Putin’s 130,000 Troops, Xi’s Jets, and Biden’s Sanctions

Dollar Diplomacy, President William Howard Taft announced in 1912, was a form of American foreign policy designed to substitute economic power for the use or threat of military force. It substitutes “dollars for bullets …” proudly announced the President. Less than five years later America was sending both dollars and bullets to Europe to join the battle against Kaiser Wilhelm II’s Germany.

Dollar Diplomacy, Circa 2022: Sanctions

Fast forward to the modern era, and the possibilities of a new Dollar Diplomacy. America had an opportunity to give it a try when the Trans-Pacific Partnership was set up in 2016 to establish the rules governing international trade by some eleven countries, including the U.S. But during the 2016 presidential election campaign both Donald Trump and Hillary Clinton announced that, if elected, they would not sign the deal. TPP was not to feature in America’s Dollar Diplomacy. That gap might be filled by the Indo-Pacific Economic Framework being finalized by the Administration, and slated for release in a few weeks.

Now we have an American administration eager to avoid involvement in what has come to be called “never-ending wars”. Dollar Diplomacy is to reincarnated as sanctions, their imposition to deter bad, their removal to reward good behavior.

Militarizing Fuel Supplies

To please Angela Merkel and Germany, President Biden removed Trump-era sanctions that had halted the construction of the nearly completed $11 billion Nord Stream 2 natural gas pipeline that would increase the dependence of America’s NATO allies on Vladimir Putin’s good will. Biden now threatens to reimpose them if Putin gives his troops an invasion green-light.

Putin has proved that he has the power to force natural gas prices so high that residents of NATO countries must choose between heating and eating. A cowed post-Merkel government has refused to cooperate with efforts to persuade Putin to stand down his troops, or even allow its air space to be used by Germany’s NATO allies flying equipment to Ukraine. Germany has taught Biden a lesson he somehow missed in his decades in Washington: if you want gratitude, get a dog. Biden has bought a dog.

The Olympics: One Round In A New Great Game

Meanwhile, Putin is enjoying the Olympics at the side of Xi Jinping. These games are sponsored in part by Xi’s useful idiots, major American corporations that regularly virtue-signal their concern about human rights, but only in  ways that do not implicate or antagonize the Chinese authorities, who are delighted when U.S. corporate CEOs attack human rights violations in the U.S., and who really believe Xi will not, when it suits his Made In China 2025 master plan, send them packing, minus their intellectual property.

If the living conditions laid on by Xi for visiting athletes are any guide – remember, he sees these games as a show case for China’s economic might and the ability of the Communist Party to deliver for its masses – life in the People’s Republic includes material deprivation along with political repression. If only Xi had allowed a few of the 3,787 McDonald’s restaurants operating in China into the Olympic bubble ….

The athletes report small portions of substandard food, reminding this writer of the old Jewish joke about the hotel patron complaining of the terrible food, and of the small portions. There are no hot meals, only crisps, nuts and chocolate, reported German ski coach Christian Schwaiger. Americans do benefit from the bags of pasta the U.S. delegation brought with it. Rooms are tiny and unheated, although probably superior to the accommodation provided the millions of Uyghurs interned in Xinjiang. In any event, American and other athletes will likely leave Beijing with a rather low opinion of the communist system’s ability to deliver the lifestyles to which they have grown accustomed.

Strong Men Flexing Their Muscles

Putin has made himself the dominant world player, for now, by demanding that America and NATO find ways to meet his “legitimate security concerns”, among them the threat posed to his 130,000 troops (many stationed in Crimea and other points already wrested by force from Ukraine in violation of pledges to respect that country’s borders) by a few thousand American troops and Ukrainians training with wooden rifles. The irrepressible Emanuel Macron has suggested to Putin the Finlandization of Putin, which the Russian leader seems to be considering.

Xi is flying his J-16 fighters and nuclear-capable H-16 bombers into Taiwan’s’ air defense zone, and threatens American vessels daring to sail close to the artificial islands China has constructed in the South China Sea. Both Xi and the Taiwanese are watching to see just how far Putin can push America without awakening a sleeping giant.

Putin and Xi Play Weak Hands Brilliantly

Here is the irony. Compared to America, its Chinese and Russian adversaries are economic pygmies. Each of the dictatorships has a per capita GDP in the neighborhood of $10,000, one-sixth of America’s, less than one-eighth of the richest U.S. state (Connecticut),  one-third of its poorest (Mississippi). Russia’s GDP clocks in at about half of California’s.

And it is not as if either Russia or China can match the military might of America, measured in nuclear weapons, combat aircraft, and aircraft carriers and, until doubts were raised by the Afghanistan exit, the number of allies. But China and Russia lead in some technologies, and are closing the gap on an America willing to devote less than 3 percent of its GDP to defense spending compared with 7 percent during the Cold War and 4 percent during the war on terror.

Corporate America, its lobbyists, and many members of congress have turned the defiant call, “Millions for defense but not one cent for tribute,” a response to French pressure in some long-forgotten diplomatic quasi-war, into “Millions for tribute, but not one cent more for defense”. Not if it might produce a demand that they pay a bit more in taxes. Defense experts, of which this writer is not one, say current levels of spending are insufficient to permit America to meet the two-front threat posed by the Sino-Russian entente.

Defining Winning Matters  

What America cannot match is those countries’ clarity of purpose. Xi is determined to restore Chinese power and prestige after what he sees as one hundred years of humiliation at the hands of the West and Japan. Putin is determined to reverse what he calls “the greatest political catastrophe of the century”, the demise of the Soviet Union.

America, on the other hand, can’t decide whether its adversaries are a bigger threat than climate change, income inequality, or its former President. It can’t decide whether to rely on its oil companies for its fossil fuel supplies, or again become more dependent on imports, some from Russia. It can’t agree on a policy to end dependence on China for solar equipment and strategic materials. There’s more, but you get the idea.

The Good News

There are a few bright spots in this dark picture. The Chinese economy is showing the ill effects of the demographic imbalance resulting from its now-defunct one-child policy, excessive debt, chaos in its important property sector, and the evisceration of the innovative entrepreneurial class that threatened the hegemony of the Communist Party. Russia is essentially a petro-state with nukes, weapons Ukraine agreed to destroy in 1994 in return for U.S., UK and Russian Federation security guarantees of its independence and the integrity of its borders.

The Better

The even better news was laid out over a dozen years ago by the much-missed Charles Krauthammer. “Nothing is inevitable. Nothing is written…. Decline is a choice. More than a choice, a temptation.”

The American economy’s major problem is that it is growing too rapidly, its workers have too many choices, its consumers and corporations are too flush with cash, its voters are having difficulty choosing among their multiple options. Just the sort of problems other countries envy.