Streetwise Professor

June 2, 2014

The Families of Six Servicemen Deserve the Truth About and the Accountability of Bowe Bergdahl

Filed under: History,Military,Politics,Uncategorized — The Professor @ 3:16 pm

I noted yesterday that the upper brass and the grunts had a very different take on Bergdahl. That has become even more clear. The national security establishment, including both the civilian and military sides of the Pentagon, seems quite pleased with developments, and is more than willing to gloss over the circumstances by which Berghdahl fell into Taliban hands. Some are even willing to engage in a wholesale whitewash, most notably the execrable Susan Rice (no shock there), who says flat out that Bergdahl “served with honor and distinction” and was “captured on the battlefield”. She should really join the band Say Anything.

Many US soldiers currently in Afghanistan are more ambivalent. The circumstances of his capture sit uneasily with them.

Then there are those who who served with Bergdahl, or who were involved in the frantic operations mounted to find him after his disappearance. Very little ambivalence there. The consensus is that he is a deserter.

What’s more, there is considerable anger among those who were engaged in the search because people died as a direct result of Bergdahl’s disappearance. That people died searching for him is not in dispute. Six soldiers were killed on operations to try to find him. Moreover, it is possible that his disappearance indirectly killed Americans because resources (air support, drones, etc.) were diverted to the mission to find him, making other bases that were attacked more vulnerable. Then there is the issue of whether Bergdahl provided information or other support to the Taliban that cost American lives (though this is more speculative.) (Or maybe not so speculative.)

This is why it is imperative that there be a formal proceeding, along the lines of what is set out in the Code of Conduct, to determine just how Bergdahl wound up in enemy hands, and what he did while a captive. Yes, Bergdahl is home. Yes, his parents can rejoice in his return. But there are mothers, fathers, wives, and children of at least six American servicemen who will never experience such a reunion. Because of what Bergdahl did: there is no way to escape that fundamental fact. They deserve the truth about what he did. And they deserve the knowledge that if Bergdahl deliberately abandoned his unit, thereby setting in train the events that resulted in the deaths of their loved ones, that he has been held accountable.

In other words, this isn’t about Bob Bergdahl. It is about Clayton Bowden, Kurt Curtiss, Darynn Andrews, Michael Murprhey, Matthew Martinek, and Morris Walker.

There are stories circulating that he did not desert, e.g., that he was captured while at the latrine. I consider this unlikely: note that not one other US soldier was captured in Afghanistan (a remarkable feat), meaning that if Bergdahl was indeed captured without his intending to fall into enemy hands  he was truly the very unlucky and unique exception that proves the rule. (There are other reasons to disbelieve the latrine story, which originated in Taliban radio chatter.) Again, let’s assemble the evidence, including his testimony, and decide accordingly.

I am not prejudging the results of any such inquiry, or the appropriate punishment. What I am saying is that there must be a formal fact finding procedure with legal consequences based on these findings. (I note that the Army had previously determined that Bergdahl walked away. But it did not have his testimony, obviously. Now we can get it.) The results could range from a commendation (in the unlikely event that the story as we know it is all wrong), to dishonorable discharge, to something more severe. The torments he might have suffered over the past five years may be grounds to ameliorate  punishment, but not to avoid assembling the facts and reaching a verdict.

One of the most well-established facts about men in combat is that they fight first and foremost for their buddies. The guys in their squad or platoon. There is a formal Code of Conduct in the US military, but there is a timeless code that binds soldiers: I will die for you because I know you will die for me.

People died for Bowe Bergdahl. That is incontrovertible fact. What remains unclear is whether they died because he violated the trust, the code, that should have bound him to his comrades.

The facts of his disappearance support that. But so too does the fact that it appears that Bergdahl didn’t have any buddies. He expressed scorn for his comrades, and was always an outsider who was independent, and likely to be reading when those in his unit were partying together. He was a man apart, at first figuratively, and then it seems quite literally.

If you want to be individualist, and follow your own lights and desires, that’s fine. But the military isn’t the place for that: go be an individualist somewhere else, and believe me, you’ll be much happier. And once you commit to the military, at times lives depend on you, and you have to put your wants aside, and choke down any disillusionment (a common excuse made for Bergdahl) and do your duty. Do it for your comrades, who may be disillusioned or lonely or unhappy or miserable or pissed off too: in fact, in combat generally, and Afghanistan particularly, it’s pretty much a lock that they all would rather be someplace else.

It’s cliche but it’s true: you surrender much of your individuality when you put on a uniform. The surrender is consensual in a volunteer military.

Much that we have been told implies that Bergdahl did not do that. He indulged himself, with no regard for the consequences his actions would have for those he left behind. (Bergdahl has more than a little in common with Snowden, by the way.)

Finding the facts and holding Bergdahl accountable for his actions is important for the good of the service, and for the memories of those who died trying to find him. But I fear that petty political considerations will trump such serious concerns. Trading hardcore Taliban for a GI is controversial enough. Trading hardcore Taliban for a deserter who cost the lives of good soldiers who sucked it up and endured the hardship that Bowe Bergdahl apparently felt he did not deserve is infinitely more so. Which means that the truth, and even the effort to find the truth, is likely to be the last casualty of this sorry affair because the truth could be extremely inconvenient for Barack Obama. If Susan Rice’s encore performance is anything to go by, the whitewash is well underway.

June 1, 2014

Enforce the Code: “I am an American fighting in the forces which guard my country and our way of life.”

Filed under: History,Military,Politics — The Professor @ 2:40 pm

You might consider this quaint, but the Bergdahl case brought to mind The Code of Conduct for the United States Fighting Forces. This was adopted in 1954 (the year my dad entered the Army as a draftee) due to the serious breakdowns of discipline by US POWs held by the NoKos and ChiComs in the Korean War.

This code was drilled into me and my classmates at Navy. (Back then, I think it was called The Code of Conduct for the United States Fighting Man.) It was one of the first things we were taught in Plebe Summer, and was the subject of numerous discussions throughout those eight weeks.

The facts as we know them strongly suggest that Bowe Bergdahl violated every article.

Here’s an important part (Article VI.d) that speaks directly to one of my points:

Upon repatriation, POWs can expect their actions to be reviewed, both as to circumstances of capture and conduct during detention. The purpose of such review is to recognize meritorious performance as well as to investigate possible misconduct. Each review will be conducted with due regard for the rights of the individual and consideration for the conditions of captivity; captivity of itself is not a condition of culpability.

It is imperative that such a review take place in Bergdahl’s case, and take place free of any command influence.

This article from the WSJ raises concerns in that regard. It states that the military brass is “ecstatic” at Bergdahl’s return. That hardly suggests that they are committed to investigate possible misconduct.

Interestingly, the article states that troopers, as opposed to the brass, are ambivalent at best. This is understandable, for many reasons. First, Obama has incentivized our enemies to take them prisoner for the purpose of using them as bargaining leverage, thereby increasing the risks they face. Second, the circumstances surrounding his capture are highly suspicious, and colorably dishonorable: you know that there is a lot of gouge that has gone around about Bergdahl, which no doubts informs the ambivalence in the ranks. Third, and perhaps most importantly, Bergdahl slandered his comrades in arms. That is pretty much indisputable. He called them losers and babykillers. Not exactly calculated to make him best loved among those still in the line of Taliban fire.

The Code was adopted for a reason. It has to be enforced for a reason.

How Bad is the Bergdahl Deal? Let Me Count the Ways

Filed under: Military,Politics — The Professor @ 12:50 pm

Obama has exchanged five hard-core Taliban held in Gitmo for Bowe Bergdahl, a US soldier who went missing in 2009, and who was captured by the Taliban and subsequently held by the Haqqani Network. (The circumstances of his going  walkabout are important, as I discuss in more detail below.)

There are many, many things wrong with this. In fact, pretty much everything is wrong with this.

  • Negotiating exchanges with terrorists, especially at such an exchange rate, is a bad idea. It just incentivizes the capture and ransoming of US military personnel, and US citizens. I understand that presidents are under a lot of pressure to renege on pledges not to negotiate with hostage takers, but the frequent reneging perpetuates the bad equilibrium. Many have pointed out that previous administrations, including for instance Reagan’s, have engaged in such exchanges or negotiations for such exchanges. The simple fact is that because it has been done before doesn’t mean we should be doing it now: N wrongs don’t make a right. The appalling outcomes of the previous negotiations (and not just in the US-Israel too) should be proof of the futility and indeed perversity of such a course.
  • The fact that the five people exchanged are truly very, very bad guys only puts an exclamation point to the previous conclusion. The fact that the Qataris will allegedly hold these people so they cannot fight against the US means nothing: they will be living large, with their families, a long way from Gitmo. It is the precedent and the incentive for future hostage taking that is the problem.
  • This is apparently part of some grand Obama scheme to negotiate a settlement in Afghanistan with the Taliban. I cannot think of anything more delusional. Even negotiating with Iran looks sane by comparison. Ever heard of Taqiya, Obama? And pray tell how would any deal with the Taliban be enforced? Or is this just another grab for a fig leaf, a la the farcical deal to eliminate Assad’s chemical weapons?
  • Obama also broke the law which requires informing Congress 30 days prior to releasing Gitmo detainees. This is part of a pattern with him, and not a good pattern: the law should not be optional, to be followed or not at the president’s discretion, unless the law grants that discretion. Ironically, Obama’s signing statement attached to the bill said that he would not be constrained by the law if it undermined his authority as commander and chief. I say ironically, because Obama blasted Bush for making similar assertions in signing statements. Obama haughtily referred to his experience as a teacher of Constitutional law to support his claim that such statements are extra-Constitutional. That was then, this is now. What’s sauce for the Bush isn’t sauce for the Bamster, apparently.
  • The involvement of the Qataris is also disturbing. They are malign and completely untrustworthy. They are the main supporters of the Muslim Brotherhood and have been the source of much mischief.
  • Obama appeared in the Rose Garden with Bergdahl’s parents. This is incredibly disturbing because Bowe’s father Bob Bergdahl is a Taliban fellow traveler who routinely criticizes the United States and embraces the Taliban cause. Check out his Twitter timeline, of which this (deleted) tweet is representative. Bergdahl also grew a Talibanesque beard and learned Pashto. The most charitable interpretation to put on his actions is that he suffers from Stockholm Syndrome by Proxy. Regardless of the genesis of Bergdahl’s allegiances, those allegiances are there for all to see: it is extraordinarily troubling for a US president to appear publicly with a man who supports quite publicly the cause of those killing US military personnel and who wish to make Afghanistan safe for Al Qaeda again.
  • Bowe Bergdahl himself is a troubling figure. This 2012 Rolling Stone profile based on extensive interviews with those who knew him, and on emails he sent to his parents, makes him out to be a combination of Holden Caulfield and Walter Mitty. He joined the Army only after being turned down by the French Foreign Legion (!). He was a wannabe mercenary and survivalist. This Caulfield-esque rant suggests that he was a self-absorbed Jonah: “The US army is the biggest joke the world has to laugh at. It is the army of liars, backstabbers, fools, and bullies. The few good SGTs are getting out as soon as they can, and they are telling us privates to do the same.”
  • The most plausible explanation for Bergdahl’s capture is that he deserted because of his hatred of the Army and his sympathy for the Taliban: the Rolling Stone article strongly supports that conclusion, and provides zero support for any benign alternative. This raises an important question: will the US Army investigate his conduct? Will it inquire whether he provided aid and comfort to an enemy killing US troops? For instance, did Bergdahl provide information about US security procedures? Did he help translate US communications for Afghanis fighting the US?
  • It is imperative for the good order and discipline of the service that Bowe be investigated thoroughly, and if he is found to have deserted, and/or provided aid-and-comfort, that he be disciplined accordingly. But is it really likely that the Army will proceed with a thorough investigation, and bring charges against Bergdahl, after Obama personally negotiated his release? I would be shocked if the Army does in fact undertake an investigation that would call into question Obama’s actions. If the Army does not, this will be yet another example of Obama’s corrosive effect on US institutions.
  • Speaking of translation, and investigations, Bowe Bergdahl’s father claims that Bowe has difficulty understanding English after his captivity. I am deeply dubious. This sounds for all the world like a ploy to impede interrogation.

I don’t like to see US service personnel in the hands of the likes of the Taliban or the Haqqani Network. But I also don’t like to see the president of the US making deals with terrorists (precisely because that increases the odds of US troops being held hostage), especially to free soldiers who most likely willingly defected to the enemy, and especially as part of a delusional scheme to negotiate with sworn enemies who will under no circumstances live up to any agreement we reach with them. I do not see the upside for the US here, but do see numerous downsides.

Obama is a national security and diplomatic disaster. What a mess he will be leaving for his successors to clean up.

May 30, 2014

So Where Are the Emails, Ed?

Filed under: Military,Russia,Snowden — The Professor @ 10:23 am

Snowden gets more farcical-and more tiresome-by the day. In his interview with Brian Williams (who should really reconsider his life choices), Snowden asserted that he had made numerous complaints about violations of the law to his superiors, including the NSA’s General Counsel.

The GC responded by releasing a single, and predictably pedantic, email from Snowden that inquired about the precedence of executive orders over statutes. The GC claims that this is the only email in which Snowden raises any questions about NSA programs. It claims that it has searched not just its own records, but other NSA departments’ records as well, and found nothing.

Predictably Snowden has responded that the GC’s release was incomplete.

Well, this is easily solved, you’d think. After all, it stands to reason that someone who vacuumed up a reported 1.7 million highly classified NSA documents and shared many of them with the world would have kept a complete archive of his (alleged) whistle blowing correspondence with the NSA, and would have no problems releasing it. This is Ed’s perfect opportunity for a Gotcha!

So where are the emails? A few of those would be far more persuasive than the interminable, droning retort that Snowden wrote. (I should say “allegedly wrote”: one never knows given his current circumstances as an FSB houseguest.) (And really, Ed, wouldn’t “The NSA is lying. It has more emails than it released” have been sufficient? Did you really need to go on and on and on?)

And if for some unfathomable reason Snowden didn’t keep the emails, he always has another option: a FOIA request. Easily done. And Ed has a lot of time on his hands to do the necessary paperwork. So why hasn’t he?

In addition to the lack of the release of any damning (to the NSA) emails, there are also a couple of statements in Ed’s Epistle to the World that really strike a jarring chord:

Ultimately, whether my disclosures were justified does not depend on whether I raised these concerns previously. That’s because the system is designed to ensure that even the most valid concerns are suppressed and ignored, not acted upon.

That sounds like a weaseling. An escape hatch. It sounds like an admission that he can’t prove he blew the whistle, so he’s trying to dismiss the importance of that. “Even if I had blown the whistle internally, it was irrelevant. My concerns would have been rejected anyways. So it doesn’t matter that I didn’t. Let’s not discuss that subject again.”

But it is very important. Because if Snowden did not exhaust all opportunities to make the competent authorities aware of violations of the law, his decision to take matters into his own hands and release documents without authorization looks all the more suspicious. All the more the actions of a grandiose, self-appointed savior -or traitor-than of a genuinely public spirited individual with legitimate concerns.

The word “previously” also jumps out. Previously to what? His stealing the documents?

Note the date on the email that NSA released: April, 2013. Well after Snowden had contacted Greenwald and Poitras. Well after he had started to steal documents. Mere weeks before he fled to Hong Kong, and then Russia. It suggests that he raised concerns-and then only obliquely-after his operation was well advanced, and almost complete, as a sort of cover story or ex post rationalization. But in Snowden’s telling, that he did it after he set his scraper to work doesn’t matter, because his complaints would have been rejected anyways. The insertion of the word “previously” in a prepared, written document (rather than an extemporaneous answer to a question) suggests that Snowden is being Clintonesque here: strictly correct, but deliberately creating a misleading impression.

One other interesting thing. The email that Snowden wrote that the NSA released refers to mandatory USSID 18 training that Snowden took. The subject matter referred to is very basic, almost Schoolhouse Rock-level material about the legal framework in which the NSA operates. Would a trained spy who had previously operated undercover (as Snowden claims he had) have been required to take such training after going to work for an NSA contractor? Trained spies would presumably have to take such training. Why would he have to take it again? Maybe he did: maybe this is just Mickey Mouse bureaucracy at work. But it does strike me as odd that someone who claims to have held an extremely sensitive position would be taking such a basic course again.

Merkel Remembers the Past, But Seems Intent on Repeating It

Filed under: History,Military,Politics,Russia — The Professor @ 9:38 am

Frau Merkel claims that she has taken a firm stand on Russia and Crimea, based on her fears of history repeating itself:

German Chancellor Angela Merkel said on Wednesday she had taken a firm stance against Russia’s annexation of Crimea in part due to the lessons of two world wars, but added it was vital to keep talking with Moscow.

Speaking to students at the opening of an exhibition on World War One, Merkel said her insistence that Russian President Vladimir Putin join her and other Western leaders in Normandy, France on June 6 for ceremonies marking the 70th anniversary of the D-Day landings was to avoid past mistakes.

“There are times where you have no desire to talk any more, such as with Russia now,” said Merkel, who speaks Russian and regularly talks to Putin on the phone. “I force myself to talk. I’m surprised every time to see the other side’s point of view.”

Merkel said Russia’s annexation of the Crimea was an unacceptable move because it upset Europe’s postwar order – even though a 54-percent majority of Germans expressed understanding, in a March opinion poll, for the annexation.

“That’s why I’m so strict when it comes to the Crimea issue,” she said.

“Territorial integrity is the foundation pillar of our postwar European order. If you start saying things like ‘it’s my right’ and then just take something, you’ll end up with an incredible calamity. That doesn’t work.”

The sad thing is that Merkel probably truly believes she’s been strict on Crimea. The sadder thing is that by German standards that’s definitely true: Siemens and Adidas and BASF and RWE and numerous smaller companies have been importuning her to accommodate Putin, as has a vast swathe of the German political elite, including her own foreign minister, the execrable Steinmeier. Sadder still is that Merkel’s simulacrum of strictness gives Obama the multilateralist cover to avoid taking real action against Russia. But the saddest thing is that for all her self-perceived strictness, Crimea remains in Putin’s hands, and there is no move to force him to disgorge it.

Merkel says the right things, but doesn’t follow them up with action. Meaning that her invocation of the lessons of the World Wars is so much cheap talk, more likely to be fulfilled through the repetition of these experiences, than their prevention. She gets the first part of Satayana: she remembers the past. But despite this, she seems intent on fulfilling the second part: repeating it.

May 29, 2014

Snowden’s Narcissism on Full Display

Filed under: Music,Politics,Russia,Snowden — The Professor @ 9:49 am

Snowden was interviewed by NBC’s Brian Williams. There was nothing in the way of real information, except that the interview confirmed Eddie’s rampant narcissism and grandiosity. His insistence that he was a trained “spy” rather than some low level system administrator was a classic. One thing that narcissists can’t handle is to have their delicate, fragile self-esteem challenged. Sometimes they react with rage. Other times with haughty assertions of their own talents and achievements. Snowden’s answer was definitely in the latter category. Blathering on about how he was a trained “intelligence operative” pretty much betrayed that he was in fact not a trained intelligence operative.

The most amusing portion of the interview was when Snowden insisted that has no relationship with the Russian government.

And I am Anastasia Romanoff.

Even if he’s not a trained intelligence operative, he is a natural for the FSB, for he has Putin’s ability to utter patently-and obviously-untrue statements that spindle, mutilate and fold credulity (“there are no Russian troops in Crimea”) without batting an eye.

Obama Gives a Speech, Meaning That No Straw Man is Safe

Filed under: China,History,Military,Politics,Russia — The Professor @ 5:07 am

Reading about Obama’s commencement speech at West Point took me back years, to 1978 when Jimmy Carter spoke at the USNA graduation.

Not that I remember anything that Carter droned on about. Not a word. And that’s part of the reason Obama’s speech brought me back to Annapolis, 36 years ago: I wouldn’t be surprised if that’s the case of those in attendance at USMA yesterday.

Some things have stuck in my mind. Like my classmates getting booted from their room at 0600 by a man wearing sunglasses and carrying a long black case who proceeded to lock himself in: their room overlooked the field where Marine 1 was going to land. I remember the march over to Memorial Stadium. I remember my classmates and I heckling Sam Donaldson before he did a standup in advance of Carter’s speech.

But as for what Carter said, in one ear and out the other, if it made it in the one ear at all. And the assembled WooPoos (sorry-as an ex-Squid I couldn’t resist) will probably have similar non-memories of Obama’s banal, vacuous, and totally predictable foreign policy speech.

I knew what he was going to say and how he was going to say it before he said it because the man is utterly incapable of originality, and stubbornly clings to both his rigid and narrow perspective on policy (a view apparently invulnerable to the reality of repeated failures) and his mental and rhetorical tics. I knew that he would justify his own positions by reference to those of his opponents, and do so by outrageously mischaracterizing them. For the most notable of his tics are the false choice and the mass murder of straw men. And I was not disappointed. In these expectations, anyways.

Obama portrayed himself as the realist and the peacemaker, and his opponents as troglodyte warmongers who advocate a military solution to every foreign policy challenge. He said that because the US has the world’s premier military hammer, his political foes see every problem as a nail to be driven by it. Yes. He said every.

He was at his most outrageous in his discussion of Syria, where he peevishly and pridefully congratulated himself for his calm wisdom in not committing US ground troops to the country. Which absolutely no one was calling for in the first place, or ever. Well, maybe the chief oped writer and head of classified advertising for the Back of Buggery Bugle was shouting Geronimo and calling for the deployment of the 82d Airborne, but no major politician or policy figure, or A, B, C, or even D-list conservative opinion leader was advocating any such thing.

In point of fact, in Syria Republicans and even people in his own administration presented a variety of different policy alternatives, including arming the rebels to airstrikes. None advocated insertion of ground forces, and indeed almost all who even mentioned it did so only to disclaim that intent. Pretty much the entire security establishment in his own administration pressed for arming the rebels, but Obama demurred. Obama and Kerry themselves threatened air strikes before backing down.

And here we are, years after the war began, and the carnage and misery drags on day after day. But Obama is giving himself bursitis patting himself on the back for a job well done in fending off those baying for battle in Damascus.

200,000 dead Syrians could not be reached for comment.

Insofar as Ukraine is concerned, Obama said it brought back memories of Soviet tanks rolling into eastern Europe after WWII. I said to myself: yeah, we didn’t do anything about it then, and we sure ain’t going to do anything about it now. Obama has gone full auto-Yalta.

And again, no one except the chemtrail set and Russian propaganda shills (there is a large overlap between the two) even suggest the possibility of US military action. Many advocate far more robust financial measures against Russia, but (a) Obama has shied away from those despite Russia’s attempt to disrupt the election (which Obama said was a trigger for more sanctions, but what’s another red line anyways?), and (b) Obama pretends as if his critics never mention measures short of war to confront Putin.

There was stiff competition, but these were the dumbest bits:

“We can’t call on others to make commitments to combat climate change if so many of our political leaders deny that it is taking place,” Obama said. “It’s a lot harder to call on China to resolve its maritime disputes under the Law of the Sea Convention when the United States Senate has refused to ratify it. – despite the repeated insistence of our top military leaders that the treaty advances our national security. That’s not leadership; that’s retreat.”

Translation: How can I ram idiotic policies down your throats if some uppity people insist on pointing out that they’re idiotic? The LOST part is particularly outrageous. What China is doing violates maritime rights and laws and obligations that far pre-date LOST. Moreover, even putting the legalisms aside, China is engaged in aggressive acts that greatly raise the risk of serious confrontation or even conflict.

Obama did throw in a few stock lines. If the US doesn’t lead, who will. I believe in American exceptionalism to the last fiber of my being. Cheerleader media outlets, notably Bloomberg, dutifully led with this boob bait in their headlines. But every substantive part of the speech contradicted those assertions.

 

This was billed as a major foreign policy speech and a ringing defense of his policies. The scary thing is that Obama and his minions probably believe that. But given the tiresome predictability of the speech, you have to wonder what they are thinking. Any slightly self-aware speechwriters, not to mention a slightly self-aware president reading what’s going on the teleprompter, should have realized that critics would be ready to pounce on the resort to Obama’s standard rhetorical tricks, and that this would greatly diminish the impact of the speech. And diminish it has. The impact is pretty much zero, from what I can tell from reading a rather wide range of sources.

Reading through the transcript, it struck me that Talleyrand’s characterization of the Bourbons fits Obama well too. He has learned nothing, and he has forgotten nothing. In his mind, despite the wreckage of policies in the Middle East, Asia, and Russia/FSU strewn all around him, it’s still Berlin 2008 or Cairo 2009. He rationalizes the criticism by mischaracterizing the critics and their arguments, in a profoundly unfair way.

With a never forgetting, never learning Bourbon in charge, we are condemned to 2.5 more years of foreign policy fiascos. Get used to it, if you haven’t already.

 

May 27, 2014

Gazprom Down, Rosneft Up: Cutting the Oil Link, Sucking Up to Sechin

Filed under: Energy,Politics,Russia — The Professor @ 4:23 am

The news and commentary pages have been filled for days with big stories claiming that the (alleged) China-Russia gas deal represents a seismic change not just in energy markets, but in international relations.

I remain skeptical because I still remain unconvinced there is a real deal with price and financing terms nailed down. What’s more, some of the more sober commentary casts doubt about how favorable the economics of the deal are for Russia, even if the reported contours of the deal are correct. Gazprom must develop green fields in east Siberia, and build the pipes to China. This will be quite expensive, and the reported pricing terms may border on the break even. This should not be surprising because the Chinese are hard bargainers, and Putin needed a deal more than they. (Probably the biggest beneficiaries will be the tunnelers at Gazprom, and companies to whom money is tunneled, like the pipe making Rotenberg brothers.)  So I don’t see this deal-if it exists-being the triumph for Russia and Gazprom as the commentariat is trumpeting.

Here is a piece of hard information that is very bad news for Gazprom: Eni has negotiated an end to oil-linked pricing, and the adoption of European hub pricing. This undermines Gazprom’s pricing model, and for this customer alone costs the Russian company about $650 million off the bat. There is a virtuous cycle here that will make the oil-link progressively less defensible. More hub based pricing tends to enhance the liquidity at the hubs, which makes the hub prices more reliable, and thereby reduces the cost of indexing contract prices to hub prices.

On the Rosneft side of the house things are much cheerier. Western company after western company trooped to St. Petersburg to pay court to the sanctioned Igor Sechin. They signed dozens of deals, and ladled on sick making praise for Sechin, Rosneft, and Russia. Bob Dudley from BP was the worst (go figure, given how Sechin has him by the short ones), but he had a lot of competition. Decent people would get a room to engage in such sucking up, but Dudley et al did it in full public view.

BP (and other companies) were obviously undeterred by the US sanctions on Sechin. They said they can deal with Rosneft, and meet with Sechin personally: they just can’t do deals with Sechin personally. Or something. Meaning the sanctions are a joke.

So I would score things Rosneft up, Gazprom down. Would that they were both down, and hard.

La Plus Ca Change, German Sellout/See No Evil Edition

Filed under: Economics,History,Military,Politics,Russia — The Professor @ 1:02 am

Re-reading Pipes’s account of the Russian Revolution. I’m at the part where he is discussing Brest-Litovsk, and the relations between Germany and the Bolshevik regime.  The more things change, the more they stay the same. Large German firms succeeded in pressuring the government then, as they do now, to turn a blind eye to the true nature of the regime in Russia, all in order to facilitate German business with that regime.

Soviet ambassador to Imperial Germany Ioffe had three missions, one of which was to cultivate German business by holding out “dazzling prospects of profits in Soviet Russia.” Despite the fact that Ioffe was also fomenting unrest among German workers, German businesses fell for the transparent lie that this was the work of the “private” Communist Party, rather than the Soviet government. According to Pipes:

Hard-headed businessmen fell for this ploy in part because they wanted to believe it and in part because they could not conceive that anyone in his right mind could take Bolshevik slogans seriously. The Krupps, the Thyssens and the Stinneses, all future supporters of Hitler, pressured their government to maintain good relations with the new rulers of Russia in order to secure German hegemony over the country. The coalition of diplomats, industrialists, and bankers managed to neutralize the military.

Later Pipes discusses post-War relations between the German government and the USSR. Again, very much a see-no-evil, go along to get along, cynical and amoral approach.

Fast forward to the present. The entire German elite is now bending over backwards in order to appease Putin. Merkel makes some scolding noises now and again, but (a) never takes action, and (b) completely undercuts those messages with conciliatory remarks about needing to extend an “open hand” with Putin. Even normally sensible figures like Schaeubel counsel cooperation at all costs. The German business community is pulling out all the stops to make sure that Germany derails any attempt to impose costs on Putin.

But as Pipes shows, such attitudes have a long pedigree. The Germans like to claim that they are different. In very crucial ways, and in very unattractive ways, they are not.

May 26, 2014

Still Crazy After All These Years

Filed under: Economics,Politics,Russia — The Professor @ 1:48 pm

I have been going through an extremely high variance travel experience, hence the light posting. And no, the crazy in the title does not refer to me and what United Airlines has done to me over the last 3 days.

Instead, I am referring to Putin, who has been on a major roll at the St. Petersburg International Economic Forum.

Where to begin? One statement is loonier than the next.

A lot of it is whining about how Russia doesn’t get any respect.

Note to Vova: respect has to be earned. Cleptocratic autocracies that annex the territory of other countries and foment rebellion in other countries often come up short in the respect department. Just sayin’.

Putin justified the annexation of Crimea by saying that if he hadn’t, Ukraine could have joined NATO and Sevastapol would have become a NATO base.

First of all, Ukraine was and is decades away from any possibility of being in NATO. Any belief that Ukraine’s ascension to NATO was or is imminent is the raving of a paranoid mind. Not to mention that never during Maidan or post-February 22 had breaking the Russian lease to Sevastapol been mooted.

Second, raising NATO as a bogeyman is also the raving of a paranoid mind. Other than the US, and maybe France and UK on good days, NATO couldn’t fight its way out of a piss soaked paper bag (as Patton used to phrase it). It is militarily shambolic, spending well under 2 pct of GDP on defense, and most of that is on waste and militarized welfare rather than weapons. But Schaeuble says no, no, no, NATO nations should raise defense spending in response to Ukraine or any of Vlad’s other adventures.

To illustrate how toothless NATO is, consider the fact that when the Russians sent the carrier Kustnetsov through the Channel (rather than around Ireland, per usual), the Dutch navy did not have a single ship to dispatch to follow it, and also has no maritime patrol aircraft to shadow any vessel sailing of its shores.

All this stuff about big, bad NATO is so much hot air. Militarily, NATO is the US, and as anyone following things knows, in the era of Obama and sequestration, US military capability is extremely stretched. And the prospects for Sevastapol becoming some sort of NATO outpost are somewhere between zero and as if.

Another of Vlad’s wacko statements was that the only reason the US wants to impose sanctions on Russia is to achieve competitive advantages over the EU. Or something:

“By insisting on sanctions against Russia, I suspect that our American friends, and they are shrewd guys, may wish to gain certain competitive advantages in their trade and economic relations with Europe,” Putin said at the St. Petersburg Economic Forum on Friday.

Exactly how that works is beyond me.  The US is going to replace Russia as a supplier of gas to Europe and accelerate that process through sanctions? Really?

This is part of Putin’s plan-which has been all to successful-to sow discord between Europe and the US.

In the same conversation, Putin said this about Ukraine:

“A civil war is starting in Ukraine, but what do we have to do with that?” the Russian president asked.

Try “everything” for an answer.

Relatedly, Putin had the chutzpah to demand of Ukraine: “Where’s our money?” [for natural gas]. To which Ukraine should reply: “Where’s our Crimea?”

But as stiff as the competition was, this had to be Putin’s most outlandish uttering:

“Russia is not the type of country that gives up fighters for human rights,” Putin said during the plenary session of the St. Petersburg International Economic Forum.

Actually, I sort of agree with that. When the fighters for human rights happen to be Russians, the country doesn’t give them up: it imprisons them, beats them, or kills them. Because Russia is not the beacon for human rights, as Putin outrageously suggests: but because it is the enemy of human rights.

Face it. The world is dealing with someone who either is believes the most insane things, or is willing to say the most insane things even when he knows they are crazy. Either way, this man is a menace. Not someone before whom it is necessary to cringe, or to extend a hand. Indeed, what Merkel says is as crazy, or crazier, than anything Putin has been saying. And that is saying something.

 

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