The Best Country in the World?

There are many ways to rank countries, including by income per head, infant mortality, educational achievement, stability of families and marriages, openness of social mobility, quality of government, and so on.

Americans are accustomed to viewing the United States as the world leader in most respects. In the popular mind, we are the richest large country, the freest, the one with the most opportunity, the best public education, the best medical care, the one with the largest and best-off middle class. We may have a lot of inequality, but that is the natural result of individual freedom in the capitalist system, and thus the result of a system in which everyone has the best chance to do well overall.

Yet two publications this week give reason to pause and ask Americans (and those who want to migrate here) if all this remains true. Michael Porter’s new Social Progress Index ranks the U.S. as 16th in the world on a broad measure of social well being, including access to knowledge, health, clean air and water, opportunity, etc. Even on basic after-tax real income, America’s middle class has been losing ground compared to other industrialized nations.  According to a story in the New York Times yesterday, the middle classes of almost all other countries (Germany being the main exception) have enjoyed much greater gains in income than Americans since 1980.   Indeed, for the lower 40% of Americans, comparable income groups in many other countries are now equal to or even higher than in the U.S. in real after-tax incomes.  In the middle (fourth quintile), the U.S. still has a modest lead, but it is shrinking fast.  It is only for the top 20% of US earners, and especially for the top 5%, that incomes in the U.S. remain  much higher and deserve the envy of the world.

Another way to put this is that in 1980, the average income at almost any point in the U.S. income distribution (excepting only the bottom 5%) was about double the real income of other industrialized countries for the same point in their income distribution (for the bottom 5% it was about equal).  But by 2010, this was only true of the top 5% of US earners.  For all other groups, the U.S. income advantage has been reduced, sometimes substantially, and for the bottom 40% the advantage has virtually disappeared.

We need to be asking why this has happened.  But one answer leaps out from the data.  That is the lack of investment in America’s younger generation.  The top of America’s income distribution is dominated (silicon valley whizzes aside) by the generation raised in the 1960s — the baby boomers.  This generation benefitted from extensive investment in public education, from K-12 through universities.  For this generation, raised to compete under the scare from Sputnik that the U.S. was falling behind in the space race and other knowledge area, schooling was by far the best in the world.  This generation has had much higher educational achievement, including college completion, than its counterparts in other countries, even the wealthiest.  America’s vast expansion of colleges and well-funded outstanding public universities produced the world’s best-educated and most productive generation.

By contrast, the 20-30 year olds in America today lag behind their counterparts in educational attainments.  America’s elite and richly-endowed private Universities may still be the best in the world, but the rest of America’s university system, especially the state colleges and universities, have become poorly funded, underperforming institutions that do a poor job educating people, with amazingly high drop-out rates and low levels of skills for most graduates.  By comparison, the state universities of European and other rich countries may not shine as brightly at the top, but they do a much better job of instilling education across the board for the average college student.   And the with cost of American public education having skyrocketed (not due to higher faculty salaries, but due to increased administrative, physical plant, and accessory function costs), college is less accessible to most Americans today than it was forty years ago.

So it is not surprising that other countries have caught up, and may soon surpass us, in the incomes of average earners.  America’s top echelon — the elite universities, their graduates, and the top earners in the country — still lead the world.  But is that really as wonderful an achievement if the rest of the country falls behind?

Of course, to some degree this catching up is necessary and desirable.  America had such a huge lead over other countries at the end of World War II, that it is no wonder that the baby boomers who grew up afterwards should have an edge on their counterparts elsewhere.  We would expect the generations in Europe growing up after 1980, when the war damage and trauma had finally healed, would do much better than their parents and begin to close the gap with America.

Yet what is distressing is that for the 40% of Americans in the lower portion of the income distribution, average after-tax real income has nearly flat-lined since 1980, while the rest of the world has enjoyed strong growth.    Now for business and political leaders, it may be that this does not matter.  If the elites can lead the way, and the grunt work be done by robots and foreign labor, at a much lower cost than paying lower middle-class Americans to do that work, what does it matter?

It matters in terms of whether we are all one country, connected to each other, or a set of separate classes, living in separate neighborhoods, going to wholly different schools, homes, vacation places, and workplaces, as Charles Murray claims we have become.   After all, the U.S.’s ranking of 16th on social progress is largely due to huge shortfalls in health and education among the lower portion of the income scale.  If these people matter, and America’s average or overall well-being matters (not just that of the top 5%), then it is imperative that our country does a better job of investing in the young, and creating better health and opportunities for the lower half of the income distribution as well.

So this is America today.  To the extent that we lead the world, we are doing so on the backs of the generation raised with a huge advantage in the 1950s and 1960s; and on the accomplishments of our top 5% in income and achievement.   Will that be enough to preserve the America we have come to value in the last half-century?   Or will we continue to do as we have done since 1980 — cherish the best and forget the rest?

Posted in The Global Economy, U.S. Politics | Leave a comment

A Prayer for Peace

Happy Easter and Happy Passover week to all my friends and followers. Please join me today in a much-needed prayer for peace. Whether for families that have lost loved ones to tragedies (as from the South Korean Ferry capsizing or Malaysia Flight 370 disappearance or countless smaller and less visible accidents), or for societies experiencing violence and conflict, from the Central African Republic to Syria to Myanmar and beyond, may God bring an end to your conflict and suffering and help us bring a better world to future generations. Amen.

Posted in Uncategorized | 3 Comments

The State has not Gone Away

Today I am headed to the Wharton School at the University of Pennsylvania for a conference on the “Future of the State.” It is an interesting title. Ten years ago, we thought the state was on the way out. Between the rise of global corporations and global NGO’s, not to mention global networks of trade, internet communities, and international governance, it seemed that states were quaint anachronisms, important for keeping roads maintained and paying pensions to the boomer generation. But they no longer seemed so powerful, not major agents of change that would shape the world!

The actions of Vladimir Putin in Ukraine have just put an exclamation point on the continued relevance of the state. But in France, the UK, Hungary and Japan, in the rich world, and in Brazil, Turkey, Venezuela, Thailand, and other places in the developing world, we are seeing politics focus on the state once again — who will control the government, and what will they do, is the central question for these societies.

In fact, global networks and trade have not made the state irrelevant. Quite the reverse; the quality of governance and the choice of state policies now is the determining factor in whether countries benefit from the gains made available through global finance and the international economy.

Where a state invests in its workers, creates sound infrastructure, regulates the financial sector, encourages international investment, and maintains political stability and accountability, economies thrive in global competition. Where a state maintains access to economic and political opportunities, limits corruption, and provides strong public services, a middle class can grow and boost human capital, productivity, and consumption.

Yet where states fail to do these things, leaving workers with educations that are not useful for work, produce economic or political uncertainty, and corruption that diverts capital from useful ends and produces rampant inequality, people fall behind.

Today’s world has two huge challenges. Africa retains extremely rapid population growth, and will add 2 billion people to its population this century. Will they become productive contributors to the world economy and fast growing markets for the rest of the world? This is the greatest potential growth source in future — but whether it is realized depends entirely on the quality of governance in that region. And that is something that is very uncertain as we write today, with some countries like Ghana looking like models of good governance, and others like Uganda appearing to descend into the wreck of personalist and autocratic rule.

The second challenge is for rich countries (and China) who have rapidly aging and contracting workforces. How will these countries keep productivity rising fast enough to support aging populations, whether by keeping older people productive at work or raising the productivity of younger workers? Right now, these countries are not investing in the younger generation, but visiting on them high rates of unemployment and sharply decreased public investment in education, forcing the young to incur large debts just to acquire human capital. My daughter is starting college this Fall, and we were offered loans with an origination fee of 4% PLUS an interest rate over 6% per year. Can students truly move ahead with that kind of burden? Can the state turn over the future of its labor force to market forces when such forces threaten to choke off much-needed improvements to human capital?

In short, states and state policy matter hugely. Unfortunately, in the long run and on the big things that matter, we are getting it wrong. Not surprising, perhaps, that some states are flexing their muscles and not expecting a particularly strong and effective response from others.

Posted in The Global Economy, U.S. Politics | 3 Comments

Bad to worse in Ukraine?

I am in Russia this week, and the view from Moscow is a bit more disquieting than from home.

It’s not that things are any different here. Life goes on in the University, traffic still clogs the street, and people are out and about. The weather is moving toward Spring and Muscovites are starting to wear lighter coats and enjoy the sunshine.

But the world in the newspapers is another matter entirely! It is not just the vitriol aimed at Europe and the US for undermining Ukraine, supporting thugs and terrorists, and planning to encircle and throttle Russia. I could dismiss this as trotting out Cold War rhetoric in response to the sanctions in order to prepare people to blame someone else should things get tougher.

No, what is worrying is the people who are writing these things who are identified as Putin advisors. Russians who for twenty years had been marginalized as hard-core Cold Warriors (their Dick Cheneys), who use the language of the Berlin Wall and Cuban Missile Crisis, are now being welcomed back and appointed to senior positions. These are people who considered any easing of relations with the EU in the first place a mistake, who believe the Soviet Union should never have fallen, who want to nationalize everything, expropriate foreign firms, and lead Russia for Russians and the hell with anyone else. As for Ukraine, it was Russia’s soulmate and partner for 1000 years — it is inconceivable that true Ukrainians could have abandoned their real family (Russia) and turned toward outsiders from NATO and the EU! The whole run of events of the last few months must therefore be the work of foreign agents, and the current “government” in Ukraine a sham and a tool of Russia’s enemies. Only a line of tanks entering Kiev could correct this intolerable intrusion into Russia’s dear ally and brother-nation of Ukraine.

Or so say numerous commentators in the TV and Press. (Of course, Russians forget that former Soviet leaders let their Ukrainian brothers and sisters endure a rain of radiation from Chernobyl without saying a word to warn them; Ukrainians, however, do NOT forget.)

Still, a stroll around downtown Moscow shows familiar names everywhere: MacDonald’s (dozens of locations, some on both sides of the same street), Starbucks, Burger King, KFC, Sbarro, Vapiano, Coke, Pepsi. We may worry about Russia invading Ukraine, but it seems America has already invaded Russia, at least to judge by the fast food outlets! In addition, walking around the main shopping areas near Red Square (admittedly the high end of Russian shopping), the signs in the shops all scream “Europe”: Chanel, Breguet, Bentley, Bvlgari, Dolce & Gabbana, Mont Blanc, Louis Vuitton, Armani, Canali, Brioni, plus a few more Americans: Harry Winston, Ralph Lauren, Tom Ford and Tommy Hilfiger. The cars whizzing by or waiting outside are Audis, Mercedes, BMWs, plus Fords, Skodas, Mazdas, and the occasional Lamborghini (Moscow is the city of billionaires, after all).

So the whole idea that Russia’s leaders would risk cutting off the flow of imported goods from Europe and America, or impede corporations based in those countries from doing business in Russia, seems insane. Half or more of the shops and restaurants in downtown Moscow would have to close up!

Yet my Russian colleagues tell me they think the people writing these stories care not a whit about the consumption of the Russian economy. These are ideologues for whom all that matters is power, who argue that Russia was humiliated by the end of the Cold War and must do whatever it takes to be reborn as a great power. This is, of course, delusional — Russia has the GDP of the Netherlands, an aging and shrinking population, and is technologically further behind the West than ever. If you stroll through Moscow, the shops are filled with foreign brands because there ARE NO familiar Russian brands — can you think of a Russian name-brand product you have ever seen to purchase in an American or European store? Russia can be a bully, but can never hope to be a world power on the scale of Europe (with 5 times as much population and 8 times the GDP) or America.

So my colleagues say, with a straight face and some anxiety, that given the tone in the TV and newspapers, it would not take much to stir up a crowd to march on a MacDonald’s and burn it down, even if that meant all MacDonald’s fleeing Russia. Beating the enemy is all that matters to these old Cold Warriors, whatever the cost.

The only thing that would be worse than not recovering Ukraine would be a military defeat. So it is essential for NATO to state clearly that it will fight to prevent any more of Ukraine from being snipped off. Otherwise, there is no meaningful risk for Russia to stop from doing so and soon.

I still think Putin is more rational than his extremist advisors. I hope that they are just being trotted out to rev up support for Russia’s retaking the Crimea. Yet my colleagues here in Moscow are worried there is worse to come. I hope they are just the victims of chronic Russian pessimism (“bleak house” say my American Russian relatives). But they could be right–I (and they) just hope they are not.

Posted in The Global Economy, Uncategorized | Tagged , , , , , , , , | Leave a comment

Ukraine: Next steps and threats

Is Putin on the move again, planning to take additional slices off of Ukraine?

The news seems to think so. The take-over of government buildings in three cities in Eastern Ukraine has commentators all a-flutter about Putin’s plans and continuing the “Crimean gambit” in other regions.

I hope that is wrong, and I think there are reasons to believe the fears are exaggerated. First, the threat of even stronger sanctions is real. Russia’s economy is not strong, and further capital flight and uncertainty could do it real harm. The Russian stock market dropped another three percent on the news of the pro-Russian urban rebel actions. I do not think Putin would risk damaging the entire Russian economy to gain a few more chunks of Ukraine — that is a very bad trade.

Again, I think it is important to understand why Crimea was different. If Ukraine goes its own way, it is likely to eventually join NATO, as did the Baltic countries. And NATO rules prevent any foreign military bases or installations in NATO member countries. So Russia was looking at the risk of losing its entire military presence in Crimea, including the critical Sevastopol naval base and other bases with tens of thousands of troops. It had to act to protect that capacity, almost regardless of the political costs. There is no such urgency to recover other parts of Ukraine.

Second, the situation in Eastern Ukraine is very different from Crimea on the ground. In Crimea, except for the Tartar minority, most people felt part of Russia and supported a re-unification. In eastern Ukraine, much of the urban population may be pro-Russian, but not all of it, and even less of the rural population longs to be part of Russia. Most critically, Ukraine’s oligarchs, whose wealth is concentrated in the East, do not want to be under Putin’s sway. In the Ukraine, the oligarchs have a strong hand and are relatively secure. In Russia, the oligarchs keep their positions and money at Putin’s pleasure. Those who oppose him politically are driven into exile or jail; only supporters and friends are allowed to keep their exalted status and wealth. That is not a situation that the Ukrainian oligarchs envy. They are therefore using their influence to try to prevent dismemberment of Ukraine.

Third, the Ukrainian government in Kiev is likely to fight to retain its eastern regions. If Russian troops enter Ukraine from outside — something they did not have to do in Crimea — they will have to fight against Ukrainian forces. They may win, but the damage an armed battle to take over foreign territory will do to Russia’s image and economy will be far greater than the cost of its ‘stealth’ take-over of Crimea.

So who is behind the urban uprisings of pro-Russian armed groups in eastern Ukraine? How could this happen unless Putin was orchestrating it?

In fact, it is a mistake to think that everything that happens on every day in every area is a direct result of orders from Putin. Like any good absolute ruler, Putin has packed his government and military with people who are enthusiastic loyalists, anxious to demonstrate how far they will go to please and serve their master. Often these subordinates carry on, doing what they think their master desires, but often going further than he might wish.

When I was in Russia last year, I often saw sudden and surprising actions and reversals in local government decisions, in the courts, and in national policies. Sometimes these made international news, as with the Moscow mayoral race in which the main opposition candidate, Alexei Navalny, was first arrested, then released, then hauled back and convicted and sentenced, and then again released and allowed to run for office, but then again arrested. But there were many other similar cases that only surfaced in local news.

What apparently happened in many of these cases is that local officials wanted to show their zeal in supporting what they believed was Putin’s policy, but went too far; then their actions had to be reigned back.

What I think happened this week in Ukraine was something similar. Local pro-Russian groups in Ukraine probably reached out to Russian officials or military officers they knew and told them they wanted to follow the path of Crimea. Some of these Russian officials or officers, thinking that Putin would be pleased with their following the path that he laid out just a few weeks ago, gave their tacit support and perhaps even sent arms or men to help. The result is that small armed groups were able to take over a few government buildings in eastern cities.

But it is vital to note that these actions were not followed my massive outpourings of popular support for Russification, as happened in Crimea. No crowds of tens or hundreds of thousands came out to support and protect them. Rather, these seem to be small bands of provocateurs, with a few thousand supporters, hoping to draw Ukrainian forces into using force against them to then justify requests for Russia to intervene to protect them.

At this point, Russia is maintaining it does not want to intervene or invade, but is begging Ukraine NOT to use force, saying that might precipitate civil war and lead to Russian action to protect Russian-speakers.

Is that all disingenuous and hypocritical? I actually do not think so. Rather, I think Putin really wants to avoid being drawn into an armed conflict in eastern Ukraine. Of course, if Ukraine did use force to clear the protestors and ending up killing significant numbers of pro-Russian activists, Putin would likely feel compelled to act. After the rhetoric of the last few weeks, he would look weak and not credible if he stood idly by while Ukrainian forces killed dozens of Russian-speaking protestors or activists in eastern Ukraine.

So if Putin does not want to risk the costs of an invasion of eastern Ukraine, then he would not want to be forced into such a move by clashes between Ukrainian authorities and pro-Russia rebels. In that case, his warnings about the need to avoid use of force and civil war would be genuine.

We will find out for sure what is in Putin’s mind fairly shortly. If over the next week, the pro-Russian protestors are reinforced, hold the government buildings, and have Russia back their demands for rapid referendums for independence, then I am wrong, and Putin will be seen to be actively seeking to break up the Ukraine. However, if what we see is the government buildings being isolated and surrounded by Ukrainian forces, with Russia continuing to insist on no civil war and simply insisting on a federal constitution (its current demands), then we are not likely to see an invasion, as Putin will have calculated that this is too costly and urged his supporters to back away from further aggression.

Posted in Uncategorized | Tagged , , , , | 3 Comments

Terror comes to Egypt

In revolutions, there often comes a stage of “terror” involving purges, numerous executions, mass arrests, and disappearances. Terror arises at a time when a new government, brought to power by popular agitation, decides the time has come to destroy its enemies.

Evidently, we are now entering that period in Egypt. After the initial mass mobilization and overturning of the old regime of Hosni Mubarak, and the honeymoon period in which hundreds of new political parties came forth and everyone believed in the power of democratic contestation, there followed a period of sharp polarization. In that period, the Muslim Brotherhood and the military emerged as the two major forces struggling for control of Egypt, while secular liberals and intellectuals, Salafists, Coptic Christians, and other groups were marginalized.

At first, the Brotherhood seemed to gain the upper hand, winning the first election for president and packing the new parliament with its followers. The President, Mohammed Morsi, even pushed many of the “old guard” military officers into retirement.

But as with so many revolutionary leaders, Morsi drifted into radicalism, assuming more and more powers unto himself, and giving more legislative power and discretion to his immediate followers. This provoked a counter-coup from the military (or more of a counter-revolution, given that the military spent months demonizing Morsi and building up popular support for their actions, so that more millions of Egyptians went into the streets to demand and then applaud their actions than even turned out to agitate against Mubarak.)

The military, instead of calming things down, however, has heated up revolutionary rhetoric to ever higher degrees, and has further polarized Egyptian society rather than unifying it. The military’s propaganda now depicts Morsi as a terrorist and stooge of the United States, and the Muslim Brotherhood as an international terrorist gang backed by all enemies of Egypt and pious Islam. The Brotherhood has not only been outlawed; MB sympathizers have been hunted down and imprisoned or disappeared, and over 500 MB supporters have been given death sentences for “Terrorism” for supporting the Brotherhood’s politics.

In this mass trial, we see all the hallmarks of revolutionary  terror tribunals: the court took only two hours to reach its decision of death for all 528 individuals; there was no jury and no defense presentation; and the majority of those accused did not even appear in court.

Yet if the intent is to destroy the Brotherhood, these actions will not do so. The Brotherhood has been woven into Egyptian society as a widespread underground presence for decades. Their leaders have set up headquarters abroad in Doha, London, and Istanbul.

Moreover, the attacks on the Brotherhood have mobilized other Islamists, including associates of Al-Qaeda, who have led a bombing campaign said to have killed over 400 security personnel since last July.

Field Marshal Sisi has now positioned himself to be the next military man to become Egypt’s President. Yet when he does so, he will inherit a fearsome brew of economic problems, an armed rebellion in parts of the Sinai, an Islamist and terrorist underground, and an angry, polarized society. Sadly, it seems likely that the conflict and violence spawned by Egypt’s revolution is far from over, and may even get worse for another year or two.

Yet phases of terror are usually followed by periods of consolidation. The resultant government may be authoritarian, but is also likely to allow a time for civil society to gradually rebuild itself. One can even hope that democracy will have another chance to move forward a decade from now.

The Revolutions of 1848 in Europe are generally regarded as failures, and indeed ended in counter-revolutions (supported by Russia) and ushered in a period of renewed authoritarian, monarchical rule.  With the exception of Tunisia, that also seems the likely outcome in most countries of the Arab Spring.  Yet within just 22 years, Europe’s wave of authoritarian rule was being reversed, and in 60 years absolute monarchy had vanished from western Europe. Here is what I wrote about this period in my new book, Revolutions: A Very Short Introduction:

“From 1849 to 1871, conservatism reigned in Europe, and it appeared that the clock was turning back toward monarchies. Yet this was not to be. In 1871, after Prussia defeated Napoleon III in the Franco-Prussian War, the residents of Paris proclaimed the city to be a revolutionary commune, freed from the erstwhile emperor. Although the revolutionaries were eventually suppressed by a national French Army, the Army made no attempt to restore the Empire. Instead, they proclaimed the Third French Republic; France has been a republic ever since.

The ideas of democracy and constitutional government continued to spread; the Italian states were united as a constitutional monarchy in 1870, and even the Prussian minister Bismarck began granting constitutional rights to Germany’s peoples.     In 1918, following Germany’s defeat in World War I, a worker’s revolution helped topple the last German monarch and install the Weimar Republic. By the end of the First World War, every state in Europe had thrown off their absolute monarchies, and all but Russia had become parliamentary, constitutional regimes.”

The current outcomes in North Africa and the Middle East are tragic, and deeply troubling.  Yet we should not give up all hope; we have seen this pattern before, and eventually the children of those who were oppressed were able to reclaim democratic and limited government.

 

Posted in The Middle East Revolts | Tagged , , , | Leave a comment

What are Russia’s Plans for Ukraine?

American Secretary of State John Kerry turned his plane around to meet Russian Foreign Minister Sergei Lavrov in Paris on Sunday.

Both had clear and inflexible demands. The U.S. wished Russia to withdraw a portion of the troops it has massed on Ukraine’s borders, and cease any pressure or interference in Ukraine’s affairs. Russia wants the Ukraine to remain militarily neutral (read: no NATO troops or affiliation); wants Russian to be a coequal legally recognized language in the Ukraine with Ukrainian; and wants a federal structure to allow greater autonomy for Russian-speaking regions. Russia would, of course, also like to see the sanctions that the EU and America placed on Russian officials and business elites removed; but since the US still sees the annexation of Crimea as an illegal act, those sanctions are likely to remain in place unless Russia does more than merely drawdown its troops.

Still, the most important goal now is to avoid escalation. And that depends on what really lies behind Russia’s demands. I would say the first demand — that Ukraine remain militarily neutral — is what everything is about. Russia was outraged to have NATO on its borders in the Baltics and eastern Europe; it will not stand for being encircled on its western borders by having Ukraine also align with NATO. So that is the absolute demand. The other two demands are things that would be nice but can be negotiated. The Ukraine can agree to allow the free use of Russian language for any purposes, and agree to have all official documents appear in both languages (much like French and English in Canada). That will do no harm, and simply reverts to the status quo before the revolution this year.
The Ukraine can and should adopt some kind of federal structure, as its regions are very different in resources and outlook. But the actual powers reserved to the sub-national units can be wide or limited as the Ukrainian people and government choose.

That means that the US should be able to say: We encourage Ukraine to remain militarily neutral; how they manage their internal affairs with regard to language and federalism is up to them. However, we hope they will see the advantages of adopting dual official languages and some form of federal structure. In any event, we demand that Russia draw down its troop buildup on Ukraine’s borders.
Russia — if satisfied that Ukraine will not be the next NATO outpost — can then draw down its troops a bit to signal it is not intent on war, and then await legislation on language and federalism, probably after the May national elections, followed by drawing down the rest of its troop buildup.

Unless, that is, what Russia really wants is to annex more of the Ukraine. If that is the case, then the latter two demands (language and federalism) are the key, and a pretext for claiming that eastern regions of Ukraine are being denied their rights and therefore need to break away from rule by Kiev.

I would argue that the first scenario is more likely, that military neutrality is the main goal and the Russia wants to de-escalate and avoid an even more costly, larger intervention or annexation in Ukraine. If Putin really wanted to take more of Ukraine, damn the costs, he would not have sent Lavrov to negotiate on de-escalation; he would simply have moved more troops into eastern Ukraine to “protect” Russian-speakers and then had Lavrov explain the necessity of doing so. Yet Putin must realize that moving into eastern Ukraine with more troops could well lead to requests by the government in Kiev for help from NATO to fortify the western, Ukrainian-speaking regions. That would leave Putin in control of the eastern regions but facing a NATO engaged and supported independent Ukraine on his borders nonetheless; exactly what he sent Lavrov to prevent!

So I believe de-escalation is possible, and that Putin will want to digest Crimea but no more (even that will be difficult, as Crimea’s Tartars are demanding their own referendum on self-determination!).
Yet as long as there remains a massive Russian troop build-up on Ukraine’s borders caution will be necessary. Military neutrality is a reasonable price to pay for territorial integrity and political freedom; let us hope that all parties will make and respect that bargain.

Posted in The Global Economy, U.S. Politics | Tagged , | Leave a comment