How and Why the U.S. Has Re-Started the Cold War (The Backstory that Precipitated Ukraine’s Civil War)

By Eric Zuesse.

When the Cold War ended, in 1990, Russia was in a very weak position, no real threat at all (except for nuclear weapons, but the nuclear rivalry had been greatly reduced via arms-control agreements). Communism was proven to have failed as an economic system, and this failure of communism had left a former U.S.S.R. that was decayed and unproductive. The Russian people were in misery. Alcoholism, which was historically a huge problem among Russian men, and which kept Russia’s overall life-expectancy figures remarkably low, was rampant. Here, courtesy of Trading Economics, is a chart showing the longevity of Russian men (the main victims of alcoholism), during the period from 1980 to 2010 (Russia’s transition out of communism, and into capitalism):
As you can see, there was a burst of progress at the end, right before 1986, when the fading regime merely relaxed controls (while it started a campaign against alcohol-consumption) and didn’t go into capitalism, but this progress mildly reversed during the reign of the liberal Mikhail Gorbachev, 1985-1991, and it sharply plunged during 1991-1994, which was the period of the libertarian Boris Yeltsin’s privatization of Russian industries. Russia’s climb-back, after that libertarian surge, was brief, ending in 1998, and Russia still hasn’t yet improved itself beyond the Soviet era. Communism had certainly failed there, but capitalism also failed there — or at least the capitalism that Russia tried did, and this capitalism was designed for them by the Harvard economics department, the capitalist world’s dominant economics department: it was mainstream economic theory being put into practice in a non-capitalist economy, capitalist theory being introduced where there had been no capitalism before. The same economic theory that a decade later would produce the 2008 global economic crash was being applied in Russia during 1991-1998, and it did not get Russia out of the doldrums.

The unspoken but universally recognized truth was that communism had failed, and that the Cold War had been won by the capitalist nations of the OECD (U.S., Western Europe, and Japan), not by any nations of the former Soviet Union.

There was no longer any doubt that Marxism was dead, and that it can never come back. As an ideology, its value had gone to zero. A few people (in places such as Cuba) still spout Marxism, but it’s actually finished, and there was in its wake within Russia only a kleptocratic form of capitalism, mainstream-economics “greed-is-good” corporatist or “fascist” economics, which, when introduced after communism, turned out to be hardly better than the communist regime itself was at its end. Though the 70-year Marxist experiment had definitely failed, Russia is still crippled by what Harvard designed and largely implemented in Russia to replace it. Since 2004 at the latest, Russia has been recovering from that form of “capitalism,” Harvard-economics capitalism, mainstream-economics capitalism.

Here, from p. 66 of Charles I. Jones, “What Every Leader Should Know About Macroeconomics”, is a chart showing the per-capita GDP of various nations, including Russia, as compared to the U.S. (=100%), from 1990-2010:

Measured in this way, purely economically, Russia started recovering earlier, in 1998, rather than in 2004. Perhaps there was a six-year delay in the impact of the improving economy showing up in the public’s improved health. As you can see from this graph, Russia went down during 1990-1998 (the era of the Harvard-run reforms), and has been edging back up ever since, toward the percentage now it had had at the very end of the Soviet Union. Growth at that rate, since 1998, makes them an economic threat to the U.S., long-term — a threat to continued U.S. global dominance, this time an economic threat, which it never seriously was before, but still not necessarily a military threat, which is a different matter.

If you want to understand why Russia was hobbled during 1990-1998, that’s explained in two excellent articles, one (brief) from Mark Ames in November 2008 titled variously “The Summers Conundrum” and “Larry Summers: A Suicidal Choice” (that latter referring to Obama’s committing his Administration to suicide by appointing Summers to lead Obama’s economic team), and the other (very lengthy) from David McClintick in February 2006, titled “How Harvard lost Russia.” Basically, it’s the story of how Harvard’s leading economists engineered the creation of Russia’s kleptocracy, or fascism, and how it hurt Russia. Russia’s switch to fascist or “crony” capitalism (the thing that Mark Ames feared then from Obama) was planned and masterminded first by Jeffrey Sachs in 1990-1991, then by the Russian-born Harvardian Andrei Shleifer in 1991-1997, who was the protégé of Lawrence Summers, who had been the protégé of Martin Feldstein, who had been the Chairman of President Ronald Reagan’s Council of Economic Advisors, at the time (the 1980s) when “Greed is good” first became publicly and proudly the Republican Party’s ideology (subsequently to be championed with such phrases as, “Drill, baby, drill!”). Feldstein-clone Summers sent his man Shleifer, a native Russian-speaker, into Russia, during 1991, to take over the process from his previous man Jeffrey Sachs, who had introduced economic “shock therapy” in Poland the prior year, in 1990, and then run it for a year in Russia. Sachs and then Shleifer applied to Russia the “greed-is-good” economic theory that’s taught worldwide under the aegis of Adam Smith’s beneficent “invisible hand,” and that in the U.S. dominates the Republican Party, both ideologically and in practice, and that dominates the Democratic Party only at its very top, Presidential, level in actual practice, though not in the Democratic Party’s rhetoric, because the view that “Greed is good” had been condemned by Franklin Delano Roosevelt in the 1930s, and it rabidly violates the Democratic Party’s egalitarian basic principles, which were established by FDR and his “New Deal”; and FDR’s ideology had dominated this entire country until Reagan’s “Greed is good” ideology came in after 1980 and replaced the progressive post-FDR-era with the conservative  post-Reagan-era. [Note: We at Washington’s Blog believe currently there is no difference between the mainstream Republican and Democratic parties.] Anyway, those two articles, about the Harvard operation in Russia, document a deeply corrupt economics profession (corrupt at its very top), and the application of its similarly corrupt “free market” economic theory, to Russia, as a form of supposed “aid” from the “West,” which was tragically invited into Russia at the very time when Russia was trying to recover from the clear and disastrous failure of communism.

The bottom line is that the economics of fascism wasn’t much, if at all, better than the economics of communism; and, so, the Russian economy kept on plunging, while the Harvard plan was being put into place there. Afterwards, and clearly after 2004, Russian growth has more closely mimicked the stellar growth in the Chinese economy, which never subjected itself so fully to the Harvard, or “capitalist,” economic system, and thus never experienced the “capitalist” (actually fascist capitalist) failure that Russia experienced during 1990-1998.

If you look at those trend-lines, both for Russia and for China, after 1998, they could cross America’s in per-capita GDP, within 20 to 30 years. This would mean the end of the dollar’s being the international reserve currency, within merely a few decades [Note from Washington’s Blog: we believe that will happen within months to years … not decades.]; and the consequence of that happening would be catastrophic for the U.S. economy, which benefits enormously from having the planet’s standard currency for international business transactions. That’s because it would mean the end of “the American Century,” the era of the dollar. For example, without the dollar as the global-exchange currency, the ability of the U.S. Federal Reserve to carry out “Quantitative Easing” (“QE1,” “QE2,” etc.), or unlimited monetization of “toxic assets” at full value, simply would not exist. That’s just one of many economic-policy tools that are available only to the nation that “prints” the world’s reserve currency. Consequently, if and when the dollar-era ends, the U.S. economy will probably go into a tailspin unprecedented in U.S. history (since we never previously experienced the end of the era of dollar-domination, since we’re still in it). This would unwind many decades of pent-up corruption within the U.S. economy (the result of the “Greed is good” ideology), which would be suddenly cast aside by international investors, after decades of U.S. immunity, that protect this country against otherwise-basic economic realities (the realities that non-reserve-currency countries must face every day).

Furthermore, Russia post-2004 has undertaken to slash its astronomical alcoholism-rate. This recent program increases the economic threat to the aristocrats in the U.S. Here is a good graph from Britain’s The Lancet, 26 April 2014, “Alcohol and mortality in Russia”:

U.S. President Barack Obama is therefore very concerned to stop the rise of Russia and of China. They are now a national security threat to the U.S., because they present a threat to the continuation of the dollar’s being the world’s reserve currency. That threat is clear from just that second chart alone (“Per Capita GDP”). Understandably, Obama wants to whack both Russia and China, to serve America’s aristocrats, who benefit enormously from the dollar’s being the global reserve currency. Whereas the Chinese threat right now is primarily economic, the Russian “threat” right now is supposedly military (and that’s fictitious because our military bases surround Russia, and Russia’s military bases don’t surround the U.S.; it’s a “threat” purely in U.S.-aristocracy-controlled “news” media, pure propaganda); but if those trend-lines continue, the aristocracies in both Russia and China will become powerful competitors against the now-dominant aristocracy (roughly the top 0.001%), which is the aristocracy in the U.S., the aristocracy that controls the largest number of international corporations.

The Obama-pushed international-trade agreements, the Trans Pacific Partnership, and the Transatlantic Trade and Investment Partnership, or TPP and TTIP, are designed to tie or bind, respectively, Asia and Europe to the dollar, and to give U.S. international corporations, which is to say the largest chunk of the world’s aristocratic wealth, supranational control over national laws regarding labor, consumer protection, environment, and the regulation of foods and drugs. This U.S.-led mega-corporate control will also protect the dollar’s dominance. Russia and China might separate themselves from American economic theory, but they won’t present a serious threat unless they break the dominance of the dollar. It’s the wealth and power of the various nations’ respective aristocracies that’s driving this, not any ideology at all.

This also explains why the U.S. is encircling Russia with NATO members and weapons and U.S. military bases. Things like this are probably major factors of concern at secret private meetings of U.S. and EU aristocrats and their top agents, at the annual Bilderberg conferences; but, since those meetings are secret, one cannot know. Among the attendees at both the 2013 and the 2014 meetings were not only Martin Feldstein and Lawrence Summers, but Robert Rubin, Eric Schmidt, Peter Sutherland, Peter Thiel, James Wolfensohn, Robert Zoellick, David Petraeus, Richard Perle, George Osborne, Mario Monti, John Mickelthwait, Peter Mandelson, Christine Lagarde, Henry Kissinger, Klaus Kleinfeld, Alex Karp, James Johnson, Kenneth Jacobs, Carl Bildt, John Kerr, and Roger Altman. Even the husband-wife pair of Henry and Marie-Josée Kravis attended it during both of those latest years. There were no Russian oligarchs, and none from China, attending either meeting. Even the Japanese oligarchs are excluded. This cannot make them feel welcomed by the western oligarchs. Various western kings and queens are also regularly in attendance, but none from outside Europe. Also attending the 2013 conference were both Jeff Bezos and Donald Graham, the former of whom purchased a few months later the Washington Post from the latter. Also attending then: Peter Carrington, Manuel Barroso, and Timothy Geithner. Among the people not attending (or at least not publicly listed) in either year were: Warren Buffett, Bill Gates, George Soros, and any member of the family that owns Koch Industries, and of the family that controls Walmart. Attendance is by invitation only; and, among the many secret features of these meetings is the criteria for attendance. However, clearly: that particular oligarchic organization doesn’t even make a pretense at representing any aristocracy outside of the U.S. and Western Europe. Like the Council on Foreign Relations, the Trilateral Commission, the World Economic Forum, and a few other such oligarchic organizations, the Bilderberg meetings have provided opportunities for aristocrats from more than merely a single nation to get to know each other and transact business together personally, outside the reach of the NSA, KGB, or any of the “news” media (most of which are themselves owned by oligarchs). The fates of the publics everywhere, and of war and peace, might be more determined by such meetings as these, than by “democratic” “elections” in any single country. Democracy, within nations as well as internationally, is so strongly “influenced” by aristocrats, so that it might be a PR sham to merely “legitimize” rank exploitation. Nobody outside the inside can possibly know. The very existence of such an “inside,” appears to be inconsistent with any authentic democracy existing anywhere. Putin himself expressed publicly at the 2009 World Economic Forum in Davos his view of the 2008 economic crash, and it clearly rejects the view that Lawrence Summers, Timothy Geithner, Eric Holder, Barack Obama, and the entire Obama Administration, have put into practice to deal with that crash and to prevent a recurrence of it. Only time will tell whether Russia under Vladimir Putin and his successors, whomever they will be, will perform better or worse than the U.S. under its oligarchs. The only news-medium that devoted any attention to the 2014 Bilderberg meeting was Britain’s Guardian.

In this context, the current civil war in Ukraine can be understood; but western “news” media present it as being instead a result of Putin’s supposed aggressive expansionist agenda for Russia, even though it was actually started by Barack Obama (backed up by Christine Lagarde of the IMF just a day before the May 2nd massacre in Odessa against the supporters of independence from Kiev). Putin has struck back against the fascism of Obama and the IMF, by making serious arrangements with China to ditch the dollar as the world’s reserve currency — their own assertion of independence from West’s fascists. The movement for independence isn’t just within Ukraine, but is now (after the May 2nd massacre) an international independence movement.

This article is being submitted to all news-media; the ones whose owners (who hire the editors) don’t want the public to know the information it contains won’t publish it. (Those editors will reject it.) To find out which “news” media those are, just google the title of this article, “How and Why the U.S. Has Re-Started the Cold War,” and it’ll be all the “news” media that don’t come up. Any that come up in such a search are informing the public about reality, not keeping them ignorant of it — because this article is about the reality, not about any mere myth. The subject here is the world as it actually is. It’s news, not propaganda.

UPDATE: See this: http://off-guardian.org/2015/07/26/damned-lies-and-statistics-the-guardian-view-on-putins-mysterious-popularity/

———-

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,  and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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  • Charles

    I’ve read your article several times —– and,
    the only polite thing I have to say is —– I disagree !
    I may be tooooo simplistic, but, I’ll bet you could write an
    article about a home invasion and make it look like the
    home owners fault ~~~~~~
    Oh ! Why be polite !!!!!
    This is Junk Journalism with all the hallmarks:
    1) A catchy headline
    2) Implied insight only the writer has achieved.
    3) Disparate “facts” that support almost nothing, but,
    4) Fear we are all victims of other peoples success
    5) Fear that if the truth is known the world will collapse
    6) Fear that if the truth is NOT KNOWN the world will collapse
    7) Fear that nothing is actually as it seems everything is a conspiracy.
    8) Anyone who disagrees is a traitor to the cause of truth
    9) An orange is not an orange but an apple in disguise.
    10) This is enough for now
    I will fight to the death your right to write and to think.
    I just can’t imagine your world of torment and feel sorrowful for
    so many people that live such lives.
    {{In other words, I think the cold war has re-started because Putin
    invaded and annexed Crimea. Simple, period, end of story ?
    No way !!!!! }}}
    But then, I’m just a common folk who couldn’t possibly see the truth ~

    • cettel

      This is Eric Zuesse.

      If you had clicked onto the links, and onto the linked sources in those linked sources, etc., you’d have found that everything I said in this article is well documented.

      Here is a very different article, from Michael Hudson, that makes similar points but in different ways: http://www.nakedcapitalism.com/2014/05/new-cold-war-ukraine-gambit.html

      Does that help you a bit more?

      • Ignatenko

        I believe your article was well written and while I am not in total agreement with every assessment made, I support your basic premise. Our achilles heel is our national debt. China and Russia know they can not match America’s military might but if they can cause an economic collapse in the US (similar to Soviet Union), they can greatly marginalize us. Unfortunately, there are a lot of countries, including our allies, that feel uncomfortable with the dollar being the standard international currency and would consider jumping ship if there was a better alternative. In my opinion, it is not a question of “if” but “when”!

  • hyperbola2

    What is glossed over here is that all of this was in service of a corrupt sect that sucks the blood out of America.

    We are seeing a repetition of this in Ukraine, which has nothing to do with “freedom”, but rather with the attempts of a sect to control corruption in Ukraine.

    “Mainly Jewish Oligarchs” in the Ukraine
    http://www.theoccidentalobserver.net/2014/03/the-unstable-alliance-of-nationalists-and-mainly-jewish-oligarchs-in-the-ukraine/

    And, of course, as usual “our” government is being bled to finance their dirty business.

    Victoria Nuland Admits: US Has Invested $5 Billion
    http://www.informationclearinghouse.info/article37599.htm

    Victoria Nuland’s family ties
    http://www.theoccidentalobserver.net/2014/02/victoria-nulands-family-ties/

    The crimes against humanity in Honduras are another recent example of how the sect bleeds Americans to further their corruption.

    “Honduras: Stolen elections, continued assassinations and US antics as usual”
    http://wfpsw.org/2013/12/04/honduras-stolen-elections-continued-assassinations-and-us-antics-as-usual-preliminary-report-by-tanya-cole-december-4-2013/

    The Jewish families that run Honduras
    http://www.radioislam.org/islam/english/jewishp/honduras/jew_rule_honduras.htm

    The high-powered hidden support for Honduras’ coup
    http://articles.latimes.com/2009/jul/23/opinion/oe-weisbrot23

    Who’s behind Lanny Davis’ putsch paycheck?
    http://narcosphere.narconews.com/notebook/bill-conroy/2009/07/whos-behind-lanny-davis-putsch-paycheck

    The irony in all this is that our own war of independence was against this sect and their corrupt bankers and “multinationals” of that time (East India Company).

    Jewish banishment and the City of London
    http://www.thetruthseeker.co.uk/?p=32142

    But, by now “our” government protects their corruption, right down to their centuries of narcotrafficking.

    HSBC Helped Rothschild CIA Mossad Terrorists, Soros Mexican Drug Cartels Launder Money
    http://politicalvelcraft.org/2012/08/02/hsbc-helped-rothschild-cia-mossad-terrorists-soros-mexican-drug-cartels-launder-money-senate-report-says/

    DRUG MONEY AND THE ABOVE-THE-LAW GLOBAL BANKING CARTEL
    http://www.blacklistednews.com/__Banking_on_Criminality%3A_Drug_Money_and_the_Above-the-Law_Global_Banking_Cartel/23079/0/38/38/Y/M.html

    Jews, the Opium Wars & Banking
    http://careandwashingofthebrain.blogspot.com.es/2013/01/jews-opium-wars-banking.html

    It really is time to chuck out all the lackeys of a foreign sect and get some Americans into our government.

    Zionist Democrats
    http://www.counterpunch.org/2006/05/30/zionist-democrats/

    “America’s First Jewish President”
    http://www.voltairenet.org/article158792.html

    John McCain: A Closer Look at Evil
    The career of John McCain offers a textbook case confirming how war is waged on the U.S. by way of deception—with the help of senior lawmakers.
    http://www.veteranstoday.com/2010/07/29/john-mccain-a-closer-look-at-evil-part-4/
    http://www.veteranstoday.com/2010/07/30/john-mccain-a-closer-look-at-evil-part-5/

  • hyperbola2

    Actually what the cesspool called “harvard”

    http://landdestroyer.blogspot.com.es/2011/02/big-oils-tree-huggers.html
    http://jewssansfrontieres.blogspot.com.es/2006/05/alan-dershowitz-plagiarist-liar-and.html

    cooked up for Russia was never meant to be successful, anymore than it was in Poland

    Russia – the biggest robbery of the twentieth centuryhttp://www.polskawalczaca.com/viewtopic.php?f=4&t=20332&sid=22aefdbd1d830426a4ea5283dad4e0d9

    or Latvia

    http://michael-hudson.com/2013/01/latvias-economic-disaster-as-a-neoliberal-success-story-a-model-for-europe-and-the-us/

    It is about thieves.

    The New Cold War’s Ukraine Gambit

    Finance in today’s world has become war by non-military means. Its object is the same as that of military conquest: appropriation of land and basic infrastructure, and the rents that can be extracted as tribute. In today’s world this is taken mainly in the form of debt service and privatization. That is how neoliberalism works, subduing economies by indebting their governments and using unpayably high debts as a lever to pry away the public domain at distress prices. It is what today’s New Cold War is all about. Backed by the IMF and European Central Bank (ECB) as knee-breakers in what has become in effect a financial extension of NATO, the aim is for U.S. and allied investors to appropriate the plums …..

    http://www.nakedcapitalism.com/2014/05/new-cold-war-ukraine-gambit.html

  • earlyindigo

    Well, I am a Ukrainian American and I can tell you that it is indeed about Independence you idiot. Ukraine does indeed want to be an Independent country and Putin just doesn’t want to accept that and wants to swallow it back up. Ukrainians ARE NOT RUSSIANS and if you had any knowledge of Ukrainian History you would know that. You write of “facts” but you don’t even know basic Ukrainian history.

    • cettel

      You clearly didn’t click on the links to that part of this article.

    • Ezra Pound

      Ukraine will never, and can never, be an “independent nation.” The US does not allow the existence of independent nations. Ukraine outside of the Russian orbit will be nothing but a US puppet state and Ukrainians are going to suffer because of it. Why a Ukrainian would rather be a slave of the US rather than a brother to its Slavic family in Russia is a mystery to me. Either way, the current US-installed regime in Kiev is fascist in the extreme, and it is murdering hundreds of Ukrainians.

      • Ignatenko

        Indeed

      • rvborgh

        Why is it a mystery to you? Just what good has this so called Russian brotherhood been for Ukraine? Staying bound to Russia would just ensure economic stagnation and the maintenance of the corrupt way of doing things that was Yanukovych. That is just fact. Perhaps the possible risk of being a puppet US state is a better outcome for the common Ukrainian than being a brother to Russia.

        As far as murdering hundreds of Ukrainians… didn’t they vote to become their own Republics… so are they Ukrainians anymore or not?

        • Ezra Pound

          Do you work for USG or any non-profit orgs? just wondering.

          • rvborgh

            No i don’t… i am just a concerned American with lots of Ukrainian friends who has been to Ukraine twice, and used to vacation in Crimea (mostly Yalta) before the Russians took it over.

            One of my Ukrainian friends is still suffering from PTSD from his time of service in the Ukrainian Army. So much for Russian brotherhood.

          • Ezra Pound

            Well, the Banderists and other Nazi-types shouldn’t have attacked their own people. It was not Russia that started any of this nonsense. No one in Crimea or Eastern Ukraine wanted to break away until Washington’s puppets banned the Russian language and the Jewish Nazis like Kolomoisky started killing people by incinerating them to death in locked buildings. None of this would be happening if the US did not try to take over Ukraine and appoint Nazis and foreign rulers over the people there.

            http://www.bne.eu/content/story/three-foreigners-appointed-new-ukrainian-cabinet

          • rvborgh

            Hi,

            i really am not going to rehash stuff that we will just disagree on…

            i will only say that even Strelkov/Igor Girkin disagrees with you:

            http://zavtra.ru/content/view/kto-tyi-strelok/

            i agree with him that had he not done what he did… what has transpired in the Donbass would not have happened… it would have fizzled to nothing.

            The DPR, and LNR made a gamble that Russia (Putin) would annex them just like Crimea. This gamble didn’t pay off… with the ensuing consequences.

    • Ignatenko

      Your views are appreciated but name calling reduces your input and makes you appear stupid because you can not voice an opinion without it. Ignatenko is my last name and I am Russian and Ukrainian. Most of us have strong Russian ties by family and economics. The Kiev gov since breaking away from the Soviet Union, has done little to improve our lifestyle. Those of us that live in western Ukraine want to have more political say in our region. I don’t support breaking away from Kiev but I, as many other Ukrainians do, support the right to more political and economic freedom. I believe we have become a political football. We should be able to do business with the EU and Russia and not have to choose.

  • ProfessorPBZ

    This is poorly written.

    • ProfessorHarHar

      Your argument is empty.

  • roni