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What If Biden Gave a War and Nobody Came?
What if Joe Biden gave a war and no one came? Such is the case in Ukraine where slogging Russian progress is unmatched by Biden’s and Biden’s alone belief a struggle for global hegemony is at stake, and that he is fighting his war at little cost. Here’s the war at about four months in, as Joe announces a new aid package of $1.2 billion atop his previous $40 billion “lend-lease.”
Given that core NATO raises a quiet glass every night that it does not have to be militarily involved in the fight for the Donbas and Crimea (the latter invoking 19th century memories of the disastrous Charge of the Light Brigade, as the area was last seriously contested between east and west when the British fought the Russians there, the Charge over the disposal of abandoned Turkish cannon) Joe Biden stands nearly alone thinking he is leading the west in some sort of epic struggle. In that the west does not have troops in the field, the western war is being fought with arms supplies and sanctions, both of which are failing and leave Biden exposed, one day to awake to find himself the Emperor of Donbas without any clothes.
Rumors of the death of the Russian military have been greatly exaggerated, literally: Ukraine has claimed kill rates for men and machines in weeks what are produced over months and years (two decades in the case of U.S.-Afghanistan) elsewhere. Despite the sexy time women snipers and Ghost of the Ukraine, it has been massive arms shipments primarily from the U.S. which have limited Russian gains largely to the eastern part of the country.
The biggest problem with trying to win simply via outspending the other guy is artillery and anti-tank missiles do not hold ground, infantry does. A brave Ukrainian taking on a T-72 may stop the tank (until another comes along) but he cannot retake a village or hold ground against a combined arms offensive. In short the flow of U.S. defensive-style weapons has done its job, doing exactly what it was intended to, blunt an offensive. The problem is there seems little plan for after that and so in areas like Donbas where Russia enjoys local support, or areas like around Mariupol where is it willing to employ a scorched earth policy, the Ukrainians are predictably losing and will continue to do so.
There are other problems with trying to win simply with arms sales. One is finding a way to train Ukrainians not familiar with modern weaponry in a way that is fast and effective enough to make a difference on the battlefield while not escalating the fighting overall. The usual method, either bringing foreign personnel to the U.S. or using American Special Forces trainers on the ground, both would dramatically escalate the war and give Russia the excuse to begin killing Americans. The American “volunteers” on the ground now are only going to fool some people for some time before it is obvious the U.S. has had to become deeply involved in the actual fight.
A secondary problem with dropping so many arms higgledy-piggledy into a fluid situation like Ukraine is blowback, always a great fear during the CIA-Russian war in Afghanistan. What would terrorists in the Middle East pay for a shoulder fired anti-anticraft missile? How many sophisticated anti-tank weapons (the pop-up capability that allows the missiles to strike down on a tank’s weaker top armor is highly classified) are the Chinese interested in? “While the response to provide more weapons to Ukraine is understandable, it would be prudent to consider the immediate and long-term security implications,” said one think tank. “We’ve seen time and time again how arms aimed at aiding an ally in one conflict have found their way to the frontlines of unforeseen battlefields, often in the hands of groups at odds with U.S. interests or those of civilians.” Ukraine has a very poor record in this regards; in the aftermath of the fall of the Soviet Union the country lost track of $32 billion in weapons and sold China its first aircraft carrier.
Supply is also an issue. America has currently sent about one third of its entire Javelin anti-tank missile inventory to Ukraine along with 50 million rounds of conventional ammunition, extraordinary quantities which strain production capability. Lastly, there remains concern over Russian reaction should American-made artillery rounds begin falling inside the Russian border. The recently shipped 155mm howitzers are seen by many as the first truly offensive weapon the U.S. introduced into the conflict. For Joe Biden what seems like a risk-free no brainer — send more weapons — actually carries with it considerable risk no one seems to be thinking about.
But it was sanctions which were to have won the battle, forcing Russia to withdraw at the risk of her economy collapsing, perhaps along with Putin’s own regime. The problem is that not only has that not happened, U.S. sanctions have actually aided Russia. Though Russia’s energy exports fell by volume in reaction to American sanctions, surging prices driven by supply shortages have more than canceled out the effects. Russia’s export prices have been on average around 60 percent higher than last year. Simple supply and demand.
Demand remains the thing thwarting Biden’s charge into the guns. France and Germany in particular have evolved the ability to talk tough and do little of substance, making quite an event out of the end of Russian energy exports via ship while quietly lapping at the pipelines like drunkards. And what demand does not fix supply steps in for. The EU reduced natural gas imports from Russia 23 percent in the first days of the invasion. Meanwhile Russia’s Gazprom has seen its income levels double year-over-year, thanks to higher prices. The EU also reduced its direct imports of Russian crude oil by 18 percent but thanks to Russian re-exporters India and the United Arab Emirates, that has lead to no net change in Russia’s overall oil export volumes. China, too, has helped make up for the EU shortfall, albeit more for domestic use and not re-export into the global market, as the largest single buyer of Russian energy. Japan holds that title for unsanctioned Russia coal exports. Even the U.S. itself helps out, buying unsanctioned highly refined oil products from the Netherlands and India that most certainly were made at least in part from Russia crude.
Russia has shown it can also play offense, cutting natural gas flow to western Europe by 60 percent blaming technical difficulties. Germany correctly understood the latest curtailment in its gas supply as a political move. “Russia’s reason for reducing gas supplies is just a pretext,” the German Vice-Chancellor said. “Their strategy is obviously to drive up prices.” Poor Joe can’t catch a break it seems. May be it is time to seize another megayacht to show Putin who is boss?
So where are Biden’s allies? The EU and Japan talk a great game but are hamstrung by their own energy needs. Next month Joe Biden travels to Saudi Arabia to bargain away any remaining American self-respect for oil. The UN, such as it is, saw 35 key abstentions, including much of Africa, on a symbolic get-out-of-Ukraine resolution. The head of the African Union explicitly called for the lifting of sanctions on Russia. India re-exports Russian oil. Brazil and Mexico refuse to condemn Russia. China won’t step in. Biden stands nearly alone claiming the liberal world order is at risk. Or could it be those other nations have seen so little benefit from that order they are not sorry if they see it pass?
Bottom line: Russian energy exports, which make up some 45 percent of the country’s budget, are stronger than ever. Russia has more money than ever to finance its war in Ukraine, and Putin is as secure in his post as ever before. The irony is with gas hitting $5.00 a gallon across the U.S., the sanctions driving that may indeed bring about regime change, albeit in Biden’s next Congress.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
What the Hell is Joe Biden Doing in Ukraine?
Does anyone know what the hell Joe Biden is doing in Ukraine? Americans must feel like a high school substitute teacher. America turns its back for five minutes after having won the Cold War, and Joe Biden has restarted it in the back row. No address to the nation, no white papers, just “Putin attacked Ukraine and it is an existential threat we must respond to.” Didn’t we used to vote on this kind of thing?
Engagement is a given. But what is the end point for Joe, the moment we announce we won? In Ukraine, no one knows. By starting this intervention with the promise not to send NATO into actual combat, Biden sent a clear signal to Putin — if you are willing with your overwhelming military advantage over Ukraine to spend the blood and treasure, you win. Putin’s goal is the creation of some sort of buffer state between him and NATO, so Putin can win whether Kiev physically stands or tumbles. A “win” for the US side requires Putin to retreat in shame. Breaking things is always easier than getting someone to admit they were wrong.
Biden has two weapons to deploy: guns and sanctions. Can either create a win?
While Ukraine has antitank weapons and rifles, Putin has hypersonic missiles and lots of tanks. If a win for him includes a scenario where Kiev is reduced to looking like Detroit, how will any of the weapons the US sends matter? Infantry-based proxy ground warfare can delay a mechanized army but not defeat it, forestall a Ukrainian defeat but not prevent it, when its only goal is greater destruction. Notice when Zelensky showcases photos of kids with guns and old women making Molotovs and then the Russians target “civilians” an apartment complex at a time?
Those are poor odds in a war of attrition. Ukraine boasts it destroyed 509 Russian tanks, almost all using shoulder fired missiles. Maybe; one of the techniques of modern propaganda is to throw out some outrageous number, challenge people to disprove it, and then shout “you can’t disprove it so I’m right.” So no proof. But history suggests 509 man-on-tank kills is ridiculous. During Gulf War 1.0, one of the largest tank battles of modern times at 73 Easting saw Coalition forces destroy only 160 Iraqi tanks, and that was using the M-1 tank with its sophisticated aiming tech and night vision. Even at the famed Battle of the Bulge only 700 tanks from both sides were destroyed.
There are similar reasons to be skeptical of Ukrainian claims of 15,000 dead Russians in three weeks. That would be double the number killed on Iwo Jima in five weeks of fighting, or at Gettysburg on both sides in the whole battle. It is about four times the total US losses in Iraq over 17 years. Ukraine also claims to have killed five Russian generals, five more general officers that have been killed in all the wars the United States have fought since WW II. Same for the claims Russia is running out of food, gas, and tires. Same for the social media war; how many divisions does Facebook control?
The theory of sanctions is that they will place such as squeeze on Russian oligarchs Putin will be forced to withdraw from Ukraine. Putin, otherwise portrayed as a dictator who answers to no one, will supposedly listen to these men complain someone seized their yacht and cause Putin to reverse a foreign policy that he otherwise believes benefits Russia in the long run. The US has been piling sanctions on these same oligarchs for decades, with a new, tougher, round each time Putin made his moves against Georgia, Grozny, and Crimea. None of those sanctions compelled a withdrawal and none have stopped Putin from making his subsequent move against Ukraine. Effective, no, but points for creativity: there’s a plan to strip Putin’s “Eva Braun” (you can’t make this up) of her old Olympic medals in hopes she’ll withhold nooky Lysistrata-like until Putin, sorry, withdraws.
Another problem with sanctions is they are nowhere near strong enough to actually hurt. Goofy yacht warfare aside, Biden’s ban on Russian petroproducts accounts for only some one percent of Russia’s output. NATO allies are not able to participate fully without crippling their own economies. But loopholes amid half-measures are only part of the problem. Having grown used to slapping sanctions casually against lesser countries like Cuba and North Korea, Biden has limited understanding of their effects against a globally-connected economy. Such sanctions have the potential to cause grave fallout because unlike say Cuba, Russia can fight back.
Though the goal of sanctions is to punish very specific Russians, known by name, in a position to influence Putin, concern on world markets drove up prices of crude oil, natural gas, wheat, copper, nickel, aluminum, fertilizers, and gold. A grain and metals shortage now looms, even in early days of this spillover effect. While the cost to oligarchs is unknown, the affect on economies the US should be courting, not hurting, is clear. Central Asia’s economies are now caught up in the sanctions shock. These former Soviet states are strongly connected to the Russian economy through trade and outward labor migration. They will be as likely to blame the US as Russia for their problems, converting potential US allies into adversaries. We have also yet to see what counter-moves Russia will make toward the West, to include nationalization of Western capital. Russian fertilizer export restrictions are putting pressure on global food production. Russia could also restrict exports of nickel, palladium, and industrial sapphires, the building blocks for batteries, catalytic converters, and microchips. Unlike supposedly targeted sanctions, these would spank global markets broadly.
Biden is in the process of discovering sanctions are a blunt instrument. It will be a diplomatic challenge he is not likely up to to keep economic fallout from spilling over into political dissention across a Europe already not sure where it stands on “tough” sanctions.
Bad as all that sounds, some of the worst blowback from Biden’s Ukraine policy is happening with China. During the only Cold War years Biden remembers, China was mostly a sideshow and certainly not vying to be the world’s largest economy. Without seemingly understanding the world is no longer bipolar, the West versus the Soviet bloc, Joe Biden actually may do even more harm than he understands right now.
Russia is a big country that has committed only a small portion of its military to Ukraine. It absolutely does not need Chinese help to prosecute the war, as Biden claims. Biden is unnecessarily antagonizing China, who should be more or less neutral in this but instead now is being positioned by Biden as an enemy of the United States and an ally of Russia. China buys oil from Russia but that does not translate into some sort of across-the-board support for Russian foreign policy a la 1975. Biden, by threatening China with sanctions of its own, by likening Ukraine to Taiwan, and by essentially demanding of Beijing that they are with us or against us threatens to turn China just the wrong way. Economic spillover from Russia is one thing; disturbing one of the world’s largest trading relationships is another.
As the Wall Street Journal points out, China’s basic approach of not endorsing Moscow’s aggression but resisting Western efforts to punish Russia has garnered global support. The South African president blames the war on NATO. Brazil’s president refused to condemn Russia. India and Vietnam, essential partners for any China strategy, are closer to China than the US in their approach to the war. Biden seems oblivious to the opportunities this gap creates for China.
In my own years as a diplomat I heard often from smaller countries’ representatives about the “America Tax,” the idea America’s foreign policy dalliances end up costing everyone something. Whether it is a small military contribution to the Iraq War effort, or a disruption in shipping, nobody gets away free when America is on a crusade. This cost is built in to those smaller nations’ foreign policy. But when the Big Dog starts in on sanctions which will impact globally against a target like Russia, the calculus changes from a knowing sigh (“The Americans are at it again…”) to real fear. Many nations the US needs as part of its alliances don’t trust its ability to manage economic consequences to protect them, even if America is even aware of those consequences. US moves against Russia’s central bank become a weapon they fear could one day be directed against them as America seeks to weaponize the global economic system. Russia can weather a nasty storm; a smaller economy cannot. Chinese propaganda about the need for alternative economic arrangements that limit Western power are significantly more influential now than a month ago.
So in the end were left with the question of what fundamental US interest is being served by Biden‘s intervention in Ukraine at what cost. There’s always the sort of silliness that fuels Washington, things like “send a message” or “stand up for what’s right,” ambiguous goals that tend to get people killed without accomplishing anything — strategic hubris. Biden has fallen deep into the Cold War trap, and cannot accept there is little that can be done, and back away from the Ukraine to spare further bloodshed. Every world problem is not America’s to resolve and every world problem cannot be resolved by America.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Taiwan is Not Ukraine is Not Taiwan
I have a medal for winning the Cold War. It was issuable to any member of the military, or civilian employee of the federal government, who served during the Cold War. That included me, at the tail end, with the State Department. Ironically my so-called Cold War service was on Taiwan. I probably should return the thing; the Cold War is far from over.
Part of the Cold War’s real conclusion is playing out in Ukraine in real time. Is Taiwan, another hanging chad from the Cold War, next? Is President Xi watching a weakened America giving in to the Russians and seeing his chance to seize Taiwan?
Nope. Taiwan is not Ukraine is not Taiwan. The two states only exist next to each other in articles like this because both are the results of American policy. Each exists alongside its nemesis only because the rules the U.S. created after WWII are not subscribed to anymore by most of the world, if they ever really were. But that does not mean Taiwan is in imminent danger.
While Putin‘s instant invasion timing may or may not have had something to do with Joe Biden (if Trump were really his puppet that would have seemed an easier time to do this) the reality is what is unfolding in the Ukraine reaches back much further than Biden or Trump, to the collapse of the Soviet Union. It was then the policy of the United States to empower the former Soviet satellite states and grow American influence by expanding NATO eastward (Lithuania, Latvia, Estonia, Poland, and Romania formally joined the alliance, East Germany as well by default) and to do this while taking the nuclear weapons away from those states so that none of them would become a threat or rival in Europe. We took their people, too. As a young State Department officer in London in the early 1990s I was told to issue visa after visa to former nuclear scientists from the Ukraine, as well as all sorts of rogues headed to the United States to get them out of the ‘Stans. We created a brain drain to ensure none of the new nation states could rise above the nuclear threshold the United States established unilaterally for them. It was American policy to have weak but not too weak border states between Russia and the “good” part of Europe.
Understanding why an adversary does something is not the same as supporting him. As the Soviet Union collapsed, borders were redrawn with more attention to the West’s needs than any natural flow of those borders (the same mistake was made earlier by the British post-WWI in the Middle East.) Historically at some point in time all those borders were just glaciers, so it is always possible to argue some slip of history means somewhere used to be owned by someone going all the way back to mastodons. The reality of 2022 is Putin is seeking to redraw borders created by his adversaries, something now possible as Russia has been allowed by the West to re-grow its fangs. Ukraine as a possible NATO member was a threat to Putin and he this week is taking care of that. Americans live in a country that essentially has no border threats and fail to understand this time after time. We believe when we invade countries (Vietnam, Cambodia, Grenada, Iraq, Libya, Afghanistan) it’s part of international law.
Geopolitically, it was easy. A pro-Russian faction exists inside Ukraine, and Ukraine exists outside the NATO umbrella. Putin’s proof-of-concept, his 2014 takeover of Crimea, assured him NATO would not militarily intervene. About the only real obstacle he faced was the likely pleas of President Xi to hold off a couple of weeks and not spoil the Olympics.
Taiwan is another Cold War relic. The U.S. propped up Taiwan’s very undemocratic military government for decades as an ironic bulkhead against communism. Taiwan grew into an economic powerhouse and in that lies the fundamental difference between the relationships of Russia and Ukraine, and China and Taiwan.
China and Taiwan are economic partners. Between 1991 and March 2020 Taiwan’s investment in China totaled $188.5 billion, more than China’s investment in the United States. In 2019, the value of cross-strait trade was $149.2 billion. China is Taiwan’s largest trading partner. China and Taiwan are ethnically the same people, enjoying an enormous amount of cross strait commerce, culture, student exchanges, visits among relatives, and other ties that indicate a growing, positive relationship not an adversarial one. What incentive would China have to drop bombs on one of its best customers?
There’s also the U.S. to consider, as any cross-strait violence would affect US-China relations; Ukraine has little effect on the already poor state of US-Russia relations. The total Chinese investment in the U.S. economy is over $145 billion. U.S. investment in China passed $1 trillion. China is the second largest foreign holder of U.S. government debt. If something interfered with all that commerce, China would have to find a way to use unfinished iPhones as food.
One of the problems with the sanctions Biden is claiming he’s going to use to punish Russia is how unintegrated Russia is in the world economy after so many years of sanctions. Really, what’s left that will sting? Biden promises “economic consequences like none [Putin]’s ever seen.” But the Panama Papers already showed much of the so-called oligarch money, including Putin’s, is not in the U.S. or its allies’ banking systems anyway. Germany is temporarily halting certification of the Nord Stream 2 pipeline, but no one is talking about tearing it down. if U.S. sanction drive up gas prices without affecting the situation on the ground in Ukraine, who is sanctioning whom?
China on the other hand is deeply integrated into the global economy and vulnerable to sanctions and disruptions of commerce following an attack on Taiwan. The risk in calculatable dollars is beyond any gain owning Taiwan would bring; imagine the impact of closing U.S. ports to Chinese cargo vessels.
On the military side, Russia was able to literally drive into Ukraine, something the mighty Red Army has been perfecting since 1945. Taiwan famously is an island, and a Chinese amphibious invasion would represent something larger than the Normandy D-Day landings. Whereas the Ukrainians have limited ability to respond to a blitzkrieg land invasion, Taiwan fields Harpoon missiles with the range to put Chinese forces under fire almost as they leave port. Militarily there is no comparison between the flat plains of the Ukraine and the rocky coast of Taiwan. Nobody undertakes an invasion they are very likely to lose.
An invasion of Taiwan would leave China politically isolated, economically damaged, and reputationally crippled. Not so for Russia and Ukraine where the benefits to Russia outweigh the risk. Taiwan is not Ukraine is not Taiwan.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
More Media B.S. — OMG, Trump Company Legally Rented Office Space to Iranian Bank!
Once again a story that Trump did nothing illegal is somehow front page news. His crime this time? Continuing to legally rent out office space to a bank already in a building he bought 18 years ago.
So the big news is that Donald Trump’s real estate organization rented space to an Iranian bank later linked to Iran’s nuclear program.
Bank Melli, one of Iran’s largest state-controlled banks, was already a tenant in 1998 when Trump purchased the General Motors Building, above, in Manhattan, but he kept them on for another five years, until 2003.
Quick summary:— There is no evidence and it is highly unlikely that Trump himself knew every one of the hundreds of tenants in a building he bought in 1998. In fact, the building occupies a full city block, with 1,774,000 net leasable square feet (the bank rented 8,000 square feet.)
— U.S. security authorities allowed Bank Melli to legally operate offices in the U.S., so renting to them is not a story.
— Bank Melli was prohibited from conducting bank transactions in the U.S., and did not conduct transactions, but kept an office in New York in hopes sanctions might one day be eased.
— Bank Melli operated fully in the open. The U.S. Department of the Treasury could have shut them down at any time, or sanctioned Trump for dealing with them if it wished. It did not.
— The bank itself (not Trump) was only sanctioned by Treasury in 2007, four years after it left Trump’s building. However, the Huffington Post helpfully notes (emphasis added) “[Unnamed] Experts told the Center for Public Integrity that the bank likely supported proliferation activity and Iran’s military years before the Treasury Department publicly condemned the bank,” something the owners of the rental building presumably should have been aware of somehow.
— The Center for Public Integrity reveals on its website that the Bank Melli “as being controlled by the Iranian government” since 1999. Actually in its own publically available history, the Bank notes it served as the nation’s central bank, issuing currency, from 1931.
While the media is enjoying this story, it ignores the broader picture. Despite sanctions and trade embargoes, over the past decade the United States government allowed American companies to do billions of dollars in business with Iran and other countries blacklisted as state sponsors of terrorism.
At the request of companies from Kraft Food and Pepsi to some of the nation’s largest banks, the Treasury Department across multiple administrations granted some 10,000 licenses for deals involving sanctioned countries.
The media is so full of sh*t on these stories their eyes are brown.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
John Kerry Accidentally Sanctions Self
“I’m still not sure exactly what happened,” said gaffe-prone, beleaguered Secretary of State John Kerry, “but I’m told I agreed to sanctions on myself.”
In an exclusive, Kerry explained his mistake.
“So there we were in the Middle East. I travel almost constantly, and at my age, even with a large staff, it can get hard to keep track. I mean, have you ever been to the MidEast? Every place looks like every other place. It’s hot, sandy, and each country seems to have some sort of odd headgear. Look, I’m not the first to get confused by all this.”“Anyway, so I’m tired. We’re in West-Somewhere-Stan, some forsaken patch of garbage with no oil, where the national export is dust, and I’m shaking hands for a photo op with what seems like the same orphan I shook hands in Baghdad, Kabul, Cairo and Tunis. Does that kid travel on the plane with me? We had had some local food for lunch which did not agree with me, and so I proposed sanctioning humus. Maybe it was sort of a joke, maybe I meant Hamas, maybe it was the Ambien talking. Next thing I know, the State Department spokesperson in Washington is telling reporters I have imposed a sanction on a beloved food product.”
“It really hits the fan then. Half the Middle East turns around and imposes retaliatory sanctions on me. Those people can’t agree on something simple like not killing each others’ kids, and bang! overnight they band together on some silly food thing. I had hoped it was going to blow over after another suicide bombing like always, but then Israel joins in the sanctions against me. Cray cray, amiright?”
Kerry leaned over to an aide, who confirmed for him that he had read his printed talking points correctly.
“Can’t be too careful, right?” joked Kerry, now chewing on the edge of the note card.
“So once Israel agreed to join every Arab nation on the planet in sanctioning me, my hands were tied. I mean, when Israel barks, I’m there with a Scooby treat, often a multi-million dollar treat. So, in a show of solidarity with Israel– who indeed has the right to defend itself against me, which I strongly support– I agreed to join the sanctions regime against myself. I even explained that the United States views the situation with concern to make it all official. Tomorrow I’ll add ‘grave concern.’ That’ll show me I mean business about myself.”
“Next thing I know, everybody in the U.S. is on TV about it. I thought nobody actually watched those Sunday morning news shows, but it turns out that Fox has an intern who takes notes if she’s up early. Pretty soon all of the media has opinions on this, some former Ambassador is writing an Op-Ed and then Barack orders me to come home and not leave my room.”
“So we get on the plane and I’m relaxing with a stiff drink when out the window I see three F-18’s escorting us. My pilot tells me they’re trying to force us to land somewhere, saying I’m violating my own sanctions by flying, plus I’m on the No-Fly list now. Guess what? I end up in Moscow! Nearest airport somehow. You’d think they had a lot of places to stay there with capitalism and all, but I found out all the VIPs are stuck in the same place, which was booked solid for the Ukrainian National Day celebration, and I get stuck on Edward Snowden’s couch for the night. Awkward.”
“At least the guy is pretty quiet, though he leaves his towels on the floor in the shower. And who doesn’t flush? But we got along OK and he even helped me with my laptop. The State Department still runs some software thingie I’m told is called “Windows XP” and Snowden told me it hadn’t been ‘patched’ since ‘like when the first Matrix came out.’ I had left the paper with all my passwords on the plane, but he knew mine somehow. He even said he installed a free ‘keylogger’ for me and some other good stuff. I asked him if I needed a new laptop and he was adamant that I should never, ever stop using the one he had installed all that magic stuff on. What could I say? Hah hah, I can’t even program my VCR I told Ed.”
“That was apparently funny, because my aide had to explain to Ed what a VCR was. Ed said ‘LOL,’ which made me feel good after all those sanctions.”
“How it could the day get worse? One word– Vladimir Putin. Really, what is that guy’s problem? Putin shows up on TV opposing sanctions against me. C’mon, does that dude have to oppose everything we do? Yeah, apparently he does. So I have to throw together a press conference where I call out Putin for opposing sanctions on me, and call on the international community to robustly support even greater sanctions against me. The EU issues a statement saying they resolutely aren’t sure what their position is, and the press sniping starts all over. I’m stuck ‘accidentally’ saying into an open mic I’m personally really angry at myself for not upholding the sanctions. What a mess.”
“Next thing I know, my own State Department starts Tweeting about the sanctions, hashtagging my sorry self with junk like #SaveALifeSanctionKerry. Worse yet, they’re sending me emails asking me to approve the Tweets about myself, something about policies come and go but bureaucracy remains. Man, me and Snowden had a laugh about that one. He knew my password for Netflix and so we just chilled after that.”
“So here I am stuck in Russia with all these sanctions on me. I hear Obama is threatening to ‘ratchet down’ the sanctions on me if China doesn’t lower tariffs. I’d like to fly there and sort that out, but with the sanctions I’m really over a barrell. I can’t even use my card at the ATM. At this point I’m not sure what to do next. I’m thinking of calling up Jon Stewart and seeing if he’ll weigh in for me. He’s about the only guy left Barack really listens to. Wish me luck.”
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
North Korean Sanctions Don’t Interfere with Making Money
Oh, a new crisis in North Korea! (Drumbeat) On June 26, 2008, the President issued Executive Order 13466, declaring “a national emergency to deal with the threat to the national security and foreign policy of the United States constituted by the current existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula,” and continued certain restrictions with respect to North Korea that had been imposed under the authority of the Trading With the Enemy Act.
(Drumbeat) On August 30, 2010, another President issued Executive Order 13551, expanding the scope of the national emergency declared in E.O. 13466 and adding new restrictions.
(Drumbeat) On April 18, 2011, the President issued Executive Order 13570 to take additional steps to address the national emergency declared in E.O. 13466 and expanded in E.O. 13551 that will ensure implementation of the import restrictions contained in several United Nations Security Council Resolutions and complement the import restrictions provided for in the Arms Export Control Act.
(More Dramatic Drumbeat) Criminal fines for violating the E.O.s range up to $1,000,000; individuals may also face imprisonment up to 20 years. In addition, civil penalties of up to the greater of $250,000 or twice the amount of the underlying transaction may be imposed administratively for each violation.
The path was clear: The United States would apply a variety of economic sanctions to both punish North Korea for going nuclear and, more importantly, choke off its access to the world markets and the hard currencies needed to keep the evil regime alive. By cutting off its money supply, sanctions wold starve North Korea of the real fuel– money– needed to drive its nuclear program.
Except of course if real money is involved.
Kaesong
Meanwhile, a South Korea-North Korea joint venture project happily churns away, generating some two billion dollars a year in hard currency for the North. At the Kaesong project, 123 South Korean firms employ more than 50,000 North Koreans to make whatever “household goods” are. In addition, Kaesong also generates more than $80 million a year in cash in wages, paid directly by South Korean firms to the North Korean government rather than to workers.
Business is done in the international currency of U.S. dollars, ensuring North Korea of plenty of sanctions-free moolah.
Business Could Not be Better
In fact, business couldn’t be better. According to North Korean Economy Watch, despite rising cross-border tension, the trade between South and North Korea reached a record high last year. South Korean products worth $896.26 million were shipped to North Korea, up 13.4 percent from the previous year. The amount of products that came from the North jumped 19.3 percent on-year to $1.07 billion.
In fact, since 2004, total wage payments for North Korean workers in Kaesong totaled $245.7 million, rising from $380,000 in 2004 (the first year of operation) to $61.76 million in 2011 and $45.93 million in the first half of 2012. To keep things humming along, electrical power and telephone service are supplied from South Korea.
All About the Benjamins
The appeal to South Korean industrialists is counted in dollars and cents; the monthly wage for a North Korean worker in Kaesong is about US$128, pennies compared to the labor costs in the South. The Kaesong complex is only a short one hour drive from Seoul, rail service exists to move goods and heavy raw materials, the labor force speaks Korean and shares cultural ties and hey, if a worker gets out of line, demands labor union rights or simply a day off, he can be “replaced,” replaced with extreme prejudice as they say. This is capitalism on steroids, baby.
And while on April 3 the North Koreans banned South Korean personnel from Kaesong, they continue to accept South Korean money there. In addition, some 261 South Korean workers remain in Kaesong; although new workers are banned from coming in, the old ones are conveniently allowed to stay on. Follow the money.
One sweet deal: while the U.S. throws sanctions at North Korea in a hissy fit because they went nuclear while we were looking the other way (wars in Iraq and Afghanistan), what really matters on the Peninsula is money. It’s all about the Benjamins.
BONUS: The U.S. just spent $5.5 million of your sequester tax dollars flying two B-2 bombers over South Korea to intimidate North Korea. They did not bomb the industrial complex at Kaesong described above.
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