Tag Archives: ukraine

tdaxp predicted the Russian invasion of Ukraine

If Barack Obama and others had read my blog on October 29, 2008, they would have known that Russia will invade Crimea to turn it into a frozen conflict.


Russia is not a European country.  it is a Central Asian oil exporter that has invaded Europe — again. A variety of moves, from pushing renewable energy to helping Ukraine sign the Association agreement with the European Union, should now be made. Ukraine must join Europe.

Too bad I was ignored.

The “Free Parking” Analaogy in International Relations

In business strategy, it is common to subsidize a money losing business that in order to make a primary business profitable. This is called “free parking.”

For instance, McDonalds is one of the largest parking lot operations in the world. The scale of their investment in an international network of places to park your car is staggering, involving professional and operational employees and contractors all of the world.

But McDonalds is not in the parking business. They are in the hamburger business. But absent providing “free parking,” McDonalds would find the cost of customer acquisition painfully high and the economics of scale from its operations too small.

Of Interest to Parking Lot Operators

Likewise, the United States runs one of the largest carbon-economy rollback operations in the world. The scale of US investment in preventing the success of the carbon economies (from “King Cotton” in the late 19th century to “King Oil” in the late 20th century to King Natural Gas today) is staggering. This anti-carbon-intervention — from a massive climate science masquerade to military actions in the American South and the Middle East.

In most of the world most of the time, carbon-based economies are naturally despotic and authoritarian. These “hydraulic empires” exist because of the government monopoly over the infrastructure needed to extract wealth from the earth. This form of social organization can be internally stable but maintain considerable freedom of movement in international relations because rules do not need worry about complicated economic links that limit non-carbon economies. That is, they are warlike.

Of Interest to Carbon Extraction Operators

(Whether refers to carbon-economy rollback by that name, or says something about sustainable political-economic growth, or “shrinking the gap” or whatever, the meaning and the concept is the same: minimizing the political and military importance of carbon extraction throughout the world.)

Rolling back the carbon-based economy is to the US what free parking is to McDonlads. For McDonalds, free parking is the side business and selling hamburgers is the main business. For the US, carbon-economy rollback is the side business and selling security is the main business. McDonalds could not afford the customer acquisition cost, and could not enjoy the economies of scale, without subsidizing free parking for its customers and potential customers. Likewise, the US could not afford the country-acquisition cost of its military alliances nor enjoy economies of scale, without subsidizing carbon-economy rollback for its customers and potential customers.

My friend Dr. Samuel Liles thinks that free parking is a distraction, whether for McDonalds in a shopping mall or the US in the world political system. He’s wrong on both points.

McDonalds cannot provide hamburgers (in exchange for cash) without providing parking, for free.

The US cannot provide security (in exchange for power) without rolling back the carbon-based economy, for free.

Free Parking and Ukraine

May good friends Dr. Samuel Liles (who I had the pleasure of meeting in person the other day) has taken to twitter to advocate to an isolation response to Russia’s invasion of Ukraine’s Crimea.


Sam has written a tweeted a number of times, but this tweet is probably the most concise description of a pro-Putin line you’re likely to see in the non-lunatic West:

If you say “POTUS should do something” I’ll ask you why. Ukraine wasn’t in NATO or EU so NATO & EU shouldn’t do anything absent specifics.

I like Sam, he has a lot of cool stories and is a serious guy, but his comment is an exact analog to

If you say “McDonalds should provide parking” I’ll ask you why. Customers aren’t yet in the building so McDonalds shouldn’t spend money on them absent specifics.

The common thread in my friend’s Sam’s comments on Ukraine, and that crazy comment about McDonalds, is called “free parking.” Most successful enterprises, whether business or governments, provide subsidized or free secondary services in order to acquire customers for their primary services.

McDonalds runs one of the largest parking lot operations in the world, not because they are in the business of running profitable parking lots, but because the parking “business” is actually critical infrastructure to being successful in the restaurant business.


Similarly, the US has traditionally supported the expansion of the European Union, not because the US is in the EU, but because the Eu is critical infrastructure to being successful in the security business.

The European Union, like the United States, has a political-military system that focuses on extracting taxes from producer surplus of the non-carbon sectors of the economy. An interesting result of this is that the EU and US focus on peaceful relationships with each other, as economic integration allows the economies of scale in multiple sectors necessary to increase the tax base thru increasing the producer surplus of the non-carbon sectors of the economy. Besides the first-order economic gains of this “capitalist peace,” this also provides second-order gains as the costs of the US of providing security are lowered.

Supporting the EU’s provisioning of that political-economic infrastructure throughout Europe is in America’s interests, in the same way that paying parking lot pavers is in McDonald’s interests. The US is not the EU. McDonalds is not a paving company. But McDonalds is in the paving business in order to provide free parking to its customers. And the US is in the business of supporting the expansion of the EU to provide free parking — access to the legal, technical, and economic infrastructure the EU provides — to its customers.

The Next South Ossetia: Crimea

Though South Ossetia is only recognized by Russia and Nicaragua, it has still allowed Russia to extend its influence by attacking neighboring states. South Ossetia, along with Abkhazia and Transnistria, are puppet entities supported by Russia.

The next puppet state may well be Crimea, which is part of Ukraine:

World Briefing – Europe – Ukraine – Concern About Russia – NYTimes.com
Foreign Minister Bernard Kouchner of France said Tuesday that Moscow had been issuing Russian passports in Crimea, a region in southern Ukraine where Russia’s Black Sea fleet is based. “We all know that they are handing out Russian passports over there,” Mr. Kouchner said in an interview with Kommersant, a Russian online newspaper. The government of Ukraine has said it wants the fleet to leave the Crimean base in Sevastopol when its lease runs out in 2017. But the Russian naval authorities have indicated that they want to retain the base. Mr. Kouchner said Russia might try to make advances in Crimea after the success of its military operations in Georgia in August.

Gap regimes such as Russia rise and fall with hydrocarbon prices. The lower we can keep the price of oil, the less Russia will be able to create this kind of trouble.

Multilateralism in the context of Russia’s invasion of Georgia.

I don’t know who the neo-coni-sh unilateralists are on the issue of Russia’s invasion of Georgia. I suspect they do not exist.

Rather, most of the hard work in processing the politically bankrupt Soviet Union has been done by the old democracies of Europe — Britain, France, Germany, and Italy. Three classes of reforms, each more profound than the last, integrated members of the former Warsaw Pact solidly into the European scene. A free trade area, a free movement of labor area, and even an integration into Europe’s internal political machinery changed the war that western Europeans do their work, live their lives, and even pass their laws.

Throughout this, America’s contribution has been easier but still important. We expanded NATO, providing the ‘security guarantees’ necessary to make it easier for European connectivity to flow.

Moving forward, the struggle against Russia (which has reverted to behaviors typical of a gap state stuck in time) will continue to be heavily multilateral. The actions that America can perform on its own are limited, the most serious being granting security guarantees to the seam states on Russia’s edge. However, real victory will come from working with Europe. Tying the European Seam to the European Core will be the job of Europe, as it integrates Georgia, Ukraine, Azerbaijan, and Moldova into the multilateralist institutions that have been post-War Europe’s greatest achievement.

Keep faith with our friends. Don’t give in to an isolationist unilateralism on Europe, where we abandon the Seam to the Gap in exchange for a return to the pre-8/8/08 world. Closing our eyes and keeping to ourselves is not a good way forward. Rather, we should work through multilateral institutions, keep patience, and focus on integrating Georgia, Ukraine, Azerbaijan, and Armenia into the European Union and NATO.

In Search of Green Collar Jobs That Can’t Be Outsourced

The meme is old — Barack Obama and Hillary Clinton promises to supply work to otherwise underemployable Americans through green collar jobs that can’t be outsourced.

Obama and Clinton also agreed on the need to build a green economy. Said Obama, “We have to look at energy and the potential for creating green jobs that can not just save on our energy costs but, more importantly, can create jobs in building windmills that will produce manufacturing jobs here in Ohio, can put rural communities back on their feet by working on alternative fuels, making buildings more energy efficient. We can hire young people who are out of work and put them to work in the trade.” Clinton echoed those ideas and cited the example of Germany, which “made a big bet on solar power” and “created several hundred thousand new jobs … that can’t be outsourced.”

But what is a green-collar job, and why can’t it be outsourced? Because of new trade barriers? Or because it involves manual labor on the electrical and biofuel transmission system?

If “green-collar jobs” is just a new name for protectionism, then to bad. But if green-collar jobs involve replacing hydrocarbons through manual work on the electrical and biofuel transmission system, then good… for Ukraine!

Europe must integrate Ukraine into the EU and NATO system. This means making both Europe Ukraine richer, through increased ties and increased trade. However, such wealth comes with real damage. For instance, in Ukraine businessmen who are puppets of the Putin regime will be hurt by exposure to western legal, political, and behavioral standards (in the sense that we have a largely apolitical criminal justice system, and Russia doesn’t). In Europe, the losers will be uneducated people who find themselves competing with Ukrainians for work. So Europe must find useful work for either these unemployable Europeans to do, or else find something to keep Ukrainians productive at home.

Green Collar Jobs would help Europe absorb Ukranian. Green-collar agriculture jobs would turn Ukrainian corn into ethanol, helping to displace Russian hydrocarbons. Green-collar mechanical jobs would turn Ukrainian wind into electricity, helping to displace Russian hydrocarbons. Green-collar technological jobs would build new Ukranian power plants on the latest French lines, helping to displace Russian hydrocarbons.

Green Collar Jobs help knit Ukraine into Europe, and help protect Europe from future Russian tantrums.

Now, that’s a progressive idea.

GUAM in the News

GUAM stands for Georgia, Ukraine, Azerbaijan, and Moldova: four former Soviet states that are increasingly menaced by Russia. Indeed, Russia invaded Georgia a few weeks ago. These four countries have already formed the GUAM Organization for Democracy and Economic Development. Fortunately, the international community’s balancing against Russia is providing additional support for the GUAM states, both from Europe and the United States.

The Eastern Partnership was already in the works — the May 2008 plan to begin bringing in the remaining countries of central Europe into the European Union:

“To the south, we have neighbours of Europe. To the east, we have European neighbours…they all have the right one day to apply [for EU membership],” Mr Sikorski said, urging the eastern countries to follow the example of the Visagrad Group set up in 1991 by Hungary, Poland, Slovakia and the Czech Republic as part of their EU integration efforts.

“We all know the EU has enlargement fatigue. We have to use this time to prepare as much as possible so that when the fatigue passes, membership becomes something natural,” the Polish minister said.

The preperation was well prepared… now there is talk of a visa and free trade area. See this article published today, by China’s Xinhua news agency

BRUSSELS, Sept. 2 (Xinhua) — The European Union (EU) is to launch the Eastern Partnership to boost ties with its eastern neighbors by the end of the year, an EU commissioner said here Tuesday.

Benita Ferrero-Waldner, commissioner for External Relations and European Neighborhood Policy, made the announcement at a joint press conference after meeting with Georgian Prime Minister Vladimir Gurgenidze.

The Eastern Partnership, proposed by Poland and Sweden and approved at the EU summit in June, would cover countries including Georgia, Ukraine and Moldova, she said.

“We will have to see how far we can go. There should be greater economic integration, more mobility and more tools to help solve the security situation and resolve frozen conflicts,” the commissioner said.

Under the partnership, the EU will enhance regional cooperation between these countries and open bilateral negotiations with each one of them on a visa regime and free trade areas.

The EU is expected to make decisions on such a partnership, an extension of the European Neighborhood Policy (ENP), in late autumn or by the December European Council, according to Ferrero-Waldner.

The EU is able to make life easier for GUAM from an economic perspective. The US is able to assert its interests in other ways:

As he starts a tour of Georgia, Azerbaijan and Ukraine, Mr Cheney will try to allay fears that Russia’s campaign in Georgia has fatally damaged a cornerstone of the West’s energy policy.

That message will be particularly potent in Azerbaijan’s capital Baku, once the capital of the Soviet oil industry and now a pivotal ally of the United States.

The Caucasus region, between the gas-rich Caspian Sea and Turkey, provides the only energy pathway from Central Asia to Europe that does not traverse Russia or Iran.

More still needs to be done. We need peace with Iran and we need to use more countermeasures against Russia.

Tom, Russia, Georgia

Three recent articles linked to by Tom present some interesting perspectives on on Russia’s invasion of Georgia.

Edward Luttwak, “Georgia conflict: Moscow has blown away soft power,” is deceptively titled. The subject is perfectly right, but the analysis is wrong. Russia’s President Putin has indeed destroyed his country’s soft power. But the article makes the same mistake that Putin does, saying

It was in that other world of “soft power” that has just ended that the admission of both Georgia and the Ukraine to NATO was being rapidly prepared. That was precisely the strategic setting of an attack on Georgia’s independence by the former Russian president Vladimir Putin.

Sadly, Tom doesn’t pick up on this, and instead makes a strange analogy to the Austro-Hungarian Empire. As far as I can understand the analogy, Tom’s arguing that Russia naturally supports a policy of assassinating and removing foreign critics of the regime, and that attempts to change this behavior are futile.

Another piece with a great title nd so-so-writing is Spengler’s “Americans play Monopoly, Russians chess.” My first reaction was of course. Chess is a zero-sum bipolar game in which there is no economy: Monopoly is won only by increasing your wealth to the extent that, in real life, you could easily buy off your opponents and leave everyone better off than they were before. But no. Spengler mistakes Putin for a very smart man, correctly diagnoses Russia’s fall into demographic irrelevancy, and concludes with a list of mixed-up priorities. Spengler even shows himself to be one of those gun control nuts–on the international level, that is)“!m A very disappointing piece. Tom’s contribution is to call Ukraine and Georgia “immature/pseudo-democracies,” by which I assume he means client states that Putin managed to alienate so much that they have begun importing European rulesets.

Lastly is “The Russians doing joint ops right,” which appears to be a recognition of high-level Russian competence in the war, even if their attempts have been largely betrayed by an unprofessional and violent ground force Tom’s reaction is to praise the Russians for their ability to fight a long war against radical extremism, as if generating hatred on the ground and maximizing one own’s energy-export revenue are signs of being a viable partner..