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Wednesday, March 19, 2014 2:00 PM


Negative Sum Game; Winners and Losers


Stick to the Economy

In response to Ron Paul vs. USA Today on Crimea; Reflections on "High Costs" of USA Today Proposal one seriously misguided interventionist told me I do not know what I am talking about and to "stick to the economy".

Well, I do know what I am talking about. 1000 years of history shows this is not our battle. But the big irony is that I am precisely talking about the economy.

Military and Economic Foolishness

It is military foolishness as well as economic stupidity to send missiles to the Czech Republic as senator John McCain wants us to do.

I was against the War in Vietnam (and proud of it). I was against the War in Iraq (and proud of it). I am against the use of drones that have killed hundreds if not thousands of innocent victims (and proud of it). The cost of these wars has been staggering in both moral and economic terms.

All we have to show for warmongering is a massive pile of government debt and a growing number of citizens in various countries who are sick of the US. Some of those people have so much hatred for the US they will become terrorists themselves.

Negative Sum Game

War is a negative sum game. Sanctions are a negative sum game as well. Anything that disrupts free trade is a negative sum game.

Russia promises to act "in kind" to any sanctions. If provoked enough, it will shut off supply of natural gas to Europe. That may cost Russia $70 billion in badly needed monetary reserves. It will also cripple European nations dependent on Russian gas.

No one wins from tit-for-tat economic sanctions. Yet economic illiterates propose such sanctions to "teach Russia a lesson".

The real lesson is economic illiterates as well as warmongers never learn.

More Economic Insanity From McCain

Just today, warmonger-in-chief, Senator John McCain released a Statement on Ukraine.

McCain wants to provide the Ukraine with military assistance, loans, food, small arms and ammunition, and conduct military exercises. McCain also wants to "deploy a large civilian monitoring mission in eastern Ukraine that could help set the record straight about alleged threats to ethnic Russians."

Think that hand-picked group of civilian monitors will be unbiased? They will be biased all right, ignoring right-wing attacks on pro-Russian Ukranians, while nit-picking over the slightest abuse the other way.

McCain's Mind is Economic Mush

McCain wants to "Expand significantly the U.S. and E.U. targeted sanctions against the most corrupt Russian government officials, companies, and financial institutions."

And Russia won't do the same? Clearly McCain's mind is economic mush.

A simple question will prove it: Does the US have more investment in Russia that Russia can target or does Russia have more investment in the US that the US can target?

Only the 11th of McCain's 11 proposals makes any economic sense: "enhance the exportation of U.S. oil and natural gas, especially to NATO allies and other European partners, in order to decrease Europe's reliance on Russian supplies of energy."

Notice the difference in that proposal. It is the only one that promotes trade as a solution. It is the only one that can do any good, but it will take a while.

Huge Human Rights Irony

One of McCain's proposals was tremendously ironic. He wants to "Use the Magnitsky Act to sanction additional Russian officials for their gross violations of human rights."

Speaking of human rights, the US policy of bombing nations into submission and wasting trillions of dollars in the process was one of the grossest violation of human rights in history. So is the US drone policy in which the US is willing to kill innocent civilians, writing off the deaths of children and loss of limbs as "collateral damage".

Our drone policy is such a flagrant violation of human rights that it is far worse than anything Russia did in the Ukraine. Crimea had a vote. Rigged or not it is crystal clear that an overwhelming percentage of Crimeans want Crimea to be part of Russia.

Where is Pakistan's vote on whether the US gets to keep killing innocent children in drone strikes?

To return to the economy, there are negative economic consequences of our drone policy. Not only do we waste money on drones, we make more terrorists in the process.

Winners and Losers

The warmongers, those employed by warmongers, and morally corrupt politicians like McCain (via campaign contributions) make out OK but everyone else loses.

So yes, we should stay out of this mess on both moral and economic grounds. Morally speaking the US is the biggest hypocrite in the world. Economically speaking, war and sanctions are negative sum games.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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