That the West has made serious strategic
errors in its support of Ukraine are now becoming more obvious by the
day. According to recent media reports, the U.S. is using unofficial
back channels to secure crucial supplies from Russia, while publicly
talking about tough sanctions. This somewhat embarrassing development
was reported by Bloomberg, June 13, 2022, which noted:1
"The US government is quietly encouraging
agricultural and shipping companies to buy and carry more Russian
fertilizer, according to people familiar with the efforts, as sanctions
fears have led to a sharp drop in supplies, fueling spiraling global
food costs.
The effort is part of complex and difficult
negotiations underway involving the United Nations to boost deliveries
of fertilizer, grain and other farm products from Russia and Ukraine
that have been disrupted by President Vladimir Putin's invasion of his
southern neighbor.
US and European officials have accused the Kremlin of
using food as a weapon, preventing Ukraine from exporting. Russia
denies that even as it has attacked key ports, blaming the shipment
disruptions on sanctions imposed by the US and its allies over the
invasion.
The EU and the US have built exemptions into their
restrictions on doing business with Russia to allow trade in fertilizer,
of which Moscow is a key global supplier.
But many shippers, banks and insurers have been
staying away from the trade out of fear they could inadvertently fall
afoul of the rules. Russian fertilizer exports are down 24% this year.
US officials, surprised by the extent of the caution, are in the
seemingly paradoxical position of looking for ways to boost them."
Biting the Hand That Feeds
All of this is starting to look like
a combination of "biting the hand that feeds you" and "cutting off your
nose to spite your face." On the one hand, the West wants to appear
tough on Russia by issuing trade embargoes, sanctions2
and bans on investments, while simultaneously being more or less
dependent on Russia for essential commodities such as oil, gas, food and
fertilizer components.
As a result, the Russian ruble is now the strongest it's been in
seven years. It's so strong, the central bank in Russia is actually
taking steps to weaken it, as they fear an excessively strong currency
will make Russian exports less competitive.3 Meanwhile, the U.S. dollar is in the toilet and getting weaker by the day.
According to Bloomberg,4
the Kremlin now wants the Biden administration to provide assurances to
buyers and shippers of Russian fertilizer and grain that they aren't
subject to sanctions.
This, Bloomberg notes, appears to be a condition to release shipments
of Ukrainian farm products as well. Ivan Timofeev, a sanctions
specialist at the Kremlin-founded Russian International Affairs Council
told Bloomberg:5
"For Russia, it's really important that U.S.
authorities send a clear signal that these deals are permitted and in
the interest of global food security and they shouldn't refuse to carry
them out."
An estimated 25 million tons of grain, sunflower oil and other
commodities are reportedly stuck in Ukraine due to security fears in
ports and shipping lanes. Countries that have the most to lose by this,
being the largest importers of Ukrainian grain, include Egypt,
Indonesia, Bangladesh, Pakistan and Turkey.6
Who's Getting Hurt?
The questions that Western leaders seem unwilling to answer are "who
benefits and who gets hurt?" Right now, most of what they've done have
only helped strengthen Russia's position, while placing their own
citizens in harm's way.
Shortages of energy and food and rising inflation now loom large
around the world, which could have catastrophic consequences for the
average person, without doing one lick to pressure Putin to pull back
from Ukraine. Basically, American and European citizens are the ones
being punished, through higher prices on food and energy, while Russia
is reaping mostly benefits.
According to Radio Free Europe,7
Russia has "nearly doubled its income from energy sales to the EU"
since it entered Ukraine, this despite the fact that the EU cut its oil
imports by 20% and coal by 40%.
Research by Center for Research on Energy and Clean Air (CREA)
released on April 28, 2022, showed "soaring prices have more than
compensated Russia for the loss in sales volume due to sanctions," Radio
Free Europe writes. China and India have also increased their imports
from Russia.
Corporate Self-Sanctioning Was a Bad Move
The new corporate trend to make political statements at every
opportunity is also backfiring and worsening the situation. As reported
by Bloomberg, June 14, 2022:8
"Officials were initially impressed by the
willingness of companies from BP Plc. to McDonald's Corp. to abruptly
'self-sanction,' sometimes selling assets at fire-sale prices. But the
administration was caught off-guard by the potential knock-on effects —
from supply chain bottlenecks to uninsurable grain exports — due to the
companies' decisions to leave, according to people familiar with
internal discussions ...
So while Ukrainian President Volodymyr Zelenskiy has
urged US businesses to cease operations in Russia, telling a joint
session of Congress that the Russian market was 'flooded with our
blood,' the Biden administration has been encouraging some commerce,
including for agriculture, medicine and telecommunications."
Here's the key problem: The decision of some 1,000 companies to
"self-sanction" and drop their business in Russia has now actually
become a barrier to diplomatic resolution.
Sanctions are a popular tool because it outsources government policy
to the private sector. Once warring sides decide to meet at the
negotiation table, the promise to eliminate sanctions can act as a
strong incentive to end the violence.
Alas, with so many private companies choosing to make political
statements rather than just running a business — selling burgers to
hungry Russians, or whatever — diplomatic negotiations are now actually
hampered, because these companies have eliminated a lot of the leverage
that the promise to lift sanctions could bring.
They left voluntarily, spitefully, and not because government
sanctions legally prevented them from doing business there. As a result,
the "carrot" of lifting sanctions doesn't have the same bargaining
power. As explained by Bloomberg:9
"It's hard even to offer that [removal of sanctions]
as a potential benefit of entering into negotiations because much of the
pullout by American businesses has been self-inflicted. Companies could
face public blowback if they are seen as rushing back into the Russian
market ...
[L]onger-term, the US may undercut its 'soft power'
in Russia by abandoning the local market to brands from other countries —
or even to Russian firms that are snapping up company assets at little
or no cost. The departure of high-profile US firms 'does some
psychological harm to Russia, psychological injury,' Smith said. But 'at
the end of the day, is removing elements of US soft power where the US
wants to be?'"
Moralism Fail
In the Jimmy Dore Show video in the section above, Dore expands on
this, quoting some tweets by independent journalist Glenn Greenwald. In
one June 14, 2022, tweet, Greenwald commented on the Bloomberg story:
"The problem from the start was the obligatory
moralism narrative didn't help decipher what policies would and wouldn't
work. And that was as intended: there was so much to debate and
question about US policy, but it was barred. Anyone who tried was
maligned as a Russian stooge."
Why the Ukraine War Is a Scam
The Jimmy Dore Show above discusses journalist Wolfram Weimer's
appearance on German television, in which he boldly contradicts the
official narrative about the Ukraine conflict.
Weimer points out that while the German chancellor "is working with
this language template: 'Russia must not win this war, Ukraine must
win,'" it's clear that Russia has already won the war and Ukraine
doesn't stand a chance. So, where is this headed, politically? Weimer
wonders. "Since we cannot win this war, we have to end it as quickly as
possible," he adds.
The fact that Western supporters of Ukraine have not yet stepped up
to help Ukraine negotiate a peace deal is instructive in and of itself.
What could that mean? Well, for starters, it's an ominous indication
that it's all about greasing the wheels of war.
Time and again, the U.S. has entered into intentionally unwinnable
conflicts that have but one real purpose: To funnel taxpayer dollars
into the private military industrial complex. Almost all of the $40
billion "Ukraine aid" package, for example, went straight to weapons
manufacturers.10
It can be tempting to jump on the "support Ukraine" bandwagon, but it
would be far more useful to try to really understand the deeper forces
at play. More often than not, war is about keeping the weapons industry
flush with cash.11
In the final analysis, that's typically what decades-long, drawn-out
unwinnable conflicts are all about, and in this case, it seems NATO is
trying to take advantage of the situation by dragging it out as long as
possible. Let's not forget that NATO allies actually circumvented an
arms embargo against Russia, supplying it with weapons as recently as
2020. In an exclusive report, The Telegraph reported:12
"France and Germany armed Russia with €273 million
(£230 million) of military hardware now likely being used in Ukraine, an
EU analysis shared with The Telegraph has revealed. They sent
equipment, which included bombs, rockets, missiles and guns, to Moscow
despite an EU-wide embargo on arms shipments to Russia, introduced in
the wake of its 2014 annexation of Crimea.
The European Commission was this month forced to
close a loophole in its blockade after it was found that at least 10
member states exported almost €350 million (£294 million) in hardware to
Vladimir Putin's regime.
Some 78% of that total was supplied by German and
French firms ... Alongside bombs, rockets and torpedoes, French firms
sent thermal imaging cameras for more than 1,000 Russian tanks as well
as navigation systems for fighter jets and attack helicopters."
Meanwhile, both Germany and France have been reluctant to provide
Ukraine with high-powered arms. So, is it really about helping the
people of Ukraine, or is it about squeezing out money for the military
industrial complex? Many nations have sent what amounts to antiquated
cast-offs to Ukraine, including old Soviet-era tanks.13
The mishmash of weaponry from different countries and eras make for a
logistical nightmare, but it allows countries to virtue signal, wave
the flag of solidarity, and justify a new surge of military spending to
rebuild their own armaments. Dump the old in Ukraine and refill with the
latest and greatest. Quite the racket.
War as a Source of Profit Endangers Conflict Resolution
It's high time the world starts to realize that most wars have a
profit motive behind them. Not always, but often enough. As noted in
"Profits of War: Corporate Beneficiaries of the Post-9/11 Pentagon
Spending Surge," a 2021 report by the Watson Institute and Center for
International Policy:14
"The United States government's reaction to the
terrorist attacks of September 11, 2001 led to dramatic increases in
Pentagon funding and revenues for weapons contractors. While the costs
and consequences of America's war policies of the twenty-first century
have been well-documented, the question of who has profited from this
approach has received less attention.
Corporations large and small have been, by far, the
largest beneficiaries of the post-9/11 surge in military spending. Since
the start of the war in Afghanistan, Pentagon spending has totaled over
$14 trillion, one-third to one-half of which went to defense
contractors.
Some of these corporations earned profits that are
widely considered legitimate. Other profits were the consequence of
questionable or corrupt business practices that amount to waste, fraud,
abuse, price-gouging or profiteering.
The Pentagon's increasing reliance on private
contractors in the post-9/11 period raises multiple questions of
accountability, transparency, and effectiveness. This is problematic
because privatizing key functions can reduce the U.S. military's control
of activities that occur in war zones while increasing risks of waste,
fraud and abuse.
Additionally, that the waging of war is a source of
profits can contradict the goal of having the U.S. lead with diplomacy
in seeking to resolve conflicts.
More broadly, the outsized influence of defense
contractors has resulted in a growing militarization of American
society. This is manifested in everything from the Pentagon's receipt of
the lion's share of the federal discretionary budget — more than half —
to the supply of excess military equipment to state and local law
enforcement agencies."
Bankers Also Profit From War
Contractors aren't the only ones that can cash in on war. Did you
know, for example, that Goldman Sachs, the New York-based investment
bank, is profiting from the war in Ukraine by selling Russian debt? In
March 2022, NBC News reported:15
"As the Western world scrambles to defend Ukraine by
locking down Russian money, the company is acting as a broker between
Moscow's creditors and U.S. investors, pitching clients on the
opportunity to take advantage of Russia's war-crippled economy by buying
its debt securities low now and selling them high later, according to
four financial world sources familiar with the strategy.
An investor who declined a Goldman trader's offer to
add Russian debt to his hedge fund's portfolio — because of the war —
said the trader suggested he could 'just put it in your personal
account' to avoid scrutiny. That does not violate the U.S. sanctions
regime, but it is very different from the public face Goldman is putting
on its relationship with Russia ...
When U.S. officials sanctioned Russian banks this
month, it became illegal for U.S. companies to do business directly with
major Russian financial institutions. But the Treasury Department's
Office of Foreign Assets Control, or OFAC, issued a memo affirming the
legal legitimacy of trading Russian assets in "secondary markets" —
those not directly involving the Russian banks. That's why Goldman can
act as a broker ...
Goldman's effort to profit from the war highlights
the complexities the Biden administration faces in trying to punish
Russia without harming Wall Street and the economies of the U.S. and its
allies. And it is a stark reminder that no asset is too toxic to be
traded when there are willing buyers, sellers and brokers."
There's More to the Story
In this case, Russia appears to have had at least some justification for its actions. In a June 14, 2022, article16
in The Guardian, Angela Giuffrida summarized comments made by Pope
Francis during an interview with the Jesuit magazine La Civiltà
Cattolica.
While the pontiff condemned the "ferocity and cruelty of the Russian
troops," he added that Putin's invasion of Ukraine was "perhaps somehow
either provoked or not prevented," and we should resist the temptation
to think of the conflict in terms of "good versus evil."
He explained he'd met an unnamed head of state some months earlier,
who told him "he was very worried about how NATO was moving." When
Francis asked why, the head of state replied, "They are barking at the
gates of Russia. They don't understand that the Russians are imperial
and can't have any foreign power getting close to them."
Indeed, shortly before Russia's launch of its "special military
operation" in Ukraine, Putin had demanded NATO rule out allowing Ukraine
— which shares a border with Russia — into the alliance. In June 2022,
Russian Foreign Minister Sergei Lavrov told the BBC:17
"We declared a special military operation because we
had absolutely no other way of explaining to the West that dragging
Ukraine into NATO was a criminal act."
Russia has also accused Ukraine of conducting dangerous bioweapons
research on behalf of the U.S. I reviewed the evidence for this in "Bioweapons Expert Speaks Out about US Biolabs in Ukraine."
Thirdly, Russia has been critical and seemingly grown weary of
Ukraine's attacks on native Russians in the Donbas region, a conflict
that has been ongoing since 2014. So, there's more to this story than
what the media are telling us.
What's the Real Motive for Keeping Conflict From Resolution?
If Russia suspected Ukraine was being groomed to be used against
Russia, there's every reason to suspect a diplomatic solution is
available. Why not give Russia the assurances it wants that Ukraine
won't be used against it? The fact that Ukrainian supporters send
weapons rather than diplomats therefore raises questions about motives.
As recently as June 19, NATO chief Jens Stoltenberg warned the
Ukraine war "could last for years," and that Western nations "must
prepare to continue supporting Ukraine" — "Even if the costs are high,
not only for military support, [but] also because of rising energy and
food prices."18
U.K. Prime Minister Boris Johnson has issued the same warning.19
So, ask yourself: Is NATO interested in negotiating peace and saving
lives by ending the violence? Or is it merely taking advantage of the
conflict to keep the war machine, the war industry, going, for as long
as possible?