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MurphTheSurf3 On August - 1 - 2014

Tank

Actions by the U.S. and its European allies in last two week to financially sanction Russia seem even more justifiable in light of the increasingly clear evidence that a Russian surface to air missile shot down a commercial airliner over Ukraine.

But Western European reaction remains muted despite intercepted radio communication wherein separatists and Russians seem to admit that they “F’d up” in the use of the weapons thinking they had mistakenly targeted a civilian plane, satellite imagining, and photos of Russian missile transports in the region from which the attack took place.

President Obama has placed additional restrictions on the financing of state-owned companies such as Russian oil giant Rosneft. European leaders having just completed a meeting of foreign and finance ministers have also announced that they would restrict new funding from the European Investment Bank and would pressure the European Bank for Reconstruction and Development to do the same.

Beginning with specific individuals, and expanding to specific companies, sanctions are now seeking to target entire sectors of the Russian economy.

World stock market reaction was well justified since such sanctions will  reduce available financing, and supplies and will further destabilize the operating  environment of a number of international ventures. BUT the knife cuts in both directions…..all of Europe has strong ties to the economy of Russia especially in the production of fossil fuels. An impaired Russian economy will have spillover effects on major trading partners in Europe, which will in turn weigh on the global economy.

Another question is how close Russia is to setting its own counter-sanctions on energy supplies to central and western Europe. Such an escalation, which would certainly trigger even tougher sanctions from the West would tip both Russia and Europe into recession, and would likely drag down the global economy.

Up to now the world markets have discounted the possibility that rational politicians will do their utmost to keep this from happening. They’ve tended to focus on other factors supporting stability including central bank policies, merger-and-acquisition activity and the gradual healing of Western economies. But events like the one where a single incident, the shooting down of a plane by Ukrainian separatists with a Russian Weapon (certainly supplied by the Russians), could introduce a level of brinkmanship which has been largely avoided by the major powers until now.

We are learning that Putin, facing more and more opposition from Western European powers, outright hostility from former Warsaw Pact nations, and surprising resistance with even more surprising success from Ukrainian armed forces, is doubling down on Russian support for the separatists.

All of this demonstrates that it is not beyond the realm of possibility that politicians will take the conflict over Ukraine to the tipping point.

Written by MurphTheSurf3

Proud to be an Independent Progressive. I am a progressive- a one time Eisenhower Republican who is now a Democrat. I live in a very RED STATE and am a community activist with a very BLUE AGENDA. Historian, and "Gentleman Farmer."

16 Responses so far.

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  1. EXFANOFARIANA says:

    Very well crafted,Murph.But the moment I saw Merkel in sweet talks with the thug/goon, I knew we /Europeans were f’d up. Nobody seems to have the guts to endure a little (or a lot, for this matter)sacrifice and tell him to shove his gas, for the EU MUST stand together against this despot. Meanwhile he has all Russians support and never stopped sending more military weapons to destroy every Ukraine plane.The world should come together in face of this horrific massacre and try and impose all the utmost sanctions against this barbarian.Thumbs up.

  2. SearingTruth says:

    Well spoken gentle friend MurphTheSurf3.
    ST

    “History should be taught twice, so it will be more difficult to forget.”
    SearingTruth

    A Future of the Brave

    • MurphTheSurf3 says:

      Curious…you have written a lot about how our leaders have to do what is brave, and difficult, return to a devotion to the constitutional rights at the heart of the Revolution….where do you stand on the action of foreign leader like Putin. I have an image on the front page of Putin as Hitler….do you think that this is an exaggeration or is it an accurate depiction. What should the U.S. and the Western Powers in Europe be doing?

      • SearingTruth says:

        I agree with you gentle friend MurphTheSurf3.

        Putin, at least, would like to be another Hitler (minus the losing and suicide part).

        The free world made a great mistake when it did not come to Georgia’s defense.

        And an even greater one when they ignored the Crimea’s annexation.

        It is another grand appeasement.

        You know that I believe in peace, and understanding, and political solutions to humankind’s dilemmas. But I also know that there will always be an evil that cannot be reasoned or negotiated with.

        Our problem now is that the Republican Party, and many in the Democratic Party, have spent over a decade screaming wolf. And as the classic tale foretells, now few believe any of them.

        The perfect time for tyrants to sneak in …

        What would I do?

        I would continue the sanctions, tell Putin that Ukraine was under our protection, and send two aircraft carrier groups to the Black Sea.

        And watch him, like any bully, suddenly decide he didn’t want to fight after all.
        ST

        “Once again, war is upon us. When peace had a greater hand.”
        SearingTruth

        A Future of the Brave

        • EXFANOFARIANA says:

          As usual ST, brilliant!

          • SearingTruth says:

            Thank you gentle friend EXFANOFARIANA, though it was sadly spoken.

            I desperately wish it were not so.
            ST

            “There is great danger in calling a thing evil, equaled only by the ignorance of it.

            Therefore let our judgments withstand the passions of our time, and endear the admiration of our future.”
            SearingTruth

            A Future of the Brave

    • MurphTheSurf3 says:

      hello there…I take it you have been hyper busy…thank for the pat on the back!

      • SearingTruth says:

        I’ve been ill gentle friend MurphTheSurf3. You deserve far more than a pat on the back, I’m sorry.
        ST

        “Our greatest weakness is that we can’t see each other for who we really are.”
        SearingTruth

        A Future of the Brave

  3. Beatlex says:

    The people of Russia are for Putin because he raised their standard of living a hundred fold.How long will they put up with him if that sours?
    Sanctions are really the only avenue.Let’s just hope that our sacrifices financially rid of this fanatic.I don’t like the alternatives much

    • MurphTheSurf3 says:

      Correct.

      From U.S. News
      http://www.usnews.com/opinion/blogs/world-report/2012/10/31/putins-russia-wont-achieve-super-power-status

      “The past 12 years of “Putinism” orchestrated through a game of presidential and prime ministerial musical chairs between Putin and Dmitry Medvedev is essentially a system that “…depend[s] on the Russian economy growing rapidly enough that most people had rising standards of living and, in exchange, were willing to put up with the existing soft repression.” Putin’s initial liberal economic Land Code, Civil Code reforms coupled with flat income and lower profits tax resulted in rapid growth of real GDP (gross domestic product) and a 50 percent reduction of poverty in Russia. Over the past 12 years, under the Putin and Medvedev machine, Russians have seen their real living standards—i.e. GDP and real income—more than doubled, average salaries increase eightfold from $80 to around $640, and regained much of their pride—hence Putin’s popularity.”

      Since economic growth has slowed (from 4.2 percent in 2012 to around 3.5 percent in 2012) and Putin’s internal support is waning as the people are pushing back against increased state repression, he now needs an external opposing force—the West—to rally the Russians under him.

      =======================

      This was published in October 2012. Its author is Scheherazade S. Rehman a professor of international finance/business and international affairs at The George Washington University.

      Prophetic?

      • Beatlex says:

        It all comes down to money Murph.Lets hope the sanctions work and his people turn against him

        • MurphTheSurf3 says:

          Money is Power in the day to day world, but when Power is expressed in other forms such as the repression of rights or military aggression we are into a new paradigm. It strikes me that Putin and his Duma allies have one foot in the money camp and one foot in repression/aggression camp.

  4. kevinbr38 says:

    The silver lining here could be that Putin’s actions, intentions, forces the EU to at least temporarily set aside it’s internal differences,squabbles, and act with unity.

  5. NoManIsAnIsland says:

    Very well reasoned and said, Murph. As Putin the Puny appears
    to be confirming our worst fears about his intentions, not to
    mention his sanity and grasp on reality, his wild actions in
    the Ukrainian crisis have brought the conflict to the verge of
    a tipping point. It’s already well past the boiling point.

    And since Putin himself may not see a way to back down without
    losing face, however it turns out isn’t likely to be pretty.

    • MurphTheSurf3 says:

      I think so too. Putin’s efforts to relaunch the Russian Empire, as the founder of United Russia which has quickly become the dominant political party, and then as Premier and President flow out of his ideology, his experience as an officer in the KGB, his time with Yeltsin and his macho persona.

      All of this leads me to agree with your conclusion.


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