(Ukraine Latest Update + US GDP 1st Quarter 2022, US Inflation & Yield Curve as Recession Predictor)


(Price Gouging Inflation)

(1. Inflation & the Fed)

(2. Ukraine Crisis)

In recent weeks both US and NATO have been stumbling toward confrontation with Russia over whether the Ukraine will be allowed membership in NATO. While there are various secondary issues on the negotiating table—deployment of US troops into Poland, Baltics and Romania and Russian natural gas delivery to Germany, among other issues—make no mistake: NATO membership is what the developing conflict is fundamentally about. As one of the main media vehicles of US imperialism, the New York Times, recently blared in its front page headline: “U.S. Won’t Bow to Russia Over Who Can Join NATO”. (February 3, 2022).

Background to Today’s Conflict


The pending conflict over Ukraine NATO membership has intensified recently, events have been leading to this at least since the January 2005 so-called Orange Revolution in Ukraine when emergent right wing forces rode a wave of popular protest over the previous November 2004 national elections. The origins of the current crisis go back even further, to the breakup of the former USSR in the early 1990s during which the US promised Russia that NATO would not be expanded to Eastern Europe, the Baltics, or the Caucasus.

In the November 2004 Ukraine election the pro-Russia candidate, Viktor Yanukovich won 39% of the vote; but the anti-Russia candidate, supported by growing fascist forces, also won 39%. Yanukovich’s support was heavily concentrated in east and south Ukraine, while Yushchenko’s in western Ukraine. As the vote was underway that November, and not yet concluded, Yushchenko called for mass street demonstrations. He then immediately declared himself president as mass protestors threatened to assault the Ukraine Parliament. In front of his massed supporters in Kyiv, the day after the election, Yushchenko unilaterally took the ‘oath of president’ in the Parliament in which only his supporters were present and which therefore lacked a quorum to legitimize the November vote results.  After he had himself sworn in, he then immediately called for continued mass strikes, protests and sit-ins to force the acceptance of his declared victory and questionable ‘oath’.

Yushckenko’s declaration was supported by the Central Electoral Commission which, it was later determined, withheld significant regional votes from being counted and ran a separate computer tally of the votes. In order to avoid growing political conflict in the streets, the Ukraine Supreme Court intervened in early December and voided the November election in which Yanukovich had won a narrow popular vote victory by less than 1%. The Court declared a run-off election for late December 2004. The same Central Election Commission tallied 52% vote for Yushchenko vs. 44% for Yanukovich in that run off, as several minor parties either abstained or threw their support to Yushchenko.

The next election in 2010 saw Yanukovich win back again in an election international observers declared was fair.  Rising right wing forces did not accept the 2010 results, however. In 2014 another uprising was staged, focused in the capital city of Kyiv. This time far more violent than in January 2005. This time, February 2014, fascist forces murdered more than 100 in the streets.

The insurrection of 2014 was clearly organized and funded by US imperialist interests. Manipulating forces behind the uprising was US undersecretary of State for Eastern Europe, Victoria Nuland. In a pubic speech in the Ukraine following the uprising of 2014, Nuland was quoted by the press bragging the US has spent $5 billion funding various grass roots movements behind the insurrection that toppled ‘fairly elected’ pro-Russia leader, Yanukovich.

At the core of those movements were largely self-declared fascist organizations that had grown and mobilized since 2005. Using classic fascist violence, including assassinations and widespread shootings of police and government officials in Kyiv (as well as subsequent multiple assassinations in Ukraine’s second important city, Odessa), the US-backed fascist forces—along with their political representatives—took control of the Ukraine government that February 2014.

In the wake of the insurrection and take over, Nuland was appointed by the new right wing Ukraine government as ‘economic Czar’ for Ukraine.  Nuland had formerly been an owner of a well known US Chicago financial firm before being appointed as under-secretary of State for the region, a position she held at the time of the February 2014 coup. After she became ‘economic Czar’, however, US investors began to pour into Ukraine—including relatives of well-known US politicians like Vice President Joe Biden. The quickly took up positions on various Ukrainian company boards of directors. US economic imperialism now penetrated deeply into the economic infrastructure of Ukraine.

Russia’s response to the insurrection of 2014 and the deposing of ‘fairly elected’ Yanukovich, was to provide support to the heavily pro-Russian eastern provinces. As it became clear in 2014 that outright declared fascist organization members took over key positions in the Parliament and government, Russia sent military forces to take back the strategic Crimea peninsula that housed Russia’s black sea naval forces. Crimea had always been part of Russia, but was ‘given’ to the Ukraine in the 1950s by the USSR in a government provincial reorganization.   In 2016 further conflict erupted in the eastern Ukraine provinces of Donetsk and Lugansk as Ukrainian fascist-led military forces attempted to take back the provinces but failed in the wake of Russian military support to the region.  The US and NATO then imposed sanctions on Russia in response which exist to this day, which Biden is threatening to intensify still further.

It’s important to note that while these events from 2004 to 2016 were occurring in the Ukraine, US war hawks pushed for, and achieved, expansion of NATO into East Europe—contrary to assurances made to Russia by the Clinton administration in the 1990s. The same year, 2004, as the first right wing uprising occurred in Ukraine, the US expanded NATO into seven East European countries and the three Baltic nations, Estonia, Latvia, Lithuania.  NATO forces were now located less than 400 miles from Moscow.

In 2008 US political factions in government, led by US Senator John McCain, Dick Cheney and others signaled and encouraged then Georgia President, Mikhail Saakashvili, to invade Russia’s South Ossetia province on Georgia’s northern border.  Georgia had been courting US and demanding NATO membership since at least 2003, when it sent significant troops to join the US invasion of Iraq. Georgian military forces invaded South Ossetia on August 7, 2008. Russia drove them back and entered Georgia itself a week later. It later withdrew and military conflict ended October 2008.

In 2009 and 2010 the US announced plans to deploy advanced missile systems of NATO into Poland and Romania, which were completed by 2016. The US also deployed ship-based advanced Tomahawk offensive missile systems on warships it sent into the Black Sea around the same time. Both the Romania land-based and US ship-based missiles were of the advanced ‘Aegis’ type, capable of rearming with nuclear warheads on very short notice.  If Russia intervened in the US election of 2016, it certainly had some justification given the US/NATO threat of forward basing of nuclear capable new missiles to Romania and Poland.

Russia responded angrily in 2017 and 2018 to the advanced US missile deployments of 2016, declaring they violated the Intermediate Nuclear Forces (INF) missile treaty signed with the US in 1987, in which both sides had agreed not to deploy nuclear-capable missiles in eastern Europe or on Russia’s western border.  In an unprecedented direct public response, Russia further declared it would destroy the missile systems in Romania if necessary. In reply, the US followed up with deployment of a Patriot anti-missile system in Romania.

In July 2019 the US formally withdrew from the 1987 intermediate missile treaty that Reagan and Gorbachev had negotiated. During the 2020 US election year and Covid health & economic crisis further escalations more or less froze in place.

It is in this context of events in Ukraine from 2004 to 2016—i.e. the coup staged in 2014, the deployment of US missile systems in Eastern Europe and in the black sea thereafter in 2016, and US withdrawal from the INF treaty in 2019—that the recent events of US-NATO expansion into Ukraine should be understood. History and context mean everything.  Explanations based just on immediate events are easily manipulated by mainstream media and political forces behind it.

US/NATO vs. Russia: Ukraine 2021-22


Once Biden was elected and Democrats were in power once again in 2021 political forces—in both Eastern Europe’s NATO allies and within the newly elected Zelensky government in the Ukraine—began pushing for more US advanced armaments and for Ukraine’s admission into NATO.  By late summer 2021, aware of the new pressure to allow Ukraine into NATO and the greater sympathy of the Democrats to sanction Russia compared to Trump (whom they, the Russians, had largely neutralized for reasons still unknown), Russia responded to the new NATO inclusion initiative.

Putin wrote an extended position paper in late summer 2021 that more or less drew a line in the sand so far as Ukraine inclusion in NATO was concerned. He noted in particular that the US and other NATO governments declared in 2008 that Ukraine “will become members of NATO” in the future, albeit without specifying exactly when, but that US/NATO has never withdrawn or repudiated that 2008 statement.

That fact, plus the advanced and potentially nuclear armed missile deployments in Poland, Romania, and on the Black Sea constituted a clear threat to Russia.  The US pulling out of Afghanistan and the middle east, while bolstering its sea-based nuclear submarine forces in Australia, was another signal that the US empire was clearly shifting its military resources and preparing for new conflicts. A NATO Ukraine could mean moving Romanian and Black Sea US missiles still further north into Ukraine right up to Russia’s border. With similar NATO forces in the Baltics on its border, Russia would be surrounded with NATO missiles just a few minutes from Moscow.

About the same time in 2021 uprisings erupted in Belarus and Kazakhstan. Russia might easily conclude these two events likely portend future 2014-Kyiv like insurrections in these border states. Another Ukraine 2014-like coup in Belarus or Kazakhstan would mean Russia would be even further encircled.  Russia intervened to assist their governments and put down the protests.  Future such insurrections in these states, however, are not out of the question.  And it is probable that Russia and Putin have interpreted these uprisings as US assisted—not unlike that of 2014 in Ukraine.

It is easy to see why Putin and Russia felt themselves increasingly encircled by NATO in East Europe and Baltics, given the likely US instigated and backed support for anti-Russian forces in Georgia, Belarus, Kazakhstan destabilizing its frontiers. A NATO Ukraine could destabilize Russia’s borders on a number of fronts. It would in effect strategically outflank Russia and close the ring on them.

NATO in Ukraine in 2022 would accomplish what Nazi Germany in 1942 could not. Social memories of the German Nazi invasion of Ukraine in 1941-42 run deep in Russia. It is often under-estimated by western political advisers—and especially by the so-called non-military ‘experts’ advisers to US presidents who have a long history of advocating US run headlong into military adventures abroad—most notably Vietnam, Iraq, Libya and Syria.  One might ask: “would Russia allow NATO and the US to enter and ‘take’ Ukraine—after it had lost 10 million of its citizens there to deny the same to the Nazis?” While this is not a mode of thought among US advisers, it is no doubt a central consideration within Russian circles—military and civilian.

It is true that Putin and Russia began a build up of military resources on its Ukrainian border. It’s also true the US is purposely hyping and exaggerating it.  Thus far the Russian military build up has been a ‘measured’ one. It is mostly military hardware that has been moved to forward bases with limited troops to support it. Most of the alleged 175,000 troops at the border, trumpeted almost daily by Biden and US mainstream media, are not in forward border positions. They are in some cases hundreds of kilometers within Russia at their regular bases.  A truer signal of intent to invade Ukraine will occur once support battalions move forward to the border—i.e. medical, ammunition, food and similar logistical troops and supplies. That doesn’t appear to have occurred as yet, however. Russia’s military movements so far have been designed apparently to get the attention of Biden and the US to bring them to the negotiating table. And in early January 2022 it worked.

Biden released what the US media is calling a ‘Transparency Mechanism’ offer.  In it the US offered to allow the Russians to verify if its missile systems in Poland and Romania were defensive or not. But in exchange, the US wanted Russia to reciprocate by allowing it access to Russian border missile sites—one of which would be the Russian facilities in the Kaliningrad, Russia region, a small area sandwiched between Lithuania and Poland on the Baltic sea coast. The US also offered in the ‘Mechanism’ that it would not permanently deploy offensive missiles in Ukraine—indicating it would only do so ‘temporarily’ (however that might be defined). The real kicker of the Mechanism offer, however, was Russian had to withdraw from eastern Ukraine and Crimea as part of any deal.  It was obviously a non-starter but it gave the US cover that it was putting a proposal on the table and negotiating.

But as Biden was making the above offer he simultaneously announced the US was sending another 5,000 US troops to eastern Europe, no doubt to placate Poland and the NATO Baltic states now demanding even more advanced NATO arms. Biden also reiterated his oft-repeated threat since December that if Russia invaded there would be new massive economic sanctions imposed on Russia by the US and its allies worldwide. He didn’t, and hasn’t yet, defined what exactly that might be the new massive sanctions, but clearly it suggests sanctions of a new nature not just more severe. (That could include, in this writer’s opinion, denying Russia to the US controlled SWIFT international payments system that would prevent Russia from selling its oil on global markets.) At the same time the US Congress has rushed to pass new emergency aid and military supplies to Ukraine and US ‘war hawks’ have been demanding US sanctions be placed on Russia even before it invades.  Somehow they think that is a deterrent, instead of a provocation.

Throughout January 2022 Biden and the US media kept pounding away the message that invasion is ‘imminent’.  This premature declaration, often repeated, has disrupted social stability within Ukraine itself, resulting in its president, Zelensky, to go so far as to publicly contradict Biden’s message. The US toned down its ‘imminent invasion’ theme for a couple days, to allow the British to release a document claiming to show Russian invasion plans (One wonders why it is that the Brits typically release such politically salacious but unverified ‘reports’—i.e. dossiers, false flags, etc. on behalf of their US big brother?).  In the interim the pressure continued to grow on Ukrainian politicians as near panic by Ukrainians themselves took root among the populace.

On February 1, Putin predictably rejected the ‘Transparency Mechanism’ proposal and publicly stated he believed the US and NATO were attempting to provoke Russia into a war in Ukraine.

In a clear appeal to western Europe NATO countries, Putin added he expected “dialogue to continue”.  That set off a flurry of announcements and visits by heads of state in the UK, France, Germany and Italy this past week. About to get sacked by his own party in the UK, Boris Johnson ran off to Kyiv for some photo ops.  France’s Macron announced had had telephone conversations with Putin and planned to meet him directly. So did Germany’s newly elected chancellor, Olaf Shultz, who scurried off to Washington to meet with Biden.

Putin meanwhile flew off to China to meet with President Xi during the opening of the winter Olympics. Both released a direct joint statement accusing the US of aggressive military moves in both the Pacific and Ukraine that would severely destabilize global peace and status quo.

At latest report, the media war in the west continues to intensify, with the Biden administration leaking a report that suggested Russia had plans to fake a ‘false flag’ operation as a prelude to invasion. In a like response, the Spanish newspaper, El Pais, in turn leaked some US/NATO plans in the works. Lately US media is hyping the number of likely dead from an invasion at around 60,000.

The preceding events and moves by both sides around the Ukraine today are reminiscent of how, in August 1914, both sides kept raising the stakes, in what appeared at first as small inconsequential moves but which then accelerated, grew increasingly threatening, until eventually resulting in military conflict and the 1st World War. Today in the Ukraine both sides circle each other, like boxers coming into the ring in the first round, testing and feinting, looking for weaknesses, sizing each other up, trying to determine what the other’s opening move might be.  Should one slip or fall by accident or the other unknowingly signal a blow is coming, it might very well precipitate a general exchange between both.

10 Reasons Why US Elites May Want Russia to Invade Ukraine


Much of mainstream media continues to focus on why Russia is about to invade Ukraine. It refuses to consider the fact there are significant advantages for the US in provoking Russia to invade Ukraine.  The US media, the Biden administration, and US war hawks in Congress say they are trying to discourage Putin and Russia from invading. But what they say and what they do are not the same thing. Ample evidence suggests the US and a good part of NATO want a confrontation, so long as it’s a proxy war fought between Russia and Ukraine on Ukrainian ground so that they can stand by, feed the conflagration with arms, and in the process achieve other US-NATO objectives. Just what might these other objectives of US/NATO be?

Here are at least 10 reasons why US political elites in both US parties, war hawks and military-industrial complex capitalists favor a Russian invasion of Ukraine:

  1. Reunite NATO and strengthen US hegemony over it once again


In recent years—and especially since Trump—certain members in NATO have questioned whether the US is as reliable a partner to the alliance as it once was in decades past.  Nations like France, and now Germany, have had growing doubts. Voices have risen within the EU that it should go its own way with its own defense and strategy.  China has made major economic inroads to the EU NATO states. Europe and China are now either first or second biggest export/import traders with each other.  Key Europe state leaders are very nervous about the US leading them into a conflict in Ukraine that could have very serious effects on their economy, at the very least, and at a time Europe’s economy continues to struggle to jump start a recovery from the past two years Covid precipitated recession.  The US’s track record in the middle east is giving them pause as well: it achieved little, left the area in shambles, and the US then just pulled out to shift its focus on China.  The European NATO allies, moreover, are also quite split among themselves. The East Europeans, the recent additions to NATO, follow the US lead in hope of more arms and troops. But big players like France and Germany are not so inclined to follow blindly.  If a US provocation of conflict in Ukraine goes poorly, the risks—political and economic—for western Europe NATO states are high.

  1. Get Germany to cancel the Nordstream2 Russian Gas Pipeline; get Europe to buy US gas instead; increase US natural gas exports to Europe and thereby create supply shortage in US to justify US domestic gas price hikes & US profits


Germany is particularly uncertain about following the US leading Europe into another middle east-like quagmire in Ukraine. Its new chancellor, Olaf Shultz, is especially nervous about the prospect. There is significant public opposition in Germany to becoming embroiled in Ukraine, even indirectly. And German capitalists themselves are split as well over the fate of the Nordstream2 natural gas pipeline from Russia. Germany desperately needs the supply. Russia’s gas is significantly less costly than would be purchasing natural gas from the US. For years now the US has been pressuring Germany to halt Norstream2 and buy liquefied natural gas from the US—at higher prices. Substituting US gas for Russian would also require Germany to build highly expensive new port facilities to import the US gas.  US oil corporations want to sell the gas, to offload a US glut of natural gas supply. That would bring not only profits from more sales to Germany, but create shortages of supply in the US that would enable US corporations to raise prices in the US domestic market as well. The US gas corps—mostly owned by the big oil corporations—will enjoy a win-win profit. Then there’s the German and Europe uncertainty whether the US would even be able to supply the roughly 40% of natural gas Europe gets from Russia. Behind the scenes in the conflict in Ukraine is the looming gray presence of US oil companies who own and control most of US natural gas—who have had their hand in just about every American military adventure since the 1960s.

  1. Create excuse to send still more troops & advanced weaponry to Baltics (Estonia, Latvia, Lithuania) & East Europe (Poland, Romania)


There are political forces in the US that want to arm Poland, Romania, and the Baltic countries to the hilt, including stationing nuclear weapons in their countries.  Governments in the region are more than happy to bloc with these US war hawks. It means new massive funding from the US, more US arms and troops, and a boost to their economies (and to those politicians’ pockets as well no doubt).

  1. Obtain more economic concessions from Ukraine for US business in exchange for more and better US/NATO arms


The US empire does not provide aide without demanding a cost. US investors and corporations have already, post-2014, penetrated deeply into the Ukraine economy. They have funded, acquired, and otherwise controlled a significant number of former all Ukrainian companies in key sectors of the economy.  Biden’s son is not the only next generation representative of the US political elite (from both parties) to sit on Ukraine company boards of directors.  As the US provides even more funds and weapons to Ukraine, it will exact a price in return. It will demand a still deeper further influence over the Ukraine economy and banking system.  Ukrainian elites will more than welcome them, however, since the US form of economic empire integrates the colonial elites by sharing a big piece of the economic pie with them. It’s the Ukrainian workers and consumer that will have to pay the higher price in the end.

  1. Grow US political support to go after Moldova to drive out Russian supporters & install US puppet regime over entire country


It is a certainty that should military conflict erupt in Ukraine, the US and its field intelligence services (CIA, State, etc.) will move on Moldova as well in some manner. Moldova is the small state located between southwest Ukraine and Romania. For years it has had an uneasy truce between Russian backed forces running half of the country and pro-western the other half. The US will attempt to change this and turn the country to full pro-western hegemony if NATO absorbs Ukraine, or perhaps even if military conflict erupts there.

  1. Justify more US effort & funding to try to destabilize Belarus & Kazakhstan


It is naïve to think that US intelligence and related forces are not deeply involved in the recent public demonstrations and protests in both Belarus and Kazakhstan, the latter just weeks ago as tensions have risen in the Ukraine.  At a minimum, the US is testing the extent of anti-Russian opposition in these countries, which are closely aligned economically and politically with Russia. Russia has helped these governments put down the demonstrations, some of which, as in Kazakhstan, were especially violent uprisings.  Should the US ‘turn’ Ukraine fully toward NATO it is certain the US will intensify its efforts to further destabilize Belarus and Kazakhstan on Russia’s borders. They will be the next ‘Ukraine-like’ targets, following the template for Ukraine that began with 2014 and now culminating in 2022.

  1. Provide major foreign policy distraction for the Democrat party before November 2022 midterms


One cannot discount the potential advantages for the sitting president and party (Democrats) of a foreign policy issue such as Ukraine. It allows Biden and the party to ‘look tough’ in an election year, which always seems especially to add support for the party that ‘gets tough with Russia’—so long as it doesn’t lead to direct conflict with the US. Ukraine is a classic US proxy war possibility—the kind the US prefers to fight at a distance and on the ground of another country (Ukraine) using its own troops.

  1. Get Congress to approve a further increase in US defense budget in addition to $778B


The US wars in the middle east are over.  It will take time to build up new technological weaponry and forces to confront China in Asia. The US is behind in several key technological areas. The US deal to provide Australia with latest US nuclear subs is just one such example of how the US build up in the Pacific will not occur overnight. It will take time to build those subs in Australia.  A proxy war in the Ukraine serves as a convenient interim excuse not to reduce defense spending as the US withdraws from the middle east but actually to raise it still more.

US defense spending is clearly out of control. Pentagon spending alone is now $778 billion, and continues to rise even after the US withdrawal from the middle east.  However, total US defense spending is well over $1 trillion a year when other departments of government are included as well: Energy, State, AEC, Homeland Security, CIA, NSA, DARPA, etc.) The MIC never wastes time encouraging the US to get into another conflict once it ends one in order to prevent defense spending cuts post-war: Once the USSR imploded in the late-eighties/early nineties the military bete noir became Saddam Hussein.  That fueled the 1991 first Gulf War and continued war spending thereafter and turned US attention to the middle east.  The US intervention in Somalia in the 1990s and Balkans kept it going. The next convenient enemy was the ‘Terrorist Threat’ in wake of 9-11 attack in the US. That fueled defense and war spending still further over the next two decades, including wars in Iraq, Afghanistan, Libya, Syria and the current US proxy war in Yemen.  Now that the US has withdrawn from the middle east direct wars, it needs a new enemy to keep the war spending going. It will take time to build up China as the target. In the interim, however, Ukraine and Russia will do nicely to keep Congress flowing dollars to the US military-industrial complex war machine.

  1. Excuse to go after pro-Russian supporters: Venezuela, Nicaragua and Cuba again


A protracted conflict in Ukraine could eventually lead to a spread of the conflict to other ‘proxy’ nations.  For Russia that means Venezuela, Cuba, and Nicaragua. Given a war in Ukraine, war hawks in the US will no doubt find justification to go after these countries with renewed destabilization efforts run by US intelligence units and even perhaps US special ops forces.

    10. Test effectiveness of latest US weaponry against Russian forces & Russian weaponry effectiveness   against US without having to directly confront Russia; get Russia to reveal state of its cyber capability

Proxy wars provide a good excuse to test new weaponry of the US in a third country battlefield. That means not only testing how well offensive US weapons perform against Russian defenses, but how well Russian weapons perform against US defenses.  Weaknesses inevitably appear, permitting the correction and upgrading of the weaponry for potential future use elsewhere. But they are only discernible on a real battlefield.  The US especially is interested in testing its cybersecurity weaponry while getting Russia to reveal the extent of much of its capability. Another area of interest to the US military is to test how well US anti-armor missiles perform and how well US/NATO missiles perform against Russian anti-missile systems (like its S-500).

Some Conclusions


All the above constitute advantages for the US should a direct conflict occur in the Ukraine against Russian forces.  Ukrainians will pay the human and economic price. The US and its corporations will benefit economically and strategically.  Europe will be caught in between, uncertain as to the economic effects of a conflict on it or the great political risks should the conflict not go well.

The behavior of US interests the last two months increasingly suggests it is the US that favors an open conflict in the Ukraine. For the US, it’s win-win situation. There is much to be gained strategically, politically at home, and economically: re-establishing its unchallenged hegemony over NATO; driving Russia out of Europe’s economy and making Europe even more dependent economically on US resource exports instead of Russia; deepening US influence and control over Ukraine’s economy and government; feeding US war hawks demands to destabilize other countries which, like Ukraine, also border Russia; resurrect spending and operations targeting Latin America friends of Russia;  create justifications in Congress to spend even more on US defense and war in the interim until the bigger, longer term buildup and military spending targeting China can come on line; and test in a real theater of operations the effectiveness of both US defensive and offensive weaponry against a sophisticated opponent like Russia—without having to provoke a direct conflict with Russian forces.

Time will reveal whether Russia and Putin also favor an open conflict in Ukraine—or whether the western media is exaggerating the Russian threat and beating the drums of ‘imminent invasion’ to serve the interests and various objectives of US and NATO.

Longer term, Russia may have no alternative but to invade should the US play its ‘final card’ and move to bring Ukraine into NATO.  The US says it has no such intention. But if so, why does it refuse to withdraw its declaration of a decade ago that Ukraine in NATO is the goal ‘at some point in the future’?  Is the future now?  Once the Ukraine joins NATO it is ‘game over’ for Russia strategically for decades to come. Similar developments like Ukraine eventually would occur in Belarus, Kazakhstan and likely Moldova. Calls and efforts to bring them too into NATO would similarly follow. Russia will have been outflanked. It will be thereafter now more easily intimidated.  Surrounded by NATO states everywhere, what likely would follow would be a US-NATO demand of a full scale nuclear disarmament by Russia.

This writer believes therefore that preventing NATO from entering Ukraine is a ‘red line’ for Putin and Russia.  If pushed into a corner with no retreat or way out, it is quite possible Russia may see no alternative to invading. That’s not on the immediate agenda. But that’s not to say it will never be.

Jack Rasmus

February 7, 2022

Dr. Jack Rasmus is author of ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, 2020 and the forthcoming ‘The Viral Economy’ latter in 2022. He blogs at http://jackrasmus.com. His website is: http://kyklosproductions.com . He hosts the weekly radio show, Alternative Visions, on the Progressive Radio Network and tweets at @drjackrasmus on daily economic and political events.

The US & NATO appear to be stumbling toward a confrontation with Russia over US insistence that Ukraine be allowed into NATO (see NY Times headline today, February 4, 2022, p. 1). What’s the full story behind the drift toward confrontation? Is it simply that Russia wants to ‘take back’ Ukraine, as western media maintains? Or are the causes and various political forces behind the scenes more complicated? Is a Russian invasion ‘imminent’ as Biden says? Is Biden’s statement part of an attempt to provoke Russia? Who wants a proxy war between US/NATO and Russia in Ukraine? How may the US war hawks, oil corporations, and politicians benefit from a Russian invasion?

Listen to my discussion of the event, tracing its origins back to the 2014 US coup in the Ukraine, and even earlier to the collapse of the USSR in the early 1990s. And a list of at least 10 ways various factions of the US capitalist class and their politicians may actually benefit from a Russian invasion.




Dr. Rasmus reviews the historical background to the possible military confrontation in the Ukraine, going back to Gorbachev and the breakup of the USSR in the early 1990s; aggressive moves by the US to move NATO into East Europe after promising not to do so; then US efforts to push pro-Russian politicians out of Ukraine in 2006 and the US backed Georgian invasion of South Ossetia, Russia; followed by the US financed coup of 2014 and Russian responses in Crimea and eastern Ukraine and US unilateral withdrawal from the Intermediate Nuclear Weapons (INF) treaty with Russia in 2019 and moving of NATO missile systems into Poland and Romania. Rasmus chronologically describes events since Putin’s public article last summer indicating NATO in Ukraine was a ‘red line’, up to the current maneuvering going on between Biden and Putin since December 2021 and western European leaders’ shuttle diplomacy now underway. Why a Russian invasion is not ‘imminent’, as Biden claims, but is nonetheless still possible. A preview of Dr. Rasmus’ latest article, ’10 Reasons Why the US May Want Russia to Invade Ukraine’ is presented (see his blog, http://jackrasmus.com for the print version)

Listen to my January 28 Alternative Visions radio show where I dissect the just released 2021 US GDP report and follow up with a commentary on Fed chairman, Jerome Powell’s, announcement of rate hikes coming in March.




Alternative Visions SHOW ANNOUNCEMENT:

The Biden administration this week hypes the 2021 US GDP release of 5.7% growth for 2021 as ‘fastest growth in 38 years’. Yet poll after poll show US households very downbeat and negative about the course and future of the US economy. Who’s right? The politicians or consumers? This show will unpack the just release preliminary figures for US GDP for 2021 and for latest 4th quarter. Why the hyped 5.7% is not all that relevant for the average consumer and household—whether measured in inflation, jobs, wage incomes or even future GDP growth in 2022-23. What’s the real rate of inflation and thus actually lower GDP? Why GDP has been over-inflated since 2013. Why sectors of GDP growth in 2021 are set to slow in 2022. The second major announcement of last week was Fed chair Powell’s declaration that interest rates will rise starting March 2022. Why rate hikes won’t halt inflation, however, and may actually slow the real economy and push financial markets toward more instability.


CRITICAL HOUR Radio: https://drive.google.com/file/d/1Kq2QYJZWPQQJmwqJ7-J9IE2TtN4-MJlo/view

Watch my Youtube presentation on “America’s Healthcare System–Lessons from the Pandemic” to the Henry George Institute.



Today the US Senate slammed the lid permanently closed on the Voting Rights Acts, voting 48-52. After giving the ‘deep six’ to Biden’s Build Back Better bill last month, Democrat Senators Manchin & Sinema followed up with a coup d’ grace for Voting Rights too. Both desperately needed bills are now DOA!

In his press conference tonight president Biden took a swipe at Bernie Sanders instead of Manchin-Sinema, revealing the Democrat party’s spin to cover up the two historic defeats has already begun; That spin and new messaging is to blame Sanders, progressives, and the so-called Democrat party ‘left’ for Biden’s debacle instead of laying blame where it accurately belongs: with those corporate interests and lobbyists who, behind the scenes for months, have been backing Manchin and Sinema.

Biden’s remarks about Sanders (“I am not Bernie Sanders, I’m not a Socialist’) will now open the door to a crescendo of ‘me too’ commentary from Democrat politicians, operatives, talking head pundits in the media, and other opportunists who’ll echo the claim the party moved ‘too far left’ in proposing Build Back Better and Voting Rights. That will be the mantra of the corporate wing in the party who’ll now take further control of legislative proposals and other initiatives. The Democrats will now move even further to the right. Their single proposal will be ‘vote for more of us in November and then we’ll get the job done’.

This historic failure of the Democrats to confront the economic and political crisis facing the country was predictable way back in the primaries in 2020. Recall the claim of Biden at that time that only he could ‘get the job done’ by forging alliances with Republicans to pass legislation. History now shows what a farce that was. It was the old Obama bipartisanship strategy that failed totally under Obama, resurrected during Biden’s election, and failed once again during Biden’s first year in office.

Biden has shown he can’t even slap together 50 votes of his own party. This fact is already not lost on the American electorate. The farce of the campaign pledge that he can get the job done (whereas Bernie couldn’t) has not been lost on the American people one year later. Biden’s approval rating has plummeted to 33% and will fall further as inflation continues to roll back wages, Covid continues to run its course, and Fed now quickly raises interest rates that will both slow the real economy in 2022 and provoke financial markets instability.

That is not the only consequence of Biden’s total failure to deliver as promised during the primaries.

The risk is high that Biden and Democrats will now push to confront Russia over Ukraine. The real issue is Russia’s obvious resolve not to let NATO gain a foothold in its back yard. Russia wants assurances that won’t happen. The Democrats and US foreign policy elite won’t give it to him. But Russia is not about to let Ukraine go NATO without a shot–after it lost 20 million people defending Ukraine from the Nazis–and after the US encouraged Georgia to invade it back in the Bush years. US political advisers–mostly civilian academics and intellectuals–don’t seem to understand where Ukraine fits in the Russian historical psyche. The odds are better than even that Biden, the Democrats, and US elite will push too far into brinkmanship and provoke an invasion.  With Biden and Democrats two great legislative defeats now in the Republican-Corporate bag, and social and political conditions worsening, an historic foreign policy miscalculation is increasingly real.

It’s even possible that US capitalists and elites may want a Russian invasion. It may be the one way to bring the European Union fully back into the US-NATO fold, from which parts of it have been drifting in recent years, not to mention getting Germany to abandon the Russian gas pipeline and instead buy imported US producers natural gas. The Ukraine situation is scary, since both parties may have independent motivations to see an invasion occur.

History may yet show a Biden policy of brinksmanship in foreign affairs may prove the analog to Biden’s failed domestic policy of bipartisanship.

Meanwhile, domestically the crisis of US Democracy is escalating rapidly.

A year ago we saw how Trump and is wing of capitalists were going to eliminate it in all but name–and almost succeeded. The Achilles heel of the electoral college was evident for all to see: Trump’s plan was simply to bypass electors that didn’t vote for him. That was to be accomplished by getting pro-Trump governors to simply appoint and send to Washington pro-Trump alternative electors of their choice; or else not to endorse the results in their states and send any elector delegation. Vice President Pence was then to acknowledge, when the count took place on January 6, 2021, that there were disputes in key states over which elector delegation was official, and therefore neither delegation should be counted. Remaining states’ electors would then be counted and the outcome would calculate in favor of Trump. That was evidently the plan to bypass even that un-democratic institution of the electoral college itself. Pence did not play ball, however. But can anyone doubt that, with a Republican majority in both the House and Senate, that Pence would not have balked? And next time, 2024, the Republicans will have a majority in both Houses of Congress.

There’s a further alternative scenario that might play out in 2024. If some elector delegations are in question and red state governors refuse to send them to Washington on January 6, 2025, then the decision on president could be made by the US House itself. Per the Constitution, each state would have one vote. And if a majority are red states, which they almost certainly will be, then a simply majority of red states could vote not to seat the popularly elected president.

Some combination of these scenarios are quite possible come 2024.

Since a year ago, the prosecution of the rioters of the Capitol has proceeded at snails pace. It won’t reach conclusion by the midterm elections this coming November, after which it is 99% certain Republicans will win the US House and shelve it in a bottom drawer somewhere in the basement of the Capitol. They’ll be able to win and do this not just because of Biden and the Democrats have been too timid and have failed to develop a strategy to push legislation; not only because of raging inflation devastating workers’ incomes; but because that second front of the attack on Democracy has been succeeding as well.

That second front is the corresponding assault underway on US democracy at the state level, concentrated in the roughly two dozen Republican dominated and controlled state legislatures.

Together the two assaults represent a political ‘double pincer’ political movement: In the Republican/Trump run ‘red states’ at least 20 anti-voting laws have been passed and hundreds more are pending. That goes forward, while Voting Rights laws are stopped in their tracks at the national level.

Biden attempts to put a spin on the defeat of Voting Rights, saying he’ll continue to fight. But fight ‘how’? He never says what’s his next strategy now to achieve what he couldn’t achieve to date by pleading with the Manchins, Sinemas, and McConnells. It’s because he has no strategy. His failed strategy of bipartisanship has been replaced by no strategy except to talk about how he’s not giving up.

Not only will Democracy fail to go forward, now the Voting Rights Acts are DOA, but Democracy in America will slide still further backward as voting repression at the state level accelerates. The even longer run trend accompanying voter suppression, of course is gerrymandering. The latter endorsed by the Supreme Court in various decisions over the last decade.

Gerrymandering plus Voter Suppression at the state level is the ‘second front’ to the US Senate’s killing of voting rights at the national level. Add procrastination in the investigations of January 6, 2021, and a Supreme Court that will continue to endorse all the above, and you have poisonous political brew that bodes ill for American Democracy in both near term and mid.

Throw in the mix a growing potential for confrontation in Ukraine and the risk grows of the anti-Democracy forces accelerate their efforts while the American public is distracted by yet another foreign policy military adventure.

Jack Rasmus
copyright 2022

Recently David Baker, a frequent commentator to this blog, raised the point that don’t current US inflation, the pending Fed rate hikes in response to inflation, have negative as well as positive consequences for the future short term 2022 trajectory of the US economy? He asked what are the ‘connections’.

As David noted: “

My take away is that inflation is a savage form of class warfare which is why Biden et al will do nothing about it. Where I am confused is how this inflationary spike will play out because Neoliberal policies require cheap money as well as the substantive issues raised in ‘Central Bankers on the Ropes’ obviously there are connections I just can’t process them.

My reply is the following to this important question:

Dr. Rasmus Reply to Baker:

The ‘connections’ you identify are in fact also contradictions. One the one hand owners of bonds and other fixed capital incomes want inflation controlled since it eats into their wealth and income; so they favor Fed rate hikes. On the other hand, corporations don’t like too much rate hike since it raises the cost of borrowing and thus investment (although banks like higher rates that add to their net interest income). Also, US multinational corps don’t like higher rates since it results in an appreciation of the US dollar, which means when they repatriate their offshore profits earned in foreign currency in the countries they do business, they must convert profits from foreign currency to dollars. And if dollar appreciates (due to higher Fed rates), it means they repatriate few profits in dollar form. Also, rising Fed rates and dollar causes big declines in foreign currency exchange rates, that slow foreign economies (and offshore profits in those countries). It also raises fragility of foreign debt, both sovereign foreign government debt and dollarized private corporate bond debt–all of which can result in financial crashes in emerging market economies. So it’s a mixed picture for US capitalists. Some benefit from higher Fed rates; some not. Capitalist governments continually try to balance the contradictions, not letting either get too far out of control. But when crises deepen, the balancing act becomes more difficult. Sometimes they lose control. Then sovereign bond defaults occur and the IMF has to bail them out (e.g. Argentina, Turkey, etc.); or a sector of the global financial economy experiences a crash and crisis; or re-recessions of the real economy emerge. And in a globalized financialized capitalist economy today, the risk of accelerating contagion–real and/or financial–becomes more likely. Capitalism works by enriching the capitalists while feeding more crises and instability within itself. Capitalist policy makers are always trying to maintain an uneasy balance between enriching capitalists more and provoking more instability and crisis within their own system. That’s what’s behind its ‘boom and bust’ characteristic. Problem is the rich and their corporations benefit most from the ‘boom’, and then are the first to be bailed out when there’s a bust. The rest of the population has to fend for itself to different degrees depending on how important this or that segment is to the system itself. The last four decades illustrate the balancing act is getting increasingly difficult–more is going to the capitalists and their corporations during both pre-bust and post-boom, and less and less relatively to the rest. That’s my ‘short’ explanation.

The US govt’s most recent inflation report shows consumer prices rising past 12 months at 7% rate, up from prior report that showed 6.8%. (Really both over 10% for reasons I’ve stated before). The worst since 1981. Biden admin. spokespersons say it’s ‘slowing’. Yet prices rising first week of January twice as fast as last week of December; and 7% is more than 6.8%. Inflation will cut into 1st Quarter 2022 real US GDP, dampening consumer spending. Also, the end of child care benefit will have same effect on real consumption. Then there’s the general fall of disposable income for millions of US households due to failed Build Back Better plan, which is now not only dead but buried. Continuing problems of production and exports from China/Asia will further add to US real economic slowdown this quarter. Ditto as Omicron slows business investment and adds to workers shortages; and as Fed raises interest rates as well. Focus will be on Fed raising rates as means to slow inflation. However, Fed rate hikes depress demand which is not the problem behind inflation. That problem is in part supply side issues (US and global trade) and even more so problems of US monopoly corps price gouging. Fed rate hikes can’t effect either supply or monopoly causes. It can make households pay for inflation by rate hikes that result in layoffs in housing, autos, other big ticket purchases–just as the Fed did in 1981-82 when it raised rates to 18%. It provoked recession as solution to dampen inflation–when the real cause was OPEC and Saudi supply side cause.  Will the Fed repeat 1981 in 2022? If it tries it will fail. US economy is far more fragile today. Should Fed raise rates beyond 3% (10 yr. US bond rate now at 1.5%), it will provoke major real economic contraction–i.e. double dip recession in 2022. So it won’t and will back off, I predict.

In summary, more chronic inflation coming 2022.  More slowing US real economy this quarter.  And growing fragility in global/US financial markets as China property developers default pressures spread, contagion potential rises, US dollar rises and emerging market economies’ currencies deflate (and their economies slow).  The fiscal stimulus phase of Great Recession 2.0 is now over.  There’ll be no further fiscal stimulus for households, as Fed monetary policy turns contractionary as well with rate hikes.

Longer run conclusion: whereas Great Recession 1.0 (2007-10) was precipitated by financial markets crash that pulled down the real economy in its wake, today’s Great Recession 2.0 (2020-22) may experience a similar cause-effect but in reverse: real contraction 2020-22 followed by financial markets’ contraction (late 2022-2023).

Read my commentary of the past week below on twitter noting the key developments for prices in wake of government’s latest inflation report:

#Fed rate hike in March all but certain, as all Fed governors now lined up for it. Before rates drift up. Auto prices (new & used), houses, etc. to rise more next 2 months. Ditto as exports from China slow & US monopoly corps continue price gouging. Result: inflation continuing

#Inflation Republicans say its excess Demand from too generous stimulus. But stimulus ended in Aug-Sept. Inflation surged after. Dems say its supply. But oil, meat, grain, etc. corps have no supply problem. So what is it? It’s monopoly corps price gouging to recover 2020 profits

#Inflation there’s no shortage of domestic US oil supply. Yet US oil corps raised prices 29.6%! So not even supply supply driving oil, gas, energy inflation. So what is? Price gouging by oil corps (and other monopolies like meat producers, cereal-bread corps, etc. etc.)

#Inflation report today = 7% Dec CPI rise, so it’s accelerating from Nov 6.8%. Big driver is oil/gas up 29.6% over year. So oil corps = biggest cause of supply side inflation today, just as in 1981 when OPEC oil supply shock caused inflation. Monopolies price gouging = main cause

#Fed raising Fed interest rates will actually exacerbate & worsen supply side driven inflation. It will mean less business investment, more worker layoffs and lost wage income to spend & more labor supply shortages–all of which will add to supply side inflation in coming months

#Fed using interest rate hikes to slow inflation is like using a sledgehammer to swat flies. Powell knows rate hikes won’t check supply driven inflation. It won’t take 18% Fed rate to provoke another recession in 2022. US economy more fragile. A 3% 10 Yr. Treasury rate will do it

#Inflation Biden & media saying inflation is abating. Another lie. Govt own data show inflation rising first week of January twice as fast as during last week of December. There’s so much lying going on, from both wings of capitalist party–radical right/Republicans & Biden/media

#Inflation In 1981 inflation 10% due to supply side issues with global oil imports, caused by OPEC & Saudis. US response: get Fed to raise rates to 18%. Autos, housing, crashed. Investment & wages fell. Recession. Demand was used to address Supply cause. Fed planning same 2022.

#Inflation CPI up 7% again December-most since 1981. Inflation not slowing. So what’s Biden proposing? More competition for monopolies like meat producers. When asked by nat’l media today what’s being done about supply driven inflation, Biden’s Director of CEA ducks the question

#Fed As inflation accelerated in 2021 Fed refused to raise rates. Now as wages try to catch up to prices, Fed says will soon raise rates =Fed trying to protect profit margins of corps & businesses, not really to stop inflation which is supply driven & rate hikes can’t slow

#Wages Govt & Media hyping 4.7% wage gains past 12 mos. Say compares to 3% pre-covid. But inflation pre-covid 2%-2.5%. Inflation now almost 7%. So now Real Wages less than pre-pandemic.(Also 4.7% is ‘average’, so higher paid managers, tech, professionals getting > & others <4.7%)

#Fed signals will raise rates maybe as early as March, not next fall. Rate hikes to address supply side inflation work instead by depressing demand, jobs, wages, consumer spending–i.e. make workers pay for what is corp. driven supply inflation. Fed made same error in 1980-81

#Inflation Biden’s says today: “We must get to the bottom of why farmers and ranchers continue to receive low payments while families across America endure rising meat prices”. ‘Get to the bottom’? Really? Biden means let’s study & bury it. It’s obvious food corps price gouging.

#Inflation Biden’s answer to monopoly price gouging by food industry: govt give more $ to smaller capitalists to create more competition. Translated: Inflation is just an excuse for govt to provide more subsidies to corporations. Real solution: price controls + tax big food corps

#Inflation meat & food prices up 20% so far. Biden says due to lack of competition: “Capitalism without competition isn’t capitalism. It’s exploitation” (wall st. journal 1-4-22). Since all food industry is near-monopoly, it’s all capitalist exploitation.

Listen to my January 7, 2022 Alternative Visions radio show in which I comment on the major developments and events in 2021 in the US/Global Economy (including the likely further slowing again of the economy in early 2022, continuing inflation, Fed rate hikes) and US/Global Politics (including the accelerating attack on US Democracy, the failure of Biden/Democrats to check it, and flash points in Ukraine and Taiwan). My predictions on what’s most likely to occur in US economy/politics in 2022 follow.