Thursday, July 31, 2014

Criminal character of the sanctions

For more than a decade or so, I have known that most of the EU-level officials are crappy politicians – and crappy human beings, for that matter – but I wouldn't have believed that they would go towards something as insane as a trade war against Russia.

Russia will undoubtedly retaliate but it doesn't even have to.

The point is that trade wars and sanctions always automatically affect both sides. There is a sense in which it is obvious that the overall damages are exactly the same on both sides. Well, one side may have a bigger trouble to replace the "forbidden" business partner with new ones than the other side. But in different cases, it's a different country that has the bigger problem. It's surely not always Russia.

The Czech lands have been the industrial heart of the territory of Austria-Hungary for more than 150 years. The advances were brutally slowed down in the age of communism. But at least, the Czech machine industry and similar parts of the economy could still enjoy the pride of being pretty much the most developed national industry in the socialist bloc. In some, usually "softer", industries, the East Germans were ahead of us. In some "truly heavy" things, the USSR itself did the best. And you could find some unusually good production in Hungary, Poland, perhaps even Bulgaria, and so on. But overall, we were arguably at the top of the socialist bloc. We would also produce the only socialist cars that could actually be sold to standard Western consumers and mass markets, despite the jokes, and so on.

Almost all the exports would go to other socialist countries during communism, especially to the USSR. It became a bad market 20 years ago so the Czech economy did have to reorient itself to the West, especially to Germany. These days, Germany represents 1/3 of exports and 1/3 of imports of Czechia and the Czech economy is much more tightly integrated into the broader German economy than e.g. the economy of Denmark, however counter-intuitive it may sound.

Czechs worked hard to reduce the dependence on Russia – e.g. by getting oil from a new direction (Arab oil from Germany). But we would never decide that Russian business partners have to be surgically removed from our economy. Russia has never been removed in this way and it continues to represent 5% of our exports and 5% of our imports. Other countries' (e.g. Slovakia's) percentages are higher, often around 10% or higher.

Zeman is checking PBS motors

Just four weeks ago, President Zeman visited one of the local industrial producers in Brno, Moravia, Eastern Czechia – namely PBS. It is not the Public Broadcasting Service. Instead, it is the First Brnian Machinery ("První brněnská strojírna") in Velká Bíteš, a part of Brno, the Moravian capital. In that neighborhood, it is the largest employer with 770 employees.

The annual revenue is something like $50 million which is not bad – $70,000 annual revenue per "ordinary employee" in a "normal neighborhood" of an "average city" is surely something inspiring in the Czech context. Russia is their most important market. They are delivering motors for drones, among other things.

Perhaps, I should have used the past tense.

PBS, a completely innocent company and a source of (not only) local pride, became one of the many targets of the sanctions. The sanctions may be lethal for the company. You find other companies like that. Some larger companies have a smaller (but still large) exposure to Russia and they're predicted to survive. However, they will have to fire many people.


Because populist politicians in Brussels, D.C., and other cities have figured out something that tons of politicians have figured out before them – that their parasitic life will become easier if they encourage hatred in millions of cheap, low-quality voters, and if they acquire the role of "punishers", "foci of the hatred", and "saviors" against the hypothetical threats.

Millions of people who are brainwashed hateful losers will like these policies because they hurt "someone else" and will find it more important to keep the same politicians at place. They're the people who have no independent thinking, the vacuum in their skull, and they usually have nothing to lose except for their shackles. An ideal material to build a totalitarian society, whether it wants to call itself a fascist society, a communist society, or the EU society.

People who are not losers can't like the sanctions because of diverse reasons – including the reason that they hurt them personally. Everyone who is not a complete loser has a few million invested in Russia or connected with some companies that depend on business or Russia, or are being bought by a Russian, and so on. It's normal. The world is interconnected, largely "globalized", and Russia is a part of it.

What the sanctions do to the people who actually produce something useful and sophisticated, like motors for drones, is something that the fascist populists don't care about. The number of brainwashed losers who will "compensate" for the productive people who have lost something and who will lose the trust in the politicians is high enough for the politicians to press the green button (which is really red).

The totally unnecessary financial losses and threats – self-inflicted wounds – are clear. But of course that I am ultimately much more outraged by the fact that the sanctions against the European exporters, their consumers, and their mirror images are totally unjust and morally indefensible. People and nations are not supposed to be innocent angels but in recent years and especially since the not really spontaneous explosion of the "Maidan" havoc in Ukraine, Russia has obviously been much closer to the ideal of an angel than any major Western power. I would almost always favor Western powers in all kinds of things but I would have to be a complete moron – or an asshole – not to notice how nasty and intrusive the behavior of the West's powerful has been, and how the Russian politicians have been restrained, modest, pragmatic, and humane in comparison.

It hasn't won them – and us – anything, so I kindly ask the leaders of the Kremlin to find all possible legal tools to eliminate the authors of the criminal sanctions, sanctions that will undoubtedly cause greater damages to the world economy than the total market price of all the politicians who will have caused the mess. I want them to pay the billions back and if they can't, they should spend the rest of their lives in prisons or hanging.

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