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More on the Russo-Georgia conflict.

August 22, 2008 Leave a comment

“When Mikheil Saakashvili attacked the Russian peacekeepers in Tskhinvali, he expected to find success, or, at least, some cashable Western support. Part of his wish was granted. As soon as the Russians counter-attacked, an American politician was ready with threats and dire prophecies. John McCain was out of the gate on Georgia long before George W. Bush or Condoleezza Rice or Robert Gates made their first statements for the record. Why? Who gave McCain his early cue?

“A fair bet is Saakashvili, through his closest American friend and former agent, Randy Scheunemann. Since Scheunemann is John McCain’s adviser on foreign policy, this looks like a dangerous contact — dangerous, that is, for the security of the United States. Yet it follows a pattern. Scheunemann was the agent of Ahmed Chalabi in agitating for the war against Iraq. He is a former director of the Project for the New American Century, which welcomed a world at permanent war, dominated by the U.S., as the order of the 21st century. And Scheunemann is as closely linked as it is possible to be — while holding a nominally different post — with the American Enterprise Institute, the Office of the Vice President, and the Weekly Standard: the most drastic and persistent lobbying network for the Iraq war, and the group that lately pressed the hardest for a war with Iran.

“The idea of bombing Iran did not catch fire this summer. But these people are ambitious; they never let up one project without starting another. In their way of thinking, the United States — to keep the archaic Constitution at bay, and our enemies on the run — must always be occupied with a war somewhere. Iraq may be turning into a peaceful occupation; Afghanistan is getting to be an old story. Why not start a war in Georgia? At best, you push back against Putin, and show him to be a hollow threat. Or — a different advantage — you make a pitiful spectacle of the tears and the trampled pride of Saakashvili, and prove the brutality of Russia which has never really changed. So you restart the Cold War — a very good thing indeed. As for the run for president: on this issue as on FISA and Iran, Barack Obama can easily be shown to be a diluted version of McCain.”

Full piece here:

Russia’s terrible miscalculation…

August 17, 2008 Leave a comment

The extent of the Russian miscalculation in Georgia is completely revealed by the following excerpt:

[T]he Russians have backed the Americans into a corner. The Europeans, who for the most part lack expeditionary militaries and are dependent upon Russian energy exports, have even fewer options. If nothing else happens, the Russians will have demonstrated that they have resumed their role as a regional power. Russia is not a global power by any means, but a significant regional power with lots of nuclear weapons and an economy that isn’t all too shabby at the moment. It has also compelled every state on the Russian periphery to re-evaluate its position relative to Moscow.As for Georgia, the Russians appear ready to demand the resignation of President Mikhail Saakashvili. Militarily, that is their option. That is all they wanted to demonstrate, and they have demonstrated it. The war in Georgia, therefore, is Russia’s public return to great power status.

This is not something that just happened – it has been unfolding ever since Putin took power, and with growing intensity in the past five years. Part of it has to do with the increase of Russian power, but a great deal of it has to do with the fact that the Middle Eastern wars have left the United States off-balance and short on resources. As we have written, this conflict created a window of opportunity.

The Russian goal is to use that window to assert a new reality throughout the region while the Americans are tied down elsewhere and dependent on the Russians. The war was far from a surprise; it has been building for months. But the geopolitical foundations of the war have been building since 1992. Russia has been an empire for centuries. The last 15 years or so were not the new reality, but simply an aberration that would be rectified. And now it is being rectified.

George Friedman: Russia stamps its authority

The writer believes the Americans to be outmaneuvered by the Russians, owing to the American problem wars in Iraq and Afghanistan.

Nothing could be further from the truth.

The role of the dollar is key here, as we will show this when we return to the piece. With the dollar, Washington command not only the economic strength of the US, but of all countries which use the dollar to complete trade transactions.

Obama has promised to increased the military by 90,000 troops, McCain has promised an equal measure of increase. Added to this is Secretary of Defense Robert Gates plan to “counterbalance what the secretary sees as the U.S. Defense Department’s natural tendency to focus excessively on winning conventional conflicts rather than ‘irregular wars’ such as those in Iraq and Afghanistan.”

The actual increase will likely be much more than this. Why?

As you know from this little series we have been writing, business is good for war.

The present cascade of economic difficulties the US is now experiencing would have been diagnosed by Keyserling, the economic architect of NSC-68, as resulting not from too much military spending, but too little.

Keyserling estimated the US timidity to go all out with a really aggressive military build-out resulted in the loss of “…8 trillion dollars worth of GNP and about 85 million hours of civilian unemployment…” between 1953 and 1981.

The American economy is hollow, consisting of nail salons, restaurants, real estate and financial speculators, and millions of employees who spend all day moving emails from their inbox to folders under their inbox.

Increasingly, China and the rest of the world provide an ever larger percentage of what Americans consume; and, the dollars exported through trade return to the American economy as loans for ever more consumption.

The Americans can, in other words, provision themselves with very little effort, while amassing astonishing military power. There are sufficient manpower resources to undertake a massive military buildup without causing the slightest impact on American consumption.

The self-deluding Russia leadership believe it is confronting the United States at the limits of the latter’s power – that the US will back down owing to its draining wars of occupation. They have, in fact, merely positioned themselves to be an object lesson for China and any other challengers.

Russia has tragically misread global power relations; it has engaged in a hopeless battle against the economic power of an entire planet which effectively sit in hands of Washington.

Notes on a Work Free Society has been posted to Creative Capitalism project

June 29, 2008 1 comment

We have posted the piece, Notes on a Work Free Society, to Michael Kinsley’s new blog, Creative Capitalism.

The blog is part conversation, part collective publishing project, designed to address billionaire Bill Gates’ concept of Creative Capitalism.

As Kinsley sums up Gates’ idea:

Despite his move from capitalism to philanthropy, Gates believes that some of the world’s problems — especially the problems of the world’s poorest countries — are too big to be solved by philanthropy. Only capitalism can address them successfully. But — as he argued in a speech at Davos in January — capitalism is much better at serving the needs of the the prosperous than the needs of the poor. He goes on to argue that capitalism needs to be, and can be, reformed to solve this problem. He called this new system “creative capitalism.”

Asks Kinsley,

So why isn’t his approach — make the money, then give it away; “to every thing there is a season,” and so on — the right approach? That is one question raised by creative capitalism. There are others. Wouldn’t the small-d democratic approach be: make the money and then tax part of it away? When corporations start giving money away or devoting it to good works, aren’t they cheating their shareholders? (That was Milton Friedman’s position, you won’t be surprised to hear.)

To explore these questions, I’m producing a book. And “producing” is the right word. This is a literary experiment as well. The book will be derived from a private website and a public blog in which economists and others debate whether “creative capitalism” is meaningless, dangerous, useless, maybe useful, very useful, or brilliant. Anyone interested is welcome to join in at creativecapitalismblog.com. As the project progresses other contributions to the book will be published on this site and perhaps elsewhere — all in the spirit of web collaboration. The book will be out by the end of the year.