Category Archives: defense policy

That’s Nice

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JPMorgan thinks the current suite of economic sanctions against Russia could shrink its economy by 20% quarter-on-quarter and by 3.5% on the year. JPM also admits that these estimates may badly overestimate the downward movement. Also,

In conjunction and cooperation with the European Union, Japan, the UK, Canada, and others, the United States has effectively frozen financial transactions of Russian central bank assets held by Americans, a senior administration official told reporters during a briefing on Monday.
The intended effect is to cripple the Russian economy and use up the country’s “rainy day fund” as its currency, the ruble, plummets in value, the official said.

However, these sanctions carefully and deliberately leave untouched the bulk of Russia’s income—its foreign sales of oil and natural gas, with Russia our second largest source of imported oil as of last August.

The European Commission, France, Germany, Italy, United Kingdom, Canada, and the United States issued a joint statement on Saturday that “selected” Russian banks would be removed from the SWIFT financial system.

Except for the Central Bank of Russia, its central bank, and those oil and gas transactions.

Commerce Department unveiled…export controls [that] include semiconductors, computers, telecommunications, information security equipment, lasers and sensors. In addition, BIS’s [Bank of International Settlement, the bank of nations’ central banks] rule imposes stringent controls on 49 Russian military end users, which have been added to its entity list.
The European Union, Japan, Australia, United Kingdom, Canada and New Zealand announced that they would implement “substantially similar restrictions.”

Export controls aren’t export bans….

Some ladies from the South might say, “That’s nice,” regarding these economic moves, or even “Bless their hearts” regarding the persons making them.

However.

How many divisions, much less bullets, do those sanctions provide Ukraine in the here and now, as women and children are butchered by Putin’s barbarians as his invading horde begins increasingly to target apartment buildings and residential neighborhoods? How many divisions do those sanctions cause Putin to withdraw from Ukraine as his military prepares a Stalingrad-esque starvation siege of Kyiv or a Grozny-esque destruction of it, and begins its Grozny-esque burning of Kharkiv to the ground?

The economic sanctions actually are a good start, and they should continue in effect until Putin, his oligarch syndicate cronies, their deputies and assistants and lower down made men, and the members of the Duma are long gone from the Russian government and economy. But those sanctions are wholly inadequate alone. Ukraine will lie in ashes, its survivors existing in Russian serfdom, long before those sanctions take material effect.

Ukraine needs lethal weapons—antitank, antiaircraft, antimissile, along with anti-infantry and small arms—and those lethal weapons need to include, also, offensive weapons with which to drive Putin’s barbaric military out of Ukraine altogether. Ukraine needs tons of ammunition for those weapons and training in the use of many of them.

Ukraine needs food and medical supplies for Kyiv, Kharkiv, Odessa, Kherson, Mariupol, and on and on.

Yet Another Reason

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…to adjust our supply chains, especially the beginning points of them in this case.

Palladium and neon gas are seriously needed for chip production, and Russia’s invasion and attempt to conquer or destroy Ukraine is about to have a major effect on the supply of those items if nations and businesses don’t make the required adjustments.

Russia and Ukraine produce 40% to 50% of semiconductor-grade neon, according to market-research firm Techcet CA LLC. Largely derived from steel manufacturing, neon gas is used in lasers that help in the design of semiconductors.
Approximately 37% of the world’s palladium production comes from Russian mines, according to Techcet, and the metal is used in sensor chips and certain types of computing memory.

As a follow-on, palladium at least might be sourced from the People’s Republic of China, expanding that nation’s influence over the economies and national security of the US and the nations of Europe.

However expensive the shift will be, changing to other sources are critical to security. The PRC notwithstanding, South Africa is nearly as large a palladium producer as Russia. The US can produce our own neon gas either directly, or as a byproduct of steel production with further refinement for use in chip production.

It’s not only production of palladium and neon that matters, though. Currently, the PRC is the major producer of finished chip components and of finished chips themselves. That, also, needs to change, and other producers of chips and components need to be found, and producers need to be developed domestically.

In any event, there’s also little reason to go back to buying either of these from Russia, even if it is driven out of Ukraine. So long as the current men and women of the Russian government—at all levels—remain in place, that nation cannot be trusted with anything.

This is Just Dumb

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President Joe Biden (D) says there are only two alternatives vis-à-vis Russia’s invasion of Ukraine.

You have two options. Start a Third World War, go to war with Russia physically. Or two, make sure that a country that acts so contrary to international law ends up paying a price for having done it[.]

Biden-Harris went on to admit that sanctions can have no immediate effect.

Leave aside the simple fact that Russian President Vladimir Putin is perfectly willing to “pay a price;” he’ll still have Ukraine after ponying up.

No, the problems here are two. One is that effects of sanctions that take effect (maybe) at some time in a nebulous future do Ukraine no good in the present with Ukrainian men, women, and children dying now. Ukraine—soldiers and civilians alike—is fighting for its survival against Russia as the latter’s soldiers invade and kill now. Biden knows this.

The other problem is that there is at least one additional alternative: sending serious arms, ammunition, and training in serious quantities to the Ukrainian military. So far, what Biden—and the weak European government men and women—are delivering is insultingly limited quantities: the ammunition amounts, for instance, that they deign transfer are good only for a few days.

A bonus alternative: cyber attacks against Russian government-military communications. Hacks into Russian financial facilities to completely drain (or simply to completely corrupt) the financial holdings of Putin and his oligarch cronies and of the officers and their civilian counterparts of the General Staff of the Russian Defense Ministry.

Interested readers can think of more. It’s appalling that Biden-Harris cannot. Or chooses not to.

A Two-Edged Sword, and another Thought

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Russia is a, if not the, major exporter of energy to Europe, and that helps hold Germany especially, and Europe generally, back from fully supporting Ukraine against Russia’s invasion of that nation.

The two-edged sword is this.

If Russian gas to Europe stops flowing entirely, “this would do severe damage to Europe’s economy and also undermine global growth,” Mr [EurasiaGroup’s Director, Energy, Climate & Resources, Henning] Gloystein said.

That damage, were it to be inflicted by Russia’s President Vladimir Putin, should prod Europe, and especially Germany, decisively away from Russian gas (and oil) altogether, as it would make clear—or should make clear—just how many weapons, including economic, the men and women of Russia’s government are willing to use in order to club Europe into submission.

The disruption from such an assault on Europe would not be felt until the next fall and winter; Europe has reserves enough to finish the present winter. That should be sufficient time for Europe to find more reliable supplies of energy. It might even convince German Chancellor Olaf Scholz to reverse ex-Chancellor Angela Merkel’s panicky cancelation of the nation’s nuclear plant energy production (although, maybe not—Germany has gotten used to tacit subservience to Russia).

The additional thought flows from this remark by President Joe Biden (D) in the context of that Russian invasion, quoted in the article at the link:

I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me.

This is virtue-signaling dishonesty. Biden’s “everything” consists of begging OPEC and Russia(!) to pump more oil. Biden utterly refuses to open Keystone XL; to get his Cabinet and himself out of the way of exploring, drilling, and pumping lease permits on Federal land and water; to get his Executive Orders and his Cabinet rules and regulations out of the way of our oil and natural gas production and fracking for same; to get his administration out of the way of liquid natural gas production and port development so we can export LNG; to do anything at all to support and expand our domestic oil and gas production.

Biden-Harris’ determined war on our American hydrocarbon energy production industry represents a strong impediment to Europe’s ability to wean itself off Russian energy, and his war supports the Russian invasion effort by contributing heavily to the rapidly increasing price of oil (which underlies those rising “gas pump” prices), which in turn increases revenue for Putin’s Russian economy.

 

[NB: Germany has agreed a limited SWIFT sanction against “selected” Russian banks, and it has authorized shipment of some anti-tank RPGs, stinger anti-aircraft missiles, and 10 metric tons of fuel to the Ukrainian military.]

Yes, He Can

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Since Russia President Vladimir Putin—the man then-Presidential candidate Joe Biden (D) bragged was so afraid of him—invaded Ukraine, oil prices have gone up to levels not seen since the Obama years, even beyond the inflation levels Biden-Harris’ current war on our energy industry had already driven them: $105/barrel. Biden-Harris proclaimed last Thursday,

I know this is hard and that Americans are already hurting. I will do everything in my power to limit the pain the American people are feeling at the gas pump.

Jason Furman, one of ex-President Barack Obama’s (D) economic minions, claims—and he’s actually serious—

This is a world price and the president is largely powerless to do much[.]

Both men are being cynically disingenuous; Biden-Harris’ dissembling, though, given his position in our current government and on the world’s stage, is especially pernicious.

Our President actually could do quite a bit about oil prices for our nation and for our friends and allies; he could do quite a bit about energy prices generally, were he not in thrall to the “green” extreme Left.

He could, for instance, reopen the Keystone XL pipeline and work to get Canada to reopen oil flows from its end.

He could get out of the way of drilling leases on Federal land.

He could get out of the way of fracking for domestic oil and natural gas.

He could get out of the way of American exports of oil and liquid natural gas to Europe.

He could rescind the myriad anti-hydrocarbon regulations he enacted via Executive Order or that he had his several Cabinets enact through rules.

The list is really quite extensive.

Biden-Harris has moved to release oil from our strategic reserve, but that’s merely insulting in its puniness and in its use to distract from energy price inflation.

Instead, Biden-Harris is allowing energy prices, especially those for oil and natural gas, to rise rapidly, and that benefits no one more than it benefits Russia, which needs high oil prices to support its budget—especially during its assault on Ukraine.