It's one thing that US foreign policy wonks imagined that Russia would remain in a coma forever, but the idea that we could encircle Russia strategically with defensible bases in landlocked mountainous countries halfway around the world...? You have to ask what were they smoking over at the Pentagon and the CIA and the NSC? So, this asinine policy has now come to grief. Not only does Russia stand to gain control over the Baku-to-Ceyhan pipeline, but we now have every indication that they will bring the states on its southern flank back into an active sphere of influence, and there is really not a damn thing that the US can pretend to do about it. We could have spent the past ten years getting our own house in order -- waking up to the obsolescence of our suburban life-style, scaling back on the Happy Motoring, reconnecting our cities with world-class passenger rail, creating wealth by producing things of value (instead of resorting to financial racketeering), protecting our borders, and taking the necessary measures to defend and update our own industries. Instead, we pissed our time and resources away. Nations do make tragic errors of the collective will. The cluelessness of George Bush is nothing less than a perfect metaphor for the failure of a whole generation. ... This must be an equally sobering moment for Europe, and an additional reason for the recent plunge in the relative value of the Euro, for Europe is now at the mercy of Russia in terms of staying warm in the winter, running their kitchen stoves, and keeping the lights on. Russia also exerts substantial financial leverage over the US in all the dollars and securitized US debt paper it holds. In effect, Russia can shake the US banking system at will now by threatening to dump its dollar holdings. The American banking system may not need a shove from Russia to fall on its face. It's effectively dead now, just lurching around zombie-like from one loan "window" to the next pretending to "borrow" capital -- while handing over shreds of its moldy clothing as "collateral" to the Federal Reserve.
...
This must be an equally sobering moment for Europe, and an additional reason for the recent plunge in the relative value of the Euro, for Europe is now at the mercy of Russia in terms of staying warm in the winter, running their kitchen stoves, and keeping the lights on. Russia also exerts substantial financial leverage over the US in all the dollars and securitized US debt paper it holds. In effect, Russia can shake the US banking system at will now by threatening to dump its dollar holdings. The American banking system may not need a shove from Russia to fall on its face. It's effectively dead now, just lurching around zombie-like from one loan "window" to the next pretending to "borrow" capital -- while handing over shreds of its moldy clothing as "collateral" to the Federal Reserve.
for Europe is now at the mercy of Russia in terms of staying warm in the winter, running their kitchen stoves, and keeping the lights on.
No it's not.
That's been repeated so many times that everybody believes it to be true. But it's not. In the long run, we're all dead. John Maynard Keynes
So I can only assume it's a cultural tendency to say "yes things are bad, but poor Old Europe is worse". As if it somehow excuses anything they're doing wrong. keep to the Fen Causeway
Dear Professor Krugman, I am a huge fan, but regarding a statement you made in a recent column, "The Great Illusion" -- After all, Russia has already used gas as a weapon: in 2006, it cut off supplies to Ukraine amid a dispute over prices. -- please see "Don't Blame Gazprom for Europe's Energy Crunch" by Jérôme Guillet of the European Tribune. Best regards, ...
I am a huge fan, but regarding a statement you made in a recent column, "The Great Illusion" --
After all, Russia has already used gas as a weapon: in 2006, it cut off supplies to Ukraine amid a dispute over prices.
-- please see "Don't Blame Gazprom for Europe's Energy Crunch" by Jérôme Guillet of the European Tribune.
Best regards, ...
i know some gas comes from n. africa, but why are all these pundits so uninformed?
even after years here, i thought it was true, at least mostly.
leave aside the 'weapon' stuff, i don't buy that, they need the money... The person who says it cannot be done should not interrupt the person doing it. Chinese Proverb.
Thus Ukraine has never paid for the gas it needs to import from Russia, as it can simply tap the transit gas. That happened in 1992 and 1992, when Russia tries to cut them off and Ukraine reduced transit by the same volume. Since then, both countries have agreed to "swap" transit rights for free deliveries, which is actually a pretty cheap price for Russia to pay to protect exports which make 25% of its hard currency earnings, and, some years, the same proportion of its federal tax income. Today's noise is an attempt to try to scare off the Europeans again into putting pressure on the Ukrainians to behave, but it stands exactly zero chance of success, because Russia will never cut its gas deliveries to the West. Its credibility as a supplier is too vital an asset for it to endanger it. That situation shows the interesting thing about pipelines - they create lasting dependencies that force countries to talk and find peaceful agreements, because otherwise both get hurt economically. Pipelines are pretty much like kids in a marriage - they tie you for a long time, force you to talk - but in this case, they cannot even be hurt...
Today's noise is an attempt to try to scare off the Europeans again into putting pressure on the Ukrainians to behave, but it stands exactly zero chance of success, because Russia will never cut its gas deliveries to the West. Its credibility as a supplier is too vital an asset for it to endanger it.
That situation shows the interesting thing about pipelines - they create lasting dependencies that force countries to talk and find peaceful agreements, because otherwise both get hurt economically. Pipelines are pretty much like kids in a marriage - they tie you for a long time, force you to talk - but in this case, they cannot even be hurt...
Marco might want to direct Krugman to that post, too. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
that's exactly what i needed to read and understand. The person who says it cannot be done should not interrupt the person doing it. Chinese Proverb.
Skennah Kowa
