What are the limits to economic warfare?

Laurie Meadows
3 March 2022 (edited 19 February 2023)

 [implementing the Biden economic plan]     [eliminate foreign competition]     Destruction of China's business     Destruction of European business      Destruction of Russian business   Ukraine - the US tool to destroy Russia and the West Eurasian peninsular    The US government plan to keep war profits pouring in  

President Biden gave his 'State of the Union address' on March 1st 2022. It was largely about improving the social conditions of the people of the United States, as you would expect. United States is a big and powerful country, but the US economic policy is not just domestic. It also impacts the rest of the world, for good or bad.

A diverse and competitive domestic economy with a thriving middle class

The speech, which is largely for domestic campaign purposes, promises more money for veterans, help for the 23 million people recovering from drug addiction, help for children's mental health, subsidies for childcare for working mothers, improved police accountability, tax the rich, build out and repair of roads, airports and other infrastructure in disrepair, allow 'least cost' pharmaceuticals, provide continuing Covid-19 measures for free, and so on. You can read the details here. (His June 28, 2023 speech in Chicago repeated all the same points, although, interestingly, the propaganda on Russia was omitted. President Biden understands which way the wind is now blowing in the domestic audience.)

American society, like all developed Western societies, provides for it's people's basic level comfort and security. But the trend toward needing more and more state aid will accelerate. This is due to an aging population, the diabetes epidemic, huge increases in anxiety and stress (especially in the young), and the costs of coping with heat, fires, floods, soil degradation, and ever rising food prices.

Constant increases in transfer payments means a need for more government income. And the limits of printing Government IOU's has been reached, because the money paid out in interest on Government debt will soon reach totally unpayable levels. Debt has to be reined in.

Government income therefore requires taxpaying corporates, and a middle class that is 'doing well'. These are the taxpayers and their numbers have to keep increasing. Joe Biden proposes a 15% tax on all corporate profits, and global cooperation to set this as a minimum tax in all countries, to prevent companies basing themselves overseas in low or zero-tax special zones.

He believes these proposals will fund his social programs and reduce the deficit at the same time.

From exploitation of cheap labor to a living wage for all

The President highlighted the fact that American agriculture, in particular, relies on cheap migrant labor. These people, mostly Mexican, slog their guts out in the fields harvesting everything that can't be mechanically harvested - sugar beet, strawberries, vegetable of all kinds. No American will do this 'stoop labor' for the low wages paid. Mr. Biden's policy is to give these people citizenship (the expectation being that the grateful immigrants will vote Democrat). At the same time, he wants to raise the minimum wage. And strengthen unions.

The principle appears to be 'rights are indivisible'. That is, there cannot be a 'superior' right for American workers to receive a living wage for their labor, but an 'inferior' right for a Mexican laborer, so let's make them citizens and solve the problem.

Lowering the cost of living for Americans

If he succeeds in turning illegal migrants into citizens, labor costs will rise, and the price of fruit and vegetables will rise as a result.

We already know the cost of fertilizer will rise. The cost of oil will remain high (unless there is a recession).

The pandemic has caused the cost of shipping to rise, which means the cost of all consumer goods will rise.
"See what’s happening with ocean carriers moving goods in and out of America.  During the pandemic, about half a dozen or less foreign-owned companies raised prices by as much as 1,000 percent and made record profits."
President Biden is talking about shipping costs and the cost of container hire. These have followed the laws of supply and demand, and at a time of high demand and limited supply. Why the limited supply of goods? Because truly vast amounts of Western consumer goods are made in China and Vietnam. China's policy of massive lockdowns to control covid meant closed factories, staff shortages, and consequently, shipping delays and supply shortages. Can these bottlenecks and shipping costs be avoided?

Re-shoring American industry

The 'problem' for the USA is not so much lack of overseas goods and not enough ships - it is lack of domestic manufacture. China's factories are highly automated, but their overall cost structure is lower. They pay lower hourly wages, and the costs of dealing with factory wastes is evaded, to the detriment to the environment. (The West is hardly innocent in this regard, but controls are now tighter.) How can American businesses produce consumer goods cheaper than the highly automated, low labor cost Chinese factories?

The President argues that American business can compete by first, lowering costs, and second, by decreasing the manipulative power that comes from industries being controlled by only a few big corporations.
"Lowering your costs also meant demanding more competition. I’m a capitalist, but capitalism without competition is not capitalism. Capitalism without competition is exploitation. It drives up prices".
He doesn't explain how companies can 'lower costs'. I'm skeptical much can be done, because the fundamental drive of a business is to keep costs - including labor - as low as possible. Energy costs can't easily be lowered in the short run, although solar panels on industrial roofs may lower costs in the medium to long run. As for market dominance by a few big corporates, well, you can scrutinize them for price gouging if you like, but they employ the brightest lawyers there are, so I doubt much will be discovered there.

In the face of these facts, what is the Presidents plan? There seem to be 3 main elements.

1.  Subsidize both foreign and local investment in new factories in USA.

"to compete for the jobs of the future, we also need to level the playing field with China and other competitors.  That’s why it’s so important to pass the bipartisan Innovation Act sitting in Congress that will make record investments in emerging technologies and American manufacturing.

We used to invest almost 2 percent of our GDP in research and development.  We don’t now.  Can’t — China is. <...> 20 miles east of Columbus, Ohio, you’ll find<...>the ground on which America’s future will be built. That’s where Intel, the American company that helped build Silicon Valley, is going to build a $20 billion semiconductor “mega site.”  Up to eight state-of-the-art factories in one place. Ten thousand new jobs. And in those factories, the average job — about $135 — $135,000 a year.

Some of the most sophisticated manufacturing in the world to make computer chips the size of a fingertip that power the world and everyday lives, from smartphones, technology that — the Internet — technology that’s yet to be invented<...>Intel’s CEO <...>told me they’re ready to increase their investment from $20 billion to $100 billion.
That would be the biggest investment in manufacturing in American history

Companies are choosing to build new factories here when just a few years ago, they would have gone overseas.  That’s what is happening.

Ford is investing $11 billion in electric vehicles, creating 11,000 jobs across the country.

GM is making the largest investment in its history — $7 billion to build electric vehicles, creating 4,000 jobs in Michigan.

All told, 369,000 new manufacturing jobs were created in America last year alone."
Many of these jobs are in high tech industries - industries where China (including Taiwan) excel. Most jobs in Western countries (60% or so) are in the low paid service industries. (And some of these are being automated out of existence.)

The effect of building state-of-the-art modern manufacturies is to promote technical education in general, and science, engineering and math in particular. These are areas where America lags badly. According to Mr. Biden, the USA used to invest 2% of GDP in research and development, but in 2023 it had fallen to just 0.7%.

The CHIPS and science Act of 2022 not only subsidised semiconductor manufacture, it had a provision to create (presumably) government funded 'tech hubs'. These science and industry co-located hubs "invest in critical technologies, like biotechnology, critical materials [minerals], quantum computing, and advanced manufacturing so the U.S. will lead the world again in innovation".

The hubs will attempt to create a synergy between private businesses, universities, government, and worker training efforts. Upskilling workers so that they can work in the semiconductor industry is a particular focus. In late October 2023 he announced that 31 of these 'tech hubs' will compete for (presumably) government funding of $75 million each.

An important component of the policy is regionalisation, so that neglected regional communities whose jobs went overseas will now see the work come back, even if the work is now high level automated manufacturing.

"We’re creating good jobs in communities all across the country, including places where, for decades, factories have been shut down, hollowed out when jobs moved overseas to find cheaper employment.

Over the past few decades, these communities lost more than jobs.  They lost a sense of — their sense of dignity, of opportunity, a sense of pride.  We’re going to change all that. 

Tech hubs are going to bring this work to where people live in communities all across America. 

The press has started to call my plan “Bidenomics.”  Well, under Bidenomics, you don’t have to leave home or your family to get a good job."
Joseph Biden, 23 October 2023

The most important effects are to ensure critical components such as computer chips are always available locally, and to have a range of good quality products available for export. America exports more than 1 trillion dollars of goods and services every year. Goods and services are biggest export by far, with travel and air transport dominating. In fact America runs a pretty decent surplus in the balance of trade in this area.

Another major export category is agriculture, dominated by soya beans and wheat (USA is the world's second largest wheat exporter). Supply of civilian aircraft and engines, cars and car parts also make up a very large chunk of the US export income.

2. Reduce the value of the dollar

A low dollar makes US exports cheaper to buy. It makes imported goods more expensive, which helps to steer consumers to local manufacturers - presuming they are fairly competitive on price and quality.

A low dollar makes fuel imports more expensive, which in turn acts as a subsidy to a move to electric cars and more fuel efficient cars.

A low dollar makes US government payments on debt easier to bear. But makes price inflation higher.

The US status as a reserve currency needs to be reduced. It is inevitable anyway, and a low dollar will help.

3. Own both businesses and important overseas resources necessary for American industry

This has been American policy since the days it arranged a coup against the Guatemalan Government as a favor to the United Fruit Company.

Dwight D. Eisenhower was elected U.S. president in 1952, promising to take a harder line against communism; the links that his staff members John Foster Dulles and Allen Dulles had to the UFC also predisposed them to act against the Guatemalan government. Additionally, the U.S. federal government drew exaggerated conclusions about the extent of communist influence among Árbenz's advisers. Eisenhower authorized the CIA to carry out Operation PBSuccess in August 1953. The CIA armed, funded, and trained a force of 480 men led by Carlos Castillo Armas.

The coup was preceded by U.S. efforts to criticize and isolate Guatemala internationally.

Castillo Armas' force invaded Guatemala on 18 June 1954, backed by a heavy campaign of psychological warfare. This included a radio station which broadcast anti-government propaganda and a version of military events favorable to the rebellion, claiming to be genuine news, as well as air bombings of Guatemala City and a naval blockade. The invasion force fared poorly militarily, and most of its offensives were defeated. However, psychological warfare and the fear of a U.S. invasion intimidated the Guatemalan army, which eventually refused to fight. Árbenz briefly and unsuccessfully attempted to arm civilians to resist the invasion, before resigning on 27 June. Castillo Armas became president ten days later, following negotiations in San Salvador.

Described as the definitive deathblow to democracy in Guatemala, the coup was widely criticized internationally, and strengthened the long-lasting anti-U.S. sentiment in Latin America. Attempting to justify the coup, the CIA launched Operation PBHistory, which sought evidence of Soviet influence in Guatemala among documents from the Árbenz era; the effort was a failure.

Castillo Armas quickly assumed dictatorial powers, banning opposition parties, imprisoning and torturing political opponents, and reversing the social reforms of the revolution. Nearly four decades of civil war followed, as leftist guerrillas fought the series of U.S.-backed authoritarian regimes whose brutalities include a genocide of the Maya peoples.

Russia has vast reserves of minerals, including gold, palladium, titanium, nickel, silver, iron ore, rare earths, diamonds, coal and more. It is also one of the largest oil and natural gas producers in the world. This makes Russia a primary target of American politcal-corporate greed.

4. Eliminate foreign competition

USA's largest competitor for wheat sales is Russia. Brazil is the largest competitor for Soya bean sales. China consumes almost 60% of the world's soyabean exports, and it's demand is growing. France and Germany are very important competitors for US aircraft sales. Germany is the major competitor for US automobiles and auto parts. The USA is the dominant manufactured food exporter in the world by a good margin from number two, the European countries (Russia is about 9th largest). At the moment USA competes with Russia for the sale of natural gas to Europe. If USA business is to dominate, something must be done about European and Russian competition.

Implementing the Biden economic plan

America has largely gone as far as it can with eliminating free trade (it has unilaterally crippled the World Trade Organisation). It can fiddle with tariffs to a certain extent, but not much. It has found China and other countries have outbid it for many of the mineral resources in Africa. China has bought up a very large chunk of Iran's oil production (at a hefty discount, due to the US trade embargo), and other Gulf countries hold tight to their sovereign oil resources. Yemen's untapped mineral and oil resources have not been able to be fully seized by any foreign country so far. Iraq oil deals are a quagmire of corruption. The USA is illegally occupying (and exploiting) Syria's oil reserves, including the Al Tanf prospect, but I doubt they will be able to hold them very much longer. So much for resources.

So what's left?

Lowering the value of the dollar and eliminating foreign competition. All in all, Europe is the greatest competitor for US exports. Once unified, China is potentially the biggest competitor for advanced computer chips, thanks to Taiwan-based factories. Russia is the biggest competitor for wheat exports, and increasingly, for arms sales. It would be very useful to increase the production costs for all major competitors and thus reduce their market share. Longer term, when Biden and his uni-party clones are 'done' with Russia, and are well 'on their way' with China, they will squeeze their European 'partners' even harder.

"We know that European leaders informally, so to say, furtively, discuss the very concerning possibility of sanctions being levelled not at Russia, but at any undesirable nation, and ultimately anyone including the EU and European companies"

Vladimir Putin, President of the Russian Federation 17 June 2022

Destruction of European business competitiveness

Update November 2022 - as it turns out, the United States has been wildly successful in using their Ukrainian proxy war to damage Europe. The US comprador governments in Europe have raised the cost of energy by refusing cheap Russian gas, by aiding the destruction of the Nordstream gas pipeline, and are now planning to throttle the flow of oil from Russia. As a result India and probably other countries are sending Russian oil to Europe at higher prices. US LNG is much higher priced than Russian gas. German industries are going bankrupt as a result. The huge supply of aid and weapons from Europe is a profit center for the US arms industry, as Europe gives up older weapons to Ukraine it must resupply them from USA. The USA can simply print money for the 'aid' it gives to Ukraine, so it is at no (immediate) cost. Europe, in contrast cannot emit money beyond prescribed bounds, and so must go into debt. Millions of Ukrainians have fled to Europe, further indebting the Europeans.

In the meantime, the USA created a subsidised 'green industry' fund worth $369 billion that made US manufactured electric vehicles cheaper than electric cars imported from Europe. In addition, cheaper energy in USA is attracting European businesses to leave the huge energy cost of operating in Europe in favor of the much lower energy costs in USA.

"Europe, the EU countries, are gradually coming to see what the United States is doing and what its actions are aimed at.The United States is aiming at two centres in their efforts – China and Russia, which they cannot challenge. In fact, there is a third centre, which is actually the first one.

A look at the destructive effects of US actions towards the EU shows that the United States now regards the EU as a frenemy.

They would like to ruin it as a market, a territory of opportunity and a major player and centre of power. They cannot do this openly with statements, political pressure or blackmail, because it would amount to admitting that Washington is using such measures because it does not want economic competition

In fact, this is what’s happening now. The EU countries have started asking themselves where people like Ursula von der Leyen and Josep Borrell are jointly leading them. They are clearly moving them away from prosperity, peace and stability on the European continent.

All this increasingly suits the interests of the other player, the United States, which is forcing its will through Brussels officials who promote a pro-American policy."
Russian Foreign Ministry Spokeswoman Maria Zakharova, November 30, 2022

Destruction of Russian business competitiveness

Ideally, America would break Russia up in order to assign it a subservient role as exporter of minerals, with the USA as majority shareholder of the production companies.
"... production sharing arrangements dating back to the Yeltsin era had been forced out of Russian government when it was in dire economic straits during the transition from the Soviet period and was in no position to negotiate optimal deals...something like 262 such so-called production sharing agreements (PSAs) were squeezed out of the Russian government by western oil companies by the time Yeltsin retired. 

After coming to power in 1999, President Vladimir Putin set about the mammoth task of cleaning up the Aegean stables of Russia’s foreign collaboration in the oil sector. The “decolonisation” process was excruciatingly difficult, but Putin pulled it through and got rid of as many as 260 (out of 262) PSAs. In fact, Sakhalin-1 and Sakhalin-2 are the very last remaining two PSAs harking back to post-Soviet Russia’s decade of humiliation under Yeltsin."

Any surprises why the Biden Administration hates Putin so much and wants him out of power in Moscow? "
M.K. Bhadrakumar 10 July 2022

Ukraine is not only their instrument of destruction in this game, but also this plan anticipates that the best of the newly privatized Ukrainian companies (producers of oil, gas, steel, coal. neon, wheat) will go to the US & west. Ukraine's aircraft industry will be destroyed in favor of Boeing. Ukrainian industrial products will be displaced by US and European products. Both Ukraine and Russia, under the American plan, will be nothing more than providers of raw material and consumers of American and EU manufactured goods.

"Do you know what the problem is? When did the problem of 2014 and the coup in Ukraine emerge? This happened because former President Viktor Yanukovich said that he needed to think about the principles for Ukraine’s association with the EU.

Why? If you open and read specific principles and requirements for Ukraine’s association, you will see that they are completely excessive.

...they wiped out the foundations of all the main production sectors. They simply opened up Ukraine’s customs borders to relatively cheap and high-quality goods from EU countries, but [Ukrainian] businesspersons would have been unable to raise their heads and work. ...Yanukovich did not say that he did not want to join the EU; he said that he needed to think and work on these parameters...

We can see the result. I repeat, the entire [Ukrainian] aircraft manufacturing industry has been lost completely. Who needs the Ukrainian aircraft manufacturing industry? Add to this the engine manufacturing industry. Motor Sich used to make all aircraft engines. Who needs them except Russia? Nobody needs them. Does Boeing need Ukrainian rivals?"
Vladimir Putin 17 June 2022

Destruction of China's business competitiveness

America has what seem like legitimate concerns with China's business and trade policy. Some of these are justified, mainly in the area of transfer of technology to China when American firms locate there. However, this comes under patent law, and although China's patent and other intellectual property laws are still developing and somewhat cumbersome, there is still protection for intellectual property - but that protection sometimes fails (as it does in the USA, by the way). Even when companies agree to operate in China under China's IP sharing rules, such as plant patents, there case of the theft of the New Zealand patented and trademarked kiwifruit variety Hort16A shows there is little or no effective recourse to remedies within China.

Bottom line, companies come to China with their eyes open to local conditions - yet they still come. They didn't have to. Worse, the complaints of the US government, as outlined by Janet Yellen, could - and should - be referred to the trade disputes procedures of the World Trade Organisation. But the American government has jammed it from operating. You reap what you sow. Yellens list of complaints, justified or not, is within her recent remarks. Some are rather hypocritical and ironic, considering the malign behaviour of the US government. We should note that the 'rules-based global economy' is code for American rules. Once again, America has unilaterally crippled the actual global rules system - the WTO.

 "Government intervention can be justified in certain circumstances – such as to correct specific market failures.

But China’s government employs non-market tools at a much larger scale and breadth than other major economies.

China also imposes numerous barriers to market access for American firms that do not exist for Chinese businesses in the United States.

For example, Beijing has often required foreign firms to transfer proprietary technology to domestic ones – simply to do business in China. These limits on access to the Chinese market tilt the playing field in favor of Chinese firms.

Further, we are concerned about a recent uptick in coercive actions targeting U.S. firms, which comes at the same moment that China states that it is re-opening for foreign investment.

The actions of China’s government have had dramatic implications for the location of global manufacturing activity. And they have harmed workers and firms in the U.S. and around the world.

In certain cases, China has also exploited its economic power to retaliate against and coerce vulnerable trading partners.

For example, it has used boycotts of specific goods as punishment in response to diplomatic actions by other countries. China’s pretext for these actions is often commercial. But its real goal is to impose consequences on choices that it dislikes – and to force sovereign governments to capitulate to its political demands.

The irony is that the open, fair, and rules-based global economy that the United States is calling for is the very same international order that helped make China’s economic transformation possible. And the inefficiencies and vulnerabilities generated by China’s unfair practices may end up hurting its own growth...

...As we press China on its unfair economic practices, we will continue to take coordinated actions with our allies and partners in response. A top priority for President Biden is the resilience of our critical supply chains. In certain sectors, China’s unfair economic practices have resulted in the over-concentration of the production of critical goods inside China. Under President Biden’s leadership, we are not only investing in manufacturing at home. We are also pursuing a strategy called “friendshoring” that is aimed at mitigating vulnerabilities that can lead to supply disruptions.

We are creating redundancies in our critical supply chains with the large number of trading partners that we can count on."
Janet Yellen, US Secretary of the Treasury April 20 2023

One of Americas biggest concerns is the export business potential unleashed when China and Taiwan unite. Mostly, it is about domination of the advanced computer chip market. Taiwan Semiconductor Manufacturing Co (TSMC), is the world’s largest contract chip maker, and the sole supplier to Apple. It also holds patents on the advanced lithography to make very advanced 3nm and 5nm chips. In 2021 TSMC started work on opening a 5nm plant in Arizona, USA. In 2022 it started planning to build a US12 billion dollar 'cutting edge' 3nm plant, to be completed by 2024. The US government subsidised the move with tax concessions on imported semiconductor fabrication equipment. In 2023 the US government will give USD 39 billion in subsidies for chip manufacture, presumably as the cost structure in USA is much higher, meaning production has to be tax-payer subsidised to be internationally competitive. At the same time, TSMC is considering opening plants in both Japan and Germany.

This move has the ancillary aim of denying China access to advances in TSMC chip technology (assuming it is developed outside Taiwan). It also prevents the highly advanced chips being available to China to use in sophisticated ground-based military surveillance, direction, and response systems. Although China makes a lot of chips domestically, China still imports high end chips. China imported USD 400 billion worth of computer chips in 2022 alone - including from American companies like Applied Materials. (China is not sitting on it's hands - unified or not, China is spending billions to develop it's own high end chip making equipment.)

The highly desirable high-tech jobs that chip manufacture provides will support American workers standard of living, not China's middle class. The inevitable industry - university collaborative research and development (and co-owned patents flowing from it) will support America university graduates, and provide an 'employment magnet' for graduates of universities in China, further robbing China of potential competitive advantages.

"America’s ability to compete in the 21st century turns on the choices that Washington makes – not those that Beijing makes...Our economic strategy is centered around investing in ourselves – not suppressing or containing any other economy.
Janet Yellen, US Secretary of the Treasury April 20 2023

The statement that the US economic strategy is not centered on "suppressing or containing any other economy" is a blatant lie.

The proof is the US actions against the Russian Federation. The word 'containing' or 'containment' is a typical American euphemism designed to hide reality. 'Containment' means, amongst other on-economic actions, a blockade on a countries exports and imports. It may not be a physical blockade - this is no longer necessary in a globally connected system dominated by a limited number of very large economic players like China the USA, and the west European countries. It is still a blockade.

Ultimately, once Taiwan is unified with the rest of China, the USA government will use the so-called 'sanctions' technique (illegal under international law) to block sale of computer chips produced in China, including the province/autonomous region of Taiwan. This blockade will be embraced by compliant vassals in Europe, especially if TSMC has opened a plant in Germany by then (it, too, will have to be subsidised, as energy costs in Germany will be chronically very high due to Germany abandoning low cost energy from Russia.)

The US process of eroding China's business competitiveness will be long and strewn with consequences the brilliant minds in the US political establishment didn't foresee. On April 20 2023 Janet Yellen, US Secretary of the Treasury, in effect declared economic war on China. The Moon of Alabama site, one of the very best geopolitical analysis sites in the world, gave relevant comments:

"Yesterday Secretary of the Treasury Janet L. Yellen gave a speech on the U.S.-China economic relationship. It's a bit like of declaration of war...

To use undefined "values", undefined "vital interests" and undefined "international rules" always make for a sorry excuse for mischief. To claim "unfair economic practices" in China when it is the U.S. that is breaking its own rules left and right is embarrassing. As Edward Luce writes In today's Financial Times:

Today’s US cannot make trade deals, cannot negotiate global digital rules, cannot abide by WTO rulings and cannot support Bretton Woods reforms. [So] how can China be squeezed into a US-led order in which America itself has stopped believing?

One can of course forget about the third point when the first and second are made. There will be no cooperation when the other points create a hostile confrontation...This has nothing to do with national security but with suppressing economic competition."
Moon of Alabama April 21 2023

We should never forget the "hostile confrontation" when it comes to the USA government foreign policy. Inciting direct or indirect hostile confrontations with non-state and state actors is the US government specialty. There is no doubt the USA is trying to incite a military clash between Taiwan and China (although it is a little early, TSMC must be able to relocate staff and equipment to the 3nm plant in Arizona first).

If the Taiwan plan fails, as seems likely, the USA fallback position is to incite a conflict between Japan and Russia and 'attach' China as a party. The USA has supplied 500 tomahawk missiles to Japan, and Japan's military budget has been bumped up to match Russia's. Japan is working on hypersonic missiles, and they may succeed where, to date, the US has failed.
No doubt Japan will try to seize the Kuril Islands, which it lost to Russia in world war 2. As Japan has still not signed a peace treaty with Russia, then technically they are still at war. This is a delicious set-up for the USA. Especially if Japan can be lured into NATO and all that entails. Massive US arms sales to Japan would follow. As would American first strike cruise missile systems (potentially nuclear armed, if the US can persuade the pro-war Japanese political faction).

The US medium term plan

The value of the dollar should be pushed down at the same time as USA advantages local businesses and destroys European, Chinese, and Russian competitors on the world market. This seems like an improbably big task. But the Americans have a long standing plan, their '30,000 foot' medium term view.

The plan is as cunning as it is immoral.

Ukraine - the US disposable tool to destroy Russian and European business

For at least 10 years now there has been a campaign by the West to demonize Russia, sometimes in the most grotesque and cynical ways. The Russian state has been personalized as 'Putin', and a media invented uncomplimentary avatar projected onto the western public psyche. The campaign has been at least xenophobic, if not racist. The Western propaganda campaign will probably prove to be the most massive multi-country propaganda campaign in history.

Why do this?

Simple. To make immorality seem permissible.

The plan is use NATO's eastward expansion to the point the existence of the Russian State is threatened, to corner it, with no place to retreat except the sea. Then, when Russia acts to remove the threat, the pre-propagandized public mind will not object to the virtual close down of all export activity of the Russian State. And if the Russian State collapses as a result, start feasting on Russia's most succulent businesses.

"Question: Was Russia lured into the conflict? Is it possible the West provoked Russia so it would get stuck in a quagmire?

Sergey Lavrov: I can’t rule out that somebody wanted to bog Russia down with this artificial conflict designed by the West. American political experts say it would allow the US to fully focus on countering China. This cynical and totally neocolonial approach is very characteristic of our Western partners.

This may be true, after all, but we were adamant in our attempts to avoid more bloodshed in Ukraine and prevent the country from becoming a foothold for future attacks against the Russian Federation. Our decisions were based on the situation on the ground regardless of the plans of the West.
And the situation was concerning, mainly because the West was doing everything in its power to make the situation more dangerous to Russia."
Sergey Lavrov 2 March 2022.

Here's how the American Government plan works:

The USA set out to deliberately corner Russia into having to annex Crimea - if Russia didn't, the USA would place missiles in Crimea directly on Russia's border AND lock Russia out of the Black Sea. Knowing that Russia would have to annex Crimea to prevent this, the USA could demonize Russia, and introduce sanctions against it. In the next stage, USA would create a pretext to unilaterally withdraw from the Intermediate Nuclear Force Treaty, bring Ukraine into NATO, and place multiple nuclear tipped missiles on multiple places on Russia's border.

Once again, the USA was fully aware that Russia simply could not allow that - these missiles would reach Moscow in 10 minutes; and future improved versions of the missiles even faster.

No doubt USA was aware that the Easternmost oblasts (provinces) of Luhansk and Donesk might try to break away to protect their cultural rights, and in particular the right to use the Russian language (which Ukraine had vowed to suppress). It didn't matter to the US plan either way, as there was still ample Ukrainian 'borderland' to place missiles on.

Russia's only options would be either to try to persuade Ukraine to agree to a mutual security agreement or invade Ukraine and occupy it, perhaps permanently. At that point, the US trap would be sprung.

Russia would be placed under a full trade embargo, cut off from the international settlement system, all ability to ship goods would be crippled, essential components of industry cut off. Russia would experience runaway inflation, job losses, international pariah status, barred from sporting organisations, it's media would be shut down by claims of disinformation, Russians wouldn't be able to travel. In short, it would be finished. Soon people would riot on the streets. America's pre-trained 'leaders' would emerge. Clashes between the more liberal West and the highly conservative East of Russia would break out.

Whether things stabilised or not, internal divisions and indebtedness would weaken Russia enough to force it to 'sell the family silver' at bargain prices. To the West.

How would the US dollar be affected? USA is well aware Russia and China have moved to create an alternative bank settlement system, outside Swift. USA is also aware that other countries will join the new system because they are afraid they could fall victim to the treatment meted out to Russia. Over time, the net result would be a fall in the use of the US dollar, and so a gradual fall in value.

The usefulness of the US dollar as a central bank reserve currency would fall, further eroding the value of the dollar.

The US plan to keep it's war profits pouring in Edited 19 February 2024

War is profitable for the US. Profitable for the US shareholders. Profitable for the coffers of the campaign funds of US politicians. Profitable for employees working in the arms industry.

The end of the war industry in Afghanistan was a serious worry. The gravy train had to keep rolling. A new war, with the Ukrainian (and Russian) people as victims this time seemed the ideal solution. The United States was fully aware that Ukraine could not win a war on Russia.

"...in terms of our approach to the problem, we have worked to sustain diplomacy because we do not believe there’s a military solution to the conflict...

...Here’s the challenge. I think, in a sense if you’re playing on the military terrain in Ukraine, you’re playing to Russia’s strength, because Russia is right next door. It has a huge amount of military equipment and military force right on the border.

Anything we did as countries in terms of military support for Ukraine is likely to be matched and then doubled and tripled and quadrupled by Russia. It has the ability to do that.

It would be very difficult for us to do that.

And then you may well get into an escalatory cycle that is hard to control and hard to predict."
Anthony Blinken, Deputy Secretary of State, 5 March 2015

Russia's weaponry is simply too advanced, its air defenses, its hypersonic missiles, its enormous capacity to supply heavy artillery, its rockets, its air superiority aircraft and helicopters, its well trained military, and so on. Whats more, without either air superiority or suppression of Russian air attack means, Ukraine would never be able to break through Russia's advanced defensive lines. NATO computer simulations proved it (for details, see Scott Ritter's interview of June 24 2023).

The US had a lot of expiring weaponry that needed to be de-commissioned. That is a cost. A 'forever' war in Ukraine (to replace Afghanistan) would see the already paid-for armaments destroyed, and defense industries re-invigorated. Not only would new armaments and munitions be needed, but new weapons could be tested, new and the entire makeup of US forces could be adjusted to more of a role of 'materiel and training' support for military adventures carried out by its NATO dupes. Even better, its NATO dupes would bankroll some of the US weapons production.

The needless deaths of Ukrainian conscripts in the US government proxy army was simply immaterial to the US politicians. Even when unfolding events - publicised and widely discussed on social media channels on the internet - made it inescapably clear that Ukrainian conscripts who assaulted the Russian defensive lines were almost literally committing suicide, the US government remained indifferent. Even when the incidence of company commanders and white supremacist neonazi units murdering fleeing or 'refusing' troops increased - the US political puppet master couldn't care less. The US armaments were being successfully destroyed, and would have to be replaced. At a profit. For every US missiles that falls, the cash register rings. Every drop of blood that falls drips riches into the bank accounts of the US merchants of death. Blood weapons. Blood guns. Blood howitzers. Blood tanks. But this is 'just business'. "Nothing personal" say the sociopaths, rubbing their hands while they check their swelling bank accounts.

How it's going

The USA, which has Government staff links to Ukraine - and therefore a biase towards it - stood behind the February 2014 coup in Ukraine. The neo nazi snipers who shot police and protesters alike were '80% ' responsible for the 'success' of the coup. The comprador President who emerged took some of these neonazi elements into Government, and also embedded them in the military.

USA called for contracts to build a base in Crimea even before the date of Russia's lease of the navy base there expired. As expected, Russia saw this as an existential threat, and on March 18th 2014 was forced to annex Crimea and keep access to the Black Sea. World outrage and the first tranche of trade restrictions followed. So far, so good.

In April 2014 the eastern oblasts of Lughansk and Donesk broke away, declaring themselves republics. A vicious intra-Ukrainian war broke out, with many civilians killed and wounded, mostly by Ukrainian Government fire on civilian areas. The would-be republics asked the Russian President to recognise their status, but he refused, finally convincing them to go for a treaty that allowed limited autonomy within Ukraine.

In the meantime, the USA ramped up pressure with a revolving door of 'advisors' and 'trainers' coming to Ukraine. The US started to set up bases and expand airfields to take large aircraft, such as nuclear bombers. But Russia managed to shepherd an agreement through the Security Council of the UN, an agreement which would end the violence, establish Ukraine as a Federation, and allow the rebel Oblasts their unique identities. The agreement, Minsk 2, was modeled in part on the Kosovo settlement.

It would not have interfered with Mr. Biden's plans, but for a single clause that would fatally sink all America's carefully thought out machinations:
'10. Pullout of all foreign armed formations, military equipment, and also mercenaries from the territory of Ukraine under OSCE supervision. Disarmament of all illegal groups.'
So the USA held out the false hope that Ukraine might be able to join NATO. And advised Ukraine not to fulfill the UN Security Council's Minsk Agreement.

Ukraine deliberately dodged it's obligations for 8 long years, with Russia constantly trying to persuade it to comply. France and Germany, supposedly co-mediators, did nothing to push Ukraine's implementation along. USA, not a mediator, held all the influence on Ukraine. USA duplicitously hinted at NATO membership for Ukraine and a 'military solution' to the breakaway republics, knowing the inevitable consequences.

"...we had for a long time been trying to persuade Berlin and Paris into telling Kiev to stop sabotaging the implementation of the Minsk agreements that had been agreed upon ...with the participation of the Germans and the French and which were subsequently approved by the UN Security Council...they did their best to “whitewash” Kiev and justify its transparent desire to disrupt the implementation of these agreements.

Mr Poroshenko is now claiming that when he signed the Minsk agreements he was not really planning to implement them. According to him, he wanted to buy time and to obtain Western weapons in order to get back at us... Now, we can safely assume that Berlin and Paris were covering up for the Kiev regime as a way of supporting these actions..."
Sergey Lavrov 6 July 2022

So here we are. The reckless shelling on civilians populations intensified in recent days, NATO provided Ukraine with huge quantities of urban warfare weapons, USA junked any prospect of a security treaty with Russia, clearing the way for nukes on the border. The trigger was pulled.

President of Russia Vladimir Putin: "We are meeting in a complicated period as our Armed Forces are conducting a special military operation in Ukraine and Donbass.

I would like to remind you that at the beginning, on the morning of February 24, I publicly announced the reasons for and the main goal of Russia’s actions.

It is to help our people in Donbass, who have been subjected to real genocide for nearly eight years in the most barbarous ways, that is, through blockade, large-scale punitive operations, terrorist attacks and constant artillery raids.

Their only guilt was that they demanded basic human rights: to live according to their forefathers’ laws and traditions, to speak their native language, and to bring up their children as they want.

During these years, the Kiev authorities have ignored and sabotaged the implementation of the Minsk Package of Measures for a peaceful settlement of the crisis and ultimately late last year openly refused to implement it.

They also started to implement plans to join NATO. Moreover, the Kiev authorities also announced their intention to have nuclear weapons and delivery vehicles. This was a real threat. With foreign technical support, the pro-Nazi Kiev regime would have obtained weapons of mass destruction in the foreseeable future and, of course, would have targeted them against Russia.

Our numerous warnings that such developments posed a direct threat to the security of Russia were rejected with open and cynical arrogance by Ukraine and its US and NATO patrons.

In other words, all our diplomatic efforts were fully in vain. We have been left with no peaceful alternative to settle the problems that developed through no fault of ours. In this situation, we were forced to begin this special military operation.

The movement of Russian forces against Kiev and other Ukrainian cities is not connected with a desire to occupy that country. This is not our goal, as I pointed out openly in my statement on February 24.

...encouraged by the United States and other Western countries, Ukraine was purposefully preparing for a scenario of force, a massacre and an ethnic cleansing in Donbass. A massive onslaught on Donbass and later Crimea was just a matter of time. However, our Armed Forces have shattered these plans."

Russia saw the black thunder clouds building ever larger. Russia learned Ukraine was on the way to building it's own nuclear weapons, with US help.

Which direction would those weapons face?

Mindful of USA's detonation of nuclear weapons on civilian centers in Japan, mindful of its untrustworthiness, mindful of the price the USSR paid in appeasing Hitler, mindful that Hitler attacked without declaring war, mindful that there could be no security unless Ukraine was de-militarised and the Government de-nazified, Russia had to act in it's self defense - and act fast.

Russia recognised the two Oblasts as Republics. It signed a mutual security treaty. The new Republics asked Ukraine to remove their military formations from their territory. Ukraine ignored them. The Republics asked Russia for military assistance, as per their freshly inked Treaty. Russia invaded Ukraine.

The objectives to free the territories of the two republics from Ukrainian military are well under way.

The objective of pressuring Ukraine Government to hand over war criminals and to agree not to allow military formations (Minsk 2, clause 10) has yet to be achieved.

Mr. Biden has achieved his objective of the most sweeping embargoes the world has ever seen. He has achieved the racist and xenophobic demonisation of all Russians.

He has limited Russia's ability to do business.

He has struck a heavy hammer blow to the cost structure of European businesses, and German businesses in particular.

"...the facts are as follows: that Western OSCE participating States rendering military assistance to the Ukrainian Government in any form are accomplices in Ukraine’s war crimes against the civilian population of Donbas."
Konstantin Gavrilov, Head of the Delegation of the Russian Federation to the Vienna Negotiations on Military Security and Arms Control, June 21 2022

He has made the western officials and citizens complicit in crimes against humanity

He has allowed armed neonazi groups in Europe - with German complicity.

He has voted in the UN against Russia's annual motion to condemn xenophonia and nazism everywhere. Only 2 countries in the world sank this low.

He has rudely destroyed diplomatic relations with Russia.

Most importantly of all, he has, with deliberation and malice aforethought, caused the death of at least 15,000 Russian soldiers, as well as of around 200,000 thousand of decent Ukrainian soldiers. Deaths that he had the power to avoid - simply by insisting Ukraine sign the Minsk 2 peace agreement.

He took from these people the greatest human right of all - the right to life itself.

Peace in Eurasia was not in his economic plan for America.

(For an excellent overview of the background to the conflict, the main actors, and how it may evolve see author and analyst, military historian, former UN Weapons Inspector in Iraq and Russia, former marine, Scott Ritter. Scott Ritter lies and deception about the Russia/Ukraine war Youtube: https://youtu.be/uHfybd6agUk )


Laurie Meadows articles on Security