Sunday, 4 January 2015

Dangerous peace avoided in the nick of time

Touts and pundits now tell us with unconcealed glee that the U.S. economy is the world champ once again, outpacing sickly Japan and Europe, trouncing the BRICs and generally proving the superiority of our financial engineers. Democrat-boosters remind the ingrate public that Obama has presided over steadily improving growth rates, sometimes even endorsing his policy of free money for the TBTF banks and zero interest rates that make it nearly impossible to eke out a retirement income on the nest eggs we are supposed to spend our lives accumulating.

The fine print, however, does tell an interesting story about what is spurring the growth that has the Dow hovering at the oxygen-short altitude of 18,000. CNN Money reported in a year-end note that the third quarter’s remarkable 5% spurt included all sectors on the upswing—consumer spending, housing, exports, business investment and government outlays—all of which rose by tidy percentages.

But the biggest driver of America’s new-found prosperity: military purchases, up by a whopping 16 percent in the third quarter.

This is curious given the long, slow winding down of wars in Iraq and Afghanistan, the return of thousands of deployed soldiers, the reduced need for equipment and weaponry, Obama’s pledge to draw a line on the $3 trillion or so that those adventures have cost us and future generations. In addition, the ‘sequester’ that was sold to us as so necessary to stave off ruinous government budget deficits is just now supposed to start applying to the war departments, given that the social side suffered its cuts long ago.

According to a fascinating account by Andrew Cockburn in Harper’s magazine, however, a very convenient new/old enemy appeared just in the nick of time: the Russkies. (The Islamic State/Daesh was another handy one, but in the long run it is too piss-ant to matter and certainly no credible threat to North America.) If U.S. ‘defense’ industries needed a new excuse to kick the Washington money tree and cause new billions to drop into their ready arms, Putin’s seizure of the Crimea and trouble-making in Ukraine certainly fit the bill far better.

Cockburn reviews well-known elements of the Ukraine/Crimea story and adds juicy details. His account not only rings true but also offers a compelling explanation for why the U.S. would do everything to avoid the possible settlements that Putin offers to defuse the situation and enable everyone to pull back from the revived Cold War with all the dangers to European peace that it implies.

For example, why would Hillary Clinton and others repeatedly compare Putin to Adolf Hitler, not as accidental verbal mis-steps but intentional attempts to provoke and stir outrage? Such inflammatory language from seasoned diplomats can only be ways to poison the atmosphere and wreck possible reconciliation. Or why insist on eventual NATO membership for Ukraine when that, above all, was the trip-wire for Russian reaction (or over-reaction, if you prefer)?

Cockburn quotes Mike Rogers, the incoming head of the House Intelligence Committee, who sums up the new situation nicely: “Vladimir Putin has solved the sequestration problem for us because he has proven that ground forces are needed to deter Russian aggression.”

Setting aside individual intentions, the logic of business opportunity explains the overall trend: American companies are readying themselves for new Happy Days in which Congress signs off on whatever spending scheme comes before them that promises to chase the Russian bear back into his cave. Fortunes are to be made, and careers to flourish. We citizens will be told that these outlays are crucially necessary to protect us from foreign threats while we are simultaneously peddled the myth that there is no ready cash for luxuries like health, education, infrastructure or the wellbeing of the disadvantaged.

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