What Happened Today: March 7, 2022
Dollars in danger; Iran’s sweet deal; The two minutes of anti-Russian hate
The Big Story
The beginning of the historic period that is often called the “American-led postwar liberal order” perfectly coincides with the elevation of the U.S. dollar to global reserve currency at the 1944 Bretton Woods conference. Now another war, this one between Ukraine and Russia, may spell the end of that system as it brings the world’s great powers into a global financial conflict. The war in Ukraine is pushing Russia into an even closer partnership with China and Iran while further diminishing the United States’ global leadership. The net effect, according to the economist Nouriel Roubini, is “a geopolitical depression” that will “have massive economic and financial consequences well beyond Ukraine.” The immediate evidence of those consequences, triggered by sanctions on Russian financial transactions, is the devaluing of the dollar as Moscow begins to migrate the hundreds of billions of dollars that were just banned by the West to Chinese systems. On Sunday, following the announcements from Mastercard and Visa that they would cancel cards issued in Russia, Russia’s central bank announced that some local lenders had begun moving onto China’s card payment system, UnionPay. There is the potential for a far larger move away from the dollar depending on how Russia responds to being banned from the SWIFT system, the all-important global communications clearinghouse that connects thousands of financial institutions across the world. One option, which Russia has not yet taken but has almost certainly discussed with its ally China, would be to move onto the rival Chinese CIPS system created in 2015. “Even though SWIFT manages $400 billion of daily transactions to CIPS’ $50 billion, CIPS volume has been growing rapidly,” noted David Goldman in a recent Asia Times column. Russia transferring its economy from U.S.- to Chinese-led systems would be a drop in the bucket of the global economy but a sign that the dollar’s dominance could become a thing of the past.
Read it here: https://sg.news.yahoo.com/yuan-become-russia-new-dollar-us-europe-sanctions-ukraine-war-080909694.html
In The Back Pages: Don’t Do This, You Racist Freaks
The Rest
→ In a video released over the weekend, Russia’s head negotiator at the ongoing talks in Vienna over a new nuclear deal with Iran, Mikhail Ulyanov, brags that through its cooperation with Russia and China, “Iran got more than, frankly, I expected or others expected” in terms of a pending deal. The original interview with Ulyanov appeared in the IRNA, Iran’s official, state-backed news agency.
Read more: https://www.jpost.com/middle-east/article-700498
→ The Biden administration’s determination to conclude a new nuclear deal with Iran has led to it empowering Moscow and putting Russia in a position to make demands of the United States—even as the United States imposes sanctions on Russia and publicly decries the Russian invasion of Ukraine. A report over the weekend in the Financial Times detailed how the Russian delegation at the nuclear talks in Vienna was using its leverage as a necessary party to any deal to protect its other interests. “We need guarantees that these sanctions won’t affect the regime of trade-economic and investment ties embedded in the [nuclear deal],” Sergei Lavrov, Russian foreign minister, told reporters on Saturday—effectively asking the United States to publicly grant Moscow a loophole to get out of its sanctions. U.S. Secretary of State Antony Blinken suggested that the White House was willing to oblige, telling reporters that the administration was committed to signing a new deal “irrespective of where we are in our relationship with Russia as a result of its aggression in Ukraine.”
Read more:
https://www.ft.com/content/d101bd66-da72-4432-abc5-da2f7362bedb
→ A note from your editor: The United States cannot afford to be dependent on its main strategic rivals like China to produce critical goods. Look what happened when we couldn’t manufacture our own masks and PPE after the pandemic started. What happens if another war breaks out and we’re still dependent on China for more than half of the generic medicines on shelves in the United States?
→ Gas prices in the United States were close to hitting a new record Monday at an average of $4.065 a gallon across the country. Inflation had already been rising before Russia’s invasion of Ukraine, but the war is driving prices even higher. While the United States continues to purchase Russian oil, the market has been squeezed by individual companies declining to do business with Russian companies and concerns about a drop in global output. Economists expect food prices to go up next. Russia is one of the leading suppliers of fertilizer.
→ As NATO resists Ukraine’s calls to create a no-fly zone, the United States and Poland are in negotiations to provide Ukraine with fighter jets. Russia’s ground invasion has been slowed by strong Ukrainian opposition and muddy roads, feeding fears that Russia will now expand its aerial assault. The deal with the United States and Poland would require presidential and congressional approval and would see the transfer of F-16s to Poland and then Russian-built aircrafts from Poland to Ukraine—the Ukrainian pilots have been trained on the Russian jets, and Ukraine’s President Zelensky has requested these in particular. NATO has so far been unwilling to impose a no-fly zone over Ukraine because it could quickly escalate into direct military engagement with Russia.
→ Newly published NYPD data from February shows that crime in New York City has continued to rise, including an overall tripling of hate crimes and a 409% increase in antisemitic crimes over February 2021. NYC saw a doubling of car thefts this past February, as well as a 54% increase in robberies, 56% in grand larceny, 22% in rapes, and 10% in murders in comparison to the same time last year. The crime increase is taking place in neighborhoods across the city, with 72 of 77 precincts in the city showing increases. Mayor Eric Adams had promised to combat the rising crime rate and gun violence in particular by bringing back “Neighborhood Safety Teams,” a program that had been shuttered by Mayor Bill de Blasio’s administration. NYPD officials have also broken from precedent by not releasing crime data at the commissioner's monthly press conference, a practice that has been commonplace for years.
→ The deadliest tornadoes in 15 years tore through Iowa on Saturday, killing seven people and knocking out power for more than 10,000. With wind speeds of up to 135 MPH, the tornadoes caused damage across Iowa and were followed by a storm system that now threatens much of the Midwest and mid-Atlantic. Four of the tornado victims were from one family: a father and his two children, aged 5 and 2, as well as the grandmother they had traveled from Missouri to visit.
→ After a three-year hiatus, Natasha Lyonne’s Netflix television series Russian Doll—kind of a post-millennial East Village update on the Twilight Zone—is coming back for a second season on April 20.
Don’t Do This, You Racist Freaks
Boycotting Russian Businesses, Flags, and People Is Not Just Dumb; It’s Immoral
There are moments in any society when ordinary people shrug off their humanity, bare their teeth, and give in to their basest urges. War can bring this out in soldiers, but it happens in peacetime as well. At the moment, as the Russian army batters and attempts to subjugate the independent nation of Ukraine, we in the advanced democracies of the West are witnessing a minor orgy of anti-Russian bigotry that does nothing to help Ukrainians but punishes average Russian civilians—and their house pets—for the actions of the Putin government.
I’m not talking here about anything being done by Ukrainians in Ukraine; they are in a war where different rules apply. But the campaign to demonize Russians seems to have little interest in Ukrainians as people with lives apart from the political dramas in the West. The whole thing feels rather feverish and crudely scripted as upstanding liberal actors like Edward Norton—people raised to see McCarthyism and the Red Scare as the defining parables of American politics—now exhort the FBI and CIA to hunt down “collaborators and perpetrators” and tear out Russian subversion in the United States “by the roots.” Part of what is so strange about the recent wave of anti-Russian agitation is that it’s not being led by unruly populist mobs but instead by the boards of powerful institutions, including the opera houses and ballets that are the very symbols of Western cultural achievement and civilization.
In Washington, D.C., the American-owned Russia House Restaurant has had its windows smashed and door broken in two separate instances since the war started. In New York, the Metropolitan Opera first demanded that Russian soprano Anna Netrebko denounce Vladimir Putin and then fired her when she refused the loyalty test, replacing her with a Ukrainian singer. Much the same thing happened in the Munich Philharmonic Orchestra to conductor Valery Gergiev after he, too, refused an ultimatum to denounce the Russian leader and was fired. Gergiev’s management company called him “the greatest conductor alive and an extraordinary human being with a profound sense of decency” in a statement explaining why it was now moved to drop him due to his support for Putin. In the United Kingdom, a planned tour of the Russian State Ballet of Siberia was canceled, wrote the journalist Brendan O’Neill, “as if pirouettes were propaganda, as if sublime dancing by Russian people might pollute the hearts and minds of British audiences.”
Over at the race track, the United States’ Haas Formula 1 racing team announced over the weekend that it had “terminated” its contract with Russian driver Nikita Mazepin. In this case, no theatrical ultimatums were necessary. “We can’t deal with all that. Our other sponsors can’t deal with all that,” Haas explained to The Associated Press.
And not to be outdone by race car drivers, the International Cat Federation, known as FIFe, or Fédération Internationale Féline, announced that it was banning Russian cats from its competitions. In a statement, FIFe’s board declared that “it cannot just witness these atrocities and do nothing.”
The notion that any individual should have their employment conditioned on the actions of a foreign government, or their willingness to denounce those actions, is frankly gross and authoritarian—the kind of thing I was raised to believe happened in Russia, not the United States.
In an atmosphere of intense anti-Russian sentiment, it becomes suspect merely to question these firings—let alone the utterly devastating impact of major financial institutions like Paypal, Mastercard, and Visa deciding that they will no longer do business with Russian cardholders. That decision affects any Russian who took out a credit card in their home country, including those who hate Putin, have protested against the war, or are now living abroad. Is collective financial punishment of this sort justified to end the Russian assault on Ukraine? Perhaps, if indeed it has that effect rather than prolonging the conflict. But it will involve making normal, nonpolitical people suffer for the crimes of the government, and attempting to erase that suffering by dehumanizing those people is cruel and cowardly.
The point of all this, one suspects, is to make it easier for war spectators with no skin in the game to imagine that they are “doing something” and “contributing to the cause.” Preoccupied with their two minutes of hate, these people find it easier to ignore that nominally “pro-Ukraine” countries like the United States continue to buy oil from Russia and empower Moscow as a strategic negotiating partner while imposing sanctions designed to punish average Russian citizens.
Social media fosters the illusion that users are connected to distant events they experience through tweets and video clips. It becomes everyone’s responsibility to “do something,” which can globalize local conflicts, drawing them out. But if you really want to do something, start by not scapegoating innocent people for a war they did nothing to start.
The sound of reason in the cacophony of "me too" virtue signaling.
Yes. Sip your vodka and listen to your Rachmaninoff. Let the Ukrainians fight off the Russian army. It’s their country. We don’t need an orgy of cultural vandalism, even as we support them.