Wednesday, March 5, 2014

It’s time the West, Russia and Ukraine think about exchanging Crimea for money, stability and non-interference

By Marc Jampole

When representatives of nations get together to carve up territory to fabricate other nations, their process usually resembles that of unethical sausage makers. Take the abominations created by the winners of World War I: Yugoslavia was created out of Croatia, Bosnia, Slovenia and other geographical territories containing discrete cultures. Slovak-speaking Slovakia and German-speaking Bohemia were stitched together to form Czechoslovakia.  Modern Iraq comprises two territories that had frequently been in cultural clash since the Akkadians and the Sumerians of ancient times, plus land on which Kurds lived.

Funny, with all this slicing and dicing of territory, no one in the Western European imperium of that era thought that either the Kurds or the Armenians deserved their own country. That certainly wasn’t the case when the Hashemite family lost the war to control the Arabian peninsula to the Saudis in 1930. Britain helped the Hashemites (a family, not a people or ethnic group) install themselves as royalty over most of the homeland of the Palestinians, AKA Transjordan.

Many of the geopolitical troubles over the last few decades derive from these decisions almost a century ago to impose statehood on badly mashed-up geographies.

The aftermath of World War II wasn’t much better, with the British botching the independence of the Indian subcontinent and the weird division of much of Africa into nation states that disregarded ethnic boundaries.

In the case of the Crimea, however, the Russians brought it on themselves, or perhaps it’s more correct to say that Khrushchev brought it on Russia by giving Crimea to the Ukrainian Soviet Socialist Republic (part of the Soviet Union) in 1954 for administrative reasons.

If you go back far enough in history, many have laid claim to the Crimean peninsula, including the Cimmerians, Bulgars, Greeks, Scythian, Goths, Huns, Khazars, Kievan proto-Russians, Mongols, Tatars, Ottoman Turks, Venetians and Genovese. But since the 18th century, the Russians and then the Soviet Union, dominated by Russia, controlled Crimea until the breakup of the Soviet Union. Almost 60% of the population identifies itself as Russian (36% are Tatars, who are primarily Muslims and just 12% are Ukrainians). Although Ukrainian is the official language, most people speak Russian, most government business is conducted in Russian and most TV and radio stations broadcast in Russian.

Never fear, dear readers. I’m not getting ready to support the recent Russian saber-rattling in Crimea, whether it is conceived as army maneuvers or an invasion.  Russia is dead wrong to try to use military power to control events in a neighboring nation, just as the United States was wrong to invade Argentina (1890), Chile (1891) Panama (1898), Dominican Republic (1903), Honduras (1907 and 1911), Haiti (1913 and 2004), Mexico (1914 and 1923), Guatemala (1920, 1954 and 1966), Grenada (1983) and Colombia (2003). Except for Mexico, none of these countries borders the United States. In none of these countries is English a dominant or even prevalent language. There is no deep American cultural history in any of these countries.

American presidents have always given the same reason for all these invasions: to protect American lives.  Sound familiar? Of course it does, because it’s the essence of Putin’s rationale for using military force in Crimea. Putin is as transparently devious as the United States has been in all of its invasions of neighbors. We were wrong in every single instance and Russia is wrong now.

But wrong doesn’t seem to matter much when large and militarily powerful nations flex their muscles in their sphere of interest.

Every option seems onerous for the West and especially for the United States, still broke from prosecuting two goalless and mismanaged wars. Civil war in Ukraine, a broader conflagration with Russia, or an economic boycott of the world’s leading producer of fossil fuels makes both the West and Russia suffer. Economies are so intertwined in the new world order that any major showdown will hurt both parties. Putin knows that misery to his people and loss of income to his friends will come, which is why he is moving carefully while asserting what he thinks is Russia’s right to hegemony. Similar concerns explain why the United States and our allies are also responding gingerly.

It’s time to start thinking creatively. Let’s start by making a distinction between the Crimea and the rest of eastern Ukrainian in which Russian speakers predominate. Where Russia ends and the Ukraine begins is subject to dispute in the eastern part of the Ukraine. It’s one flat prairie for a long stretch. Crimea, by contrast, although hanging on as if by one finger to Ukraine, is a discrete territory which in every way is more Russian than Ukraine. If I were dictating foreign policy for the United States and our allies, I would let Russia have Crimea in return for three concessions:
1.      Russia agrees not to interfere in any way in Ukrainian elections.
2.      Russia removes any troops it has from the non-Crimean part of Ukraine.
3.      Russia continues to provide support to the Ukrainian economy by selling natural gas to it at discounted rates and giving loan guarantees for at least 25 years.

The trade of Crimea for money and stability is not appeasement, as Russia will pay a price for the return of Crimea. It really is a win-win for everyone except for the small number of ultra-nationalist Crimean Ukrainians. It avoids both a military and an economic conflagration. The Ukrainians get a lot more out of the deal than the Mexicans, Guatemalans or Haitians did from U.S. invasions and Russia doesn’t really get that much—just return of a small piece of land over which it has had cultural control for many centuries. It corrects a mistake that Khrushchev made some 60 years ago.  Would that all the mistakes of the so-called nation-builders were that easy to correct.

Sunday, March 2, 2014

Editorial: Make Businesses Pay Their Way

President Obama got the ball rolling on a much-needed increase in the minimum wage with his Feb. 12 executive order that federal contractors pay at least $10.10 an hour. With Republicans blocking any effort to raise the federal minimum wage for other workers from the current $7.25, progressive advocates should take up the initiative at the state and local level and see if putting the wage hike on the ballot might goose low-income workers to get out to vote in November.

We think a living wage is a good deal not only for workers, but also for ethical business owners who already provide a fair wage and benefits for their employees. How can an ethical business owner compete with an unscrupulous business owner who pays the minimum wage and no benefits, forcing his employees to rely on food stamps, public assistance and charity to provide for their families? That amounts to socialism for businesses and gives the cheapskates an unfair advantage in the marketplace.

The Congressional Budget Office on Feb. 18 reported that a $10.10 minimum wage would mean higher earnings for 16.5 million workers, resulting in $31 billion in higher earnings, and it would lift nearly one million Americans out of poverty. The CBO also projected that the increase could decrease employment by 500,000 jobs, though economists said there is minimal evidence to support that projection and the additional money in workers’ pockets would stimulate businesses and actually cause a net increase in jobs.

The Gap Inc. announced Feb. 19 that it would set $9 as the minimum hourly rate for its US work force this year and $10 next year, resulting in a raise for 65,000 of its 90,000 employees. Even Walmart, which we count among the cheapskates, appears to be coming around, as the company announced it would not take a position on minimum-wage proposals so long as they didn’t target particular employers and had some provisions to “manage the impact,” like a phase-in period. Perhaps coincidentally, Walmart, like other retailers, had a tough Christmas season as cuts in food stamps and higher payroll taxes reduced disposable income for its core customers. Extra bucks in the working poor’s pockets go straight to Walmart’s bottom line.

One of the themes we hear from conservative economists is that people who prefer a higher minimum wage instead of an increase in the earned income tax credit are motivated by an anti-business animus. We don’t see it that way. Increasing the minimum wage and increasing the earned income tax credit are both ways to help the working poor. By increasing the minimum wage, we force businesses to provide something closer to a living wage. By increasing the earned income tax credit for low- to moderate-income working individuals and couples — particularly those with children — we force all taxpayers to subsidize skinflint business owners who are too cheap to pay a living wage that will support a family.

So it’s not anti-business to support a higher minimum wage; it’s anti-cheapskate. And honest business owners who pay their employees a fair wage should welcome an increase in the minimum wage, which puts them on a more level playing field with the chiselers.

Also, the business that refuses to provide health care for its minimum-wage workers forces local hospitals to provide that care, a large portion of which probably will be uncompensated. So cheapskate businesses are the real “takers” in today’s economy.

And when the discussion comes around to tax reform, as House Ways and Means Chairman Dave Camp (R-Mich.) just debuted a proposal to “simplify” the tax code, remember that the federal government needs to come up with revenue equal to about 20% of the gross domestic product to pay the bills, as Bill Clinton proved when he last balanced the budget in FY 2001. George W. Bush rejected the balanced budget with his cuts for the wealthy, and the national debt was off to the races.
Camp proposes to shrink the tax brackets to two — 10% and 25%, with a 10% surcharge for people earning more than $450,000 and a new tax on assets for big banks. But Republicans won’t agree to a tax on bank assets and any time they get the tax rate on the rich much below 39.6%, they have to make it up by increasing revenue from lower- and middle-income taxpayers. That’s just simple arithmetic, because cutting food stamps and making life miserable for poor people won’t make up the difference.

Plenty of Targets for Pentagon Cuts

Defense Secretary Chuck Hagel is proposing to cut the size of the Army from 490,000 before the sequester to approximately 440,000. In asking Congress for $496 billion for the 2015 fiscal year, which would cut the Pentagon budget by $75 billion over two years, Hagel also proposes to limit military pay raises across the board to 1%, and freeze pay entirely for generals and admirals for one year. The budget also proposes to reduce subsidies to military commissaries, which will make goods purchased there more expensive, limits housing allowances for military families and increases health insurance deductibles for families of service members and retirees.

Of course, $496 billion is not all the Pentagon is asking for. President Obama is expected to ask Congress to approve a separate $26 billion appropriation for aircraft and weapons systems and then there’s the off-budget overseas contingency account, which is about $85 billion this year and can be used to cover shortfalls in operating expenses. And the Pentagon budget does not include money spent on the CIA, the NSA and other secret agencies, at least $49 billion in 2013 (reduced from $53.7 billion by the sequester). More than two-thirds of that goes to private contractors.

It’s reasonable to reduce the size of the Army, which peaked at 570,000 during the height of the Iraq and Afghanistan wars, but it’s wrong to cut salaries and benefits of soldiers and veterans to reach arbitrary spending limits of the sequester. Markos Moulitsas noted at (Feb. 25), “not only is proposing benefits and pay cuts wrong on policy, it’s wrong on the politics. You’d have to be a suicidal moron to vote for any such cuts, it doesn’t matter what district or state you represent. By including such cuts in the proposal, Hagel has guaranteed that the cuts — already controversial to begin with — are dead on arrival.”

There are plenty of places the Pentagon can cut before it gets to soldiers’ pay and veterans’ benefits. First, Hagel should cut weapons systems that are designed for threats that no longer exist, such as the Lockheed Martin F-35, a single-seat fighter designed to perform ground attack, reconnaissance and air defense missions with stealth capacity at a cost estimated by the Project on Government Oversight (POGO) at $181 million each for the Air Force version to $299.5 million each for the Navy carrier-capable version. It’s a fine aircraft, but no nation’s air force can challenge the battle-tested fighters and bombers we already have. In fact, the US spends more on its military than the next 10 nations (including our allies) — and the Pentagon spends six times more than China.

Military spending, at $682 billion in 2012, accounts for 20% of federal spending — as much as Social Security, or the combined spending for Medicare and Medicaid. Scott Amey of POGO noted that in 2010 Defense spent $72 billion on its 790,000 civilian workers ($108 billion if you include overhead) and $253.8 billion on military contractors. That’s a good place to cut.

It’s hard to find a figure on how much it costs to garrison the American Empire overseas, but in 2010, the White House’s bipartisan deficit commission suggested cutting US bases in Europe and Asia by one-third, which it estimated would save $8.5 billion in 2015 — which is low-balling it. Of course, when you have 11 aircraft carriers you have cruising military bases, at a cost estimated at $5.3 billion for Navy vessels and personnel. And the Navy will keep its carriers and get two new destroyers and two new attack submarines under Hagel’s budget. — JMC

From The Progressive Populist, March 15, 2014
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Selections from the March 15, 2014 issue