Orlov is one of our favorite essayists on Russia and all sorts of other things. He moved to the US as a child, and lives in the Boston area.
He is one of the better-known thinkers The New Yorker has dubbed ‘The Dystopians’ in an excellent 2009 profile, along with James Howard Kunstler, another regular contributor to RI (archive). These theorists believe that modern society is headed for a jarring and painful crack-up.
He is best known for his 2011 book comparing Soviet and American collapse (he thinks America’s will be worse). He is a prolific author on a wide array of subjects, and you can see his work by searching him on Amazon.
He has a large following on the web, and on Patreon, and we urge you to support him there, as Russia Insider does.
His current project is organizing the production of affordable house boats for living on. He lives on a boat himself.
If you haven’t discovered his work yet, please take a look at his archive of articles on RI. They are a real treasure, full of invaluable insight into both the US and Russia and how they are related.
A lot of commentators noticed a curious fact: during the May 9 parade in the Red Square in Moscow, Putin appeared in the presence of Israeli prime minister Netanyahu. Around that same time, Israeli air force was firing rockets at Syrian and Iranian targets in Syria (lots of which the Syrian air defenses shot down) and the Syrians were firing back at Israeli positions on the Golan Heights (which are occupied Syrian territory, so it didn’t count as an attack on Israel proper).
Why didn’t Russia rise to the defense of its ally Syria? Moreover, there was talk of selling Russia’s very powerful S-300 air defense system to Syria, and that offer was subsequently withdrawn. Is this really how an ally behaves?
Or take another example: relations between Russia and the Ukraine has been in a downward spiral ever since the 2014 Kiev putsch which overthrew the constitutional government. There is a festering sore of a military standoff in the Donbass region in eastern Ukraine, a constant drumbeat of Ukrainian provocations against Russia, and Russia has been saddled with economic and political sanctions by the US and the EU supposedly in response to the annexation of Crimea and the unsettled conflict in the Donbass that has claimed some ten thousand lives.
And yet the Ukraine’s largest trading partner remains… Russia. Not only does Russia continue to trade with the Ukraine, but it has also absorbed an exodus of economic refugees from the collapsed Ukrainian economy which numbers in the millions. Russia has resettled these refugees, allowed them to find work, and is allowing them to send money back to their relatives in the Ukraine. Also, Russia has declined to give political recognition to the two separatist republics in eastern Ukraine.
The only real stand Russia has taken with regard to the Ukraine is in claiming Crimea as its own. But this is more or less cut and dried: Crimea was part of Russia ever since 1783, and the transfer of Crimea to the Ukrainian Soviet Socialist Republic, which occurred under Nikita Khrushchev in 1954, violated the constitution of the USSR that was in effect at the time.
Yet another example: the US, with the European Union acting as its obedient servant, have been imposing various kinds of sanctions on Russia ever since the Magnitsky Act in 2012 which was pushed through by the fantastically corrupt oligarch William Browder. These sanctions have been sometimes somewhat damaging, sometimes helpful (stimulating import replacement within Russia) and sometimes simply annoying. Russia is too big, too important and too powerful for anyone, even an entity as large as the US and the EU combined, to isolate it or to bend it to its will by imposing sanctions.
In some cases, there is a powerful boomerang effect that causes more pain for the sanctioners than the sanctioned. But Russia really hasn’t done much in response—other than working on import replacement and establishing trade relationships with other, friendlier nations. It could have actually hurt the US, for instance, by blocking the sale of titanium parts without which Boeing wouldn’t be able to build its planes.
Or it could prohibit the sale of rocket engines to the US, and the US would then be unable to launch satellites. But Russia hasn’t done any of that; instead, it just kept repeating that these sanctions are unproductive and unhelpful.
One more: in violation of agreements that Russia and the NATO nations have entered into, NATO has expanded all the way to the Russian border and has recently turned the tiny Baltic states of Estonia, Latvia and Lithuania into a sort of militaristic playpen, holding military exercises right next to the Russian border, stationing thousands of troops there and training them to… attack Russia.
Russia has complained about this, but has continued to trade with all of the countries involved. In particular, it has continued to supply the Baltic states with electricity and to use Baltic ports to ship out its products.
When recently Latvia banned the use of Russian in schools (a third of Latvia’s population is Russian) and started violating the rights of Lithuanian Russians who tried fighting back against this affront, the Russians took even this blatant act of anti-Russian discrimination in stride. In Latvia, the lights are still on and the loaded Russian freight trains are still rolling in across the border.
“Why is that?” you might ask. “Why such a passive attitude against these numerous sleights, offenses and injuries?” It can’t be said that Russia is too big to hurt. The sanctions in 2012 were a piffle, but in 2014 the Russian economy did take a hit (though mostly from lower energy prices, not from sanctions). The ruble lost half its value and Russia’s poverty rate crept up. What’s going on, then?
To understand that, you have to take a step back and look at the overall context.
• Russia is the largest country in the world in size, but certainly not in population. Its borders are very well defended, but they stretch over 61 thousand kilometers.
• The Russian Federation is Russian in name, but it includes over a hundred different nations, with ethnic Russians making up just over 80%, and with six other nations that are each over a million strong.
• It borders 16 sovereign states—more than any other country—including two maritime boundaries (with Japan and the US), and two more internationally unrecognized states (Abkhazia and South Ossetia).
• It has the largest diaspora in the world, with between 20 and 40 million Russians (depending on how you count them) living outside of Russia proper. The largest Russian community overseas is in the US at around 3 million.
• Russian peacekeeping troops have served in numerous countries around Russia itself and across the world— Abkhazia, South Ossetia, Armenia, Transnistria, Tadjikistan, Bosnia, Kosovo, Angola, Chad, Sierra Leone, Sudan—and remain instrumental in keeping latent conflicts from escalating to war.
• Russia’s huge landmass and enormous wealth in natural resources make it one of the main purveyors of economically essential products to the world, especially oil, gas, uranium and coal, which keep the lights on and the pipes from freezing in dozens of countries. No matter what goes wrong in international relations, it must remain a stable and reliable supplier.
In this environment, countering hostile (and mostly futile) gestures emanating from across the ocean with hostile (and mostly futile) gestures of one’s own would be counterproductive: some people would get hurt, and there is some likelihood that they would be Russian.
Thus, part of the winning approach is to just muddle through, maintaining the best relations achievable with as many countries as possible, the neighbors especially, talking to every side in every conflict and trying to defuse it and carefully balancing the disparate interests of all involved. Russia has good relations with both Iran and Saudi Arabia, who are sworn enemies, and with both Syria and Israel, who are shooting at each other.
The other part of the winning approach to confronting an increasingly hostile outside world is to move in the direction of limited autarky; not closing itself off to the world, but taking measured steps to become relatively invulnerable to its vicissitudes. Russia is already self-sufficient in energy, making strides in becoming self-sufficient in food, and the next challenge is to reach self-sufficiency in technology and finance.
Viewed in this context, Russia’s seeming failures to act forcefully turn out to be parts of a careful balancing act:
• Israelis bomb Syria while Netanyahu sits at a place of honor during the parade in Moscow. Syria strikes back by bombing its own territory in the Golan Heights. Then Russia decides not to sell the S-300 system to Syria. What just happened? Well, Israel just recognized Victory Day—May 9th—as its own national holiday. A third of Israelis are in fact Russian, and a lot of them felt very proud to be Russian that day, and took part in big parades that were broadcast on Russian television. In the face of a rising wave of antisemitism in Europe and with neo-Nazis running amok in the Ukraine, Russia and Israel stand united.
Then there is the fact that Israel doesn’t like the fact that there are Iranians in Syria. It certainly has the right to feel that way, given the fact that the Iranians keep talking about how Israel should be destroyed. But Iranian presence in Syria is by invitation, so that’s not Russia’s concern. Having Israel bomb Syria isn’t helpful to Russia, but this wasn’t the first time and won’t be the last.
Syria successfully shooting down Israeli missiles and then firing on Israelis in the Golan Heights was a new development, and an escalation, and escalations are always bad. Selling the S-300 system to the Syrians would have enabled Syria to shoot down anything in the air over all of Israel, and since they had just escalated, giving them the ability to escalate even further would seem to be wrong.
• The Ukraine continuously provokes Russia and violates the rights of the eight million Russians living there, and yet Russia remains the Ukraine’s largest trading partner. What gives? Well, there is the unpleasant fact that the Ukraine is currently ruled by people who are, to use a very specific Russian term, “inadequate.” It is an illegal, immensely corrupt regime that is supported by another regime that’s across the ocean, which is, by the way, also rather “inadequate”—headed by a ridiculous buffoon who is in turn being thwarted at every turn by an immensely corrupt “deep state.”
But these are temporary facts, and in no way do they override the permanent fact that the Russians and the Ukrainians are essentially the same people (with the exception of a few tribes that mainly inhabit the west of the country that was for centuries a Central European no man’s land—next door to Transylvania, where the vampires come from).
The Russians and the Ukrainians are genetically indistinguishable, and there are numerous nations within Russia that are far more culturally different from the Russians than the Ukrainians. The winning strategy in this case is to avoid hurting the Ukraine, because it is already hurting itself quite enough, and because doing so would in essence just hurt some Russians.
Instead, it makes more sense to simply be patient and wait things out. Eventually, the people in the Ukraine will have had enough and will take matters into their own hands, throw the bums out together with their overseas handlers, and the relationship will eventually become more normal.
• On the Western sanctions, Russia has imposed some counter-sanctions, and they were clever ones. Russia banned various categories of food imports from the EU. This made it possible to ramp up food production within Russia and to move Russia toward self-sufficiency in food. Since within the EU farmers are politically quite powerful, this made US sanctions unpopular in Europe.
Add to this the fact that the US now wants to sanction Russian energy imports in Europe, forcing the Europeans to buy from the US, whose supplies are much more expensive and far less reliable, and you can see why the Europeans have by now had enough of Washington’s meddling. Of course, having surrendered much of their sovereignty a long time ago, the Europeans face fantastic difficulties in trying to claw it back, but at least they are starting to think about it.
This is already a win for Russia: it needs independent, sovereign nations for neighbors, not a bunch of Washington’s feckless vassals. As far as imposing countersanctions on the US itself, that would just cause some more economic damage without securing any political advantages.
• On NATO encroachment on Russian borders, anti-Russian slights by the Baltic midgets and NATO troops training to “attack Russia”—well, frankly, the Russians are a little bit insulted, but they are not exactly afraid. Everybody knows that NATO is part of the American defense establishment racket. Its purpose is to steal boatloads of money, not to make weapons that work or to train armies that can fight. There is now quite a bit of NATO armor and manpower prepositioned in the Baltics, but not enough to actually invade Russia in any meaningful way.
And if they ever do, they will get lonely very quickly. You see, NATO armor doesn’t fit under most bridges and can’t move large distances over rough terrain like Russian armor can. It has to be transported to the field of battle by train or on flatbed trucks over federal highways. Or it has to be shipped in via deepwater ports.
So, all that Russia has to do is take out some bridges and some port facilities by launching rockets from pretty much anywhere, then kettle and destroy the relatively small contingent of invaders, and it will be game over. NATO knows this, and so all of this activity in the Baltics is just a way to funnel some money to the economically anemic and rapidly depopulating Baltic states.
They are suffering already; why hurt them more? As for the rights of the Russians in Latvia, one might think that they don’t really mind having them violated—or they’d be moving to Russia where there is plenty of room for them. They deserve lots of moral support, of course, but it’s really their battle, not Russia’s.
This doesn’t make the most exciting reading in the world, but so be it. People search the internet for stories about dramatic turns of events, mostly because they are bored. It often happens that the most important developments fail to thrill, but this doesn’t make them any less important. For example, Russia is reducing its defense spending, because it will soon be fully rearmed.
Can the US and NATO do the same? No! If they ever tried, the American defense establishment would get a new set of congressmen and senators voted in, and the profligate spending would resume forthwith. And so the Russians can just sit calmly, arms folded, and watch the US bankrupt itself.
That will certainly be a dramatic turn of events; you’ll just have to wait for it.
Simon Harris and wife welcome new baby boy
Minister for Further and Higher Education Simon Harris has announced the birth of a baby son.
Posting on Instagram, the Minister said he and his wife Caoimhe had on Wednesday “welcomed Baby Cillian into the world”. Cillian is the couple’s second child, they also have a daughter Saoirse.
“Caoimhe and baby doing great and Saoirse delighted to be a big sister and looking forward to meeting him soon.”
Mr Harris thanked all of the staff at the National Maternity Hospital in Holles Street, Dublin.
The Fine Gael TD said he will be taking paternity leave for a few weeks to “get to know this new little man”.
In a previous post he said Tánaiste Leo Varadkar would be taking any of his department’s business to Government during the time while Minister of State Niall Collins would be carrying out his day-to-day work in the department and Labour leader Alan Kelly would be providing a pair for Dáil votes.
Macron presses Biden for ‘clarifications’ over submarine snub
Macron was left furious by Australia’s decision last week to ditch a 2016 deal to buy diesel submarines from France in favour of nuclear-powered ones from the United States and Britain.
After a cabinet meeting, government spokesman Gabriel Attal made clear French anger had not abated with an unusually frank statement of Macron’s expectations from the scheduled conversation with 78-year-old Biden.
The exchange would be an opportunity to “clarify both the way in which this announcement was made and the way for an American re-engagement in its relationship with an ally,” Attal said.
Paris was particularly outraged that Australia negotiated with Washington and London in secret, which French Foreign Minister Jean-Yves Le Drian denounced as “treachery” and a “stab in the back”.
French officials were notified about the loss of the contract just hours before Biden unveiled the new AUKUS security and defence partnership between the three English-speaking countries.
Macron was expecting “clarifications about the American decision to keep a European ally outside of fundamental talks about cooperation in the Indo-Pacific,” Attal added, without giving the schedule time for the exchange.
“We expect our allies to acknowledge that the exchanges and consultations that should have taken place did not, and that this poses a question about confidence, which all of us need to draw conclusions about now.”
The submarine row has plunged Franco-US ties into what some analysts view as the most acute crisis since the US-led invasion of Iraq in 2003, which Paris opposed.
After four years of tumultuous relations with ex-president Donald Trump, the spat has also dashed hopes of a complete reset under Biden, who took office in January aiming to rebuild frazzled ties with Europe.
As the row drags on, observers and some of France’s European partners are wondering how and when the French leader will call an end to the face-off, which is playing out just seven months ahead of presidential elections.
British Prime Minister Johnson said it was “time for some of our dearest friends around the world to ‘prenez un grip’ (get a grip)” in comments in Washington that mixed French and English.
“‘Donnez-moi un break’ because this is fundamentally a great step forward for global security,” he told Sky News.
Danish Prime Minister Mette Frederiksen, whose country is staunchly pro-American, defended Biden as “very loyal” and warned against turning “challenges which will always exist between allies into something they should not be.”
Attal said that France and the US needed to begin a process “to create the conditions for confidence to be restored”.
As well as an acknowledgement of French interests in the Pacific region, the process should include “full recognition by our American allies of the need to boost European sovereignty as well as the importance of the growing commitment by the Europeans to their own defence and security.”
This latter point is a source of tension between Biden and Macron, who has pushed hard during his four-and-a-half years in office for Europeans to invest more in defence and pool resources in order to increase their joint military capabilities.
The US, and some EU members including Denmark and Baltic countries, see this as a potential challenge to NATO, the US-led transatlantic military alliance that has been the cornerstone of European defence since World War II.
French Defence Minister Florence Parly argued against the idea of France withdrawing from NATO command structures, which some politicians in France have suggested in the wake of the submarines snub.
“Is it worth slamming the door on NATO? I don’t think so,” she said, while adding that “political dialogue is non-existent in NATO.”
Australia’s decision to order nuclear-powered submarines was driven by concern about China’s commercial and military assertiveness in the Pacific region, where Biden is seeking to build an alliance of democratic states to help contain Beijing.
Paschal Donohoe plans bank levy extension but lower haul
Minister for Finance Paschal Donohoe will continue the Irish banking levy beyond its scheduled conclusion date at the end of this year, but plans to lower the targeted annual haul from the current €150 million as overseas lenders Ulster Bank and KBC Bank Ireland retreat from the market, according to sources.
Reducing the industry overall levy target will avoid the remaining three banks facing higher levy bills at a time when the Government is seeking to lower its stakes in the bailed-out lenders.
AIB, Bank of Ireland and Permanent TSB paid a combined €93 million levy in each of the last two years, according to their latest annual reports. A decision on the new targeted yield, currently linked to deposit interest retention tax (DIRT) collected by banks on customers’ savings, will be announced at the unveiling of Budget 2022 on October 12th.
Originally introduced in 2014 by then minister for finance Michael Noonan for three years to ensure banks made a “contribution” to a recovering economy after the sector’s multibillion-euro taxpayer bailout, the annual banking levy has since been extended to the end of 2021.
A further extension of the levy has largely been expected by the banks and industry analysts, as the sector has been able to use multibillion euro losses racked up during the financial crisis to reduce their tax bills. A spokesman for the Department of Finance declined to comment on the future status of the banking levy as planning for Budget 2022 continues.
AIB, Bank of Ireland and Permanent TSB (PTSB) alone have utilised almost €500 million of tax losses against their corporation tax bills between 2017 and 2019, according to Department of Finance figures.
Sources said that the Government will be keen not to land a levy increase on the three lenders at a time when it is currently selling down its stake in Bank of Ireland and plotting a course for the reduction of its positions in AIB and PTSB in time.
The Ireland Strategic Investment Fund (ISIF), which holds the Bank of Ireland stake on behalf of the Minister for Finance, sold 2 percentage points of holding in the market between July and August, reducing its interest to just below 12 per cent.
Meanwhile, it has been reported in recent days that the UK government is planning to lower an 8 per cent surcharge that it has applied to bank profits since the start of 2016. It comes as the general UK corporation tax is set to rise from 19 per cent to 25 per cent in 2023.
“The optics of reducing the surcharge might still be bad politically, but it would signal the partial rehabilitation for the nation’s banking sector,” said Eamonn Hughes, an analyst with Goodbody Stockbrokers, in a note to clients on Tuesday, adding that he continues to factor in a retention of the Irish banking levy in his financial estimates for banks over the medium term.
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