Mish's Global Economic Trend Analysis

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Was Russia's Annexation of Crimea Illegal? Who Has the Right to Decide? Transformation of Mainstream Media Posted: 23 Mar 2014 06:42 PM PDT In response to Failure is Truly Success! Reader Tata commented ... "The key question here is Russia's Crimea annexation legal or illegal, aka criminal. If it is legal, then you are absolutely correct. If it is criminal, then a question of reaction level is not moot." Actually, there are two separate issues here. Was Russia's annexation of Crimea illegal? Was the US response justified? Even if one presumes Russia's annexation of Crimea was illegal, the US response has to be judged in and of itself. If Paul robs your house, you do not have the right to block Bob's driveway. In fact you have no right to undertake any action against Bob. If the US Congress declared war on Russia, then and only then could could Obama's response be considered appropriate (assuming of course one thinks declaring war on Russia makes sense). Let's return to the first question: Was Russia's annexation of Crimea illegal? What gives Obama the right to be judge and jury? If three bullies vote (US allies) and there are only five votes is that legitimate? I will answer the question, and not with more questions. But first please consider the following. Transformation of Mainstream Media I highly encourage everyone to read Paul Craig Roberts on Crimea, US Foreign Policy and the Transformation of Mainstream Media The Crimean peninsula was controlled by the Russian Empire from the 18th to 20th centuries until it became part of an independent Ukraine following the breakup of the Soviet Union in 1991. Even to the most astute observer, the current crisis in the southeastern region of Ukraine is difficult to interpret. The view can be blurred by geographic distance, muddled by inconsistent reporting and blinded by prejudice. Because of treacherously unremitting digital and social media, an understanding of the complex sociopolitical elements is diluted; independent inquiry loses legitimacy and critical voices enter an anarchic fray. How can one make sense of this dilemma? Paul Craig Roberts is a former assistant secretary of the treasury and associate editor of The Wall Street Journal. He has been following the situation in Ukraine closely and spoke to Truthout about the long history of the crisis, the influence of the mainstream media (in which he worked for decades) and the dangerous provocations of Western leaders. The author of more than ten books, his most recent work is called The Failure of Laissez Faire Capitalism. This interview took place on March 12, 2014. Truthout: How do you assess the current situation? What power struggle is currently unraveling? PCR: Well, I think it would be a mistake to represent the events in Crimea as a power standoff between Russia and the United States. What has happened in Ukraine is the United States organized and financed a coup. And the coup occurred in Kiev, the capital. Either from intention or carelessness, the coup elements include ultra-right-wing nationalists whose roots go back to organizations that fought for Hitler in the Second World War against the Soviet Union. Crimea was added to the Ukraine in 1954 by Khrushchev, the general secretary of the Communist Party. Both of these Russian areas have been part of Russia for longer than the United States has existed. It didn't make a difference at the time because it was all part of the Soviet Union. The population in Crimea is predominantly Russian, and so is eastern Ukraine. These people said, "We don't want anything to do with this government in Kiev, which is banning our language and destroying our war monuments and threatening us in many ways." They followed the same legal steps; the same UN procedures, the same international court procedures. So everything that has occurred is strictly legal. And when John Kerry and Obama say the opposite, they're lying through their teeth. It's just blatant, shameful, bald-faced lies. This is not debatable or a question of opinion. It's a matter of law. So the Parliament in Crimea followed these procedures and has now declared Crimea to be independent. The vote that [was] given to the people on [March 16] . ... So there has been no Russian invasion. That's easily provable. The Russian troops in the Ukraine have been there since the 1990s. It has to do with the lease arrangements it has on its Black Sea naval base [Sevastopol], because when Ukraine was granted independence, Russia certainly wasn't giving up its warm-water port. The terms of the separation state that Russia has a lease there until 2042. Sixteen thousand troops were there, and under the agreement with the Ukraine they can have up to 25,000 along with a certain number of planes, tanks and artillery. All this is specified and well-known, but it is subject to lies from Washington - and they are repeated endlessly in the so-called American media. The result is that eastern Ukraine returns to Russia, western Ukraine will be captured, subject to an IMF [International Monetary Fund] austerity plan, looted by the Western banks and stuck in NATO while US anti-ballistic missile bases will be put in western Ukraine. This is intensifying the strategic threat to Russia that Washington has been pursuing since the George H.W. Bush regime when he violated the agreements that Reagan had given not to take NATO into eastern Europe. These same agreements were violated when Washington withdrew from the ABMT [Anti-Ballistic Missile Treaty] in 2002 so it could construct an anti-ballistic missile defense. These are extreme provocations, and they are reckless. It's the same kind of behavior that gave us the First World War. Truthout: In your latest writings you've discussed the failure of the so called mainstream or American media in reporting about Crimea objectively - that is, without displaying a bias toward one side or the other. Can you discuss the role alternative media has played in relation to the crisis in Ukraine? PCR: A very important part of it has to do with something that happened toward the end of [Bill] Clinton's second term. He permitted five mega companies to consolidate the formerly independent and dispersed US media. What were once independent networks like ABC, CBS, NBC, CNN, all became cogs in a larger media empire. The value of these big media companies is their federal broadcast licenses: They can't go against the government and expect them to be renewed. Another big change is these media companies are no longer run by journalists. They're run by corporate advertising executives and former government officials. And their only interests are protecting the net worth of the company and the flow of advertising revenues. I am a former editor of The Wall Street Journal and a columnist at all the major publications as well, and I personally witnessed the change in the media and the people in it. So I already know what they're going to say; I can write the scripts before they go on and mouth them. It's been going on for some time. A similar thing happened with the Iraqi weapons of mass destruction. It was a lie told over and over. And everyone repeated it. The New York Times didn't even go to the weapons inspector we sent to Iraq, Hans Blix! Instead, Judith Miller repeated a lie endlessly in the pages of the newspaper. It reflects a total lack of integrity. One of the main reasons for this is that many of them know they cannot tell the truth, otherwise they'll be fired. They know it's pointless to take a story that contradicts the president or the secretary of state or the CIA or the NSA to the editor. He or she will look at you and say What are you crazy? Do you want to get us both fired? So they simply don't bother. It's quite a corrupt milieu, and it must be deadening to the soul. But that's what it is to be a mainstream journalist today. Truthout: Looking back on your time as assistant secretary of the treasury under Ronald Reagan, how have the global politics of brinkmanship changed? PCR: Oh, yes, it's changed tremendously, in two critical ways. One is the Soviet Union and Communist China existed, and these were huge constraints on American power. The US couldn't go waltzing in blowing up countries throughout the Middle East, for example. Those constraints on American power no longer exist. The Cold War is gone, and the alliances that were part of it have disappeared. When I was in the Reagan administration, the neoconservatives had not emerged as the ideological force that they are today; they had not written their position papers calling for American world hegemony. The neoconservatives had nowhere near the same power or influence [under Reagan] that they did under Clinton, George W. Bush and now Obama. In fact they caused so much trouble for [Reagan], he fired every one of them. They were behind the Contras in Nicaragua. Some of them were actually prosecuted and convicted - such as Elliot Abrams, who was assistant secretary of state. He and others were later pardoned by George H.W. Bush, but the Reagan administration itself took very strong action against neoconservatives. They were fired, thrown out of the government. Richard Perle was even thrown off of the [President's Intelligence Advisory Board]. The neoconservatives emerged with the American attacks on Serbia - what we call the NATO attacks - and the theft of Kosovo from Serbia and its setup as an American protectorate. Their influence then exploded in the first years of George W. Bush. The entire national security apparatus, the entire Pentagon, the entire State Department were all staffed-up by neoconservatives. The agenda was there. It had been set out in papers from the Project for the New American Century, and much of the government was run by its representatives. The Obama administration has many of the same people, but now they're able to go further because they have more resources to fund dissent groups like we've seen in Ukraine. This is a reckless thing to do. The Russians cannot accept strategic threats of this sort; it's just too high. End Truthout Interview Looking for  Hitler Comparisons? Ironically, US media portrays the actions of Putin to Hitler. The reality is right-wing Hitleristic goons now occupy key posts in Ukraine. Even the generally-liberal Huffington Post recognize that fact. Please consider The Neo-Nazi Question in Ukraine. The Obama administration has vehemently denied charges that Ukraine's nascent regime is stock full of neo-fascists despite clear evidence suggesting otherwise. Such categorical repudiations lend credence to the notion the U.S. facilitated the anti-Russian cabal's rise to power as part of a broader strategy to draw Ukraine into the West's sphere of influence. Even more disturbing are apologists, from the American left and right, who seem willing accomplices in this obfuscation of reality, when just a cursory glance at the profiles of Ukraine's new leaders should give pause to the most zealous of Russophobes. It isn't too surprising that conservative outlets like FOX News would downplay Russian allegations but the so-called "liberal" press has also contributed to the American disinformation campaign. For starters, Andriy Parubiy, the new secretary of Ukraine's security council, was a co-founder of the Neo-Nazi Social-National Party of Ukraine (SNPU), otherwise known as Svoboda. And his deputy, Dmytro Yarosh, is the leader of a party called the Right Sector which, according to historian Timothy Stanley, "flies the old flag of the Ukrainian Nazi collaborators at its rallies." The highest-ranking right-wing extremist is Deputy Prime Minister Oleksandr Sych, also a member of Svoboda, who believes that women should "lead the kind of lifestyle to avoid the risk of rape, including refraining from drinking alcohol and being in controversial company." The Svoboda party has tapped into Nazi symbolism including the "wolf's angel" rune, which resembles a swastika and was worn by members of the Waffen-SS, a panzer division that was declared a criminal organization at Nuremberg. A report from Tel-Aviv University describes the Svoboda party as "an extremist, right-wing, nationalist organization which emphasizes its identification with the ideology of German National Socialism." Last week Per Anders Rudling from Lund University in Sweden, an expert on Ukrainian extremists, told Britain's Channel 4 News: "A neo-fascist party like Svoboda getting the deputy prime minister position is news in its own right." Well, except in the U.S. Even more disconcerting has been the emergence of phone intercepts between high-ranking U.S. and Ukrainian officials which make it look as if the U.S. was basically, in the words of Princeton's Stephen Cohen, "plotting a coup d'état against the elected president of Ukraine." In other words, the U.S., in addition to providing moral support, may have paved the way for extremists to seize power in Kiev. Be they radical mujahideen or neo-fascists, Washington certainly has a penchant for bolstering shadowy forces, usually labeling them with risible euphemisms like "freedom fighters," in order to satiate short-term geopolitical needs, despite said factions being inimical to America's true long-term interests. Dark Side of Ukraine Revolt I also invite you to read the Dark Side of Ukraine Revolt on The Nation. "You'd never know from most of the reporting that far-right nationalists and fascists have been at the heart of the protests and attacks on government buildings," reports Seumas Milne of the British Guardian. The most prominent of the groups has been the ultra-right-wing Svoboda or "Freedom" Party. Svoboda—which currently has thirty-six deputies in the 450-member Ukrainian parliament—began life in the mid-1990s as the Social National Party of the Ukraine, but its roots lie in World War II, when Ukrainian nationalists and Nazis found common ground in the ideology of anti-communism and anti-Semitism. In April 1943, Dr. Otto von Wachter, the Nazi commander of Galicia—the name for western Ukraine—turned the First Division of the Ukrainian National Army into the 14 Grenadier Division of the Waffen SS, the so-called "Galicia Division." The Waffen SS was the armed wing of the Nazi Party, and while serving alongside the regular army, or Wehrmacht, the party controlled the SS's thirty-eight-plus divisions. While all Nazi forces took part in massacres and atrocities, the Waffen SS did so with particular efficiency. The postwar Nuremberg trials designated it a "criminal organization." Take Your Pick: Story A or Story B Story A: Crimea has historically been a part of Russia for centuries. Russian troops in Crimea were there by agreement. Thus, Russia did not invade Crimea. The US fomented trouble in Ukraine(and got it, but did not like the result). Crimea voted overwhelmingly to rejoin Russia. There is no legitimate reason to disavow that vote, whether we like the result or not. The US reneged on promises to not let NATO expand into Eastern bloc countries. Obama and US officials lie through their teeth, even to the point of supporting neo-nazis now running Ukraine. The IMF is now poised to wreck what remains of Ukraine. Story B: Russia invaded Crimea. The vote for independence was illegal. It doesn't matter that the US reneged on promises not to put NATO in Eastern Europe. Any force Obama wants to apply to Russia is valid. Sending US missiles to the Check Republic and Ukraine makes sense. Freedom fighters now run Ukraine. I Vote for Story A The US fomented a coup of freely-elected Viktor Yanukovych and now does not like the result. Crimea did not like the result either. Crimea leaders defected and held a vote. Crimea returns to Russia and it never should have been given to Ukraine in the first place. This is what happens when you meddle in the internal affairs of other countries. S*** happens, and the US is to blame. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Failure is Truly Success! Posted: 23 Mar 2014 12:39 PM PDT In a political gambit that at best is likely to result in some face-saving statements of support for the president, Obama Heads to Hague Hoping to Strengthen Europe's Resolve. US President Barack Obama arrives in Europe after Russia's annexation of Crimea grappling with conflicting advice, anxious allies and unsure about Russian President Vladimir Putin's next move in Ukraine. After the rebalancing of US diplomacy towards Asia, Mr Obama is also facing the challenge of sustained re-engagement with the continent's leaders, who often felt neglected in his first term and, more recently, bruised by allegations of US espionage. Mr Obama will spend three days in The Hague and Brussels, at a summit of G7 leaders in the Dutch city, followed by a visit to Nato headquarters and a meeting with the EU. The overriding focus will be how to fashion and hold together a tough line against a Russian leader whose lightning incursion into Ukraine has startled the west. So far, the US has responded with a series of sanctions against some of Mr Putin's closest associates ahead of the meeting at The Hague, taking place alongside an already scheduled nuclear security summit. But Mr Obama's pushback against Moscow has been too little and too late, according to former administration advisers, and has failed to match the tough rhetoric from the White House about the Crimean takeover. Too Little Too Late? It is interesting to see warmongering Financial Times see this as "too little, too late", while the Fiscal Times proclaims, Obama Crippled a Russian Bank with a Stroke of a Pen. (For discussion, please see Criminal Actions by Obama; Two Wrongs Make a Right). My own view is the Fiscal Times overstated the effects on St. Petersburg-based Bank Rossiya, yet the US has already done too much because no amount of sanctions will force Russia to return Crimea to Ukraine. The Financial Times continues ... Economic officials have broadly cautioned against tough sanctions because of the potential blowback against a US economy still struggling to regain solid growth, while Mr Obama's political advisers have pushed for tougher action, because of the diplomatic principles at stake. Principles or Egos? Are principles at stake or egos? Perhaps both, but any principles involved in this are misguided at best. For discussion, please see Buffoon Bluffery; What are Sanctions Really About? The neocons would love to have another war. Indeed, they would be happy to have perpetual war on multiple fronts (which is precisely why we seem to have perpetual war, frequently on multiple fronts). Everyone Should Hope Obama Fails All further sanctions can do is provoke military or economic war. There will be no winners in either outcome. Sanctions, war, and economic war are a Negative Sum Game. Thus, a failure by Obama to secure any additional sanctions is the best possible outcome. The second best result is some face-saving but meaningless statements. As is typical of misguided politics coupled with bigger than life egos, the bigger the political failure to achieve stated goals, the better off we will all be. Failure is truly success! Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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