Do Western Leftists Hate Socialist Countries?

The Anti-Socialist Western Left

by Andre Vltchek

The multitudes in Europe and North America did not really pay attention, did not notice, but in so many parts of the world, the Left was elected or it fought and won revolutions that propelled it to power. This is a totally different world than it was some twenty years ago; we are living in increasingly optimistic times, full of wonderful alternatives.

For the first time in centuries it seems possible to dream about a world that will not be defined by Western imperialism and colonialism!

In so many places, people are once again in charge of their countries, standing tall, building their cities and villages, erecting towers and bridges, putting to work mighty turbines, giving light to the poor, healing the sick and educating those who were kept in darkness, for decades and centuries, as a result of Western colonialism and savage capitalism.

Entire modern and ecological neighborhoods are growing up all over China; entire cities are being built, with enormous parks and public exercise grounds, with childcare centers and all the modern sanitation facilities, as well as wide sidewalks and incredibly cheap and super modern public transportation.

In Latin America, former slums are being converted into cultural centers, connected to the rest of the other urban areas by super modern cable cars.

Cuba, despite its extremely low incomes (if measured in dollar terms), joined the exclusive group of countries with a ‘very high development index’, as calculated by the UNDP. That group also consists of other Latin American countries with socialist governments – Chile and Argentina.

Many things that would be unimaginable just a decade or two ago, are now considered normal. The Chilean President, Michelle Bachelet, has been elected for a second time. During the Western-backed Pinochet’s dictatorship, she was held prisoner and brutally tortured. Her father, a military man loyal to Allende, was murdered. She was eventually exiled and became a doctor in East Germany. Ms. Bachelet now governs from the same palace – La Moneda – that was bombed to ashes during the fascist onslaught. Her country with only 18 million inhabitants, is an intellectual powerhouse, as are Argentina, Brazil and Uruguay. Chile is not ‘purely’ socialist, but it is implementing sweeping socialist reforms. Now it is so rich that tens of thousands of jobless Europeans are seeking work in its cities and countryside.

In Brazil, a lady, a former guerrilla leader, is lifting tens of millions out of poverty, while turning her country into one of the most important and loved nations on earth. It is one of the pillars of BRICS. Its intellectuals, filmmakers, and writers, are stirring emotions and giving birth to dreams about a much better world.

It is all thoroughly breathtaking, if one really pays attention, if one is there, if one goes out of his or her way to follow the events!

In South Africa, formerly hopeless slums are now full of life and hope, and initiatives, many connected by modern bus lanes and trains. They have stadiums, malls and fitness centers, modern hospitals and schools. By many measures, socialist South Africa is a super first world country, but still with terrible social problems. But each and every problem it has is discussed, openly and honestly, and thousands of impressive initiatives are moving this awesome country forward! As I wrote in my recent report from there, in South Africa, the African continent is rising!

Eritrea, Iran, and North Korea, are standing defiantly against Western embargos and intimidation. Their people work hard in order to maintain their freedom to move forward their own way, without taking diktats from the same nations that used to plunder and humiliate them.

And Russia, the mighty Russia that was once on its knees, during that monstrous government of the pro-Western puppet Boris Yeltsin, is now back in its saddle, standing on the side of many progressive nations, all over the world. It has forgiven a tremendous, multi-billion dollar debt to Cuba, it is forging powerful alliances with Venezuela, Brazil, and other left-wing nations, and above all, it is finally creating a grand alliance with China.

The world has never been so close to a real breakthrough – to true freedom.

***

But much of the Western Left refuses to acknowledge that this is a great opportunity for mankind.

It is because it feels left behind, humiliated by the tremendous defeat on its own turf.

It is because, despite all the rhetoric and political correctness, many of its members are actually chauvinists, and even racist. And many thinkers in China, Russia, Africa and Latin America, are actually aware of it.

The perception of the Western Left is that a revolution – a true and pure revolution – has to always come from Europe or North America. It is the West that has to liberate poor Asians, Latin Americans and Africans.

The Chinese revolution is ‘impure’. Who cares that hundreds of millions, the majority of the country, are now eating healthy and nutritious food, live in good housing with high quality services, travel on modern modes of transportation, and getting a very good education? Who cares? It is ‘not real communism’, according to most of the Western left-wing gurus, or it is not even socialism, according to some!

Only the Western thinkers can define such things as ‘socialism’ or ‘communism’, not Asians, and ‘Chinese socialism’ means nothing to them; it is just a pose, a charade.

Several years ago, in Venezuela, I travelled with a very prominent Western intellectual who had been reporting, very well I have to admit, on the events that have been taking place in the Bolivarian Republic. One evening, after several pints of beer, we began talking about China.

“I hate China”, she said. “I don’t trust Chinese people.”

I told her that I had travelled all over PRC and that I am extremely impressed and convinced that China is actually a very successful socialist, even Communist, country. She began arguing with me, passionately. I asked her whether she had ever visited China.

She replied, loudly and clearly: “I would never go there! I hate the place and I hate the people.”

Her statement impressed me: at least she was brutally honest and it was all in the open. Racism against Chinese people is hardly ever pronounced in Western ‘progressive’ circles. It is there, inside all that biased set of ‘analyses’. But it is never admitted. All is covered up by the ‘objective criticism’.

It begins with “can you imagine what would happen to our planet if every Chinese were to have his or her own car and television set, like us in the West?” and ends with “The Chinese are as brutal as we are and they have the same imperialist tendencies”.

While China’s transformation into a middle-class socialist society is clearly a miracle (but more than a miracle, it is actually proof of the superiority of central planning, and of the general excellence of the system), perhaps the single greatest success on our planet in the last 100 years, the Western Left mumbles something about what has happened is actually not pure, that it is not really Communist, and that in many ways it is all extremely sinister.

It is because, from their point of view, only what is designed and implemented in the West can be trusted. They would never say so, but it is by now so obvious! That scorn is directed at the great non-Western societies of China, South Africa or Venezuela! That black sarcasm. That overall lack of support for countries that are truly trying to take care of their people!

To most Western intellectuals, one billion human lives that have become comfortable and full of dignity, means nothing! It is because to them, Chinese people mean nothing, as individuals or as a group.

Instead of talking with pride and encouragement about the enormous parks and green areas of Chinese cities, all that is repeated ad infinitum is Beijing’s pollution, or the destruction of some ‘hutons’ – those filthy and unsanitary hives where dozens of families used to shit into one hole. That, to Western eyes, was good – stereotypical and typical of ‘ancient’ China, full of poor people. On the other hand, those proud, modern, high-quality housing towers with all their modern facilities, that are now the norm in all corners of the country, are ‘annoying’, even disturbing. And the fact that Chinese people want and have phones, good clothes, even cars, is seen as a proof of ‘consumerism’ and is used as an argument that China is not socialist, anymore! Because for many Western leftists, while they themselves have nothing against having villas by the sea, those living in the non-Western world have to be pure and poor, functioning like some sort of guinea pigs, if they want to be called Marxist.

No comrades! It is total bullshit! And by now it is clear who really cares for the people.

The goal of socialism or un-dogmatic communism is simple and clear – a better life for the people. Better cities and villages, less fear, more culture, education, dignity and yes, more fun!

And that is clearly what China is achieving, as well as South Africa, Venezuela and other socialist countries!

***

In the past few years, it has become evident that the West is ready to destroy everything that is standing in its path to the total dominance of the planet.

But suddenly, four powerful countries have refused to tolerate such banditry, and have become determined not to allow the global dictatorship to succeed. These countries are China, Venezuela, Cuba and Russia. There are more states joining, gradually, but this is the core.

The West has attempted to destroy Venezuela, openly and shamelessly, on several occasions, through orchestrated coups and by financing and supporting the ‘opposition’; some believe, even by assassinating the President of the nation.

The smear campaign that was directed against Caracas became epic! I have made several documentary films for Telesur, and I will never forget the words of one of the editors there, during the height of the anti-revolutionary riots sponsored by the West: “We are all working under the barrels of guns!”

It was a war then, and it still is, now. It is a war against fascism, and for humanity. Those who have not noticed should pay better attention.

And in a war, one has to choose sides.

The Western rulers also see China and Russia as the arch-enemies. Day and night, these two giant and mighty countries face vicious propaganda, smear and hate campaigns, provocations, and indirect attacks.

In Asia, the Empire’s goal is to isolate China, to provoke and to challenge it. The West is literally sticking a hot iron rod into the dragon’s mouth. This is common knowledge in the academia in both Philippines and Japan, two client-states of the West in the region. But it is a very little known unknown fact among the Western public.

So where is the mobilization by Western left-wing intellectuals, in support of China, which is clearly being threatened by the United States and its allies?

There is no such mobilization! Instead, some of the left-wing intellectuals are actually repeating, like parrots, most of the lies invented by the mass media outlets in both Europe and North America! All that nonsense about China having imperialist ambitions, in Asia and Africa!

If they would only bother to speak to the African people, they would hear that China is admired and seen as the hope, by the African majority. They will hear that “Chinese people are the first foreigners who treat Africans as human beings, even as equals”, as I was repeatedly told at infrastructure construction sites all over East Africa.

But the propaganda invented in the colonial centers like London, Paris or Berlin, is actually consumed and trusted, even disseminated further by many from the ranks of the Western Left! The West plundered, raped and destroyed tens of millions of African people. It hunted them down like animals, and turned them into slaves. It has perpetrated countless genocides, from those in which 10 millions died during the reign of the Belgian King Leopold II, to the German holocaust against the native Namibian people, or the present 8 million murderous drive to secure the supply of coltan and uranium, in DR Congo, using their Ugandan and Rwandan allies, and their deranged armies. Somalia is destabilized, Mali; tens of countries are screaming and bathed in blood. But ‘China has the same ambitions’!

And the Western Left is silent or complacent. A great majority of its members do not even bother or dare to travel to places where China is doing a great good.

When the US and Japanese air force flies over what China claims is its territory, when new military bases are built surrounding PRC, the Western Left does nothing, absolutely nothing, to support Beijing!

But when Russia was confronted, smeared and provoked, over Ukraine and Novorussia, there was actually almost immediate mobilization. It is good, very good, that there was one. But why did the Western Left suddenly opt for supporting the Russian government, which is actually not even socialist (although, by inertia from the Soviet days, it is still doing some great things for the nations oppressed by Western imperialism)? Why Russia and not others? Why Russia but not dozens of really socialist countries that are in great need of support?

Could it be that it is because Russia is a predominantly Western and ‘white’ country, while China, Venezuela, Bolivia, Cuba, South Africa or Eritrea, are not?

There should be serious and honest soul-searching, answering these questions. And soon!

***

These days it appears that most Western left-wing intellectuals are not even seeking power, anymore. They are comfortable with their feeling defeated and powerlessness. They appear to enjoy hopelessness and gloom. They constantly describe the faults and crimes of the Empire, but are unwilling to really confront it, in any determined way. They do not build barricades and they hardly fight intellectually.

It actually gets much worse than that: there is an easily detectable and open hostility from the Western Left towards most of the left-wing and anti-imperialist governments, all over the world, be it Cuba, Venezuela, Bolivia, China, North Korea, South Africa or Eritrea.

Those trusted and supported are only underdogs – those who already lost. That is the company in which many Western progressive intellectuals feel good and cozy.

The strength of those who fought, proudly, against the neo-colonialism and corporatism, and who are now actually governing their countries (or at least some of them are), is being ridiculed, at times even demonized. Nothing is good enough and nothing is ‘sacred’ for the Left in Paris, Berlin or London: definitely not Cuba and Eritrea, South Africa or China.

Again, that ‘religious’ search for the ideal movements, parties and societies!

It is like trashing the French resistance or Serbian partisans, during WWII, for not being fully ‘democratic’ or considerate. Of course they were not! Because there was no time to try being perfect: they were not faultless, they were not ideologically refined; they were single-mindedly fighting a war against great evil.

The Western Left is playing safe, even when it comes to world history. Some are (have for decades now) even comparing the Soviet Union to Nazi Germany, that greatest of brainwashing propaganda scoops invented by the chief propagandists of the Empire! They are actually talking about that very Soviet Union, which helped dozens of enslaved nations to attain their independence from Western imperialism, that very Soviet Union which actually, almost single-handedly, defeated Nazi Germany at the price of more than 20 million of its people; that Soviet Union which helped to build and to educate newly independent countries on all continents. Such comparisons are not only historically ludicrous; they are insulting and outrageous! If the Western Left needs to compare something to German Nazism, it should be the European constitutional monarchies and the Western ‘democracies’ themselves, as well as Western colonialism – all these institutions and political/ideological concepts have been destroying hundreds of millions of lives on all continents, for centuries, and until now!

***

Chinese intellectuals are indignant. I spoke to some, in 2013, when Tsinghua University in Beijing held a seminar on my work.

All that I am writing here is actually well known in China, South America and Africa!

The arrogance and self-righteousness of the Western Left is infuriating and the result is that there is very little of a working relation now, between the European/ North American left-wing movements and the PRC. Predictably, again, the Europeans will say, “Because China is not left wing enough”. Rubbish! Ask Fidel Castro whether China is socialist. Ask the government of Venezuela, or South Africa.

The main problem actually is, that the Western Left is not internationalist enough, or not internationalist at all! And to me, and to so many other comrades worldwide, internationalism is the essence of true socialism.

What is the European Left fighting for? It fights primarily for the privileges of its own people, not for the privileges of the other people of the world. It cares nothing about who actually pays for that free medical care or free education, or for the subsidies that the European farmers get.

During the colonial era, hundreds of millions of destroyed and enslaved people in the colonies paid for all those palaces, theatres, railroads and parks of Europe. Not much has actually changed, even to date. Ruined West African farmers are dying so those French farmers get their subsidies, and drive BMW’s and other luxury cars for producing or not producing, depending on the year. Hundreds of millions of destitute, overworked people in the neo-colonies, with no medical insurance at all, pay for those old people in Europe so that they can have free clinics/hospitals/social clubs.

And the Western ‘Left’ is fighting for more privileges for the European people. China is nothing to them. China or Vietnam… Just some annoying Asian nations that are ‘taking ‘their’ jobs away’! Chinese or Vietnamese people are just the multitudes and are un-people.

While China is reintroducing free medical care, it pays for it by the labor of its own people. And so do of course Cuba, Venezuela, Chile, Argentina and South Africa.

***

The Western Left is narcissistic, undisciplined and arrogant, self-righteous and morally defunct. That is why it lost. That is why it has no spark. That is why it does not inspire people.

And the less people it inspires the more bitter it gets, more vitriolic.

It attacks the Soviet Union (post mortem), it attacks China, and it is buying into yet another Western propaganda scoop, that the Khmer Rouge were Communist genocidal forces, not a band of deranged rural desperados that came to power after the US murderous carpet-bombing of the Cambodian countryside. It attacks Cuba and Venezuela for being ‘undemocratic’, and with unforgiveable and sickening consistency, it attacks South Africa.

And even when China fights malaria in Africa, and builds schools and hospitals, when it defends tiny nations in Oceania from total destruction, due to the rise of the ocean level by building sea walls and by planting mangroves (I saw all this with my own eyes, as I have lived in both Oceania and Africa), it is still wrong, because the entire world has to be shit, just because the West and its policies are! This nihilism is sickening, it is defeatist and it is having a vile effect even on the people in the West itself.

One has to conclude, with shock, that most of what remains of the Western Left is actually anti-leftist!

As a result, the people of Latin America, of Asia and Africa, feel much better in each other’s company than with the progressive wing of their former colonizers, and they are increasingly seeking and finding inspiration in each other.

***

Russia has joined, too, in her own way. The more the merrier!

Almost 2 billion people are now living in or building their own socialist homelands. Each country is different in terms of culture and political models. Not one single country belonging to this group is perfect, but all of them are attempting to build a much better future for their citizens, and they are fighting against Western imperialism and fascism – for centuries now, really the only serious threat to the survival of our human race!

The world is now full of hope and optimism. The cranes are helping build and turbines are humming, new television stations and publications are inspiring billions to reject and fight the old colonialist propaganda.

It will be a good world in the foreseeable future. Maybe after some battles, but in the end, it will be.

Instead of preaching, the Western leftists should admit that they have failed, together with that aggressive Western culture, once described by the great Swiss psychiatrist Carl Jung as pathology – a culture that has been enslaving the entire world for centuries.

Then, they should go and learn from the countries where the people have won, countries that are fighting for the survival of mankind!

Andre Vltchek is a novelist, filmmaker and investigative journalist. He covered wars and conflicts in dozens of countries. The result is his latest book: Fighting Against Western Imperialism‘Pluto’ published his discussion with Noam Chomsky: On Western Terrorism. His critically acclaimed political novel Point of No Return is re-edited and available. Oceania is his book on Western imperialism in the South Pacific. His provocative book about post-Suharto Indonesia and the market-fundamentalist model is called “Indonesia – The Archipelago of Fear”. His feature documentary, “Rwanda Gambit” is about Rwandan history and the plunder of DR Congo. After living for many years in Latin America and Oceania, Vltchek presently resides and works in East Asia and Africa. He can be reached through his website or his Twitter.

Source: CounterPunch

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Eritrea still standing, still tall! — RT Op-Edge by Andre Vltchek

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Eritrea still standing, still tall!

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Russia’s Vulnerability to EU – US Sanctions and Military Encroachments

Introduction: The US-EU sponsored coup in the Ukraine and its conversion from a stable Russian trading partner, to a devastated EU economic client and NATO launch pad, as well as the subsequent economic sanctions against Russia for supporting the Russian ethnic majority in the Donbas region and Crimea, illustrate the dangerous vulnerability of the Russian economy and state.

The current effort to increase Russia’s national security and economic viability in the face of these challenges requires a critical analysis of the policies and structures emerging in the post-Soviet era.

Pillage as Privatization

Over the past quarter century, several trillion dollars worth of public property in every sector of the Russian economy was illegally transferred or violently seized by gangster-oligarchs acting through armed gangs, especially during its ‘transition to capitalism’.

From 1990 to 1999, over 6 million Russian citizens died prematurely as a result of the catastrophic collapse of the economy; life expectancy for males declined from 67 years during the Soviet era to 55 year during the Yeltsin period. Russia’s GNP declined sixty percent – a historic first for a country not at war. Following Yeltsin’s violent seizure of power and his bombing of the Russian parliament, the regime proceeded to ‘prioritize’ the privatization of the economy, selling off the energy, natural resources, banking, transport and communication sectors at one-tenth or less of their real value to well-connected cronies and foreign entities. Armed thugs, organized by emerging oligarchs “completed” the program of privatization by assaulting, murdering and threatening rivals. Hundreds of thousands of elderly pensioners were tossed out of their homes and apartments in a vicious land-grab by violent property speculators. US and European academic financial consultants “advised” rival oligarchs and government ministers on the most “efficient” market techniques for pillaging the economy, while skimming off lucrative fees and commissions –fortunes were made for the well-connected. Meanwhile, living standards collapsed, impoverishing two thirds of Russian households, suicides quadrupled and deaths from alcoholism, drug addiction, HIV and venereal diseases became rampant. Syphilis and tuberculosis reached epidemic proportions – diseases fully controlled during the Soviet era remerged with the closure of clinics and hospitals.

Of course, the respectable western media celebrated the pillage of Russia as the transition to “free elections and a free market economy”. They wrote glowing articles describing the political power and dominance of gangster oligarchs as the reflection of a rising “liberal democracy”. The Russian state was thus converted from a global superpower into an abject client regime penetrated by western intelligence agencies and unable to govern and enforce its treaties and agreements with Western powers. The US and EU rapidly displaced Russian influence in Eastern Europe and quickly snapped up former state-owned industries, the mass media and financial institutions. Communist and leftist and even nationalist officials were ousted and replaced by pliant and subservient ‘free market’ pro-NATO politicians. The US and EU violated every single agreement signed by Gorbachev and the West: Eastern European regimes became NATO members; West Germany annexed the East and military bases were expanded right up to Russia’s borders. Pro-NATO “think tanks” were established and supplied intelligence and anti-Russian propaganda. Hundreds of NGOs, funded by the US, operated within Russia as propaganda and organizing instruments for “subservient” neo-liberal politicians. In the former Soviet Caucuses and Far East, the West fomented separatist sectarian movements and armed uprisings, especially in Chechnya; the US sponsored dictators in the Caucuses and corrupt neo-liberal puppets in Georgia. The Russian state was colonized and its putative ruler, Boris Yeltsin, often in a drunken stupor, was propped up and manipulated to scratch out executive fiats . . . further disintegrating the state and society.

The Yeltsin decade is observed and remembered by the Russian people as a disaster and by the US-EU, the Russian oligarchs and their followers as a ‘Golden Age’… of pillage. For the immense majority of Russians it was the Dark Ages when Russian science and culture were ravaged; world-class scientists, artists and engineers were starved of incomes and driven to despair, flight and poverty. For the US, the EU and the oligarchs it was the era of ‘easy pickings’: economic, cultural and intellectual pillage, billion dollar fortunes, political impunity, unbridled criminality and subservience to Western dictates. Agreements with the Russian state were violated even before the ink was dry. It was the era of the unipolar US-centered world, the ‘New World Order’ where Washington could influence and invade nationalist adversaries and Russian allies with impunity.

The Golden Era of unchallenged world domination became the Western ‘standard’ for judging Russia after Yeltsin. Every domestic and foreign policy, adopted during the Putin years 2000 – 2014, has been judged by Washington according to whether it conformed or deviated from the Yeltsin decade of unchallenged pillage and manipulation.

The Putin Era: State and Economic Reconstruction and EU-US Belligerence

President Putin’s first and foremost task was to end Russia’s collapse into nothingness. Over time, the state and economy recovered some semblance of order and legality. The economy began to recover and grow; employment, wages and living standards, and mortality rates improved. Trade, investment and financial transactions with the West were normalized – unadulterated pillage was prosecuted. Russia’s recovery was viewed by the West with ambiguity: Many legitimate business people and MNCs welcomed the re-establishment of law and order and the end of gangsterism; in contrast, policymakers in Washington and Brussels as well as the vulture capitalists of Wall Street and the City of London quickly condemned what they termed Putin’s ‘rising authoritarianism’ and ‘statism’, as Russian authorities began to investigate the oligarchs for tax evasion, large-scale money laundering, the corruption of public officials and even murder.

Putin’s rise to power coincided with the world-wide commodity boom. The spectacular rise in the price of Russian oil and gas and metals (2003-2013) allowed the Russian economy to grow at a rapid rate while the Russian state increased its regulation of the economy and began to restore its military. Putin’s success in ending the most egregious forms of pillage of the Russian economy and re-establishing Russian sovereignty made him popular with the electorate: he was repeatedly re-elected by a robust majority. As Russia distanced itself from the quasi-satellite policies, personnel and practices of the Yeltsin years, the US and EU launched a multi-prong hostile political strategy designed to undermine President Putin and restore pliant Yeltsin-like neo-liberal clones to power. Russian NGOs funded by US foundations and acting as CIA fronts, organized mass protests targeting the elected officials. Western-backed ultra-liberal political parties competed unsuccessfully for national and local offices. The US-funded Carnegie Center, a notorious propaganda mill, churned out virulent tracts purporting to describe Putin’s demonic ‘authoritarian’ policies, his ‘persecution’ of dissident oligarchs and his ‘return’ to a ‘Soviet style command economy’.

While the West sought to restore the ‘Golden Age of Pillage’ via internal political surrogates, it pursued an aggressive foreign policy designed to eliminate Russian allies and trading partners, especially in the Middle East. The US invaded Iraq, murdered Saddam Hussein and the Baath Party leadership, and established a sectarian puppet regime, eliminating Moscow’s key secular-nationalist ally in the region. The US decreed sanctions on Iran, a major lucrative trading partner with Russia. The US and the EU backed a large-scale armed insurgency to overthrow President Bashaar Assad in Syria, another Russian ally, and to deprive the Russian Navy of a friendly port on the Mediterranean. The US and the EU bombed Libya, a major oil and trade partner of Russia (and China) hoping to install a pro-Western client regime.

Goading Russia in the Caucasus and on the Black Sea, the US backed-Georgian regime invaded a Russian protectorate, South Ossetia, in 2008, killing scores of Russian peace keepers and hundreds of civilians, but was repelled by a furious Russian counter-attack.

In 2014, the Western offensive to isolate, encircle and eventually undermine any possibility of an independent Russian state went into high gear. The US financed a civil-military coup ousting the elected regime of President Viktor Yanukovytch, who had opposed EU annexation and NATO affiliation. Washington imposed a puppet regime deeply hostile to Russia and ethnic Russian-Ukrainian citizens in the southeast and Crimea. Russian opposition to the coup and support for pro-democracy federalists in the south-east and Crimea served as a pretext for Western sanctions in an effort to undermine Russia’s oil, banking and manufacturing sectors and to cripple its economy.

Imperial strategists in Washington and Brussels broke all previous agreements with the Putin Administration and tried to turn Putin’s oligarch allies against the Russian president by threatening their holdings in the West (especially laundered bank accounts and properties). Russian state oil companies, engaged in joint ventures with Chevron, Exxon, and Total, were suddenly cut off from Western capital markets.

The cumulative impact of this decade-long Western offensive culminating in the current wave of severe sanctions was to provoke a recession in Russia, to undermine the currency (the ruble declined 23% in 2014), drive up the cost of imports and hurt local consumers. Russian industries, dependent on foreign equipment and parts, as well as oil companies dependent on imported technology for exploiting the Arctic reserves were made to feel the pain of ‘Putin’s intransigence’.

Despite the short-term successes of the US-EU war against the Russian economy, the Putin Administration has remained extremely popular among the Russian electorate, with approval ratings exceeding 80%. This has relegated Putin’s pro-Western opposition to the dust bin of history. Nevertheless the Western sanctions policy and the aggressive political – NATO military encirclement of Russia, has exposed the vulnerabilities of Moscow.

Russian Vulnerabilities: The Limits of Putin’s Restoration of Russian Sovereignty

In the aftermath of the Western and Russian oligarch’s pillage of the Russian economy and the savage degradation of Russian society, President Putin pursued a complex strategy.

First, he sought to differentiate between ‘political’ and ‘economic’ oligarchs: the latter included oligarchs willing to co-operate with the government in rebuilding the economy and willing to confine their activity to the generous guidelines set forth by President Putin. They retained enormous economic power and profits, but not political power.
In exchange, Putin allowed the ‘economic’ oligarchs to maintain their dubiously-acquired business empires. In contrast, those oligarchs who sought political power and financed Yeltsin-era politicians were targeted – some were stripped of their fortunes and others were prosecuted for crimes, ranging from money laundering, tax evasion, swindles and illegal transfer of funds overseas up to financing the murder of their rivals.

The second focus of President Putin’s early political strategy was to deepen Russian cooperation with Western states and economies but on the basis of reciprocal market exchanges rather than one-sided, Western appropriation of Russian resources prevalent under Yeltsin. Putin sought to secure greater political-military integration with the US and EU to ensure Russian borders and spheres of influence. To that end, President Putin opened Russian military bases and supply lines for the US-EU military forces engaged in the invasion and occupation of Afghanistan and he did not oppose the EU-US sanctions against Iran. Putin acquiesced to the US invasion and occupation of Iraq, despite Russia’s long standing economic ties with Baghdad. He joined the five powers ‘overseeing” the Palestine – Israeli ‘peace’ talks and went along with Washington’s one-sided support of Israel. He even gave the ‘green light’ to the NATO bombing of Libya, naively assuming it would be a limited affair – a ‘humanitarian’ intervention.

As a result of Putin’s political and diplomatic collusion with the Washington-NATO military expansion, Russian trade, investment and finance with the West prospered. Russian firms raised loans in Western capital markets; foreign investors flocked to the Russian stock market and multi-nationals formed joint ventures. Major oil and gas ventures flourished. The Russian economy recovered the living standards of the Soviet era; consumer spending boomed; unemployment fell from double to single digit; salaries and back wages were paid and research centers, universities, schools and cultural institutions began to recover.

The third component of Putin’s strategy was the state recovery (re-nationalization) of the strategic oil and gas sector. By outright purchase and buy-outs, through financial audits and the confiscation of the assets of gangster oligarchs, the Russian state takeover of oil and gas was successful. These re-nationalized sectors formed joint ventures with Western oil giants and led Russian exports during a period of peak energy demand. With the rise in oil prices over the Putin decade, Russia experienced a consumer-driven import boom – from agricultural commodities to luxury jewelry and autos… Putin consolidated his electoral support and deepened Russia’s ‘integration’ in Western markets.

Putin’s expansion and growth strategy looked exclusively westward to the EU and US, and not east to Asia/China or south to Latin America.

With this focus on the West, Putin’s initial tactical success began to expose Russia’s strategic vulnerabilities. The first signs were evident in the Western support for the corrupt oligarchs’ anti-Putin campaign and the media’s demonization of the Russian judicial system which prosecuted and convicted gangster oligarchs, like Mikhail Khodorkovsky . The second sign was the West’s financial and political support of the Yeltsin-era neo-liberals competing against Putin’s United Russia Party and candidates…It became clear that Putin’s effort to restore Russian sovereignty conflicted with the West’s plans to maintain Russia as a vassal state. The West favorably counterpoised the Golden Years of unrestrained pillage and domination of the Yeltsin period to the Putin era of an independent and dynamic Russia – by constantly tying the Russian president to the defunct Soviet Union and the KGB.

In 2010, the US encouraged its client, President Saakashvili of Georgia to invade Russia’s protectorate in South Ossetia. This was the first major indication that Putin’s accommodation with the West was counter-productive. Russian territorial borders, its allies and spheres of influence became Western targets. The US and EU condemned Russia’s defensive response even as Moscow withdrew its troops from Georgia after applying a sound beating.

Georgia was a militarist dress rehearsal; one of several western planned and financed coups – some dubbed ‘color revolutions’ other’s NATO ‘humanitarian interventions’. Yugoslavia in the Balkans was fragmented by NATO bombing and Ukraine had several ‘color’ uprisings up to the present bloody ‘civil war’. Washington and Brussels interpreted Putin’s series of conciliatory measures as weakness and felt free to encroach further on Russia’s frontier and to knock off regimes friendly to Russia.

By the middle of the second decade of the new century, the US and EU made a major strategic decision to weaken Russia’s security and its economy sovereignty: to seize control over Ukraine, expel Russia from its Black Sea military base in Crimea, convert the Ukraine into an advanced NATO outpost and cut Eastern Ukraine’s economic ties with Russia – especially the Russian market for the strategic Ukrainian military weaponry. The coup was financed by the West, while far-right and neo-Nazi Ukraine gangs provided the shock troops .The Kiev junta organized a war of conquest directed at purging the anti-coup, pro-democracy forces in the southeast Donbas region with its Russian ethnic majority and heavy industrial ties to Russia.

When Putin finally recognized the clear danger to Russia’s national security, his government responded by annexing Crimea after a popular referendum and started to provide sanctuary and supply lines for the embattled anti-Kiev federalists in eastern Ukraine. The West exploited the vulnerabilities in the Russian economy, which had resulted from Putin’s development model, and imposed wide-reaching economic sanctions designed to cripple Russia’s economy.

Western Sanctions, Russian Weakness: Rethinking Putin’s Strategic Approach

Western aggressive militarism and the sanctions against Russia exposed several critical vulnerabilities of Putin’s economic and political strategy. These include (1) his dependence on Western-oriented ‘economic oligarchs’ to promote his strategy for Russian economic growth; (2) his acceptance of most of the privatizations of the Yeltsin era; (3) his decision to focus on trade with the West, ignoring the China market, (4) his embrace of a gas and oil export strategy instead of developing a diversified economy; (5) his dependence on his allied robber-baron oligarchs – with no real experience in developing industry, no true financial skills, scant technological expertise and no concept of marketing – to restore and run the peak manufacturing sector. In contrast to the Chinese, the Russian oligarchs have been totally dependent on Western markets, finance and technology and have done little to develop domestic markets, implement self-financing by re-investing their profits or upgrade productivity via Russian technology and research.

In the face of Western sanctions Putin’s leading oligarch-allies are his weakest link in formulating an effective response. They press Putin to give in to Washington as they plead with Western banks to have their properties and accounts exempt from the sanctions. They are desperate to protect their assets in London and New York. In a word, they are desperate for President Putin to abandon the freedom fighters in southeast Ukraine and cut a deal with the Kiev junta.

This highlights the contradiction within Putin’s strategy of working with the ‘economic’ oligarchs, who have agreed not to oppose Putin within Russia, while transferring their massive wealth to Western banks, investing in luxury real estate in London, Paris and Manhattan and forming loyalties outside of Russia. In effect, they are closely tied to Russia’s current political enemies. Putin’s tactical success in harnessing oligarchs to his project of growth via stability has turned into a strategic weakness in defending the country from crippling economic reprisals.

Putin’s acceptance of the Yeltsin-era privatizations provided a certain stability in the short-run but it led to the massive flight of private capital overseas rather than remaining to be invested in projects to insure greater self-sufficiency. Today the capacity of the Russian government to mobilize and convert its economy into an engine of growth and to withstand imperial pressure is much weaker than the economy would have been if it was under greater state control. Putin will have a difficult time convincing private owners of major Russian industries to make sacrifices – they are too accustomed to receiving favors, subsidies and government contracts. Moreover, as their financial counterparts in the West press for payments on debts and deny new credits, the private elites are threatening to declare bankruptcy or to cut back production and discharge workers.

The rising tide of Western military encroachments on Russia’s borders, the string of broken promises regarding the incorporation of Eastern Europe into NATO and the bombing and destruction of Yugoslavia in the 1990’s, should have shown Putin that no amount of unilateral concessions was likely to win Western acceptance as a bona fide “partner”. Washington and Brussels were unwavering in their strategy to encircle and maintain Russia as a client.

Instead of turning west and offering support for US-NATO wars, Russia would have been in a far better position to resist sanctions and current military threats if it had diversified and oriented its economy and markets toward Asia, in particular China, with its dynamic economic growth and expanding domestic market, investment capacity and growing technical expertise. Clearly, China’s foreign policy has not been accompanied by wars and invasion of Russian allies and encroachment on Russia’s borders. While Russia has now turned to increase economic ties with Asia in the face of growing NATO threats, a great deal of time and space has been lost over the past 15 years. It will take another decade to reorient the Russian economy, with its major industries still controlled by the mediocre oligarchs and kleptocrats, holdovers from the Yeltsin period.

With the closure of Western markets, Putin has had to ‘pivot’ to China, other Asian nations and Latin America to find new markets and economic partners. But his growth strategy still depends on oil and gas exports and most of Russia’s private ‘business leaders’ are not real entrepreneurs capable of developing new competitive products, substituting Russian technology and inputs and identifying profitable markets. This generation of Russian ‘business leaders’ did not build their economic empires or conglomerates from the ‘bottom up’ – they seized and pillaged their assets from the public sector and they grew their wealth through state contracts and protection. Moscow now asks them to find alternative overseas markets, to innovate, compete and replace their dependence on German machinery.

The bulk of what passes for the Russian industrial capitalist class are not entrepreneurs, they are more like rent collectors and cronies – oriented to the West. Their origins are more often as gangsters and warlords who early on strong- armed their rivals out of the public giveaways of the 1990’s. While these oligarchs have sought to gain respectability after consolidating their economic empires and hired public relations agencies to polish their images and economic consultants to advise them on investments, they have never demonstrated any capacity to grow their firms into competitive enterprises. Instead they remained wholly dependent on capital, technology and intermediary imports from the West and subsidies from the Putin Administration.

The so-called Russian “capitalist” rentiers stand in sharp contrast to the dynamic Chinese public and private entrepreneurs – who borrowed overseas technology from the US, Japan, Taiwan and Germany, adapted and improved on the technology and are producing advanced highly competitive products. When the US-EU sanctions came into force, Russian industry found itself unprepared to substitute local production and President Putin had to arrange trade and import agreements with China and other sources for inputs.

The biggest strategic flaw in Putin’s economic strategy was his decision to concentrate on gas and oil exports to the West as his ‘engine of growth’. This resulted in Russia’s dependency on high prices for commodity exports and Western markets. With this in mind the US and EU exploited Russia’s vulnerability to any drop in the world price for energy and its dependence on Western oil extraction technology, equipment and joint ventures.

Putin’s policy has relied on a vision of economic integration with the West alongside greater co-operation and political connections with the NATO powers. These assumptions have been proven wrong by the march of events: US and EU cooperation was tactical and contingent on asymmetrical, indeed unilateral, concessions from Russia – especially its continued willingness to sacrifice its traditional allies in the Balkans, Middle East, North Africa and especially the Caucuses. Once Russia began to assert its own interests, the West turned hostile and confrontational. Ever since Russia opposed the coup regime in Kiev, the West’s goal has been the overthrow of Putin’s Russia. The ongoing Western offensive against Russia is not a passing phase: it is the beginning of a prolonged, intensified economic and political confrontation.

Though Russia is vulnerable, it is not without resources and capacity to resist, defend its national security and advance its economy.

Conclusion: What is to be Done?

First and foremost Russia must diversify its economy; it must industrialize its raw materials and invest heavily in substituting local production for Western imports. While shifting its trade to China is a positive step, it must not replicate the previous commodities (oil and gas) for manufactured goods trading pattern of the past.

Secondly, Russia must re-nationalize its banking, foreign trade and strategic industries, ending the dubious political and economic loyalties and rentier behavior of the current dysfunctional private ‘capitalist’ class. The Putin Administration must shift from oligarchs to technocrats, from rentiers to entrepreneurs, from speculators who earn in Russia and invest in the West to workers co-participation– in a word it must deepen the national, public, and productive character of the economy. It is not enough to claim that oligarchs who remain in Russia and declare loyalty to the Putin Administration are legitimate economic agents. They have generally disinvested from Russia, transferred their wealth abroad and have questioned legitimate state authority under pressure from Western sanctions.

Russia needs a new economic and political revolution – in which the government recognizes the West as an imperial threat and in which it counts on the organized Russian working class and not on dubious oligarchs. The Putin Administration has pulled Russia from the abyss and has instilled dignity and self-respect among Russians at home and abroad by standing up to Western aggression in the Ukraine. >From this point on, President Putin needs to move forward and dismantle the entire Yeltsin klepto-state and economy and re-industrialize, diversify and develop its own high technology for a diversified economy. And above all Russia needs to create new democratic, popular forms of democracy to sustain the transition to a secure, anti-imperialist and sovereign state. President Putin has the backing of the vast majority of Russian people; he has the scientific and professional cadre; he has allies in China and among the BRICs; and he has the will and the power to “do the right thing”. The question remains whether Putin will succeed in this historical mission or whether, out of fear and indecision, he will capitulate before the threats of a dangerous and decaying West.

Source: The James Petras Website (originally published 11-8-14)

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US escalates campaign against North Korea

by Patrick Martin

December 20, 2014

The Obama administration ratcheted up the pressure Friday on the isolated Stalinist regime in North Korea, with the FBI formally accusing North Korea of responsibility for the hacking attack on Sony Pictures Entertainment and Obama declaring that the US government would carry out an unspecified “proportionate response” against Pyongyang at “a time and place of our own choosing.”

Obama made no mention of the cyberattack or North Korea’s alleged responsibility in his opening statement at his end-of-the-year White House press conference, waiting until a suitable question was posed by the media to raise the issue.

The FBI offered no proof of a North Korean link to the hacking attack on Sony, which led to the studio’s cancellation of the planned December 25 release of the Seth Rogen film The Interview, a comedy whose premise is that two American journalists are contracted by the CIA to assassinate North Korean leader Kim Jong-un.

The FBI statement claimed several similarities between computer code used in the malware deployed against Sony and that used in previous attacks linked to North Korea, but these claims are unsubstantiated and computer security experts interviewed in the press have cast doubt on whether any definitive links can be established.

The American public is asked to take on faith the FBI’s declaration that it “now has enough information to conclude that the North Korean government is responsible for these actions.” The statement continued: “North Korea’s actions were intended to inflict significant harm on a US business and suppress the right of American citizens to express themselves.”

Such language is ironic coming from a federal agency that plays a central role in the build-up of a police state apparatus in America. A recent report in the Wall Street Journal, citing figures from the National Center for State Courts, found that the FBI has accumulated criminal record files on 80 million Americans—more than one-third of the adult population.

Obama likewise provided no evidence of North Korean involvement, merely citing the FBI statement as authoritative. He criticized Sony Pictures for withdrawing The Interview from circulation in response to threats from the hackers, who called themselves “Guardians of Peace.”

“We cannot have a society where some dictator someplace can start imposing censorship here in the United States,” Obama said, “because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they’ll do when they see a documentary that they don’t like, or news reports that they don’t like.”

He continued, “That’s not what America’s about. Again, I’m sympathetic that Sony as a private company was worried about liabilities and this and that and the other. I wish they’d spoken to me first. I would have told them, do not get into a pattern in which you’re intimidated by these kinds of criminal attacks.”

This pretense of alarm over the threat to the civil liberties of Americans is just as hypocritical coming from Obama as from the FBI. His administration has prosecuted more whistleblowers for leaking information about government crimes to the press than any other in American history. Obama has presided over dragnet surveillance of the telecommunications and email of every American by the National Security Agency, trampling on the Bill of Rights. And he has asserted the unprecedented “right” of the president to order the drone missile assassination of anyone in the world, including American citizens.

As for censorship, this is a government that doesn’t hesitate to demand that major newspapers and television networks withhold information from the public, including information on massive violations of the Constitution by the government itself, in the name of “national security.” The media routinely complies, allowing the government to vet and/or censor articles and news reports before they are aired.

The latest charges against North Korea have provided yet another example of the American press corps’ readiness to function as a de facto sounding board for state propaganda. There has been no pretense of critical independence in the vast bulk of reporting on the hacking attack on Sony and the alleged responsibility of the North Korean regime, which has denied any involvement. The government’s claims are simply reported as facts, whether by the television networks and cable channels or newspapers such as the New York Times and Washington Post.

The government’s record of lying, whether on Iraqi weapons of mass destruction, NSA spying, or, more recently, CIA torture, is simply ignored.

The daily newspapers and television networks have largely dropped any reporting on last week’s Senate Intelligence Committee report documenting systematic torture by the CIA of prisoners held in secret prisons overseas. Not a single question was raised about the torture report at Obama’s hour-long press conference.

Obama made it clear that the US government would retaliate against North Korea for the alleged hacking attack on Sony. “They caused a lot of damage, and we will respond,” he said. “We will respond proportionally, and we’ll respond in a place and time and manner that we choose.”

While the tone was matter-of-fact, Obama refused to rule out military action in response to a follow-up question by a reporter, saying only that he would not expand on his previous statement about an indeterminate future response.

White House, Pentagon and intelligence officials were holding daily meetings on North Korea, an Obama spokesman said. Before the FBI issued its finding, Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, said he was “very concerned” about the US potentially concluding that a nation-state was behind the attack. “When and if that call is made, it will be a moment to confront that reality” of a state-supported cyberattack on a US corporation, Dempsey said.

The US military buildup in the Asia-Pacific region continues apace. Obama has just signed the 2015 National Defense Authorization Act, which provides for expanded efforts to establish a joint missile defense system in northeast Asia, involving South Korea and Japan. This would be directed against North Korea in the first instance, but ultimately against China, the main US target in the region.

On Thursday, Obama approved the sale of four US frigates to Taiwan, under the Naval Vessel Transfer Act, over the vociferous opposition of Beijing. The sale of the guided-missile frigates “blatantly interferes in China’s domestic affairs and undermines China’s sovereignty and security interests,” a Chinese defense ministry spokesman said.

While Obama said the FBI had not linked the Sony attack to any nation other than North Korea, other US officials pointed out that North Korea’s only connection to the World Wide Web is through China, an indication that further escalation of the Sony affair could involve charging China with at least a supporting role.

Meanwhile, evidence continues to surface that the entire Sony Pictures affair, going back to the original decision by the studio to make a film depicting the murder of Kim Jong-un, was a provocation inspired by the US military-intelligence apparatus.

Email communications obtained by the online publication Daily Beast and cited in many columns and commentaries Friday strongly suggest this. Sony Pictures co-chairman Michael Lynton is on the board of trustees of the Rand Corporation, a leading private consulting firm for the CIA and Pentagon, and it was Rand’s North Korea specialist, Bruce Bennett, who pushed hard for the Sony film to focus on the assassination of North Korea’s ruler.

According to one of these emails, Seth Rogen, the film’s co-director, had initially intended the film to target an unnamed leader of an unnamed country, and it was Lynton himself “that told them to not use a fictitious name, but to go with Kim Jong-un.” The same message, written by Marisa Liston, a Sony senior vice president, said that Rogen and co-director Evan Goldberg “mention that a former CIA agent and someone who used to work for Hillary Clinton looked at the script.”

An email from Bennett, the Rand analyst, to Lynton suggested that the film could actually help unseat the North Korean regime. “I have been clear that the assassination of Kim Jong Un is the most likely path to a collapse of the North Korean government,” Bennett wrote. “I believe that a story that talks about the removal of the Kim family regime and the creation of a new government by the North Korean people (well, at least the elites) will start some real thinking in South Korea and, I believe, in the North once the DVD leaks into the North (which it almost certainly will).”

Lynton responded, “Bruce—Spoke to someone very senior in State (confidentially). He agreed with everything you have been saying. Everything. I will fill you in when we speak.”

Other emails name two State Department officials—Assistant Secretary Daniel Russel and Ambassador Robert King, US special envoy for North Korea human-rights issues—as providing input to the film.

Source: World Socialist Web Site

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Ruble Takedown Exposes Cracks in Putin’s Defense

Barbarossa 2

by Mike Whitney

“The plunge of the Russian currency this week is the drastic outcome of policies implemented by the major imperialist powers to force Russia to submit to American and European imperialism’s neo-colonial restructuring of Eurasia. Punishing the Putin regime’s interference with their plans for regime change in countries such as Ukraine and Syria, the NATO powers are financially strangling Russia.”

– Alex Lantier, Imperialism and the ruble crisis, World Socialist Web Site

“The struggle for world domination has assumed titanic proportions. The phases of this struggle are played out upon the bones of the weak and backward nations.”

– Leon Trotsky, 1929

Russian President Vladimir Putin suffered a stunning defeat on Tuesday when a US-backed plan to push down oil prices sent the ruble into freefall. Russia’s currency plunged 10 percent on Monday followed by an 11 percent drop on Tuesday reducing the ruble’s value by more than half in less than a year. The jarring slide was assisted by western sympathizers at Russia’s Central Bank who, earlier in the day, boosted interest rates from 10.5 percent to 17 percent to slow the decline. But the higher rates only intensified the outflow of capital which put the ruble into a tailspin forcing international banks to remove pricing and liquidity from the currency leading to the suspension of trade. According to Russia Today:

“Russian Federation Council Chair Valentina Matviyenko has ordered a vote on a parliamentary investigation into the recent activities of the Central Bank and its alleged role in the worst-ever plunge of the ruble rate…

“I suggest to start a parliamentary investigation into activities of the Central Bank that has allowed violations of the citizens’ Constitutional rights, including the right for property,” the RIA Novosti quoted Tarlo as saying on Wednesday.

The senator added that according to the law, protecting financial stability in the country is the main task of the Central Bank and its senior management. However, the bank’s actions, in particular the recent raising of the key interest rate to 17 percent, have so far yielded the opposite results.” (Upper House plans probe into Central Bank role in ruble crash, RT)

The prospect that there may be collaborators and fifth columnists at Russia’s Central Bank should surprise no one. The RCB is an independent organization that serves the interests of global capital and regional oligarchs the same as central banks everywhere. This is a group that believes that humanity’s greatest achievement is the free flow of privately-owned capital to markets around the world where it can extract maximum value off the sweat of working people. Why would Russia be any different in that regard?

It isn’t. The actions of the Central Bank have cost the Russian people dearly, and yet, even now the main concern of RCB elites is their own survival and the preservation of the banking system. An article that appeared at Zero Hedge on Wednesday illustrates this point. After ruble trading was suspended, the RCB released a document with “7 new measures” all of which were aimed at protecting the banking system via moratoria on securities losses, breaks on interest rates, additional liquidity provisioning, easier credit and accounting standards, and this gem at the end:

“In order to maintain the stability of the banking sector in the face of increased interest rate and credit risks of a slowdown of the Russian economy the Bank of Russia and the Government of the Russian Federation prepare measures to recapitalize credit institutions in 2015.” (Russian Central Bank Releases 7 Measures It Will Take To Stabilize The Financial Sector, Zero Hedge)

Sound familiar? It should. You see, the Russian Central Bank works a lot like the Fed. At the first sign of trouble they build a nice, big rowboat for themselves and their dodgy bank buddies and leave everyone else to drown. That’s what these bullet points are all about. Save the banks, and to hell the people who suffer from their exploitative policies.

Here’s more from RT:

“Earlier this week a group of State Duma MPs from the Communist Party sent an official address to Putin asking him to sack (Central Bank head, Elvira) Nabiullina, and all senior managers of the Central Bank as their current policies are causing the rapid devaluation of ruble and impoverishment of the majority of the Russian population.

In their letter, the Communists also recalled Putin’s address to the Federal Assembly in which he said that control over inflation must not be in the way of the steady economic growth.

“They listen to your orders and then do the opposite,” the lawmakers complained.” (RT)

In other words, the RCB enforces its own “austerity” policy in Russia just as central bankers do everywhere. There’s nothing conspiratorial about this. CBs are owned and controlled by the big money guys which is why their policies invariably serve the interests of the rich. They might not call it “trickle down” or “structural adjustment” (as they do in the US), but it amounts to the same thing, the inexorable shifting of wealth from working class people to the parasitic plutocrats who control the system and its political agents. Same old, same old.

Even so, the media has pinned the blame for Tuesday’s ruble fiasco on Putin who, of course, has nothing to do with monetary policy. That said, the ruble rout helps to draw attention to the fact that Moscow is clearly losing its war with the US and needs to radically adjust its approach if it hopes to succeed. First of all, Putin might be a great chess player, but he’s got a lot to learn about finance. He also needs a crash-course in asymmetrical warfare if he wants to defend the country from more of Washington’s stealth attacks.

In the last 10 months, the United States has executed a near-perfect takedown of the Russian economy. Following a sloppy State Department-backed coup in Kiev, Washington has consolidated its power in the Capital, removed dissident elements in the government, deployed the CIA to oversee operations, launched a number of attacks on rebel forces in the east, transferred ownership of Ukraine’s vital pipeline system to US puppets and foreign corporations, created a tollbooth separating Moscow from the lucrative EU market, foiled a Russian plan to build an alternate pipeline to southern Europe (South Stream), built up its military assets in the Balkans and Black Sea and, finally–the cherry on the cake–initiated a daring sneak attack on Russia’s currency by employing its Saudi-proxy to flood the market with oil, push prices off a cliff, and trigger a run on the ruble which slashed its value by more than half forcing retail currency platforms to stop trading the battered ruble until prices stabilized.

Like we said, Putin might be a great chess player, but in his battle with the US, he’s getting his clock cleaned. So far, he’s been no match for the maniacal focus and relentless savagery of the Washington powerbrokers. Yes, he’s formed critical alliances across Asia and the world. He’s also created competing institutions (like the BRICS bank) that could break the imperial grip on global finance. And, he’s also expounded a vision of a new world in which “one center of power” does not dictate the rules to everyone else. That’s all great, but he’s losing the war, and that’s what counts. Washington doesn’t care about peoples’ dreams or aspirations. What they care about is ruling the world with an iron fist, which is precisely what they intend to do for the next century or so unless someone stops them. Putin’s actions, however admirable, have not yet changed that basic dynamic. In fact, this latest debacle (authored by the RCB) is a severe setback for the country and could impact Russia’s ability to defend itself against US-NATO aggression.

So what does Putin need to do to reverse the current trend?

The first order of business should be a fundamental change in approach followed by a quick switch from defense to offense. There should be no doubt by now, that Washington is going for the jugular. The attack on the ruble provides clear evidence that the US will not be satisfied until Russia has been decimated and reduced to “a permanent state of colonial dependency.” (Chomsky) The United States has launched a full-blown economic war on Russia and yet the Kremlin is still acting like Washington’s punching bag. You can’t win a war like that. You have to take the initiative; take chances, be bold, think outside the box. That’s what Washington is doing. The rout of the ruble is perhaps the most astonishingly-successful asymmetrical attack in recent memory. It involved tremendous risks and costs on the part of the perpetrators. For example, the lower oil prices have ravaged important domestic industries, created widespread financial instability, and sent markets across the planet into a nosedive. Even so, Washington persevered with its audacious strategy, undeterred by the vast collateral damage, never losing sight of its ultimate objective; to deprive Moscow of crucial oil revenues, to crash the ruble, and to open up Central Asia for imperial expansion and US military bases. (The pivot to Asia)

This is how the US plays the game, by keeping its “eyes on the prize” at all times, and by rolling roughshod over anyone or anything that gets in its way. That is why the US is the world’s only superpower, because the voracious oligarchs who run the country will stop at nothing to get what they want.

Does Putin have the grit to match that kind of venomous determination? Has he even adjusted to the fact that WW3 will be unlike any conflict in the past, that jihadi-proxies and Neo Nazi-proxies will be employed as shock troops for the empire clearing the way for US special forces and foot soldiers who will hold ground and establish the new order? Does he even realize that Barbarossa 2 is already underway, but that the Panzer divisions and 2 million German regulars have been replaced with high-powered computers, covert ops, color-coded revolutions, currency crises, capital flight, cyber attacks and relentless propaganda. That’s 4th Generation (4-G) warfare in a nutshell. And, guess what? The US attack on the ruble has shown that it is the undisputed master of this new kind of warfare. More important, Washington has just prevailed in a battle that could prove to be a critical turning point if Putin doesn’t get his act together and retaliate.

Retaliate?!?

You mean nukes?

Heck no. But, by the same token, you can’t expect to win a confrontation with the US by rerouting gas pipelines to Turkey or by forming stronger coalitions with other BRICS countries or by ditching the dollar. Because none of that stuff makes a damn bit of difference when your currency is in the toilet and the US is making every effort to grind your face into the pavement.

Capisce?

There’s an expression is football that goes something like this: The best defense is a good offense. You can’t win by sitting on the sidelines and hoping your team doesn’t lose. You must engage your adversary at every opportunity never giving ground without a fight. And when an opening appears where you can take the advantage, you must act promptly and decisively never looking back and never checking your motives. That’s how you win.

Washington only thinks in terms winning. It expects to win, and will do whatever is necessary to win. In fact, the whole system has been re-geared for one, sole purpose; to beat the holy hell out of anyone who gets out of line. That’s what we do, and we’ve gotten pretty good at it. So, if you want to compete at that level, you’ve got to have “game”. You’re going to have to step up and prove that you can run with the big kids.

And that’s what makes Putin’s next move so important, crucial really. Because whatever he does will send a message to Washington that he’s either up to the challenge or he’s not. Which is why he needs to come out swinging and do something completely unexpected. The element of surprise, that’s the ticket. And we’re not talking about military action either. That just plays to Uncle Sam’s strong hand. Putin doesn’t need another Vietnam. He needs a coherent gameplan. He needs a winning strategy. He needs to takes risks, put it all on the line and roll the freaking dice. You can’t lock horns with the US and play it safe. That’s a losing strategy. This is smash-mouth, steelcage smackdown, a scorched-earth event where winner takes all. You have to be ready to rumble.

Putin needs to think asymmetrically. What would Obama do if he was in Putin’s shoes?

You know what he’d do: He’d send military support to Assad. He’d arm rebel factions in Saudi Arabia, Somalia, Nigeria and elsewhere. He’d strengthen ties with Venezuela, Bolivia, Ecuador providing them with military, intelligence and logistical support. He’d deploy his NGOs and Think Tank cronies to foment revolution wherever leaders refused to follow Moscow’s directives. He would work tirelessly to build the economic, political, media, and military institutions he needed to impose his own self-serving version of snatch-and-grab capitalism on every nation on every continent in the world. That’s what Obama would do, because that’s what his puppetmasters would demand of him.

But Putin must be more discreet, because his resources are more limited. But he still has options, like the markets, for example. Let’s say Putin announces that creditors in the EU (particularly banks) won’t be paid until the ruble recovers. How does that sound?

Putin: “We’re really sorry about the inconvenience, but we won’t be able to make those onerous principle payments for a while. Please accept our humble apologies.” End of statement.

Moments later: Global stocks plunge 350 points on the prospect of a Russian default and its impact on the woefully-undercapitalized EU banking system.

Get the picture? That’s what you call an asymmetrical attack. The idea was even hinted at in a piece on Bloomberg News. Here’s an excerpt from the article:

“Sergei Markov, a pro-Putin academic, wrote in a column on Vzglyad.ru. “Since the reasons for the ruble’s fall are political, the response should be political, too. For example, a law that would ban Russian companies from repaying debts to Western counterparties if the ruble has dropped more than 50 percent in the last year. That will immediately lower the pressure on the ruble, many countries have done this, Malaysia is one example. It’s in great economic shape now.” (Is Russia ready to impose capital controls? Chicago Tribune)

Here’s more background from RT:

“Major banks across Europe, as well as the UK, US, and Japan, are at major risk should the Russian economy default, according to a new study by Capital Economics. The ING Group in the Netherlands, Raiffeisen Bank in Austria, Societe General in France, UniCredit in Italy, and Commerzbank in Germany, have all faced significant losses in the wake of the ruble crisis…

Overall Societe General, known as Rosbank in the Russian market, has the most exposure at US$31 billion, or €25 billion, according to Citigroup Inc. analysts. This is equivalent to 62 percent of the Paris-based bank’s tangible equity, Bloomberg News reported.

Following the drop, Raiffeisen, which has €15 billion at risk in Russia, saw its stocks plummeted more than 10 percent. Raiffeisen also has significant exposure in Ukraine, which is facing a similar currency sell-off as Russia.” (Russia crisis leaves banks around the world exposed by the billions, RT)

So Putin defaults which nudges the EU banking system down the stairwell. So what? What does that prove?

It proves that Russia has the tools to defend itself. It proves that Putin can disrupt the status quo and spread the pain a bit more equitably. “Spreading the pain” is a tool the US uses quite frequently in its dealings with other countries. Maybe Putin should take a bite of that same apple, eh?

Another option would be to implement capital controls to avoid ruble-dollar conversion and further capital flight. The beauty of capital controls is that they take power away from the big money guys who run the world and hand it back to elected officials. Leaders like Putin are then in a position to say, “Hey, we’re going to take a little break from the dollar system for while until we get caught up. I hope you’ll understand our situation.”

Capital controls are an extremely effective of avoiding capital flight and minimizing the impact of a currency crisis. Here’s a short summary of how these measures helped Malaysia muddle through in 1998:

“When the Asian financial crisis hit, Malaysia’s position looked a lot like Russia’s today: It had big foreign reserves and a low short-term debt level, but relatively high general indebtedness if households and corporations were factored in. At first, to bolster the ringgit, Deputy Prime Minister Anwar Ibrahim pushed through a market-based policy with a flexible exchange rate, rising interest rates and cuts in government spending. It didn’t work: Consumption and investment went down, and pessimism prevailed, exerting downward pressure on the exchange rate.

So, in June 1998, Prime Minister Mahathir Mohammad… appointed a different economic point man, Daim Zainuddin. In September, on Daim’s urging, Malaysia introduced capital controls. It banned offshore operations in ringgit and forbade foreign investors to repatriate profits for a year. Analysts at the time were sharply critical of the measures, and Malaysia’s reputation in the global financial markets inevitably suffered.

According to Kaplan and Rodrik, however, the capital controls were ultimately effective. The government was able to lower interest rates, the economy recovered, the controls were relaxed ahead of time, and by May 1999 Malaysia was back on the international capital markets with a $1 billion bond issue.” (Is Russia ready to impose capital controls, Chicago Tribune)

Sure they were effective, but they piss off the slacker class of oligarchs who think the whole system should be centered on their “inalienable right” to move capital from one spot to another so they can rake-off hefty profits at everyone else’s expense. Capital controls push those creeps to the back of the line so the state can do what it needs to do to preserve the failing economy from the attack of speculators. Here’s a clip from a speech Joseph Stiglitz gave in 2014 at the Atlanta Fed’s 2014 Financial Markets Conference. He said:

“When countries do not impose capital controls and allow exchange rates to vary freely, this can give rise to high levels of exchange rate volatility. The consequence can be high levels of economic volatility, imposing great costs on workers and firms throughout the economy. Even if they can lay off some of the risk, there is a cost to doing so. The very existence of this volatility affects the structure of the economy and overall economic performance.”

That sums it up pretty well. Without capital controls, the deep-pocket Wall Street banks and speculators can simply vacuum the money out of an economy leaving the country broken and penniless. This nihilistic decimation of emerging markets via capital flight is what the kleptocracy breezily refers to as “free markets”, the unwavering plundering of civilization to fatten the coffers of the swinish few at the top of the foodchain. That’s got to stop.

Putin needs to put his foot down now; stop the outflow of cash, stop the conversion of rubles to dollars, force investors to recycle their money into the domestic economy, indict the central bank governors and trundle them off to the hoosegow, and reassert the power of the people over the markets. If he doesn’t, then the speculators will continue to peck away until Russia’s reserves are drained-dry and the country is pushed back into another long-term slump. Who wants that?

And don’t think that Putin’s only problem is Washington either, because it isn’t. He’s got an even bigger headache in his own country with the morons who still buy the hogwash that “the market knows best.” These are the fantasists, the corporate toadies, and the fifth columnists, some of whom hold very high office. Here’s a clip I picked up at the Vineyard of the Saker under the heading “Medvedev declares: more of the same”:

(Russian Prime Minister) “Medvedev has just called a government meeting with most of the directors of top Russian corporations and the director of the Russian Central Bank. He immediately announced that he will not introduce any harsh regulatory measures and that he will let the market forces correct the situation. As for the former Minister of Finance, the one so much beloved in the West, Alexei Kudrin, he expressed his full support for the latest increase in interest rates.”

This is lunacy. The US has just turned Russia’s currency into worthless fishwrap, and bonehead Medvedev wants to play nice and return to “business as usual”??

No thanks. Maybe Medvedev wants to be a slave to the market, but I’ll bet Putin is smarter than that.

Putin’s not going to roll over and play dead for these vipers. He’s got to much on the ball for that. He’s going to beat them at their own game, fair and square. He’s going to implement capital controls, restructure the economy away from the west, and aggressively look for ways to deter Washington from spreading its heinous resource war to Central Asia and beyond.

He’s not going to give an inch. You’ll see.

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

Source: CounterPunch

 

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