First US strike to “weaken” post-Cold War Russia | dissenting voice (2023)

by John V Walsh / January 3, 2023

The West's first post-Cold War attack on Russia began in the early 1990s, well before NATO enlargement. It took the form of a US-caused economic crisis in Russia, deeper and more catastrophic than the Great Depression that devastated the US in the 1930s, and it came at a time when Russians were naive about a "common European home." " languages. ' and a common European security structure that would include Russia.

The catastrophic Russian Depression as a result of Western-monitored "shock therapy".

The magnitude of this economic catastrophe was explained succinctly in a recent issueessayby Paul Krugman, who wondered if many Americans are aware of the vast catastrophe that has befallen Russia. Krugman is pretty accurate in describing it — but not when it comes to identifying its cause.

ÖChartBelow is what happened to Russia from the early 1990s as a result of economic policies implemented under the direction of US advisers, economist Jeffrey Sachs, perhaps the most important of them. Sachs describes his contributionon here. This policy takes an economy abruptly from a centrally planned economy with price controls to one where prices are determined by the market. This process is often referred to as "shock therapy".

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The graph shown above is from the World Bank (The link ison here.) correspondingWorld Bank standardsunder the guidelines ofCreative Commons.

The plot shows that with the onset of "shock therapy" in 1991, Russia's economy collapsed to 57% of its 1989 level, a 43% drop! For comparison: The US economy collapsed during the Great Depression of the 1930s70%a 30% drop from pre-depression levels. Life expectancy in Russia fell by about 4 years during this period. Poverty and hopelessness became the norm. In my experience, few Americans know this, and even fewer understand its magnitude.

The "shock therapy" used in Poland did not lead to persistent depression. Why?

Data from Poland is also included in the chart above for comparison. Why? Because “shock therapy” was also used in Poland, starting two years before Russia, in 1989. A look at the graph above shows the clear difference between the two, and the graph below reinforces this view. Below are the real GDPs of Russia and Poland, normalized to a value of 100 for the first year of their transition to market economies, shown in a 2001 IMF paper by Gerard Roland: “Ten years later... transition and economy.(China is also embraced by Roland. One lesson is that China has moved to a market economy without "shock therapy," having done so with surprising success and without surrendering to the haphazardness of US generosity.)

Roland, Gerhard. "Ten years later... transition and economy."IMF papers48 (2001): 29–52. Figure 1. Quoted from Krugmanon here.

It is immediately clear that Poland went through a brief recession that lasted two years but recovered quickly, unlike Russia, which remained in recession for 16 years. Why the difference between the two? Much of the answer comes from economist Jeffrey Sachs, who headed the transitional advisors in both countries and is therefore a man who knows his stuff. As Sachs put it in an interviewon hereanDemocracyNow!he was part of a "controlled experiment" where he could observe what led to such different results. Himit says:

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I ran a controlled experiment because I was the last year to President Gorbachev and President Yeltsin in the first two years of Russian independence, 1992 and 1993, as economic adviser to both Poland and the Soviet Union. My job was financially, really to help Russia find a way, as you (the interviewer, Juan Gonzalez) described, to cope with a huge financial crisis. And my basic recommendation in Poland, then in the Soviet Union and in Russia was: to avoid a social crisis and a geopolitical crisis, the wealthy western world should help contain this extraordinary financial crisis that accompanied the collapse of the former Soviet Union.

Well, interestingly, in the case of Poland, I made a number of very specific recommendations, and all of them were accepted by the US government - set up a stabilization fund, cancel part of Poland's debt, allow a lot of financial maneuvering to get Poland out of the crisis . And, you know, I patted myself on the back. 'Oh look at that!'

I'm making a recommendation and one of them, a multi-billion dollar stabilization fund, was accepted by the White House within eight hours. So I thought: "Very good".

Then, in the last few days, the analogous call came first for Gorbachev and then for President Yeltsin. Anything I recommended that was on the same basis as economic momentum was categorically rejected by the White House. I didn't understand that at the time, I have to say. I said: 'But it worked in Poland.' And they looked at me blankly. In fact, as an acting Secretary of State said in 1992: "Professor Sachs, it doesn't matter whether I agree with you or not. That will not happen.'

And it took me a really long time to understand the underlying geopolitics. Those were the very days of Cheney, Wolfowitz, and Rumsfeld and what became the Project for the New American Century, which meant the continuation of American hegemony. I didn't see it at the time because, like an economist, I was thinking about how to help overcome a financial crisis. But the unipolar politics took shape and were devastating. This, of course, led to Russia falling into a huge financial crisis, leading to much instability that had its own repercussions for years to come.

But more than that, what these people planned from the start, despite explicit promises to Gorbachev and Yeltsin, was NATO enlargement. And Clinton initiated NATO expansion with the three Central European countries - Poland, Hungary and the Czech Republic - and then George W. Bush Jr. added seven countries - Bulgaria, Romania, Slovakia, Slovenia and the three Baltic States - but against Russia ...

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Neoconservatives in action, realizing the "Wolfowitz Doctrine," the latest expression of the US post-WWII quest for total world domination.

It is quite clear that the US goal was not to help Russia but to overthrow it, and Sachs correctly links this to the US quest for global hegemony.founded firstus monthsIn frontPearl Harbor and reinforced by the neoconservatives who are now its proponents. Among them, Sachs cites Paul Wolfowitz, whose "doctrine" encapsulates the goals of the post-Soviet eraWords:

Our first goal is to prevent the resurgence of a new rival, whether on the territory of the former Soviet Union or elsewhere, that poses a threat on the scale of the former Soviet Union. This is a dominant consideration underlying the new regional defense strategy, and requires that we strive to prevent any hostile power from dominating a region whose resources, under consolidated control, would be sufficient to generate global power.

We must maintain the mechanism to discourage potential competitors from seeking a larger regional or global role.

What better way to achieve this goal than to reduce the Russian economy to a basket? Sachs draws a direct line from Russia's Great Depression of the 1990s and early 2000s to NATO expansion, the US-backed coup of a duly elected president in Ukraine in 2014, and the US proxy war in Ukraine, which is also expected to "weaken " will. Russia. America's hand worked every step of the way.

The NYT's Krugman fails to discuss the US role in Russia's Great Depression - it is not part of the printable narrative.

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In his article, Krugman describes the difference inResultsbetween Poland and Russia, but he does not describe otherwisefactorsthat can differentiate the two countries and serve as onecausedof the different results. Sachs points to one such cause that he has witnessed firsthand.

Krugman does not mention Sachs' experience, which Sachs himself has repeatedly addressed in interviews (such as the one citedon here) and written in different accounts since then1993and a long account2012where he describes the lack of help from the West as his "greatest frustration". The Sachs account is no secret and a competent economist would surely know about it.

There were certainly other factors that contributed to this tragedy, which Sachs himself discusses.on here. But there is no doubt that US and Western actions were key factors in Russia's Great Depression. Understanding this goes a long way towards understanding the events that have led to the present moment of the US proxy war in Ukraine and the brutal sanctions against Russia. But that understanding doesn't fit the narrative the NYT confines itself to — and its readers.

John V. Walsh, @JohnWal97469920, until recently Professor of Physiology and Neuroscience at the University of Massachusetts Chan Medical School, has written on peace and health issues for several independent media outlets.Read more articles by John V..

This entry was posted on Tuesday, January 3rd, 2023 at 3:57 pm and is filed underChina,economy/economy,Narrative,neoliberalism,Poland,Russia.


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