How COVID Spending and Green Policies Enabled Putin’s March into Ukraine
March 2, 2022
Writing in the Atlantic recently, #NeverTrumper David French urged a de-escalation of partisan rhetoric over the Ukraine crisis. “It’s important for Americans to understand where the blame lies — with Putin, not with Democrats or Republicans,” he wrote, adding that this war “is not President Joe Biden’s fault or former President Donald Trump’s fault.”
These are noble sentiments indeed and ones that the Left and mainstream media will happily follow since it spares them from the distasteful task of having to explain why Putin chose to invade on President Biden’s watch and not during Trump’s tenure.
For all the talk of Donald Trump being the stooge of Putin, it is precisely the policies championed by the Left — stringent lockdowns and green energy — that have created a significantly more favorable macroeconomic picture for Putin in 2022 than existed in 2017-2020.
In response to COVID, the government imposed lockdowns, a policy that did little to stop the pandemic but that threw millions out of work and destroyed countless businesses. To counteract the effects of the lockdowns, the government then unleashed a tsunami of monetary and fiscal stimulus.
On the monetary side, the Federal Reserve lowered interest rates and printed money on a massive scale. According to economists Steven Hanke and Nicholas Hanlon, the money supply as measured by M2, which is the Fed’s broadest measure of money in the economy, has been growing at record rates — with 39.9% cumulative growth since February 2020. They reported that M2 is still growing at an elevated, inflationary rate of 12.6% a year. This is the highest rate of monetary growth since the early 1980s.
On the fiscal side, things are equally dismal. Since the beginning of COVID, the federal government has spent 27% of America’s roughly $21 trillion GDP on stimulus, more than any other large economy in the world. While the spending spree started in March 2020 when COVID was a legitimate emergency, it continued into 2021, with the enactment of The American Rescue Plan (ARP), passed by the Democrats in Congress and signed by President Biden. The bill was initially promoted as a means of financing vaccines and treatment, but only 1% of its costs went toward vaccines and only 5% had any relation to health care. Instead, it was the worst spending bill in decades, a grab-bag of giveaways and unneeded “economic stimulus.”
In sum, as we ordered our people to stop working and stop producing goods and services, the government gave them additional money. This produced the classic inflationary scenario: more money chasing fewer goods. The result is evident for all to see. Inflation is running at levels not seen in at least four decades. For a resource-rich country like Russia, this commodity inflation is obviously a windfall.
Making matters worse, however, is that Biden’s “green energy” policy, fueled by the obsession with “climate change,” has further contributed to the rise of energy prices.
It should be remembered that both Reagan and Trump relied on a policy of cheap energy, both as a means of boosting the American economy and in order to weaken our adversaries.
In Victory: The Reagan Administration’s Secret Strategy That Hastened the Collapse of the Soviet Union, author Peter Schweizer revealed President Reagan’s strategy to dramatically reduce Soviet hard currency earnings by driving down the price of oil.
Knowing that energy exports generated 80% of the USSR’s hard currency, Reagan worked with Saudi Arabia to lower oil prices. In exchange for military aid, the Saudis opened the spigots. “Shortly after oil production rose,” Schweizer wrote, “the international price of oil sank like a stone in a pond. In November 1985, crude oil sold at $30 a barrel; barely five months later it stood at $12. For Moscow, over $10 billion in valuable hard currency evaporated overnight, almost half of its earnings. And the Soviet economy began breathing even more heavily.” [p. 243]
Gorbachev was hoping to use hard currency to finance the purchase of technology and consumer goods. The drop in oil prices was catastrophic for the Soviets.
Similarly, President Trump used energy as a foreign policy tool, emphasizing domestic production. Writing for Reuters in 2018, journalist Timothy Gardner noted that:
“U.S. oil output has risen to more than 10 million barrels per day for the first time since 1970 thanks to improved drilling technology that dates back years. Natural gas output has also soared, making America the world’s top producer of the fuel. Meanwhile, the 2015 repeal of a 40-year-old ban on crude oil exports… has made strategic shipments overseas possible.”
While the Trump program was designed to improve America’s economy and particularly its trade imbalances, the article made clear that the policies also aimed to deter Russia. “By providing an alternative source of energy, Eastern European countries won’t have to rely as much on Russia, which has wielded its influence heavily there,” Gardner concluded.
A year later the Trump plan was paying dividends. In another piece for Reuters, Gardner noted that Russia was becoming increasingly fearful of Trump’s “energy dominance policy”:
“The United States has become the world’s fastest growing exporter of liquefied natural gas (LNG) and is set to become the world’s third largest shipper of the product this year, due to surging output from U.S. shale fields. Trump has said the supplies should provide European allies with an alternative to Russian energy and his Energy Secretary Rick Perry has called the exports ‘freedom gas,’ postures that have drawn criticism from Russian officials… Trump has slashed regulations on drillers to help boost exports of oil and gas to allies and partners, a policy he calls energy dominance. Russia is also apprehensive about projects Washington has supported for 10 years to bring natural gas via pipelines from Azerbaijan’s Shah Deniz field to markets in Europe via the Southern Gas Corridor…”
That was 2019.
Biden has reversed these policies. In the space of two years, we went from a policy of energy dominance to a policy of energy submission.
As Victor David Hanson explained:
“…Biden’s decision voluntarily to cancel new pipelines, federal leases, ANWAR, and leverage loss of bank financing for fracking, and to give up well over 2 million barrels of daily production will be seen not just as an economic disaster. It was a strategic catastrophe.
“When Europe, or indeed the West, is dependent on Russian goodwill to drive and keep warm, it can never be free…The more we discount the strategic consequences of having or lacking oil, the more our enemies fixate on it.”
John Kerry, Biden’s “envoy for climate,” said that he feared that the Russian invasion of Ukraine would be a “distraction” from work on climate change and that he hoped Putin “will help us to stay on track with respect to what we need to do for the climate.” Kerry has also stated his support for the Great Reset agenda, a globalist scheme to impose radical green policies on the industrial world.
Ending American energy independence empowered Putin.
In retrospect, the people of the Ukraine might have wished for a little less globalism and little more America First.
Image: Ministry of Defence of the Russian Federation
