By Karl Reiner
The sudden departure of the President of Ukraine, Victor Yanukovych, plunged the country into turmoil. As protests mostly against his mismanagement and corruption drove him out of the country, a confrontation developed. It pitted the European Union and United States against Russia. Russia’s President Putin is a hardline autocrat in the finest Soviet and Russian tradition. He sees the Ukraine and particularly the Crimean Peninsula as vital to core Russian interests. His view of Crimea is widely shared in Russia because of the region’s history. The Crimean War, waged between October 1853 and February 1856, was not a small affair. It involved over 1,700,000 troops. It was an old style war with the number dying from wounds and disease exceeding the number killed in action. Approximately 300,000 soldiers died during the conflict.
The combined forces of the Ottoman Empire, France, Britain and Sardinia slugged it out with Imperial Russian forces. It was a war that included the siege of Sevastopol and the famous charge of the Light Brigade. The war introduced the first military use of railroads, the military telegraph, rifled muskets and war correspondents. Florence Nightingale became famous for her involvement in caring for the neglected, poorly treated wounded. Timothy the Tortoise (1839-2004) was a mascot on a British naval vessel, serving on the HMS Queen during the bombardment of Sevastopol. Over time, the tortoise became the longest living veteran of the war.
The cynical Russians have long memories, the Crimea is home to important Russian military installations. For many years it was part of Russia, becoming part of Soviet Ukraine in 1954. A sizable part of the Russian population will rally behind the cleverly devious Putin on the Crimea issue, making the resolution of the Ukraine problem more difficult. As Western sanctions are implemented, the stony Putin will probably institute his own form of economic retaliation. Hopefully, the diplomats can halt the escalation and get things sorted out before a second Crimean war is triggered. The standoff over Ukraine will also have a detrimental effect on the dicey situation in Syria and the ongoing nuclear negotiations with Iran.
The Great Recession which began with financial crisis of 2007, exposed a glaring weakness in the West’s ballyhooed political systems. They proved to be unable to manage debt or regulate unruly financial markets. Western governments had to bail out the banking sector with taxpayers’ money as unemployment soared and economies imploded. In much of the developing world, Western style democracy has become associated with debt, political dysfunction and a muddled overreach in international affairs.
The European Commission forecasts that economic growth in the Euro Zone will increase by 1.2% this year. Questions about the future of Europe and its currency abound. Does Europe with seven percent of the world’s population, 25% of it GDP and 50% of its social costs have the right formula for economic growth? Does it have the correct balance between the state and private sector? As anxiety and unhappiness increases across Europe, membership in extremist parties is expanding. A 2012 poll found that over half of European voters had lost trust in their governments.
In the 1600s, China was most likely the world’s largest economy. Sometime around 2030, China is expected to regain the top spot as it displaces the United States. Since China launched its economic reform program, the country has been doubling its living standard about every 10 years. English is becoming a second language in China. Around 300 million Chinese are taking English lessons, slightly less than the number of people in the American population. A poll taken in 2013 indicated that around 85% of Chinese were satisfied with their country’s direction, compared to only 31% of Americans. Around the 2030 time period, India is projected to displace Japan, becoming the world’s third largest economy.
In the U.S., the gridlock caused by the Tea Party in Congress hinders business planning, unemployment remains high due to the slow pace of the economic recovery. As Congress procrastinates, the nation’s underlying economic problems grow worse, 95% of the gains of the recovery have gone to the richest 1%. Social mobility appears to be in danger of stagnating; the income inequality gap has widened to a level not seen since the 1920s. The effects of recession, technology change and globalization are ignored. There has been no agreement on a medium-term debt reduction plan. In letting the matter slide, Congress is forgetting that the direction in which the national debt load is headed is more important than the size of the actual debt level. Economic growth always tends to pick up in countries where the level of debt is heading gradually downward.