Monday, February 28, 2022

The Cost of Sanctioning Russia

As you know, the Russian invasion of Ukraine has, for now, bogged down. The Western world is rising up in anger and is sanctioning Russian companies and individuals. We are very good at sanctions. We can use them to punish people, which we all consider to be a good thing.

And yet, in an interdependent world, sanctions do not just hurt those they are supposed to punish. Disrupting supply chains damages economies outside of Russia, and it hurts people around the world.


Besides sanctions on trade and commerce, the war has caused economic activity in Ukraine to slow down, even to stop. And it has caused European nations and America to cease doing any business with Russia.


The Wall Street Journal has compiled a fairly comprehensive list of the industries and the nations that are being hurt by Russia’s Ukraine incursion.


It is useful, in order to stay informed, to examine the fallout of the war and the sanctions. It makes us feel good, but it is certainly going to cost us.


The Journal begins with factory shutdowns:


Russia’s invasion of Ukraine is piling new troubles onto the world’s already battered supply chains. The fighting has shut down car factories in Germany that rely on made-in-Ukraine components and hit supplies for the steel industry as far as Japan. It has severed airways and land routes that had become crucial since the pandemic began gumming up sea trade.


Russia and Ukraine export many commodities, and these have been largely curtailed:


The conflict is also bottling up Ukraine and Russia’s vast commodity exports, sending the price of oil, natural gas, wheat and sunflower oil rocketing. Shipping from Ukrainian ports, an important corridor for grain, metal and Russian oil shipments to the rest of the world, has all but ceased.


Closing airspace to Russian airlines makes it more expensive to fly cargo:


Freighters and airlines have warned that the decision by many European nations to close their airspace to Russia, as well as Russia’s tit-for-tat retaliation, will increase the cost of flying cargo from Europe to Asia, potentially making some routes commercially unviable.


As you know, Russian banks have been banned from the global financial payment system called SWIFT. This has not just hurt Russia:


Western sanctions—especially banning some Russian banks from the Swift global financial payment system—will make it cumbersome for many companies to conduct any type of trade with the country, even in sectors that aren’t being sanctioned. There is also the risk of sanctions on individual Russian commodity players, or of Russia retaliating by choking off supply of its products.


Russia has been supplying important commodities for industry, like neon gas and palladium:


Economists and business leaders fear this will hit supply chains that rely on components and little-known commodities from Russia such as neon gas and palladium, important ingredients to make semiconductors. Industries such as car manufacturing have already been disrupted by a surge in demand after the easing of pandemic lockdowns and persistent production bottlenecks.


Automobile manufacturing will be impeded, at the least, by the sanctions regime and the war:


The car industry, which has long relied on extended cross-border supply chains, was among the first to feel the blow of the fresh economic dislocations. Leoni AG , which makes wire systems in Ukraine that it ships to European auto makers, last week shut its two factories in Ukraine and sent the roughly 7,000 employees home.


The next day, Volkswagen AG said that it could no longer get wiring systems produced in Ukraine and would have to stop production at plants in Zwickau in eastern Germany, the most important factory in VW’s push into electric vehicles, and Dresden for several days this week. VW said it would have to furlough more than 8,000 workers until it could resume production.


Within hours of the invasion, car companies dependent on parts from China and Eastern Europe were forming task forces to plot out alternative routes. “Ukraine is not central to our supply chain, but suddenly we discovered that when this part is missing, it is,” a VW spokesman said.


Ukraine is home to 22 foreign companies like Leoni running 38 factories that make goods for the automotive industry, producing wire harnesses, electronics, seats and other products, according to UkraineInvest, a government body that promotes investment in the country.


“We don’t have a problem today, but it’s too early to tell if we have a problem,” a spokesman for Mercedes-Benz Group AG said.


Nicely explained.


And then there is the problem producing semiconductors. As of now, the world is suffering a shortage of these chips. The situation in Ukraine and the sanctions imposed on Russia is likely to make things worse. These chips need specialized materials and many of those materials come from the belligerents:


The disruption of commodity and raw materials supplies from Russia and Ukraine could worsen a global semiconductor shortage that has already been roiling businesses world-wide. U.S. semiconductor makers import neon gas, the chemical compound hexafluorocyclobutene, and palladium, which are used to make chips, almost entirely from Russia and Ukraine, according Techcet, a research group that analyzes dependency on critical materials used in manufacturing.


Russia’s MMC Norilsk Nickel PJSC mines 40% of the world’s palladium, also used in catalytic converters to reduce vehicle emissions, as well as around 11% of global nickel production, used to make stainless steel and electric vehicle batteries, according to JP Morgan. Russia mines around 4% of the world’s cobalt, another battery ingredient; a quarter of its vanadium, used in steel making; and 3.5% of its copper, according to the U.S. Geological Survey.


And, let’s not forget more banal commodities, like wheat from Russia and Ukraine. Their wheat feeds a large number of the world’s people. To say that the peoples of Northern Africa, a large consumer of said wheat, are anxious is an understatement:


Russia and Ukraine combined account for almost a third of the world’s wheat exports, 19% of its corn exports and 80% of the world’s sunflower oil, according to Commerzbank AG, and much of that flows through Black Sea ports that are currently closed. Soaring grain prices adds to concerns for the mainly developing world countries, like Egypt and Indonesia, that rely on the shipments and where food prices were already rising.


And then there is the SWIFT situation. David Goldman has been following it in the Asia Times. He is especially concerned that Russia might circumvent the SWIFT sanctions by routing fund transfers through the Chinese equivalent system.


Clearly, Chinese authorities have been measuring the risk and reward of allowing Russia to get around SWIFT. If they do, Goldman explains, it will be a major blow to American financial dominance, and to the reserve status of the American dollar. As part of the sanctions against Russia some, but not all, of its banks have been excluded from the SWIFT system:


China’s Cross-Border International Payments System (CIPS) can replace SWIFT for Russian trade financing, a Chinese academic told the Shanghai-based Observer news site (guancha.cn) in a February 27 interview.


Over the weekend, the United States and its allies excluded a list of Russian banks from the SWIFT, or Society for Worldwide International Financial Telecommunications, network that clears interbank payments in US dollars and other Western currencies, although Russia has not yet been subject to a blanket exclusion.


China might be reluctant to help Russia circumvent SWIFT sanctions, said Professor Chen Xi of the Shanghai Advanced Institute of Finance at Jiaotong University in an “Observer” interview because the United States might retaliate by imposing sanctions on Chinese banks. That would have disastrous consequences, Chen added.


He continues:


Risks to the financial system cut both ways, the German daily Die Welt wrote on February 27. “CIPS already handles US$50 billion of daily transactions. That is considerably less than the $400 billion of transactions that pass every day through SWIFT, but CIPS volume has increased rapidly,” the German newspaper reported.


“If Russia and China linked their systems and offered an alternative to other authoritarian states, this could threaten American domination of financial markets,” Die Welt concluded.


Obviously, circumventing SWIFT is easier said than done. I include Goldman’s analysis:


For example, the payment system built by China may be independent of the SWIFT system controlled by the United States, but the intermediate nodes are all banks. The United States can sanction these banks. If no one is allowed to do business with Chinese banks, and other countries cooperate with these measures, then this system will not work.”


“Russia also built its own independent payment system,” Chen said. “It also could adopt the cross-border payment system established by China as a potential replacement for SWIFT. But the key point is that these international cross-border systems all require the participation of actual banks.


“The United States is likely to threaten all financial institutions. If anyone deals with Russia, it might sanction them. If this is the case, the big Chinese banks may not dare to deal with Russia. In this case, Russia would only be able to do business with some small banks.”


But “if the United States sanctioned Chinese banks in this way, the damage to the global economy would be too great for anyone to bear,” Chen said.


For now China has been on the sidelines in the conflict between Russia and the West. To give us some perspective, Goldman explains:


China has a net foreign asset position of $4 trillion and holds $2 trillion of US Treasury securities. It is also by far the largest exporter in the world, with 15% of global export trade compared to 8% for the United States.


“In the final analysis,” Chen explained in the Observer article, “ the game between major powers depends on strength. If the United States doesn’t need Russian resources at all, and it doesn’t need Chinese products, it certain could impose severe sanctions.


Of course, the United States and the world do need Russian resources and Chinese products. Complete independence is more a pipe dream than a reality:


“However, given the current level of international exchange, if trade between China and Russia were cut off completely, it would  take a long time for the United States to adjust to it, and the damage to supply chains would cause damage to the entire global economy.”


“A drastic measure probably would trigger a long-term financial and economic crisis, so the United States is also very hesitant to do this,” Chen concluded.


Sunday, February 27, 2022

Julie Burchill on Risk Aversion

To my mind, and perhaps even to yours, Julie Burchill’s take on the Ukraine War coalesces well with the points made by Allison Schrager and yours truly, namely that we have lost the habit of risk taking. 

Burchill does not quite blame it on therapy; she left that to me. But a culture build by and for therapy sees everything in terms of feelings. It defines us within a mother/infant dyad and detaches us from the real world and sends us scurrying into our inner fortress, there to wallow and whine.


She wrote:


For a moment it seemed that the war in Ukraine was straight out of the history books. Tanks rolled out of one European country and into another on the shallow pretext that it was all about liberating minority peoples in the invaded country and uniting them with their brethren – the Sudetenland Stomp. Then the Telegraph claimed that Russia had ‘triggered’ Britons, and it became clear that this was actually a very modern war – the first war to be mostly about the people not actually fighting in it. A war about our feelings.


Of course, risk aversion makes us children and makes government bureaucrats and television talking heads into Mommies and Nannies. We are, dare I say, in touch with our inner child:


We’ve been groomed to think of ourselves as precious, fragile children for quite a while now, all the easier to boss around, muzzle and be sent to our rooms for the best part of two years. It starts with the television talking head telling us to ‘Wrap up warm / Stay hydrated’ instead of simply telling us what the weather will be. It takes in the radio interviews with young doctors during the pandemic (‘We’re being fast-tracked, it’s so exciting!’ Talking head: ‘But scary too?’ ‘No, just exciting!’) And ends up here, with Western media ceaselessly nagging at Ukrainians to be more scared….


Now, thanks to therapy, we refuse all risks because we define ourselves as the sum of all our fears. We are scared. We are afraid. We want to hide and wait for it all to go away-- like children.


Social media of course makes everything all about us to the nth degree, and it wasn’t long before one bright spark was whining that ‘Russia’s attack on Ukraine means there’s a stressful news cycle ahead of us’. 


There’s been a big lie for a long time that modern life is uniquely stressful and that we should approach ourselves as delicate flowers in ceaseless need of ‘pampering’ and ‘self-soothing’ rather than as the tough, mobile pleasure-units we are born with the capability to be. And sure enough, whereas the prospect of war would once have made us more combative, now even another country’s conflict is a cue for a collective fainting fit. Each and every section of society is believed to be currently in meltdown concerning the invasion of Ukraine. And every media outlet has been offering succour to the Western world’s brave little soldiers.


Being scared of life is now accepted as the norm, hence the ludicrous rise of trigger warnings. I’m fine with people being worry-warts so long as they don’t paint me as being weird for not worrying – that’s strength-shaming.


Well said and well written.

Our Risk Averse Culture

Those who read this blog religiously know that I have attributed some part of the worldwide Covid panic to an inability to accept risk. Political leaders from New Zealand to Australia to Great Britain to America refused to accept any risk. They preferred to shut everything down, to force everyone to vaccinate and to mandate the wearing of useless masks.

Behind it all was excessive risk aversion. No risk was acceptable to our political leaders. And, for the most part, we acquiesced. Those who did not were severely punished.


Now, economist Allison Schrager, of the Manhattan Institute, has written a more detailed and entirely cogent analysis of our civilizational inability to accept risk. To be fair, she has been writing about this issue for some time now, so we grant her kudos for having been there first.


Her thinking correlates largely with my own, with one exception. I have mused, in this blog, about the possibility that we are more averse to risk because our civilization has granted more and more power to people who are naturally less inclined to take risks. Those people are-- women. 


So, girlpower, nations where strong and empowered women have taken more and more authority have naturally become more risk averse.


Aside from that point, one is happy to present Schrager’s analysis:


Americans have become intolerant of many risks that people once dealt with on a daily basis, as the Covid-19 pandemic has shown. Even 20 years ago, retreating to our homes for months on end at the government’s urging for a virus with Covid’s risk profile would have been unthinkable. We’ve often heard during the pandemic that we can return to normal “when it is safe.” Indeed, we hear the word “safe” a lot these days, but it’s often an unrealistic standard that no previous generation expected. Certain Covid restrictions can be justified, but extreme risk-aversion from government bureaucrats has caused more harm than good—for example, shutting down in-person teaching for children, who were at low risk from the virus, or imposing draconian economic lockdowns that caused many businesses needlessly to fail.


Well said, and thoroughly correct-- by my lights, at least.


Schrager then analyzes of the role of risk in economic life. A strong and vibrant economy requires people to take risks. A weak and decadent economy discourages risk. One will add here, as one has said before, that one of America’s greatest current risk takers, by name of Elon Musk, also counts among those that most Americans admire most.


And yet, Musk is rowing against the current. And he is building his next large plant in Shanghai. 


Schrager names government bureaucracy and a bloated legal system as the culprits here. They do everything in their power to reduce risk and to stifle economic innovation:


Risk is critical for a flourishing society and vibrant economy. Investors and entrepreneurs must take chances to find new innovations. Individuals need to do so as well, in order to achieve their personal and economic potential. If well designed, regulation can help us balance risk and reward sensibly. But our goal as a society seems more and more to be reducing risk at all costs.


It’s the bureaucracy, stupid. Or better, it’s the Nanny State:


A bewildering tangle of federal, state, and local housing, business-licensing, and health-care mandates is making it harder and costlier to move to a new city or to change jobs and rendering entrepreneurship untenable for many Americans. Entrepreneurship and openness to new opportunities once fueled America’s economic dynamism, but now the government is becoming our risk inhibitor, a collective helicopter parent.


Happily for Schrager’s argument, we can quantify the war against risk:


Between 1970 and 2019, the page count of the federal code of regulations on business and industry thickened from 54,000 to more than 185,000. State and local regulations can be even more of an economic burden, especially for small businesses. The number of jobs that required a license, for instance, rose from 5 percent in the 1950s to 22 percent today. Small wonder that the rate of new business creation fell 10 percent between the 1980s and 2018. Other factors influence this decline, including an aging population and changing market structures that reward larger firms, but surveys from the National Federation of Independent Business consistently rank regulatory compliance as a top economic concern. An example of the state and local bureaucratic obstacles that someone launching a small business can face: San Franciscan Jason Yu recently spent over $200,000 seeking permits to open an ice cream shop in 2019, before giving up in frustration.


And then we have the activities of the Federal Reserve, whose current role seems to be to reduce investment risk. In other circles it’s called the Fed put. 


The Federal Reserve, for example, increasingly aims not just to take the edge off inevitable recessions but also to keep its policies (or even public discussions of them) from sinking the stock market. This distorts the price of risk and our perception of it—and capital then flows to riskier places, leading to new vulnerabilities in the economy. The Community Reinvestment Act of 1977 and subsequent iterations of it sought to boost homeownership by subsidizing mortgages and lowering lending standards, giving Americans a means of building low-risk wealth and security—or so the legislation’s backers argued. But the measure distorted the price of risk in the mortgage market, helped inflate a dangerous housing bubble, and—when that bubble burst in 2007—left many families worse off because their wealth was trapped in an illiquid, over-leveraged, and now-depreciating asset.


As for Build Back Better, the Biden plan that has recently suffered an ignominious defeat in the United States Senate, Schrager remarks that it is designed to reduce risk, and thus to reduce entrepreneurship:


It took a pandemic for people to start quitting their jobs again and forming new businesses, but government policy is working against these salutary trends by piling on risk protections. The Biden administration’s Build Back Better plan aims to make gig work harder, heavily favors unionized workers, adds more wage floors, and introduces more constraints on the economy. But such policies will only reinforce the stagnation and inequality that progressives claim to be concerned about.


And then there is the psychological side of the question. When people are not allowed to take risks they are effectively being infantilized. It makes good sense when you consider that our Nanny State, New York’s very own Governess Kathy and the heads of the teachers’ unions have decided-- in the name of risk aversion-- that people should be deprived of their ability to make their own judgments:


Risk aversion is holding many Americans back in noneconomic ways, too. Psychologists believe that taking chances and confronting uncertainty are crucial to personal growth and our sense of dignity. Without them, curiosity dims and a work ethic can seem pointless—why leave your parents’ basement? (This is why unconditional cash benefits from the government are a bad idea.) Social psychologists such as Jonathan Haidt have argued that helicopter parenting, which keeps kids from taking risks and handling inevitable setbacks, is one reason that some college students have become more anxious and think that the mere expression of certain ideas can actually harm them.


Today’s young people, brought up coddled and swaddled, cannot imagine taking risks. Worse yet, Schrager says, they are so thin skinned that they cannot suffer the least discouraging word.

A Run on Canadian Banks

Here, is the issue: how much to you want to trust an economic forecasting outfit called Armstrong Economics? Its founder Martin Armstrong is a convicted felon… which does not mean that his forecasts are wrong, just that we need to remain slightly skeptical of them.

Anyway, the service has offered one plausible explanation for one event that recently happened in Canada. You know that Prime Minister Justin Trudeau froze bank accounts of protesting truckers and of anyone who had contributed to their cause. Being as Justin is apparently the bastard son of Fidel Castro, the phrase-- like father, like son-- pops into mind.


And you know that a sanctimonious twit and Canadian Finance Minister named Chrystia Freeland was flexing her considerable musculature to show who was boss in Canada.  


You also know that Trudeau managed to suppress the truckers' protest violently….


But then, after receiving a vote of confidence by the Canadian parliament and having promised that the state of emergency would continue, Prime Minister Trudeau quickly reversed himself and called it off.


Why the sudden change of heart?


Well, Armstrong Economics suggests that the executive emergency order, freezing bank accounts, canceling insurance, stopping credit cards, produced something of a run on Canadian banks. Many of those who could do so were transferring their funds out of Canadian banks, into American banks. How much? The report suggests that the sums were considerable. We do not know.

And yet, if you were an average Canadian, to say nothing of a corporate entity, wouldn’t you think that moving your funds out of Canada would be the prudent thing to do. So, it is a plausible response.... And besides, what else could have caused the petty tyrants who run Canada to reverse themselves so quickly?


Armstrong Economics explains:


Based upon reliable sources, Trudeau has been forced to abandon his Emergency Act as a staggering amount of money has fled Canadian banks. Canadians have moved accounts to the United States by the tens of thousands following Trudeau’s freezing bank accounts without a court order which has even included credit cards. Canadians began withdrawing all of their money from their bank accounts with most turning to cash, others to gold, and some to BitCoin. The demand for US dollars more than tripled in the past week.


The sheer amount of money withdrawals from Canadian banks was massive. There appears to have been a 500% increase just in the previous 24 hours. This is the problem with politicians. They are simply UNQUALIFIED to make such decisions. They have no idea that freezing accounts will undermine the confidence in the banking system.


Trudeau has created a very serious crisis and just rescinding his Emergency Act is not going to make it all better. Trudeau has driven a stake through the heart of the Canadian economy and that means that international capital will be skeptical about trusting Canada as long a Trudeau is in power.


As I said, take it with a grain of salt. And yet, if international capital decides to avoid Canada, and not just as long as Fidel’s bastard son is in power, it is a very serious problem.


You might also call it poetic justice, whatever that is.

Saturday, February 26, 2022

The Mind of Vladimir Putin

The current war in Ukraine has produced a mountain of pure stupidity. From John Kerry to Hillary Clinton to Anne Applebaum to David Brooks talking empty heads have used the war to promote themselves. 

They have all essayed, for better or mostly for worse, to offer pseudo-intelligent explanations for why Putin is doing what he is doing. Some offer the latest in psycho pseudoscience and suggest that Putin is a megalomaniac or a pathological narcissist. Others have a more theological perspective and believe that they are witnessing a final conflict in the war between liberal democracy and authoritarianism, that is between good and evil.


That these are all unsound and largely misleading does not seem to count. Saying something stupid seems to be the order of the day.


With a few exceptions, happily enough. Yesterday, one Chris Miller, of Tufts university, said something that I find thoroughly intelligent and persuasive. He said it in a New York Times op-ed. The truth is, if we do not know why Putin is doing what he is doing, we will be as inept as the hapless Biden administration. I will mention in passing that Miller is something of an expert in Putin.


Anyway, Miller conjectures that Putin goes to war because when he has done so in the past, he has won. As opposed to other world leaders, who are terrified of losing, Putin likes to win. We have seen it at home, and we know that our own leaders are on the side of being scared of losing.


One does not know, at this date, the ultimate outcome, but we cannot fail to notice that the American media seems thrilled at the Ukrainian resistance and is peddling the narrative, namely, that he who risks largely loses largely. That is the new American thesis; unfortunately, wars do not often end in three days. 


Anyway, Miller offers an explanation of Vladimir Putin:


There is no world leader today with a better track record when it comes to using military power than President Vladimir V. Putin of Russia. Whether against Georgia in 2008, Ukraine in 2014 or in Syria since 2015, the Russian military has repeatedly converted battlefield successes into political victories. Russia’s rearmament over the past decade and a half has been unmatched by a comparable increase in Western capabilities. So it is no surprise why Russia feels emboldened to use its military power while the West stands by.


That’s about as clear and concise as it comes. It makes perfect sense. It makes such good sense that our talking heads and politicians have missed the point entirely.


Miller offers some details:


 The invasion of Georgia in 2008 lasted five days but forced that country into humiliating political concessions. In Ukraine in 2014, regular Russian military units were deployed at scale for a few weeks, but this proved enough to force Kyiv to sign a painful peace deal. When Russia intervened in Syria in 2015, some Western analysts predicted a disaster along the lines of the Soviet invasion of Afghanistan, which began in 1979 and ended, after a decade of quagmire, in retreat. Instead, Syria’s civil war served as a testing ground for Russia’s most advanced weaponry.


While America has been mastering the art of losing wars, while fighting against the weather and ridding the ranks of white counterrevolutionaries in the ranks, Putin has improved his military:


 Yet as we have searched for Russian phantoms behind every misinformed Facebook post, Russia has replaced the poorly equipped army it inherited from the Soviet Union with a modern fighting force, featuring everything from new missiles to advanced electronic warfare systems. Today the threat to Europe’s security is not hybrid warfare but hard power, visible in the cruise missiles that have struck across Ukraine.


Will Putin get bogged down in Ukraine? Will he send in a battalion of feminists to explain the sexist implications of the artistic representation of urinals-- as we did in Afghanistan? Unlikely, don’t you think?


Here is Miller’s prediction, worth evaluating:


However, we should not simply assume that Ukraine will become Putin’s Afghanistan or his Iraq because other leaders have made their own errors. Mr. Putin could simply choose to destroy Ukraine and leave the West to pick up the pieces. Such a dismembered, dysfunctional Ukraine could well suit his interests. Russia’s recent wars have been carefully calculated and limited in cost. There’s no guarantee that this conflict won’t be, too.


So, the Biden administration chose to fight an information war, by filling the airways with intelligence about Russian military plans. The purpose was simple: to manipulate Putin’s mind. It might have seemed to be good therapy, but it did not work. He saw it as a bluff and called it.


And then, Miller concludes that our blind adolescent faith that the arc of history is moving in our direction is naive and dangerous. If we think that we are going to deter any aggressor by shutting down energy production and making the military more diverse, we are dangerously delusional.


The U.S. strategy of making public intelligence about Russia’s military buildup around Ukraine was clever, but Mr. Putin has called our bluff. It was once popular to mock the Russian president for his 19th-century worldview, but his use of military power to bolster Russia’s influence has worked in the 21st century. The West’s assumption that the arc of history naturally bends in its direction is looking na├»ve. So, too, is the decision to let our military advantage slip. Soft power and economic influence are fine capabilities to have, but they cannot stop Russian armor as it rolls toward Kyiv.


Friday, February 25, 2022

Another Win in the War against the Weather

As though he didn’t look foolish enough-- what with his most recent facelift-- John Kerry has weighed in on the war in Ukraine.

To be fair, Kerry has considerable experience in standing down before Vladimir Putin. After all, he was Barack Obama’s Secretary of State in 2014 when Putin took Crimea. About that invasion and take over, the pusillanimous and feckless Obama administration had very little to say.

Now, John Kerry is bemoaning the fact that the war in Ukraine is going to distract the world from the great war he is conducting-- against the weather. It is also fair to say that it might also be distracting our fearless military from its war against white supremacy. 


The word pathetic was invented for people like John Kerry.


Of course, looking at the situation more rationally, one Clarice Feldman has written a compelling piece wherein she explains how Green policy has facilitated the Russian invasion of Ukraine. Obviously, she is not just talking about the Green New Deal, many of whose policies have been implemented by hapless Joe Biden. She is also addressing the environmentalist forces in Western Europe.


In America, we had energy independence. We had overcome our reliance on Russian energy production. But then the Biden administration, lured by the Siren Song of the Squad, threw it away:


Whatever you think our obligations to defend Ukraine at the moment, you must concede that the green movement in Western Europe and the  United States made his actions possible. They also made any non-military reaction toothless and unpersuasive. It has been the equivalent of a poker player discarding a royal straight flush and then trying to bluff his opponents with the pair of deuces remaining in his hand. Only with dumb opponents is he likely to take the pot. And Russian President Putin is definitely not dumb.


And the reason he cannot actually do much more short of war, is because he and the leaders of western Europe—bamboozled by the prospect of "climate change"—have made themselves poorer and weaker by eviscerating conventional fuel production. While they without ample reason were discarding a very good hand, Russian president Putin was improving his by exploiting and selling to us and Europe his nations’ fossil fuels. 


So, we Americans went from net exporter to net importer of crude oil and petroleum. The facts speak loudly:


In 2020 the U.S. was a net exporter of petroleum. In 2021 we imported between 12 million and 26 million barrels of crude oil and petroleum from Russia every month. In November 2021, the most recent figures on record, the Energy Information Agency reports that the U.S. took 17.8 million barrels.


As it happens, Green Europe is seriously dependent on Russian energy. As we have often noted in these pages, the center-right German Chancellor, Angela Merkel, much lauded for God only knows what, managed to cave to Green pressure and shut down Germany’s nuclear power plants-- thus making her country even more dependent on Russia. (Of course, if you are opposed to carbon emissions, nuclear power is your friend. As it happens, Greens are staunchly opposed to nuclear; they prefer windmills and solar panels.)


Obviously, this limits Germany’s ability to participate in any sanctions regime.


And then there is Italy, also dependent on Russian energy:


Italy is already wavering. It’s already one of Russia’s biggest customers. It gets 90 percent of its gas from there. I wouldn’t hold my breath for Hungary or Belgium to jump into this, either. The British foreign minister imposed sanctions on five Russian banks and three wealthy Russians, but these are not new—they were previously targeted by the United States.


Feldman continues:


With all this hot air and too little energy resources to keep the bluff going, I think that Britain's Melanie Phillips is right when she asserts that the green dream has gone lethal: she quite correctly zeros in on how the green policies put so many government resources and legal proscriptions into reducing carbon emissions. that conventional fuel production was seriously reduced and funds shoveled into renewables “which are desperately unreliable as national sources of energy."


Obviously, America can no longer make up the shortfall. But it is not just America. British Tory leader Boris Johnson has joined the Green movement in Great Britain:


This has only made the West overly reliant on Russian gas supplies, threatening its security. She notes that in the United States Biden’s shutting down the Keystone XI pipeline and refusal to renew drilling licenses has tightened gas supplies and boosted energy costs. And that leaves out so much, including his war against fracking and the actions of states which marched along to this nonsense by shutting down gas and nuclear powered electrical generated power plants at the lunatic behest of the Green lobby. Britain, Phillips notes, phased out its coal-fired plants and banned fracking even though fracking alone could meet as much as 22 percent of its consumption for decades.


So, Feldman makes some very salient points. The West’s reliance on Russian energy gives Putin a free hand to do what he pleases with Ukraine. Another victory in the war against the weather.


And just as all these planning sessions apparently never discussed increasing domestic  energy production apparently they never touched on encouraging those countries we wished to ally with us in this about ramping up their energy production, the only pragmatic step to enable those countries so heavily dependent on imported Russian gas, to stand up to Russia.


And now it's too late.


A Freak of Nature

It’s not just Humanities and Social Studies Departments. The world of psychiatry was rocked yesterday by a horrific and horrifying scandal. 

One of its leading lights, Dr. Jeffrey Lieberman chair of the Department of Psychiatry at Columbia and executive director of the New York State Psychiatric Institute resigned his academic positions in disgrace-- because of a tweet. 


The work he has done treating schizophrenic patients was immediately negated and canceled because he tweeted that a fashion model, by name of Nyakim Gatwech, was possibly a “freak of nature.” He qualified his statement by adding that she is beautiful. 


To no avail….


Here is the horrifying story, via the New York Times:


The chair of the Columbia University Department of Psychiatry was suspended on Wednesday, “effective immediately,” after referring to a dark-skinned model as possibly a “freak of nature” on Twitter.


“Whether a work of art or freak of nature she’s a beautiful sight to behold,” the department chair, Jeffrey A. Lieberman, tweeted on Monday in response to a photo of Nyakim Gatwech. Ms. Gatwech is an American model of South Sudanese descent; her fans refer to her as the “Queen of the Dark.”


If you dare examine a photo of said fashion model you will discover that her fans call her “queen of the dark” because she apparently has very dark skin. 


Apparently, when your fans say it, it’s ok. When one of the nation’s leading psychiatrists says it, it’s an unforgiveable crime.


As many other public figures have done, Dr. Lieberman went into full grovel mode.


In an email to his colleagues on Tuesday before he was suspended, he apologized for the tweet, describing it as “racist and sexist.” He added that he was “deeply ashamed” of his “prejudices and stereotypical assumptions.”


“An apology from me to the Black community, to women, and to all of you is not enough,” Dr. Lieberman wrote in the email.


“I’ve hurt many, and I am beginning to understand the work ahead to make needed personal changes and over time to regain your trust.”


Apparently, Dr. Lieberman’s expertise in treating psychosis counts for nothing. Depriving his Columbia patients of his expertise counts for nothing-- because he said the wrong thing in a tweet. We don't care about qualifications. We do not care about great scientists. We only care about anti-racism.


Dr. Lieberman, who specializes in schizophrenia and is considered one of the leading psychiatrists in the nation, was also removed from his position as psychiatrist-in-chief at Columbia University Irving Medical Center/NewYork-Presbyterian Hospital. That decision is final, according to a spokesman for Columbia University.


Dr. Lieberman also resigned from his role as executive director of the New York State Psychiatric Institute on Tuesday evening.


And, of course, there was the requisite piling on. The world of psychiatry, not exactly known for offering very effective treatments under the best circumstances, came together to condemn their erstwhile colleague:


“We condemn the racism and sexism reflected in Dr. Lieberman’s tweet and acknowledge and share the hurt, sadness, confusion, and distressing emotions you may be feeling,” Thomas Smith, the new acting director, and other leaders said in an email to staff on Wednesday afternoon.


Department leaders at Columbia called a meeting for faculty and staff on Wednesday afternoon to discuss the situation, and to announce that an interim chair would be named. Several hundred people attended the Zoom meeting, according to a person who attended, and the tone was serious and grave. The head of the hospital described the tweet as “outrageous,” the person said.


The post drew negative attention from a number of medical professionals online, many of whom were Black women.


Apparently, the psychiatric profession has concluded that Dr. Lieberman’s systemic racism was the primary obstacle to the career advancement of women of color:


Elle Lett, a medical student and postdoctoral fellow in medicine at the University of Pennsylvania, wrote a Twitter thread and a Medium post about the comments.


“To not understand how racist language like that is harmful when your profession is supposed to care for the mental health of people makes you unqualified to be a psychiatrist at all, let alone the chief of the top program,” Dr. Lett said in an interview.


So, the next time you know a schizophrenic who needs psychiatric treatment, call medical student Elle Lett. But, you must not call one of the world’s finest psychiatrists, Dr. Jeffrey Lieberman, because he dared post the wrong tweet.


As for the horrifying words, “freak of nature,” Dr. Lieberman is not alone in using them to refer to a fashion model.


One Padma Lakshmi, model and television celebrity, said this in September 4, 2020:


The truth is, models are freaks of nature. We are not normal people, and we're just born this way because of a genetic cocktail that our parents gave to us. You know, most of us have a really high metabolism.


My thanks to the friend who brought this quote to my attention.