……………………
May 2, 2019, “Pompeo, Lavrov to meet next week on Venezuela: US official,” AFP, Washington, DC
“US Secretary of State Mike Pompeo will discuss disagreements on the Venezuela crisis with Russian Foreign Minister Sergei Lavrov when they meet next week in Finland, a US official said Thursday.
The
official said the top diplomats would take up a range of tensions
between the rival powers when they see each other on the sidelines of an Arctic Council meeting starting Monday in the northern Finnish city of Rovaniemi.
“I
would expect that the secretary and he (Lavrov) will have an
opportunity, obviously, to talk,” the official told reporters on
condition of anonymity.
“When they have a chance to get together they can review a whole range of issues including our concerns about Russia’s behavior that includes Ukraine and, certainly, Venezuela,” he said.
Lavrov and Pompeo had a tense call on Wednesday over Venezuela, where the United States is trying to oust President Nicolas Maduro, an ally of Moscow.
Pompeo told Lavrov that Russia’s assistance to the [so-called] leftist leader [actually a Bolivarian leader, per 1999 constitution], whose re-election last year was widely criticized internationally as fraudulent, was “destabilizing” Venezuela. [But two decades of US taxpayer funded attempted coups and starvation aren't “destabilizing?”]
Lavrov in turn denounced the “destructive influence” of the United States in what he called a “flagrant violation of international law.”
The United States and its European allies have been imposing sanctions on Russia since [2014's violent coup of Ukraine's elected government engineered by the US as Obama freely admits, the conversion of Ukraine to US colony, a result of two decades of US intervention and $5 billion US taxpayer dollars] its 2014 [voter approved] takeover of Crimea, with Moscow’s ongoing support of separatists in Ukraine becoming a major source of tension. ["Tension" is guaranteed by terms of US financial bailout. IMF loan requires Ukraine to continue war with its Russian neighbors].
The
encounter with Lavrov also comes after the long-awaited release of an
investigation by Special Counsel Robert Mueller who said [without
evidence] that Russia worked extensively to try to sway the 2016 US
election in Donald Trump’s favor.”
………………………………………… Added: “Peaceful transfer of power“ is how neocons define US taxpayer funded overthrow of non-threatening governments thousands of miles from the US....Trump says Putin is “Disruptive” in Venezuela? Worse, US now says Venezuela most important issue between Russia and US because of Florida and 2020 election!
5/5/19, “Putin Is Ready to Give Up Venezuela for the Right Price,” Moscow Times, Vladimir Frolov, opinion
“Sergei Lavrov and Mike Pompeo will soon meet in Helsinki to discuss Venezuela’s future.”
“Russia’s Foreign Minister Sergei Lavrov and U.S. Secretary of State Mike Pompeo are heading towards a contentious meeting in Finland (their first since the Helsinki summit last year) with the [US banker created] crisis in Venezuela crowding out almost all other items on the agenda. Last week, Russia and Cuba may have thwarted a U.S. backed plot to engineer a peaceful transfer of power from Nicolas Maduro to a transitional government led by interim president Juan Guaido and Venezuela’s top officials, including Defense Minister Vladimir Padrino and Supreme Court Chief Justice Maikel Moreno.
Secretary Pompeo accused Moscow of dissuading Maduro from leaving the country (allegedly he was assured of safe passage to Guatemala) when his plane was already on the tarmac. Moscow furiously denied the charges when Pompeo phoned Lavrov on May 1 to protest.
On May 3, U.S. President Donald Trump called Russia’s President Vladimir Putin to flag American concerns over Russia’s “disruptive role” in Venezuela and stress his country’s determination to ensure Venezuela’s return to democratic rule. [When will US "return to democratic rule?”] But, as common in his personal interactions with Putin [no links for this claim], Trump quickly lost the initiative, allowing the discussion on Venezuela to drift towards the softer subject of humanitarian aid.
Putin expressed Russia’s displeasure with U.S interference in Venezuela while convincing Trump that he “was not looking at all to get involved in Venezuela”.
Despite Trump’s going “full Helsinki” on his phone chat with Putin, the U.S.-Russia geopolitical stand-off in Venezuela now threatens to derail the few remaining cooperative lanes in the relationship. White House national security advisor John Bolton made it clear on May 1: “This is our hemisphere — it’s not where the Russians ought to be interfering”.
Three weeks ago, the same point, in even more forceful terms, was privately made by Fiona Hill, NSC Senior Director for Europe, Russia and Eurasia during her visit to Moscow.
The Kremlin was struck by Hill’s prioritization of Venezuela as the most important issue in the relationship due to its direct impact on U.S. politics and the 2020 presidential race in Florida. Moscow concluded then it found an issue it could use to force the U.S. to grant concession elsewhere, most notably in Ukraine.
Pompeo to Speak With Russian Counterpart on Venezuela – Bolton
Russia believes that the risk of a U.S. military intervention in Venezuela is low (despite secret meetings [English translation] at the Pentagon), since Trump does not want to get stuck in another unpopular war. But politically Trump is so heavily invested in a “win” in Venezuela that he has all but drawn himself an untenable red line with prospects of a major loss of face, while his strategy there is just “winging it”. Moscow may be undervaluing Trump’s ability to turn on a dime, but still thinks it finally has leverage.
Russia’s support for Maduro is driven by financial and energy interests, as well as by the Kremlin’s vision of a multi-polar world order, where Russia should block U.S. attempts at regime change in sovereign states friendly to Moscow. But the Russian leadership practices a transactional approach to international affairs in line with Russia’s hierarchy, where core Russian interests trump goals of less importance.
Bolton’s invocation of the Monroe Doctrine and his “spheres of influence framing” makes Moscow believe that, if done on an equal basis, a similar right should be recognized for Russia in Ukraine and other parts of the “near abroad”.
For Moscow, a deal of equals on Venezuela where Russia helps the U.S. diffuse the crisis by engineering a constitutional transition, should involve an equally significant concession by the U.S. (on a par with JFK-Khrushchev deal to remove nuclear missiles from Cuba and Turkey) to pressure Kiev into fully implementing the Minsk-2 agreements that would truncate Ukraine’s sovereignty [which doesn't exist because it's a US colony] and allow Moscow to retain some degree of control over Kiev’s security policies. Putin specifically mentioned that during his call with Trump. Withdrawing Russian military support for Maduro should also be matched by the withdrawal of U.S. military assistance to Ukraine.
Russia’s support for Maduro is driven by financial and energy interests, as well as by the Kremlin’s vision of a multi-polar world order, where Russia should block U.S. attempts at regime change in sovereign states friendly to Moscow. But the Russian leadership practices a transactional approach to international affairs in line with Russia’s hierarchy, where core Russian interests trump goals of less importance.
Bolton’s invocation of the Monroe Doctrine and his “spheres of influence framing” makes Moscow believe that, if done on an equal basis, a similar right should be recognized for Russia in Ukraine and other parts of the “near abroad”.
For Moscow, a deal of equals on Venezuela where Russia helps the U.S. diffuse the crisis by engineering a constitutional transition, should involve an equally significant concession by the U.S. (on a par with JFK-Khrushchev deal to remove nuclear missiles from Cuba and Turkey) to pressure Kiev into fully implementing the Minsk-2 agreements that would truncate Ukraine’s sovereignty [which doesn't exist because it's a US colony] and allow Moscow to retain some degree of control over Kiev’s security policies. Putin specifically mentioned that during his call with Trump. Withdrawing Russian military support for Maduro should also be matched by the withdrawal of U.S. military assistance to Ukraine.
So far Moscow has been frustrated by American refusal to engage in such bargaining of equals through the U.S. initiated bilateral high-level channel of communication on Venezuela (which Moscow assumed it was intended for).
The first meeting between Deputy Foreign Minister Ryabkov and U.S. Special Envoy for Venezuela Elliot Abrams in mid-March ended in the U.S. presenting no bargains and simply repeating its demands Russia ends its support for Maduro.
Sending two Russian military planes to Caracas days after the meeting in Rome was Moscow signaling its position if America wasn’t ready to take them seriously going forward.
Trust between Moscow and Washington is currently non-existent. No side could be sure that even if a deal was reached, the other side would implement its end of the bargain. The meeting between Lavrov and Pompeo may prove to be as bitter as the one held by Hill if neither side signals their willingness to negotiate. Or it might be the wrong format altogether, actual deals might require a secret channel or a one-on-one presidential sit-down.
Moscow, however, knows that the events of last week do not augur well for Maduro’s long-term rule. The Venezuelan military is sitting on the fence and its leaders are mulling their options.
The deal offered to them by the opposition (not just amnesty, but a retention of their power in the transitional government) is more serious than anything discussed before. Moscow does not have control over Venezuela’s military the way it had in Syria, where pro-Assad officers knew they and their families would be slaughtered [by US forces] if they lost the war. Nor are there foreign expeditionary forces of non-Russian provenance supplied and funded by an allied power (Iran) to do the heaviest fighting.
Moscow is ready to sell its stake in Maduro, but it is still unclear whether Washington is ready to offer the right price.” [Who is "Washington?"].
……………………………………..
Added: Trump called Putin: “The focus of the talks was on Venezuela, with Trump making it clear that the “United States stands with the people of Venezuela.”” …[Trump has given up and is mailing it in. Trump, you don’t even “stand with” the people of the United States. You certainly don’t “stand with” your voters. You’ve done the opposite of what you promised them for their votes.]
5/3/19, “Trump, Putin Speak on Phone for Over an Hour,“ Antiwar.com, Jason Ditz
“White House: Primary focus of talks was Venezuela”
“President Trump and Russian President Vladimir Putin spoke on the phone for over an hour on Friday, a significant occurrence for an administration that has been very reticent to engage in dialogues with Russia.
According to White House officials, the focus of the talks was on Venezuela, with Trump making it clear that the “United States stands with the people of Venezuela,” which of course means regime change.
Russia obviously would’ve been aware of that position already, since we’re just days out from a failed US-backed coup in Venezuela. It’s not clear what specifics would have been focused on, but some US officials were blaming Russia for the coup’s failure, which may have been a topic of discussion.
Russia has been backing the Maduro government in Venezuela, while the US has long sought regime change, [via coups in 2002, 2015 and 2019] and since January has recognized the nation’s opposition leader as the rightful president.
Trump also indicated that the talks included Ukraine, North Korea, arms control, and election interference. Press Secretary Sarah Huckabee-Sanders says Trump made clear that he wouldn’t allow election interference.
There was no elaborating on Ukraine, but the North Korea topic focused on both nations wanting denuclearization, with Trump urging Russia to “put pressure on North Korea” after a recent Putin-Kim summit. Putin had urged the US to show flexibility in such a deal, but so far the US has just thanked them for helping and shown no signs of policy change.”
……………………………………
Added: Easy translation of US lies about Venezuela:
5/4/19, “Venezuela: Establishment Talking Points Translation Key,“ Caitlin Johnstone
““I stand with the people of Venezuela” = I stand with some of the people in Venezuela, specifically the ones who support US government interests.
“Interim President” = Some guy most Venezuelans had never heard of until January of this year.
“Brutal dictator” = Elected leader who opposes US dictates.
“Usurper” = The guy calling the shots and leading the country.
“Opposition-led, military-backed challenge” = Coup.
“The people of Venezuela are starving” = Oil! Oil! Oil!
“All options are on the table” = One option is on the table.
“Popular uprising” = Unpopular uprising.
“Grassroots activists” = Let’s pretend the CIA’s not a thing.
“Freedom and democracy” = US control of Venezuela’s petroleum resources.
“Humanitarian aid” = Pretext for further escalations.
“Failed socialist policies” = Inability to overcome US economic warfare.
“Foreign interference” = An ally of Venezuela supporting its ally.
“We support the National Assembly” = Foreign interference.
“The Venezuelan Constitution” = Our convenient interpretation of the Venezuelan Constitution.
“We can’t just sit around and do nothing” = I have learned nothing since the Iraq War.
“54 countries recognize Guaido as president” = 141 countries don’t recognize Guaido as president.
“Troika of tyranny” = John Bolton’s second-favorite masturbatory fantasy.
“Special Envoy to Venezuela” = Convicted war criminal.
“The Monroe Doctrine” = I think all the countries on this side of the planet are my personal property.
“Operación Libertad” = Operación Libertad para el Petróleo de Venezuela.
“Shut the fuck up, bitch.” = Standard talking point from Venezuela coup narrative managers on social media.
“Talk to Venezuelans” = Talk to the wealthier, English-speaking Venezuelans with abundant free time and internet access who support a coup.
“You love Maduro” = I don’t have an argument for your opposition to US interventionism.
“You’re just a socialist who loves socialism” = I don’t have an argument.
“Go live in Venezuela if you love socialism so much” = I don’t have an argument.
“Maduro is killing his own people” = Yeah I’m just making shit up now.
“Maduro refuses to let in aid” = I just believe whatever the TV says.
“Trump is liberating the people of Venezuela” = I just believe whatever QAnon says.
“This US regime change intervention will be different” = I have replaced my brain with shaving cream.”
_______________________
Added: “A strong Russia is the only way to curtail the Western aggression:”
“The Russian government’s popularity was at a peak when the government showed it had the intelligence and will to reincorporate Crimea into Russia….All of life has an interest in a Russia too strong to be attacked or provoked as a strong Russia is the only way to curtail the Western aggression that is leading to nuclear war.…As far as we can tell, the Institute of Economics of the Russian Academy of Sciences is so brainwashed by neoliberal economics that their minds are closed to correct policies. The failure of Russian economic leadership imposes far more costs on the Russian economy than do Washington’s sanctions. Intellectual leadership is weak with many in the intellectual class favoring integration with the West rather than with the East.”
3/8/19, “Is Neoliberalism Killing Russia?“ foreignpolicyjournal.com, Paul Craig Roberts, Michael Hudson
“Russia is experiencing capital outflows due to the Russian private sector’s repayment of loans to Western creditors. Russia has experienced over $25 billion a year of capital outflows since the early 1990s, accumulating to over a trillion dollars. This money could have been invested in Russia itself to raise the productivity and living standards of its citizens. The outflow puts the ruble under pressure, and the interest payments draw money out of the country away from Russian uses. If it were not for these outflows, the value of the ruble and Russian wages would be higher.
The US sanctions give Russians every reason not to repay their foreign loans; yet Russians continue to enable their own exploitation by foreigners, as neoliberal economists have told them that there is no alternative.
Russia’s economic problems are due to the looting of the country during the Yeltsin years, to the imposition of neoliberal economics by the Americans, and to financialization as a result of the privatizations.
Russia’s stock market became the darling of the West in the mid-1990s as underpriced mining, oil and infrastructure were sold for a fraction of their value to foreigners, thus transferring Russian income streams abroad instead of leaving the income to be invested in Russia. In effect, Russians were told that the way for their country to get rich was to let kleptocrats, oligarchs, and their U.S. and British stock brokers make hundreds of billions of dollars by privatizing Russia’s public domain.
Washington took advantage of the gullible and trusting Yeltsin government to do as much political and economic damage as possible to Russia. The country was torn apart. Historic parts of Russia such as Ukraine were split off into separate countries. Washington even insisted that Crimea, long a part of Russia and the country’s warm water port, was retained by Ukraine when the Soviet Union was dismembered.
People’s savings (called the “overhang”) were wiped out with hyperinflation. Privatization was not accompanied by new investment. The economy was not industrialized, but financialized. The proceeds from privatization were deposited by the Russian government in private banks where the money was used to privatize more Russian assets. The banking system thus served to finance the transfer of ownership, not to fund new investment, and the proceeds were transferred abroad. Russia was turned into a financial colony in which proconsuls created wealth at the top.
Today privatization continues in the de facto privatization of public assets, such as charging fees for use of federal highways. As the Russian economic profession has been brainwashed by the Americans, the country is devoid of economic leadership.
We have pointed out on more than one occasion that it is nonsensical for Russia to indebt itself by borrowing abroad in order to finance investments. The Russians were sold a bill of goods that the central bank cannot issue rubles unless the rubles are backed by dollars. This advice served to prevent Russia from using its own central bank to fund public infrastructure and private investment projects by issuing rubles. In other words, Russia might as well not have a central bank.
Apparently, Russian economists do not understand that Russia does not spend borrowed foreign currencies inside Russia. If Russia takes a foreign loan, the borrowed money goes into central bank reserves. The central bank then issues the ruble equivalent to be spent on the project, and the cost of the project goes up by the pointless interest paid to the foreign lender.
As far as we can tell, the Institute of Economics of the Russian Academy of Sciences is so brainwashed by neoliberal economics that their minds are closed to correct policies. The failure of Russian economic leadership imposes far more costs on the Russian economy than do Washington’s sanctions.
Intellectual leadership is weak with many in the intellectual class favoring integration with the West rather than with the East. To be part of the West has been an important goal since Peter the First and Catherine the Great, and the Russian Atlanticist Integrationists cannot let go of the ancient goal. This goal no longer makes sense. Not only does it imply Russian vassalage, but also Europe is no longer the center of power. The East is rising, and China is the center and will be until the Chinese destroy themselves by copying the Western neoliberal policy of financializing the economy.
Although Putin is a leader and has a sense of Russian purpose, many officials use their office not in service to Russia but in service to their own wealth, much of which is held abroad. Corruption and embezzlement seem to be the purpose of many office holders. Scandals abound among members of government and reflect badly on Putin and Medvedev.
The Russian government’s popularity was at a peak when the government showed it had the intelligence and will to reincorporate Crimea into Russia. However, the Russian government, hoping to reassure Washington and Europe,refused the requests of the Luhansk and Donetsk republics to be reincorporated into Russia. Russian nationalists, the majority of the population, saw this as kowtowing to the West. Moreover, the Russian government’s decision has resulted in Ukraine’s ongoing military assault on the breakaway republics and to the arming of Ukraine by the West. Instead of acting decisively, the Russian government enabled the continuation of conflict that can be exploited by Washington. The Russian people understand this even if the government does not.
By failing to show firmness, the Russian government encourages the crony system of oligarchs who want a government that they can use for their narrow interests. Their interests include participating in the system of Western plunder known as “globalism.” These client elites of the West oppose a powerful Russian state that could assert itself on the world stage and offer an alternative policy to the West’s policy of plunder. The influence of this narrow interest group on government policy indicates that the Russian government is compromised.
Putin is trying to break free of the West’s grip by directing Russia’s economic orientation to the East. His effort is helped by the American sanctions. But Russia remains sufficiently mired in the Western system to be vulnerable to sanctions and is only slowly extracting itself.
Various aspects of Russia’s difficulties and transformation into a power with a foot in both West and East are discussed by commentators. What goes unacknowledged is that Russian economic policy is constrained—indeed, crippled—by the neoliberal brainwashing given to Russian economists by the Americans in the 1990s. Consequently, Russia is enfeebled by an economic policy that encourages privatization and foreign ownership, and by financialization of economic rents, that is, of income streams that do not result from productive investment but from such factors as location and rise in value due to public infrastructure development, such as a road built across a property. In a financialized economy credit is used to transfer property ownership instead of to finance new plant and equipment and construction of infrastructure.
The Russian government and central bank have been blinded to the fact that Russian infrastructure projects and private investment are not dependent on borrowing dollars abroad or by acquiring dollars by selling Russian assets to foreigners. Such projects can be financed by ruble creation by the Russian central bank. Money that flows into productive projects that raise output is not inflationary. Generally speaking, such projects lower costs.
For Russia to succeed, Russia needs an economic re-education and a government that finds its footing in Russian nationalism and discourages Western provocations with firmer responses.
It is our view that the Western world, indeed all of life, has an interest in a Russia too strong to be attacked or provoked as a strong Russia is the only way to curtail the Western aggression that is leading to nuclear war.”
“This article was originally published at PaulCraigRoberts.org on March 1, 2019.”
…………………………..
Added: US fully supported Russian “Strongman” Yeltsin in 1990s: UK Guardian report: In Oct. 1993 Yeltsin closed opposition newspapers and sent tanks to remove his opponents in Russian parliament. Scores were killed, hundreds wounded, Bill Clinton said, “President Yeltsin had no other alternative but to try to restore order.”
10/5/1993, “Yeltsin crushes revolt,“ UK Guardian, Jonathan Steele and David Hearst in Moscow
*“Parliament taken in tank battle · Opposition parties and newspapers banned”
“President Boris Yeltsin moved swiftly last night to stamp his absolute power on Russia by suspending a range of political movements and closing opposition newspapers after the surrender of his main parliamentary opponents in the wake of the assault on the Russian White House. Under a decree following the state of emergency that Mr Yeltsin imposed on Sunday, the National Salvation Front, the Russian Communist Party, the United Front of Workers and the Union of Officers were banned, while Pravda, the former organ of the Soviet Communist Party, and a number of other papers were told to cease publication. An overnight curfew was also imposed throughout Moscow….
With elections promised in December for a new bicameral parliament, the bans will severely limit the options for Russians who oppose Mr Yeltsin. They will also remove the risk that those unhappy with the government’s tough economic reforms will vote for communists on the model of Poland.
“Western leaders, warned in advance of the assault, promptly declared support,but urged a speedy return to constitutionality amid fears that the Russian leader could become a political hostage to the armed forces.
“It is clear that the opposition forces started the conflict, and President Yeltsin had no other alternative but to try to restore order,’ the US president, Bill Clinton, said.
“The US supported Yeltsin because he is Russia’s democratically-elected leader,” he said. “I have no reason to doubt the personal commitment that President Yeltsin made to let the Russian people decide their own future in elections.’
Added: Easy translation of US lies about Venezuela:
5/4/19, “Venezuela: Establishment Talking Points Translation Key,“ Caitlin Johnstone
““I stand with the people of Venezuela” = I stand with some of the people in Venezuela, specifically the ones who support US government interests.
“Interim President” = Some guy most Venezuelans had never heard of until January of this year.
“Brutal dictator” = Elected leader who opposes US dictates.
“Usurper” = The guy calling the shots and leading the country.
“Opposition-led, military-backed challenge” = Coup.
“The people of Venezuela are starving” = Oil! Oil! Oil!
“All options are on the table” = One option is on the table.
“Popular uprising” = Unpopular uprising.
“Grassroots activists” = Let’s pretend the CIA’s not a thing.
“Freedom and democracy” = US control of Venezuela’s petroleum resources.
“Humanitarian aid” = Pretext for further escalations.
“Failed socialist policies” = Inability to overcome US economic warfare.
“Foreign interference” = An ally of Venezuela supporting its ally.
“We support the National Assembly” = Foreign interference.
“The Venezuelan Constitution” = Our convenient interpretation of the Venezuelan Constitution.
“We can’t just sit around and do nothing” = I have learned nothing since the Iraq War.
“54 countries recognize Guaido as president” = 141 countries don’t recognize Guaido as president.
“Troika of tyranny” = John Bolton’s second-favorite masturbatory fantasy.
“Special Envoy to Venezuela” = Convicted war criminal.
“The Monroe Doctrine” = I think all the countries on this side of the planet are my personal property.
“Operación Libertad” = Operación Libertad para el Petróleo de Venezuela.
“Shut the fuck up, bitch.” = Standard talking point from Venezuela coup narrative managers on social media.
“Talk to Venezuelans” = Talk to the wealthier, English-speaking Venezuelans with abundant free time and internet access who support a coup.
“You love Maduro” = I don’t have an argument for your opposition to US interventionism.
“You’re just a socialist who loves socialism” = I don’t have an argument.
“Go live in Venezuela if you love socialism so much” = I don’t have an argument.
“Maduro is killing his own people” = Yeah I’m just making shit up now.
“Maduro refuses to let in aid” = I just believe whatever the TV says.
“Trump is liberating the people of Venezuela” = I just believe whatever QAnon says.
“This US regime change intervention will be different” = I have replaced my brain with shaving cream.”
_______________________
Added: “A strong Russia is the only way to curtail the Western aggression:”
“The Russian government’s popularity was at a peak when the government showed it had the intelligence and will to reincorporate Crimea into Russia….All of life has an interest in a Russia too strong to be attacked or provoked as a strong Russia is the only way to curtail the Western aggression that is leading to nuclear war.…As far as we can tell, the Institute of Economics of the Russian Academy of Sciences is so brainwashed by neoliberal economics that their minds are closed to correct policies. The failure of Russian economic leadership imposes far more costs on the Russian economy than do Washington’s sanctions. Intellectual leadership is weak with many in the intellectual class favoring integration with the West rather than with the East.”
3/8/19, “Is Neoliberalism Killing Russia?“ foreignpolicyjournal.com, Paul Craig Roberts, Michael Hudson
“Russia is experiencing capital outflows due to the Russian private sector’s repayment of loans to Western creditors. Russia has experienced over $25 billion a year of capital outflows since the early 1990s, accumulating to over a trillion dollars. This money could have been invested in Russia itself to raise the productivity and living standards of its citizens. The outflow puts the ruble under pressure, and the interest payments draw money out of the country away from Russian uses. If it were not for these outflows, the value of the ruble and Russian wages would be higher.
The US sanctions give Russians every reason not to repay their foreign loans; yet Russians continue to enable their own exploitation by foreigners, as neoliberal economists have told them that there is no alternative.
Russia’s economic problems are due to the looting of the country during the Yeltsin years, to the imposition of neoliberal economics by the Americans, and to financialization as a result of the privatizations.
Russia’s stock market became the darling of the West in the mid-1990s as underpriced mining, oil and infrastructure were sold for a fraction of their value to foreigners, thus transferring Russian income streams abroad instead of leaving the income to be invested in Russia. In effect, Russians were told that the way for their country to get rich was to let kleptocrats, oligarchs, and their U.S. and British stock brokers make hundreds of billions of dollars by privatizing Russia’s public domain.
Washington took advantage of the gullible and trusting Yeltsin government to do as much political and economic damage as possible to Russia. The country was torn apart. Historic parts of Russia such as Ukraine were split off into separate countries. Washington even insisted that Crimea, long a part of Russia and the country’s warm water port, was retained by Ukraine when the Soviet Union was dismembered.
People’s savings (called the “overhang”) were wiped out with hyperinflation. Privatization was not accompanied by new investment. The economy was not industrialized, but financialized. The proceeds from privatization were deposited by the Russian government in private banks where the money was used to privatize more Russian assets. The banking system thus served to finance the transfer of ownership, not to fund new investment, and the proceeds were transferred abroad. Russia was turned into a financial colony in which proconsuls created wealth at the top.
Today privatization continues in the de facto privatization of public assets, such as charging fees for use of federal highways. As the Russian economic profession has been brainwashed by the Americans, the country is devoid of economic leadership.
We have pointed out on more than one occasion that it is nonsensical for Russia to indebt itself by borrowing abroad in order to finance investments. The Russians were sold a bill of goods that the central bank cannot issue rubles unless the rubles are backed by dollars. This advice served to prevent Russia from using its own central bank to fund public infrastructure and private investment projects by issuing rubles. In other words, Russia might as well not have a central bank.
Apparently, Russian economists do not understand that Russia does not spend borrowed foreign currencies inside Russia. If Russia takes a foreign loan, the borrowed money goes into central bank reserves. The central bank then issues the ruble equivalent to be spent on the project, and the cost of the project goes up by the pointless interest paid to the foreign lender.
As far as we can tell, the Institute of Economics of the Russian Academy of Sciences is so brainwashed by neoliberal economics that their minds are closed to correct policies. The failure of Russian economic leadership imposes far more costs on the Russian economy than do Washington’s sanctions.
Intellectual leadership is weak with many in the intellectual class favoring integration with the West rather than with the East. To be part of the West has been an important goal since Peter the First and Catherine the Great, and the Russian Atlanticist Integrationists cannot let go of the ancient goal. This goal no longer makes sense. Not only does it imply Russian vassalage, but also Europe is no longer the center of power. The East is rising, and China is the center and will be until the Chinese destroy themselves by copying the Western neoliberal policy of financializing the economy.
Although Putin is a leader and has a sense of Russian purpose, many officials use their office not in service to Russia but in service to their own wealth, much of which is held abroad. Corruption and embezzlement seem to be the purpose of many office holders. Scandals abound among members of government and reflect badly on Putin and Medvedev.
The Russian government’s popularity was at a peak when the government showed it had the intelligence and will to reincorporate Crimea into Russia. However, the Russian government, hoping to reassure Washington and Europe,refused the requests of the Luhansk and Donetsk republics to be reincorporated into Russia. Russian nationalists, the majority of the population, saw this as kowtowing to the West. Moreover, the Russian government’s decision has resulted in Ukraine’s ongoing military assault on the breakaway republics and to the arming of Ukraine by the West. Instead of acting decisively, the Russian government enabled the continuation of conflict that can be exploited by Washington. The Russian people understand this even if the government does not.
By failing to show firmness, the Russian government encourages the crony system of oligarchs who want a government that they can use for their narrow interests. Their interests include participating in the system of Western plunder known as “globalism.” These client elites of the West oppose a powerful Russian state that could assert itself on the world stage and offer an alternative policy to the West’s policy of plunder. The influence of this narrow interest group on government policy indicates that the Russian government is compromised.
Putin is trying to break free of the West’s grip by directing Russia’s economic orientation to the East. His effort is helped by the American sanctions. But Russia remains sufficiently mired in the Western system to be vulnerable to sanctions and is only slowly extracting itself.
Various aspects of Russia’s difficulties and transformation into a power with a foot in both West and East are discussed by commentators. What goes unacknowledged is that Russian economic policy is constrained—indeed, crippled—by the neoliberal brainwashing given to Russian economists by the Americans in the 1990s. Consequently, Russia is enfeebled by an economic policy that encourages privatization and foreign ownership, and by financialization of economic rents, that is, of income streams that do not result from productive investment but from such factors as location and rise in value due to public infrastructure development, such as a road built across a property. In a financialized economy credit is used to transfer property ownership instead of to finance new plant and equipment and construction of infrastructure.
The Russian government and central bank have been blinded to the fact that Russian infrastructure projects and private investment are not dependent on borrowing dollars abroad or by acquiring dollars by selling Russian assets to foreigners. Such projects can be financed by ruble creation by the Russian central bank. Money that flows into productive projects that raise output is not inflationary. Generally speaking, such projects lower costs.
For Russia to succeed, Russia needs an economic re-education and a government that finds its footing in Russian nationalism and discourages Western provocations with firmer responses.
It is our view that the Western world, indeed all of life, has an interest in a Russia too strong to be attacked or provoked as a strong Russia is the only way to curtail the Western aggression that is leading to nuclear war.”
“This article was originally published at PaulCraigRoberts.org on March 1, 2019.”
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Added: US fully supported Russian “Strongman” Yeltsin in 1990s: UK Guardian report: In Oct. 1993 Yeltsin closed opposition newspapers and sent tanks to remove his opponents in Russian parliament. Scores were killed, hundreds wounded, Bill Clinton said, “President Yeltsin had no other alternative but to try to restore order.”
10/5/1993, “Yeltsin crushes revolt,“ UK Guardian, Jonathan Steele and David Hearst in Moscow
*“Parliament taken in tank battle · Opposition parties and newspapers banned”
“President Boris Yeltsin moved swiftly last night to stamp his absolute power on Russia by suspending a range of political movements and closing opposition newspapers after the surrender of his main parliamentary opponents in the wake of the assault on the Russian White House. Under a decree following the state of emergency that Mr Yeltsin imposed on Sunday, the National Salvation Front, the Russian Communist Party, the United Front of Workers and the Union of Officers were banned, while Pravda, the former organ of the Soviet Communist Party, and a number of other papers were told to cease publication. An overnight curfew was also imposed throughout Moscow….
With elections promised in December for a new bicameral parliament, the bans will severely limit the options for Russians who oppose Mr Yeltsin. They will also remove the risk that those unhappy with the government’s tough economic reforms will vote for communists on the model of Poland.
“Western leaders, warned in advance of the assault, promptly declared support,but urged a speedy return to constitutionality amid fears that the Russian leader could become a political hostage to the armed forces.
“It is clear that the opposition forces started the conflict, and President Yeltsin had no other alternative but to try to restore order,’ the US president, Bill Clinton, said.
“The US supported Yeltsin because he is Russia’s democratically-elected leader,” he said. “I have no reason to doubt the personal commitment that President Yeltsin made to let the Russian people decide their own future in elections.’
In Blackpool, the Prime Minister, John Major, said: “What is now necessary is that normal order is restored and that the Russians move forward to the elections they planned in December.”
In Brussels, the European Commission announced emergency medical aid of 300,000 ecus (around £235,000) for those wounded in the fighting.
China was the only major power not to back Mr. Yeltsin. “We are deeply concerned about the recent bloodshed in Moscow,” the Chinese foreign ministry said in a statement.
“As a friendly neighbour, we hope to see an end to the conflict and a proper solution to the current situation in the interest of the stability, unity and economic recovery.’”
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Added: How is Venezuela regime change good for the United States?
5/3/19, ““How, exactly, is any of this good for the United States?” [host Tucker] Carlson asked. “Our sanctions in Venezuela have already spiked our gas prices. Are we prepared to absorb millions of new Venezuelan migrants? All of them great people, no question. But many would have little education or skills or would not speak English.”
Carlson repeatedly asked Diaz-Balart to justify the national security threat Venezuela poses to the United States.
“What exactly is the threat? Please be specific,” Carlson asked Diaz-Balart.”…5/3/19, “Pro-Trump conservatives challenge possible U.S. military involvement in Venezuela,” McClatchy, Alex Daugherty
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