Yesterday I had the pleasure to have a lengthy chat with a brave Canadian who defies the Trudeau government’s intolerance for free speech and public debate on relations with Russia.
Our chat covered the waterfront of issues in current international affairs and I leave it to the community to watch part or all of the video as it sees fit. A written transcript will likely be available within the coming 24 hours and I will post it then.
A 90-second video capturing the essential point of this interview may be found here:
Translation below into German (Andreas Mylaeus)
Ein langes Gespräch mit Free Canada: Dimitri Lascaris in Montreal
Gestern hatte ich das Vergnügen, mich ausführlich mit einem mutigen Kanadier zu unterhalten, der sich der Intoleranz der Trudeau-Regierung gegenüber der freien Meinungsäußerung und der öffentlichen Debatte über die Beziehungen zu Russland widersetzt.
Unser Gespräch deckte eine Vielzahl von Themen der aktuellen internationalen Politik ab, und ich überlasse es der Community, das Video ganz oder teilweise anzusehen, wie sie es für richtig hält. Eine schriftliche Abschrift wird wahrscheinlich innerhalb der nächsten 24 Stunden verfügbar sein und ich werde sie dann veröffentlichen.
Transcript
Good day, this is Dimitri Laskaris coming to you from Montreal, Canada for Reason to Resist on December 2nd, 2024. About two weeks ago, Ukrainian forces attacked military targets in the Russian city of Bryansk using US-supplied ATACMS missiles. According to Russia’s Ministry of Defense, this attack caused some casualties in Russia. Ukraine carried out this attack despite prior warnings from Russia’s government that the use of such weapons on Russian territory could be deemed by the Russian Federation to be an attack by the United States on Russia. About 10 days ago, Russia responded to the attack on Bryansk by striking the Ukrainian city of Dnipro with a new hypersonic weapon called the Ureshnik.
Shortly after that retaliatory attack, Russian President Vladimir Putin gave a speech which caused some observers, including yours truly, to believe that if Ukraine attacked Russian territory again with Western supplied weapons, Russia might attack a Western military base outside of Ukraine. Well, Ukraine attacked Russia again with ATACMS. This time, however, the targets were in or around the Russian city of Kursk. Russia did not retaliate thankfully by striking a Western military base outside of Ukraine. Rather, it launched a massive attack on Ukraine’s energy infrastructure or what remains of it. So the question remains under what circumstances might Russia attack a Western military base or other Western military target outside of Ukraine. Now here to discuss this and other related matters with us is Dr.Gilbert Doctorow.
Dr. Doctorow is a student of Russian affairs going back to 1965. He’s a graduate of Harvard College, a past Fulbright scholar, and a holder of a PhD in history from Columbia University. After completing his studies, Mr. Doctorow pursued a business career focused on the USSR and Eastern Europe. He is an American citizen and a long-time resident of Brussels. And I thank you, Gilbert, for joining us today.
Doctorow:
Well, very good to receive this invitation.
Lascaris:
So based on your examination of the evidence, in light of the brief history that I’ve just recounted, what is your best sense of where the next step on the escalation ladder lies?
And by that I mean, do you think based upon statements coming out of the Russian Federation, that Russia will strike a Western military asset outside of Ukraine in response to a Ukrainian attack on Russia with Western supplied missiles. And if so, what kind of damage would such a Ukrainian attack have to inflict on Russia for Russia to respond in that manner? I think that in the last couple of weeks, Mr. Putin and his associates had some time to reflect on what is the best way to proceed. And they stepped back from this threat of striking a target in a NATO country as an early measure.
Doctorow:
I think that may not be a measure that they entertain at all, considering what now seems to be their strategy. The strategy is to destroy the regime in Kiev. It is Mr. Zelensky, who is shaken thoroughly by the power of the Oreshnik hypersonic missile to destroy bunkers up to 200 meters deep. The sort of bunker that he finds refuge in, the sort of bunker that the American and West European generals are sitting in while they do the planning of the actions for the Ukrainian army.
In other words, he is the one who is amazingly vulnerable and he is not a member of NATO and he can be destroyed at will by the Russians. Therefore, the pressure point is really on Kiev right now and not on Berlin or London or Washington. This is much safer, it’s much less likely to lead us to a nuclear war, and it is the most efficient way of getting what the Russians want, which is regime change in Ukraine.
Another factor in this new strategy that I see is that they are not interested in waiting one minute for Mr. Trump to come to power. They are, by all of his recent appointments, by the outrageous statements of some of these appointments, they understand that nothing good will come with the inauguration of Mr. Trump. It is outlandish claims to be able to resolve the war by knocking heads together, by threatening the Russians. That is unacceptable.
It is not feasible, as the Russians understand, and there’s no reason to coddle him. So the pressure point is now on Kiev, And I think it will be felt. We will see. The Russians have not only destroyed some of the 20% of power generating facilities still standing in Ukraine in the last two weeks. But they’ve also attacked various bases where there were foreigners.
And when they knew there were foreigners, they killed a number of Frenchmen. They killed 40 Americans, they say, in another attack at another location in Ukraine. And they are showing their strength right now using missiles that are less capable but very efficient. The Iskander, this is a 500 kilometer range missile that is not hypersonic, but that gets the job done at rather low cost. And they’re saving their still rather few are Oreshniks for some contingency where they might be needed to take out Berlin or could take out some facility in Western Europe.
When I say take out, I want to be clear about it. Destroying cities is not the ambition of the Russians and the missile they’re about to use, should such an attack be needed, is not capable of destroying cities. It’s capable of pulverizing a given exact site, whether it’s an infrastructure site, whether it’s a factory that’s deeply underground and protected by reinforced concrete levels, such as happened in the Dnipro bombing. The force of the Oreshnik missile is comparable to a nuclear bomb, but without the radiation and without the extensive collateral damage. It utterly pulverizes and burns to ash the immediate target and leaves cities intact.
Lascaris:
Now I had intended to ask you today, Gilbert, about the pressure growing within Russia for a more forceful response by the Russian Federation to these US missile attacks conducted by the Ukrainian military. This morning, when I woke up, I found in my inbox a comment that you had just published relating to your review of an important political talk show in Russia, the most widely watched one last night. And it sheds some light on this whole question of whether there’s pressure growing within Russia on Vladimir Putin to be more forceful. Could you share with us what you learned last night by watching this program?
Doctorow:
Well, it’s not only Paul Craig Roberts in the USA who writes about or thinks about the risks inherent in the cautious approach of Mr. Putin to all of the provocations that he has received from the West in the course of this war as it’s going up an escalatory ladder. There are those among Russian political scientists who carry a lot of weight, who have spoken about the need to be demonstrative and not just to jawbone.
I go back to July of 2023, when Sergei Karaganov, who is widely known in the West, he was very frequently a guest of the Social Democratic Party think tank in Germany. And this man, who has substantial influence within Russia, had written that the country should stage a strike, a nuclear strike, with tactical nuclear weapons, somewhere in NATO land, in order to put an end to all of the senseless, foolish denigration of Russia and of its president that has persisted into 2024 from the decade of the 90s, where it all started when Russia was indeed on its knees or on its back because of all the economic disruption of the years under Yeltsin. Karaganov was calling for a strike.
It raised a great controversy in the West and within Russia itself, where he was disowned by other professionals in the security domain of Russia. While Mr. Putin held his calm, his sang-froid, he knew better than anyone else what was in the pipeline And what would meet the requirements of a shock and awe strike that would impress the world media and some politicians, hopefully, about Russia’s true might and its ability to use that might and determination to use that might if it were further provoked and if it felt that it was liable to suffer substantial damage to not just reputation but in terms of infrastructure and loss of life. That was the Oreshnik. That the Oreshnik was such a revelation and such a talking point in the last couple of weeks is our fault.
It’s not that the Russians were holding back. It was what we were not looking at or willing to entertain. And what I mean is that from 2018, in March of that year, just three weeks before the presidential election, for which Mr. Putin was standing for another term in office. He made a speech, which we call the State of the Nation speech, to the bicameral legislature and many invited guests, in which he rolled out the various new strategic weapons that Russia had been developing ever since the United States pulled out of the the anti-ballistic missile treaty, this is going back to to President Bush Jr. in 2002. Thenit became clear that America had as its plans to become capable of a first strike, a decapitating strike on Russia, for which there would be no response in the Americans’ view. So the Russians had been developing weapons, and as these weapons were rolled out in 2018, Mr. Putin spent an hour of his two-hour speech on show and tell, using animated illustrations of how these various systems would work. But he was not taken seriously by Western media and presumably by Western politicians. He wasn’t taken seriously because how could it be that Russia with a military budget ten times less than the United States could do what Mr. Putin had just said aloud, that it had moved for the first time in its history, including the history of the Soviet Union going back 70 years. This was the first time Russia claimed to have moved a generation ahead of the United States in strategic weapons. By a generation ahead, I mean 10 years. They had developed these hypersonic missiles. The one that he rolled out and described in 2018 was a forerunner of what we saw in the last two weeks.
A forerunner in the sense that the flight characteristics, the potential damage of such a hypersonic missile were there in the forerunner, which was an ICBM, an intercontinental ballistic missile. Whereas the Oreshnik, which was just demonstrated in the bombing and destruction of Dnipro, was at the upper limit of an intermediate range ballistic missile. The upper range is 5, 000 kilometers. Above that one speaks about the missiles as being intercontinental.
In any case, this new weapon, which Mr. Putin has described as being unstoppable, if the Western air defenses cannot even track it, let alone intercept it. This was a game changer.
Now you asked me about the Vladimir Solovyov program, his evening program of last night. And this was quite interesting because the Russians have been, of course, under great pressure. I think a week before I’d noticed that the host of another authoritative and widely watched news and analysis program, Vyacheslav Nikonov of The Great Game, was ashen-faced when he mentioned on air that the Ministry of Defense had just announced what you spoke about a few minutes ago, these two missile strikes that took place on Russian territory in Bryansk and Kursk, this coming week after what should have been the showstopper, the Russian attack on Dnipro.
Well, he was ashen faced then a week or 10 days ago. This week, the Russian chattering classes already had time to absorb all the news and they felt quite comfortable with a speech and a press conference that Mr. Putin made during his two-day state visit in the middle of this past week in the city of Astana, the capital of Kazakhstan, where there was one of these periodic meetings of the Collective Security Defense Treaty Organization. This is the Russian equivalent to NATO, the idea is similar. It is a defense alliance of former Soviet republics, of which Russia is the most important member, of course.
And at that meeting and the press conference that followed, Mr. Putin spoke in a very militant way, a very self-confident way about how Russia has these weapons, is ready to use them wherever is needed, and that all threats that are being talked about in NATO and outside of NATO, how the West will respond to Russia’s advances on the battlegrounds in the Donbass and recovery of its partly occupied territory in Kursk region. This was all quite open, frank and undiplomatic. The Americans like to say that everything is still on the table, meaning that all options are open. And Mr. Putin in his speech used the Russian equivalent, saying that about measuring the weather forecast for a day, that anything is possible. So he was giving a rather open threat to the West. Don’t even think about it. We have the means to be victorious in any exchange with you. As regards the rumors that you in the West, you in the States are thinking of supplying nuclear weapons to Ukraine, please understand that we will not tolerate this and we will use everything in our arsenal to ensure this doesn’t happen, which is a not very well-disguised statement that we will bomb the hell out of Ukraine with nuclear weapons to ensure that they do not take possession of nuclear weapons that they can use against us.
So this talk really impressed these representatives of the chattering classes, those are the sophisticated watchers of politics in Moscow. And the result in what they were saying on air what I’ve called it Black humor. They were saying that Mr. Putin is no longer using Soviet-age, Soviet-vintage diplomatic talk. He is speaking directly, frontal assault language, which they liked very much and which they wished he had done earlier.
But they’re quite happy to see it now. And that essentially what Putin is saying is, to the West, is Hands Up!. The game is over, hands up. And we put that into concrete terms, since so many people in the West are talking about what the conditions of an end to the war in Ukraine can look like with or with Mr. Trump’s intervention, how Mr.Zarensky is supposedly ready to concede territorial loss in exchange for Russia’s acquiescence in his country becoming a NATO member. Mr. Trump is talking up a storm about how he’s going to end this war in a matter of days. All of that you can put in the rubbish bin. This is the essence of what the panelists were saying, because Russia is proceeding very well on the battlefield, is pushing back the Ukrainians.
To be sure, there are counter-offensives, there is great caution being exercised by the Russians in their advance because of the ever-present Ukrainian drones and strike drones. Nonetheless, they are advancing several kilometers a day. They are forming what they call cauldrons or surrounding units of the Ukrainian army for destruction, either surrender or destruction. They expect that with the offensive that they’re now preparing, they have several hundred thousand men ready to strike within the Donbas area. Within the Donbas area, they will push back the Ukrainians to the extent that the Ukrainian army will collapse and they will have to be forced to accept a capitulation.
I think that these Russians are the talking classes. They’re very close to the Kremlin. And I think that what I was hearing last night is the same conversation within the walls of the Kremlin. That they have no interest in waiting for Mr. Trump. They expect to win the war on the ground handily, to the extent that if there will be no peace treaty, there will be a capitulation act.
Lascaris:
Now, in the course of answering my question, you mentioned the relative size of the Russian military budget and the military budget of the United States, approximately 10 to one at the time that the special military operation began. By my calculations, and I’ve written about this a fair bit, NATO military spending at that time in early 2022, the official figures was collectively in the range of $1.2 trillion US. So this would have been closer to 15 times the military budget of the Russian Federation.
Those are based on official figures. There was an interesting analysis done a while ago by the Tri-Continental Institute, which said that US military spending was closer to $1.6 trillion a year, rather than a little less than a trillion. So that would put collective NATO military spending in the range of two trillion dollars a year. And of course, there have been these incessant calls over the past couple of years in Europe, in Canada, the United States for increasing the military spending of NATO member states. I would have thought that rational people here in the West who are paying taxes to fund our militaries would be very upset about the value we’re obtaining for our expenditures Because as we can see on the battlefield, as you described, it seems quite clear that the Russian Federation is going to win this war, despite the fact that the West has poured a truly stunning amount of weaponry and other forms of aid and assistance to the Ukrainians in this war.
And I would have thought that this should be precipitating a debate in the West about how is it that we are not able to compete effectively in this battlefield against the Russian Federation when our countries collectively are spending so much more money on their militaries. And I’m interested in your views on why this is the case. Why does it seem that the Russians are getting so much more value for their military expenditures than we are? And is it related to the structure of the military industrial complex in the West in Russia. I understand that in Russia, arms manufacturers, military contractors are for the most part state controlled.
Whereas in the West, of course, they’re extraordinarily profitable, privately owned corporations. What’s your view about this? Why are the Russians able to achieve so much more with such a smaller military budget?
Doctorow:
Well, it’s a very complicated question you’re asking, and I hope you’ll bear with me as I take a bit of time to respond to it because of several dimensions to this here.
One is the effectiveness of Russian spending, and the other is the total inefficiency of American and European spending, which is not goal-oriented, but is a political machine within the countries to serve interests that have nothing to do with defense. The first thing that has to be said, of course, you have to look at the value, the dollar value put on these budgets in Russia. And the real value of rubles compared to the nominal value compared to the dollar… But At what point are we comparing the numbers that make sense? That’s a small issue.
The big issue is elsewhere. It is to what extent are the Russians pragmatic and whether they sensible in setting goals for what they wanted to achieve? Let us note that the American military expenditure is very heavily on offensive weapons. The Russian military budget was very heavy on defensive weapons for defending its own territory and a few other odd pieces of land around the globe.
But the American military budget is very largely spent as none other than Vladimir Zhirnovsky, this rabid nationalist as they liked to call him in the 90s, but a very strong nationalist and a very strong mind, who said on this very same Solovyov program, going back four or five years ago, explaining just the question that we’re talking about: how could the Russians pretend with such a limited economy, with a limited GDP compared to the States, and a limited budget available for spending on military compared to the States. How could they pretend or even imagine that they could be competitors, not to say victors in a contest with the United States. Well, because the United States spends, as Mr. Zhirinovsky colorfully put it, a lot of money on toilet paper. The United States has, what is it, 800 military bases around the world, and a very large part of the American military budget is either for waging wars in the forever wars that we’ve had since the 1990s, which consume vast amounts of money, of armaments that are destroyed, and to maintain its global hegemony by all these bases, which really don’t defend the United States in a military sense.
They are means of subordinating and controlling countries all around the world. These are different objectives. The political objective of the United States stands out. I’m speaking about outside the country. Inside the country, we all know that America, there’s a lot of pork barrel, they call it in American political language.
It is the exchange of favors among the congressmen: who gets what part of the military budget for bases and for production facilities on the territory that sends that given congressman to Washington. So, it’s not just that money is going into the pockets of the major suppliers, to the major components of the military industrial complex that are in private hands, and these funds are being transferred through dividends to their shareholders. But the problem is bigger than that. It’s the whole concept of what is needed to defend the United States. I said that the weapons systems that they built have been largely for maintaining power abroad rather than defending the United States in a narrow sense.
At the same time, a vast amount of money has been spent on what the Russians call a 21st century Maginot Line. That is all the money spent on the anti-ballistic missile defense. The notion that the United States could have some kind of iron dome, could have some kind of protection against incoming missiles. Money is spent on this, a vast amount of it. The Russians, long ago, going back to 2002, understood this is almost an impossible task.
And it’s also a very expensive task. And they didn’t even want to get into it deeply. So they have some they have systems and some very advanced systems like the S-400 or now the S-500, which are anti-aircraft, anti-missile missiles. But they have not spent a vast amount deploying that. Most of their money went elsewhere into things like we saw, the Oreshnik and its forerunner, the Sarmat, which is a very heavy, ultra heavy, intercontinental missile, which carries in its nose cone, I think, a dozen Avangard hypersonic coasting missiles that hit the ground at not 10 mark, which is the speed velocity of the Oreshnik, which did its vast damage in Dnipro, but twice that, at 20 Mach.
So going back to 2018, the Russians already brought this out, and they brought out a whole range of other very impressive strategic weapons. They also redid, remade their whole nuclear arsenal, something that the United States is still talking about doing. The Russians did it, achieved it. This was all within this limited budget. There’s something that people don’t talk about. Until rather recently, it was common to say, oh yes, Mr. Putin’s a thug, and this is a kleptocracy, and the wealth of Russia is being put into the pockets of Putin and his friends. This sort of rubbish was part of the Russophobe line that we’ve heard now for more than a dozen years. I think that the demonstration that all these accusations were just vicious propaganda has been witnessed in the last two weeks when we saw the Oreshnik. You can extrapolate out from that to understand that the other weapons systems with which Mr. Putin described in 2018 also have been mostly, if not completely, realized and deployed.
All of this takes vast wealth and vast management of the highest quality physicists and engineers. So this is a tremendous investment. And if you were to believe all the stories of our rotten propagandists who have their PhDs from Yale and Columbia on the walls of their university offices, If you were to believe them, there would have been no money left for the purposes that I just described. As for Europe, Europe is a total mess.
The United States has a problem with pork barrel and with a lot of its funds for the military being utterly wasted because what is of interest to the congressman is not the effectiveness of the weapons systems that will come out of this spending, but how their voters in their districts will be beneficiaries of the defense industry and of the government’s defense spending.
Well, in Europe, you’ve got a lot of money spent, as you described, but to no effect, because there is no European vision of its defense needs. The Spanish don’t believe for a minute the threat of Russia to European security. The Baltic states don’t believe for a minute the risks posed to the southern European countries, France and Spain, by North Africa. So what kind of defenses are needed in Europe, that is not agreed.
And the spending is almost pointless because it does not bring any real unified military capability to the European Union or European members of NATO. If you take out the American military component, NATO is a deck of cards or a house of cards. It is incapable of defending itself. The European leadership, or so-called leadership, is a travesty because these high officials in the European institutions are not creative folks. They are really quite lame individuals who believe that there is strength in unity.
Unfortunately, they can’t see the folly of the policies that they are collectively following for the sake of unity and strength. And this question, for example, of Europe now spending a vast amount of money to create an iron dome over itself. I mean, these people don’t open their eyes. The Oreshnik, which I said, is not really a surprise because it’s this technology the Russians have explained to anyone with ears to hear going back to 2018. The fact is that hypersonic missiles cannot be intercepted and will not be intercepted for years to come.
And by the time that capability is arrived at, adversaries like Russia will have a new generation of assault weapons that are unstoppable. So this is a fool’s game and the European collective leadership is playing that fool’s game and throwing away the money of taxpayers.
Lascaris:
I just want to mention one specific element of that fool’s game, which is of particular interest to me because I am also a citizen of Greece and I spend a good bit of time there. And that’s reports that came out recently that both in the Israeli press and the Greek press that Greece is negotiating the purchase of a 2 billion euro iron dome system from Israel. And of course, Greece has one of the highest debt to GDP ratios in the world, is heavily indebted, barely escaped the financial crisis a few years ago, and it’s negotiating to purchase this system after the Iranians and Hezbollah have demonstrated that they’re perfectly capable of penetrating the Iron Dome system.
Quite apart from all of that, who is going to threaten Greece with a missile strike? The word is that the Turks are going to do it. I would have thought that being members of a military alliance, Greece and Turkey, should at least provide assurance to the Greeks that they’re not going to get attacked by Turkey. None of this makes any sense. It just seems like another boondoggle of the Greek military.
In any event, since we’re on the subject of rubbish propaganda, I wanted to ask you about a matter related to this missile strike in Russia by the Ukrainians. There’s been a lot of chatter in the West about North Korean troops in Kursk. And now we’re also seeing reports that the Russian Federation is recruiting mercenaries from Yemen. I’m not aware, Gilbert, of any evidence whatsoever that There are North Korean soldiers fighting in Kursk or anywhere in the battlefield in this war. What do you make of this claim that North Koreans and now Yemenis have been recruited into the Russian military effort in Ukraine?
Doctorow:
Well, I don’t know that they are fighting. Nobody knows. The Russians do not comment on this, whether yay or nay. And it really is a distraction. The Western media are looking, driven under the guidance of Mr. Blinken’s minions at the US State Department, they are looking to find any news that can distract the reading public and the viewing public from the daily disasters on the battlefield that the Ukrainians are experiencing. Nonetheless, even in a Russia-hating journal, newspaper like New York Times, even in today’s edition you find the very open statement that the Russians are advancing, are about to take several key cities in Donetsk. And these are logistical centers of considerable importance. After the seizure of which will come in the next several weeks, the Russians will be able to take almost the entire Donetsk region, meaning bringing them to the Dnieper River. So, this bad news, the Western media, under the guidance of the United States propaganda officials would like to move to the back pages and they give space on the front pages to news that demonstrates the weakness, the essential weakness of Russia.
That is the message that comes out of today’s Financial Tomes with respect to what’s going on in Syria, that the loss of Aleppo to insurgent rebels demonstrates the weakness, and this is a direct quotation from today’s Financial Times, the weakness of Iran and Russia, weakness of Russia. That’s the kind of text that the editors of this publication approve of highly. So it’s a distraction, important as it may be to other people in other regions like Western Asia, what is happening in Syria, for the purposes of the Financial Times, it’s terrific to have that news to blast all over their newspaper and hopefully just keep you from reading the bad news about how the Ukraine war is going adversely to the interests of Kiev. Let’s see, is there something that I missed in your question?
Lascaris:
No, I think you’ve… The main point of my question was to ascertain whether there was any evidence to back up disclaimer.
Doctorow:
Oh, yes. There’s no evidence. But I think it is reasonable to assume that there are North Korean soldiers in Kursk, And they’re there for training purposes. They’re there because North Korea hasn’t been in an active military conflict for decades. And to speak only about the size of an army as having some meaning without it having any hardened troops, any troops experienced in battle is not very realistic or meaningful.
So for the purposes of Pyongyang, it is very helpful that some of its soldiers who otherwise back in the homeland are almost only busy with construction projects because they’re used not as a force for war, but they’re used for civil and other infrastructure construction. So have them see and perhaps even try their hand at using some of this new military hardware that the Russians have developed and are using so effectively in the battlefield. Very few countries have the kind of experience with drone warfare, that the Russians do now. So I think it’s edifying.
There’s another aspect to this, completely different aspect to this, which is hardly spoken of in Western media. By having these people come ostensibly to help the Russians on the Ukraine front, Mr. Putin is making a point. The point is, hey, we Russians, we’re ready to come and help the North Koreans if they need any assistance on the Korean Peninsula. This is a two-way defense treaty that Russia has with North Korea. The existence of that treaty changes dramatically the power balance in East Asia.
Russia is reminding the world that it has a common land boundary with North Korea, that Russia is a major player in the Far East and the North Pacific. This is an aspect to this presence of North Koreans in Ukrainian territory from 1991, otherwise now considered Russian territory. And this is a side to it that nobody’s talking about in our newspapers. But it’s certain people in the Pentagon are well aware. Anybody in Tokyo, anyone in Seoul, is well aware of the significance of the North Koreans being on the Western front, because it means the Russians will be on the Eastern front.
Lascaris:
Since we’re talking about that part of the world, I wanted to ask you about the BRICS Summit, which concluded in Kazan, Russia in late October.
At that summit, which was chaired by the Russian Federation, there was much discussion about creating an alternative international payment system that could prevent the United States from using the dollar as a political weapon. Shortly after the BRICS Summit, I think it was actually within the last few days, Donald Trump came out swinging against the movement to replace the US dollar as the global reserve currency, and in a post on social media he stated, quote, we require a commitment from these countries, and he’s referring here to the BRICS members, that they will neither create a new BRICS currency nor back any other currency to replace the mighty US dollar, or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful US economy.”
Before I invite you to offer your views about this threat, I just want to mention that Trump just employed a similar tactic with respect to border security. He threatened both the Canadians and the Mexicans with substantial tariffs if they did not police their borders more vigorously. The Canadian response was for Justin Trudeau to get in a plane and fly to Mar-a-Lago and provide to Trump the assurances that he was looking for.
I think also the Mexican president did more from Mexico. She provided those assurances. Something tells me, however, that the BRICS member states are not likely to respond quite as cooperatively to this threat. What do you make of this threat? And what, to the extent there’s been a reaction within Russia, either at the level of the political commentators or at the governmental level, what has that reaction been? And what do you think they’re likely to do in response to this threat?
Doctorow:
Well, the Russians systematically take their time to respond to things like this. They have not made an official response. And I don’t expect that to happen anytime soon. Look, I think anyone who has followed my other appearances on videos, or more importantly what I write and publish on my Substack platform.
The situation is pretty clear. I have been a supporter of Donald Trump’s electoral campaign as being the only one of the candidates, of the two candidates. I don’t speak about Jill Stein and others like the RFK candidacy, which I supported briefly. I don’t speak about these others who were marginal candidates, but among the two main parties, the only one who had held out any hope of a change from the disastrous policies of the Biden administration leading us on the path to nuclear exchange was Donald Trump. And the likelihood, as I saw it, was that he would resolve the war simply by stopping shipment of further armaments and funds to Ukraine.
The simplest thing to do would be to step back and just say, just let the Ukrainians fight as long as they could and do the inevitable, which is to capitulate. Nonetheless, I have been deeply disappointed with most of the appointments that Donald has made, his candidates for the power ministries, for people who will have an important say in the implementation, if not in the formulation of US defense policy, as with respect to Russia and to the rest of the world. There have been several loudmouths who have said the most outrageous things, that violate completely any sense that Donald Trump was seeking accommodation with Russia. The Russians, as I said, also take note of all of these shenanigans of all of these utterly irresponsible people who speak in the name of Donald at this period of transition. And they have, as I said some moments ago, they decided not to wait for Donald’s inauguration because they don’t expect anything good from it and just to proceed in carrying out the war, winning it and ending the fighting on their own terms.
So with respect to what you just described, the policies on the dollar and BRICS, they’re outrageous. His remarks show that if given a chance, his inclination is to continue the self-destruction and the self-isolation that has been the mark of the Biden administration through his policy of sanctions. The net loser in the sanctions has been the United States and its allies, mostly the allies, of course. But this additional plan this additional plan to deny BRICS members trading relationships with the United States because they are seeking to establish a non-dollar means of exchange – that can only isolate the United States and harm the American economy. The BRICS meeting in Kazan was very careful by its body language, by some of its official language in concluding documents, to make it clear that the destruction of the dollar, the destruction of the existing global management structures, institutions is not their objective.
The objective is to build parallel institutions for global governance that will fulfill some of the tasks that the existing institutions, like the IMF and the World Bank, perform, but perform very badly. And so it is with the currency. It was when we went into this meeting of BRICS, there were many commentators in the alternative media who were expecting that there will be the rollout of a new BRICS payment system. Well, they did so, for the sake of buying a hot chocolate, not for the sake of major international trade and commerce. For that, the BRICS has nothing at this time, and it’s not rushing to fill that need.
Instead, the BRIC’s economic financial plans are presently focusing on something else which is not threatening to the United States or to the present world order. That is the incremental growth of the New Development Bank that has its seat in Beijing and which I think has $30 billion of projects that signed off, 100 projects, with some of the BRICS member states. And to use this as a Soft Power, as a point of attraction to the Global South to invite them into the BRICS community in this two-tier community of full BRICS members, of which there’ll be a very slow expansion because they have to have some kind of cohesiveness among themselves since all of the decisions are made on the basis of unanimity and consensus. And the second tier, what they call partners, who will not be insiders, but will benefit from the infrastructure that BRICS represents as it grows. So that is my answer to your question about Mr. Trump and his extremely foolish statement that you recited.
Lascaris:
Yeah. I just, as a footnote to that, you mentioned some of the other commentary coming out of his key members of his team. I’m sure you’re familiar with the statement by Sebastian Gorka, his pick, I believe, for national security advisor that Mr. President Putin is a thug.
It was interesting to me that I think it was just in the last couple of days, Vladimir Putin was quoted as saying that Donald Trump is an intelligent and experienced candidate, whether he was serious or not. There was quite a striking difference in the level of decorum that he continues to employ when he talks about Western leaders compared to the kinds of statements we’re seeing coming out of Sebastian Gorka, where they use this gutter language, which is not going to, I think we can say, safely promote a dialogue between the two governments. At the outset, when we talked about the language that the Russian government is employing around these attacks, and you indicated that the commentators in Russia are, shall we say, reassured by the fact that the Russian Federation is now using more forceful language, particularly in talking about how they’ll respond to US missile attacks on Russian territory. But they still cling to this decorum. It’s quite interesting to me.
There’s a whole culture of diplomacy in Russia, which seems to be much more mature and sophisticated than you find in the Western halls of power nowadays. Do you think that there’s any kind of capacity left for true diplomacy amongst Western governments? It almost seems like amateur hour. When you see people like Sebastian Gorka, whatever he may think of Russia’s president, referring to him publicly as a thug, is simply not going to promote dialogue between the two governments, and one would have thought that that’s obvious. I have the overall impression that diplomacy is a lost art in the West. I’m interested in your thoughts on that subject.
Doctorow:
Diplomacy is practiced between states. And here we come to the rub. The 27 member states of the European Union are for all practical purposes non-sovereign entities. They have ceded a lot of their sovereignty to Brussels.
As one head of state said a couple of years ago, the real power of a head of government in our country is equivalent to the power of a city mayor. So how much diplomacy do you expect to find practiced among city mayors? Not much. And so it’s not surprising. And why is this so?
It’s not accidental. It’s not just because of a power grab by this monstrous woman, Ursula von der Leyen, the head of the European Commission. It is an ideological persuasion here in Europe that state sovereignty yields war. And if the European peace project is furthered, as the national boundaries and national cultures of Europe fade away, that’s a dead-set proposition. It weakened, condemned Europe to lose all of its or any of its residual prestige in the world as a geopolitical force. But it’s a reality. They deny the value of sovereignty and they see it only as a force for confrontation and war.
Now, I’ve said a number of times in the last six months that the Russians are not bunny rabbits. And I wouldn’t overdo my estimate of the civilized nature and the kindness and the Christian disposition of Mr. Putin, which is real, but I wouldn’t overdo it.
I was thinking of this very point in the past week when Western journalists were trying to find something to say about Angela Merkel’s newly published memoirs. It seems, they couldn’t find anything of particular interest in those memoirs, which is not surprising because she was as chancellor, as dull as they come. And what they found was her story about how Mr. Putin threatened her with his dogs. And when he was in Astana, and he had this press conference before leaving the capital, before heading back to Moscow, there were maybe five, six minutes spent with his answering the questions of one journalist. Why did he threaten Merkel with dogs, knowing that she is afraid of dogs. Mr. Putin said: please, I apologize to Angela Merkel. I didn’t know that she’s afraid of dogs.
Don’t believe it for a minute. Do you mean to say that a man with the intelligence, gathering, interests and capabilities of Vladimir Putin, who certainly knows everything about all of his guests, so he can treat them accordingly. This man did treat Angela Merkel accordingly by exposing her to dogs, knowing that she’s frightened out of her wits.
Lascaris:
Interesting. So you’ve been very generous with your time, Gilbert. I have one more question if I might on the economic front. Do you have time for one more question? Yes, yes. You wrote recently about the decline in the ruble. I believe it was during the past week or perhaps it was the prior week.
There was something in the range of a 7% decline in the ruble against the US dollar. The last I checked, it was trading at about 115 to the dollar, which would be the lowest point since the early days of the special military operation in 2022. To the extent you’re able to say, why do you think this is happening? But more importantly, what do you think it says about the direction of the Russian economy? I’ve heard some, I don’t know how reliable they are. I’ve seen some reports that there may be trouble brewing in the Russian economy, even though it has fared very well in the face of these sanctions. It has experienced, for example, significantly higher growth than the major European economies, than the United States economy. But is this a sign of trouble ahead and how is the Russian intelligentsia reacting to this rather significant decline in the ruble?
Doctorow:
Well, the ruble, I think you meant the 115 is to the euro. I think it rose to about 105 against the dollar, maybe a little bit higher.
In any case, this is looking at a month. This is more like a 10% or 12% drop in the ruble. Now, Mr. Putin was asked about this, again, at the press conference that he held in Astana in the middle of this past week. And he didn’t give a very satisfactory answer, certainly not a definitive answer as to why the ruble has tumbled, except to say that there’s no need for panic, that the Central Bank is monitoring all of this very carefully and has it under control.
That point is a bit misleading because the Central Bank is working very hard to control inflation, but it’s not targeting the exchange rate. The Russians let the exchange rate float. They do not try to bolster the ruble by selling dollars, by selling other Western currencies in their stockpile they have available to them. So support for the ruble is minimal in the sense of the usual props. The main support should have, would have been the very high prime rate.
Russia has a prime rate now of 21 percent. It’s been going up steadily in the last several months. It is rumored to rise to 23% during this month of December. That sounds quite amazing. It’s a very high rate, considering that by all indications, the rate of inflation is only 8%.
I say only inflation would be higher if it weren’t for this very high prime rate. The high prime rate has a number of elements to it. Not only does it cut off sources of credit to commerce and industry, but it provides in the form of very high spot interest rates on savings accounts or on current accounts that are interest bearing for the population.
Now you asked about the reaction of the intelligentsia or the public at large. Intelligentsia often are ragtag people in terms of finance. But the chattering classes are not ragtag. They are very much upper middle class by Western standards. And of course, they can be unnerved by the depressed exchange rate because they’re the ones who travel abroad. Now, before the COVID and before the sanctions on Russian travel, the lower middle classes also traveled abroad.
I mean, more than 10 million Russians were traveling abroad before COVID. Now, the numbers are lower, or the travel abroad is in different parts of the world, not in Western Europe as it was before, not in the Americas. They are traveling to places where the dollar is the mark of value and they are concerned that their travel will be much more expensive, that their imported cars will be more expensive, And so that is all painful. The pains of this inherent inflation for certain types of goods and services that are imported will be compensated for by getting 21% or 22% on your current account with your bank. And practically anyone who has the money to invest or to take advantage of the possibilities of protection against inflation, it’s the wealthier people as usual.
They can open accounts that are denominated in precious metals, being gold, silver, platinum, or they can take physical property of gold ingots or gold bars starting from about a quarter of an ounce. You can take it, put it into safe deposit boxes. They have safe deposit boxes in major urban banks. And you can protect yourself against the falling domestic currency.
So there are protections for wealthier people. For the people who live hand-to-mouth, which is always a fairly large part of the population, they don’t have appreciable savings to protect since they spend the money on daily consumption. They are beneficiaries of the 8% inflation rate as opposed to a much higher rate. They were beneficiaries of the doubling of take-home pay for the average Russian worker over the last year because of the labor shortages and their ability as workers to quit and take new jobs where they are better paid. They are the beneficiaries of the reopening of factories in the middle of Russia in the Urals, factories that have been closed going back to 1990s and the economic catastrophe of that time. And they reopened, largely serving the military industry, but not only.
So all levels of Russian society have some kind of protection against the drop in the value of the ruble against the dollar. The average man was living hand to mouth in the sense of he or she lives off of the monthly paycheck. They also are beneficiaries of numerous subventions from the government, whether it’s for pensioners getting free or nearly-free tickets to cultural events, free transport, many such features, all of which are linked to the inflation rate. So the inflationary costs are compensated periodically in adjustments. So that part of the population also is protected and there’s really no reason for there to be popular discontent.
Here in Europe, we have something similar. I was quite surprised that there weren’t any big demonstrations or street marches, strikes here in Belgium when the effects of the economic downturn related to the fantastically high energy costs that Europe experienced after the first months of the Russian-Ukraine war. Well, it was all quiet here. And why was it quiet? Because salaries are all linked to inflation adjustments.
Linked to inflation adjustments. And so a large part of the out-of-pocket costs to the whole economy and to the general population was covered by the state mandated inflation adjustments in salaries and other benefits. So it is in Russia.
Lascaris:
Right. Well, I thank you very much again for you being so generous with your time, Gilbert, and I hope we’ll be able to continue the conversation in future.
Doctorow:
Well, thanks for the invitation.
Lascaris:
And this is Dimitris Laskaris coming to you for Reason to Resist on December 2nd, 2024.
Gilbert Doctorow 