The Invisible Chain That Is the Ukraine
As news outlets fall over one another to report the most recent developments in the Ukraine, many in the west wonder what the stakes are for Americans and their allies. The United States government, through myriad agencies and spokespeople, decries Russian incursion into the Crimea region because the move violates a host of international legal agreements. Even if an immediate existential threat to American interests is not perceived by her citizens, callous disregard of treaty obligations is a legitimate cause for anxiety. History buffs and those old enough to remember still point to the Munich Pact of 1938, when Adolph Hitler promised that the Sudetenland would be his last acquisition. Those who so quickly dishonor their own commitments in small matters will likely do so in larger ones.
Still, international law is a moving target when it comes to sovereign nation-states. Each will invoke it when threatened by another, but will just as easily ignore it€"better yet, re-interpret it€"when it stands something to gain. Granted, there is the International Court of Justice in the Hague. Few, however, know who sits on that court or what their competencies are. The flaccidity of international law is why we have armies. Absent these global documents, then, what compels countries to penalize Russia for its aggression? What is the advantage to the U.S. of having the Ukraine free of Russian dominance? The Secretary of State, John Kerry, stated on broadcast television, €We have European Union and NATO interests that border Ukraine.€
Almost every day serves up a reminder of George Washington's farewell warning about avoiding foreign entanglements. Secretary Kerry spoke as if the United States was part of the European Union, perhaps forgetting that the E.U. was formed€"at least in part€"to counter U.S. economic influence. Furthermore, leaked recordings from last autumn indicate that America and Europe are not on the same page when it comes to interests in the Ukraine. The New York Times of February 7, 2014 reported:
"The back-and-forth this week illustrates how many interests are a part of the mix in Ukraine €" a mix that Western diplomats seem unable to keep free of their own differences.
"In the editorial with the headline €Really Pretty Stupid,€ Klaus-Dieter Frankenberger, the newspaper's (Frankfurter Allgemeine Zeitung) foreign editor, noted how the latest issue had been stoked by months of €bad blood€ with Washington. 'You can certainly criticize some parts of European policy toward Ukraine, but it is not as if American diplomacy has found the font of all wisdom. In fact, they can't think of anything more than a few mini-sanctions against the regime in Kiev.'€
All of that said, Pandora has exited the box in terms of burdensome alliances; getting her back in is doubtful. Yet it still begs the question: what does the United States see as most urgent in preserving the Ukraine's territorial integrity? One word: exports. American differences with the European Union notwithstanding, its capacity to purchase and receive American exports is one of the main factors propping up America's less than vigorous economic growth. Key to European vitality is the steady flow of food and fuel from the Ukraine. If that stream is stanched€"and the European economy falters€"so will the export traffic from the U.S. be stifled. This event, economists believe, can adversely affect the economy of each and every state to varying degrees.
It turns out, then, that Secretary Kerry stated an ugly, if obvious, fact: we are entangled with Europe, hopelessly so. De-tangling, apparently, is not an option; so we remain entangled, hoping not to be strangled. Our economic co-dependency is not akin to strategic partnerships like NATO, where the member countries are bound to defend each other in the event of an attack. This is more on the order of co-signing or guaranteeing a loan: whatever goes wrong with the primary borrower, the co-signer is on the hook.
Of course, the United States can not prosper in a vacuum. Relationships are part of doing business in this world and those relationships require investment. The fact, remains, nevertheless, that exports comprise only 11 percent of the U.S. economy. So how can a drop in exports pack such an economic wallop? It does so in the same manner a strong wind can take down a mighty oak tree: weak roots. Robust growth adds ballast to financial well-being. The slow rate of growth that continues to dog the overall economy gives each individual component (e.g. exports) exaggerated importance. The question remains whether exports are now important enough to warrant a war with Russia.
Lowering tax rates (yes, even on the €rich€), streamlining regulation and reducing public expenditures are well-advised, long-term strategies that give weight to teetering economies. When a firm can do business€"ethically, of course€"with minimal interference from the government, it is better able to expand its customer base and its labor force. Government will appreciate the widened tax base, as well. Only when the domestic economy is running on all cylinders will foreign trade assume a proper degree of influence among the movers and shakers. Only then will the chain that is the Ukraine be de-linked.
Still, international law is a moving target when it comes to sovereign nation-states. Each will invoke it when threatened by another, but will just as easily ignore it€"better yet, re-interpret it€"when it stands something to gain. Granted, there is the International Court of Justice in the Hague. Few, however, know who sits on that court or what their competencies are. The flaccidity of international law is why we have armies. Absent these global documents, then, what compels countries to penalize Russia for its aggression? What is the advantage to the U.S. of having the Ukraine free of Russian dominance? The Secretary of State, John Kerry, stated on broadcast television, €We have European Union and NATO interests that border Ukraine.€
Almost every day serves up a reminder of George Washington's farewell warning about avoiding foreign entanglements. Secretary Kerry spoke as if the United States was part of the European Union, perhaps forgetting that the E.U. was formed€"at least in part€"to counter U.S. economic influence. Furthermore, leaked recordings from last autumn indicate that America and Europe are not on the same page when it comes to interests in the Ukraine. The New York Times of February 7, 2014 reported:
"The back-and-forth this week illustrates how many interests are a part of the mix in Ukraine €" a mix that Western diplomats seem unable to keep free of their own differences.
"In the editorial with the headline €Really Pretty Stupid,€ Klaus-Dieter Frankenberger, the newspaper's (Frankfurter Allgemeine Zeitung) foreign editor, noted how the latest issue had been stoked by months of €bad blood€ with Washington. 'You can certainly criticize some parts of European policy toward Ukraine, but it is not as if American diplomacy has found the font of all wisdom. In fact, they can't think of anything more than a few mini-sanctions against the regime in Kiev.'€
All of that said, Pandora has exited the box in terms of burdensome alliances; getting her back in is doubtful. Yet it still begs the question: what does the United States see as most urgent in preserving the Ukraine's territorial integrity? One word: exports. American differences with the European Union notwithstanding, its capacity to purchase and receive American exports is one of the main factors propping up America's less than vigorous economic growth. Key to European vitality is the steady flow of food and fuel from the Ukraine. If that stream is stanched€"and the European economy falters€"so will the export traffic from the U.S. be stifled. This event, economists believe, can adversely affect the economy of each and every state to varying degrees.
It turns out, then, that Secretary Kerry stated an ugly, if obvious, fact: we are entangled with Europe, hopelessly so. De-tangling, apparently, is not an option; so we remain entangled, hoping not to be strangled. Our economic co-dependency is not akin to strategic partnerships like NATO, where the member countries are bound to defend each other in the event of an attack. This is more on the order of co-signing or guaranteeing a loan: whatever goes wrong with the primary borrower, the co-signer is on the hook.
Of course, the United States can not prosper in a vacuum. Relationships are part of doing business in this world and those relationships require investment. The fact, remains, nevertheless, that exports comprise only 11 percent of the U.S. economy. So how can a drop in exports pack such an economic wallop? It does so in the same manner a strong wind can take down a mighty oak tree: weak roots. Robust growth adds ballast to financial well-being. The slow rate of growth that continues to dog the overall economy gives each individual component (e.g. exports) exaggerated importance. The question remains whether exports are now important enough to warrant a war with Russia.
Lowering tax rates (yes, even on the €rich€), streamlining regulation and reducing public expenditures are well-advised, long-term strategies that give weight to teetering economies. When a firm can do business€"ethically, of course€"with minimal interference from the government, it is better able to expand its customer base and its labor force. Government will appreciate the widened tax base, as well. Only when the domestic economy is running on all cylinders will foreign trade assume a proper degree of influence among the movers and shakers. Only then will the chain that is the Ukraine be de-linked.
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