of ambition and expansion, not after they have already consolidated substantial gains. Russia may possess a fearful nuclear arsenal, but the risk of Moscow using it is not higher now than it would have been in 2008 or 2014, if the West had intervened then. And it has always been extraordinarily small: Putin was never going to obtain his objectives by destroying himself and his country, along with much of the rest of the world.”

In short, don’t worry about going to war with Russia, Putin won’t use the bomb. Really? Why should you think that to be true?

These Neo-cons are lavishly funded by the war industry. They are never dropped from the networks. They rotate in and out of power, parked in places like the Council on Foreign Relations or Brookings or the AEI, before being called back into government. They have been as welcome in the Obama or Biden White House, as the Bush White House. The Cold War, for them, never ended, and the world remains binary – ‘us and them’, good and evil.

But the Pentagon does not buy it. They know what nuclear war implies. So the bottom line is that sanctions will hurt, but not collapse the Russian economy; the real war (and not the PSYOPS war of Russian military incompetence and failure) will be won by Russia (with any EU & U.S. military supplies of large equipment to Ukraine being vaporised as they cross the border); and the West will experience what it fears most: Humiliation in its attempt to reaffirm the liberal rules-based order.

Europe fears that without a resounding reaffirmation, it will see fractures appearing across the globe. But those fractures are already present: Trita Parsi writes that “non-Western countries tend to see Russia’s war very, very differently”:

“Western demands that they make costly sacrifices by cutting off economic ties with Russia to uphold a “rules-based order” have begotten an allergic reaction. That order hasn’t been rules-based; instead, it has allowed the U.S. to violate international law with impunity. The West’s messaging on Ukraine has taken its tone-deafness to a whole new level, and it is unlikely to win over the support of countries that have often experienced the worse sides of the international order”.

Likewise, former Indian National Security Adviser, Shivshankar Menon, has written in Foreign Affairs, that “Far from consolidating “the free world,” the war has underscored its fundamental incoherence. In any case, the future of global order will be decided not by wars in Europe but by the contest in Asia, on which events in Ukraine have limited bearing”.

The most salient feature of last week’s first-round of the French Presidential election was that even should Macron win on 24 April (and the Establishment and its media will do anything to ensure his win), it will be Pyrrhic. A majority of French voters voted on 13 April against a system of inter-locking interests between the state and the corporate sphere.

French voters perceive themselves to be on a runaway train of higher inflation, declining living standards, more supra-national regulation, more NATO, more EU, and more American diktats.

Now, they are being told that soaring food, heating and fuel prices is the price worth paying to cripple Russia and China and ‘preserve the moral fabric of the liberal order’.

If one was to characterise this unspoken ‘war’, it is that Macron speaks (down) to La France, in the abstract. Le Pen, by contrast has been speaking with the French people, and speaking of politics to which they can relate in a personal way. In the election, the old traditional categories and ‘containers’ of French politics: the Catholic Church; the Republican Party and the Socialist Party were rendered insignificant.

President Eisenhower, in his 1961 farewell speech, clearly foresaw the coming schism:

“Today, the solitary inventor has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present – and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.”

This is the war.

Errors, Both Tactical, and of Strategic Consequence

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