 Welcome to CN Live, season four, episode five, Ukraine, the economic fallout. I'm Joe Laurier, editor-in-chief of Consorium News. And I'm Elizabeth Voss. The collective west led by the United States declared economic war against Russia last month in response to the invasion of Ukraine, imposing perhaps the harshest sanctions against any nation in history. President Joe Biden has said the aim of this economic warfare is to turn the Russian people against its government. Sanctions against Russia's central bank were intended to destroy the value of the ruble. One US dollar was worth 85 rubles on February 24th, the day of the invasion and soared $154 on March 7th. On Friday, the currency straightened to about 101. Putin and other Russian leaders were personally sanctioned as were Russia's largest banks. Most Russian transactions are no longer allowed to be settled to the swift international payment system. The German-Russian Nord Stream 2 gas pipeline was closed down and became bankrupt. The US blocked imports of Russian oil, which was about 5% of US supply. BP and Shell pulled out of Russian partnerships. European and US airspace for Russian commercial liners was closed. Europe, which depends on Russian gas, is still importing it and is so far rebuffing US pressure to stop buying Russian oil. Other Russian commodities such as wheat, fertilizer and metals have been cut off. A raft of voluntary sanctions followed. PayPal, Facebook, Twitter, Netflix and McDonald's have been shut down in Russia. Coca-Cola has stopped sales to the country. US news organizations have left. Russian artists in the West have been fired and even Russian cats are banned. It also gave an opportunity for US cable providers to get RT America shut down. Other Russian media have been de-platformed and Russian government websites hacked. A Yale University professor has drawn up a list of shame US companies that are still operating in Russia. The West's economic war and lethal aid to Ukraine are in lieu of a direct military confrontation with Russia with all of the unimaginable consequences that that could bring. But so far the sanctions do not seem to be working as planned. China has come to Moscow's rescue, buying more oil and other commodities from Russia. Beijing has allowed Russia to use its union pay banking system, replaced Russia's use of Swift with China's interbank system and China and the Eurasian Economic Union, which Russia is a part of, are designing a new monetary and financial system that would bypass the US dollar, threatening it as the world's reserve currency. That has led to US attempts to tie China to the war in Ukraine so that it can impose new sanctions on Beijing, perhaps similar to those on Russia. The United States is acting as though the world is the West and that this is the China 30 years ago in its effort to impose its unilateral rule on the world while its domestic social problems mount. The US has not only driven Russia and China closer together than ever, but has now brought in India, Latin America, Africa and the Middle East into a new block with an economic power that exceeds the West. All of those regions have refused to sanction Russia and continue to trade with it. The US has turned the majority of the world's population against it. You might be witnessing the end of Western dominated globalization and the birth of a divided world of two separate economic, financial and commercial systems. Cutting off trade in finance to Russia has already boomeranged on Western countries, driving up prices, especially at the pump and at the supermarket. Instead of prompting a popular uprising in Russia as a result of its sanctions, Russian President Vladimir Putin's popularity has actually risen since the invasion. Adding China as a target of economic war would drive the populations of the US, could drive the populations of the US and Europe against their own governments instead. Instead of the population rising against Russia. Joining us to discuss these complicated issues are two leading economists, Professor Michael Hudson. He's a professor of economics at the University of Missouri, Kansas City and a researcher at the Levy Institute, Economics Institute at Bard College and Professor Richard Wolff who's rejoining us. Meredith Professor of Economics at the University of Massachusetts, Amherst and a visiting professor at the New School in New York. I'd like to begin with how Russia is surviving this economic war and then discuss the economic blowback on the West. And finally, what the consequences of similar sanctions on China would be. Rick, let me start with you. How is the economic war going against Russia so far? Well, it is causing pain. It is causing some difficulty. It is going to have short, medium and long-term consequences. But my guess is, and we're at a stage where guess is all you can really do here. For example, just to make that one point, Russia has not yet decided on what counter sanctions. A lot of folks seem to believe that sanctions always go in one direction. They don't. They always have consequences in which the sanctioned become the sanctioners in turn and then you have to figure out how this interplay affects both sides. The United States media in the main seem to be all cheerleaders for the one side and oblivious to either the reality or the potential of the other side. So it's a little early. Having said that, I think there's a context here that we ought to understand. Is this the mother of all sanctions? Yes. But under Donald Trump, we had what was then the mother of all sanctions for years of economic warfare. Trade war, Mr. Trump told us. Trade wars that were easy for the US to win. That's literally a quotation. He imposed tariffs on a scale that was dizzying. Hundreds of billions of dollars at a time, tariffs eventually against virtually the entire flow of goods from China to the United States. From the best I can tell, and I think this is a consensus, that program of sanctioning China, which by the way included comments about displacing the dominant role of Xi Jinping, displacing the dominant position of the Chinese Communist Party, were widely referred to by top officials kind of like President Biden's remark the other night in Poland. And to be blunt, but I think to be fair, this sanction program on China accomplished next to nothing in terms of its own stated objectives. So now we have an even bigger one against Russia. Russia, unlike China, has had quite a few years now of experience with sanctions. People should understand that sanctions began against Russia a very few years after the Soviet Union collapsed back in 1989. We go back to the 1990s, we can see sanctions imposed on Russia. They always had this mixture of short, medium and long-term objectives. One of those was to change their basic policy. That didn't happen. Another one was to get rid of Putin. That didn't happen. And yet we got bigger sanctions and you never quite know what the new situation will bring. But if I were a betting person, the notion that these sanctions are going to fundamentally alter what's going on here, I think is a delusion of the greatest sort. And if I can just end it, what's going on here is the decline of an empire and the rise of another one. And that is always like a tectonic shift of the crust of the earth. That is a rough and tumble experience. It always has been. The Spanish, the British, the Dutch. I mean, those empires as they crumbled, as they clashed with one another. There was lots of violence. There was lots of terror. The Ukraine has the sad moment in history is the time and the place. But it could have been anywhere. And in small ways it has been elsewhere. Kosovo is not all that different in terms of what it's fundamentally about. And when you have these kinds of huge shifts, the details, however horrific and painful to populations like obviously is happening in Ukraine, those end up being kind of footnotes to history even if the passions they generate are intense at the time that it occurs. Michael, I don't think that Rick is using hyperbole when he talks about this being a world historical moment that we are going through, a rare one. And it could be, it's been decade or more since we've seen a battle between the unilateralism of the US and the multilateralism of Eurasia of China and Russia. It seems like it's come to a head now. How do you see it? Well, Richard's quite right when he says it's a tectonic shift. Let's look at this from Russia's point of view. This is everything that Russia has been aiming at and insisting upon for the last five years. President Putin and Foreign Minister Lavrov have been leading the understanding that the world needs to de-dollarize, that the United States has declared an economic war against Russia, China and their allies really against Eurasia. So in effect by drawing the sanctions, not only the sanctions, but the most important thing is by seizing Russia's foreign holdings in the United States, its treasury bond holdings and the bank deposits. What the United States has done itself is exactly what both Lavrov and President Xi of China have been saying the world must move towards. They've been saying we must have a multinational world, multipolar world. We must de-dollarize, we must cut free of the dollar and isolate, protect ourselves from the United States ability to use sanctions to interrupt their economic activity, to use oil to threaten any country that doesn't follow US policy from having their energy resource cut off, to protect countries that don't produce their own food from being able to buy food and feed themselves if they do something the United States doesn't like, if they do not open their markets to the United States, if they do not privatize their infrastructure. So everybody thought for the last five years, well, what will Russia and China and their allies, India, Iran, how will they create this new world order? Well, the United States has accelerated this process. It has destroyed itself the dollar standard. It has said whether you're Afghanistan and we grab all of your foreign exchange reserves, whether you're Iran and we grab your reserves if you're Venezuela and we tell the Bank of England, simply take all of your gold and confiscate it. Nobody, no country's central bank reserves held in dollars. No country's bank accounts in the United States are safe. You must withdraw from the dollar in order to avoid the United States doing to you what we've just done for Russia and what we may, would like to do to China. Grab all of their wealth in the West and hope that this is somehow going to make them unhappy enough to say, oh, please don't hurt us anymore. We'll do whatever you want and adopt neoliberalism. So when Richard just talks about the tectonic shift, it's really a shift between two systems. It's between the United States pushing neoliberalism on the one hand and countries following, let's say an industrial capitalism evolving into socialism on the other hand. And all of this began not only just as President Putin has said, this war is not about the Ukraine. It began a year ago when the United States started the war against Germany and Europe to hold it in. When President Biden insisted that Europe and especially Germany has to block Nord Stream 2, what he said has been saying for over a year now is that we want Europe to become dependent on American gas and oil, not Russian oil. Not only because we want the business of the exporting, but we want the ability to control the world oil trade so that if countries do resist neoliberalism, we can cut off their energy supply. And we can use Russia as an example of what we can do to Argentina or Latin America or Africa, I think the Chinese phrase is killing the chicken to frighten the monkeys. So that's, you are seeing a fundamental shift and it's a shift of economic systems and the United States has accelerated it. Of course there's a transition period with interrupted supply chains, but from Russia's point of view it's just accelerated the Eurasian victory by years. And Rick, you agree with that? Yeah, I agree substantially with what Michael is saying. I think this is a remarkable act of desperation. I mean, even, let's go from the minuscule to the big picture. The so-called slip of President Biden making regime change in Russia, you know, his passion or his, whatever you want. You know, this is desperate. You don't waste your time insulting other leaders in the world that you don't like whose policies you disagree with. You don't do that if you're confident. It's a little bit like having a conflict with somebody across the street. You know, if you start calling them bad names, you know, it's you that are out of control. It's not anymore the situation and it's not the other one. And I think to flesh out what we've been saying both Michael and I, the United States wants to control Europe because it's losing most of the rest of the world. It's looking for an ally. It's looking for something. So you have to shift gears instead of showing your rear end to Europe, which was Mr. Trump's specialty. You now have a complete, oh my God, that didn't get us anywhere. We're not one step closer to a compliant China than we were before Mr. Trump took over. Maybe we better, you know, go the other direction. And, you know, instead of demonizing China, let's try to demonize Russia as an alternative ploy. And that can always scare Europe because Russia has been a problem for Europe for centuries. Everybody needs to remember little geography. Russia is bigger than the rest of Europe. I mean, it is the bear. It is the giant in this situation. That has frightened the British Empire as early as the 18th century and has been a problem for Europe all along. And the United States now wants to somehow revive all of that. That's not gonna change the basic on the ground question. And I want everyone to be clear on this. Europeans are discussing and have been for at least 10 years. The tectonic change we're talking about. They know it. They know that their trade with China is rising relative to everything else. They know their dependence on the Chinese market is rising relative to everything else. Russia, I'm gonna exaggerate now, but just to make the point. Well, let me do it this way with a statistic. The GDP of Russia is one and a half trillion dollars. The GDP of the United States is $21 trillion. It's important to keep those numbers. This is a struggle between a declining Goliath and an emerging David. China's GDP about 14 trillion is in the middle but growing fast and scheduled to surpass the US within the next few years. So that's the framework in which all of this is happening. The challenge of the Russians is precisely as Michael says, part of a very large shift of which China is a part that has several steps. We used to talk about the bricks. That was a step in the direction of some new configuration. And most of those countries are, let me be nice, lukewarm to the US position in Ukraine, to say the least. They're not going to law. They're not abrogating all of their relationships. They have no intention of doing that. Neither, by the way, do the German industries who got something out of all of this, they're not gonna cut their deals with Russia and China or very few of them are. They need those too much. And they want the future to be a growth future for them and that to better bet with China than it is with the United States. We are now, whether we like it or not, an economy that is getting, an empire that is getting old in the tooth, that we can call mature if it makes us feel better, but economic growth is over there. It's in China, it's in all these other places and capitalists who take a course at business school know that it's always better to be where the growth is than where it isn't. Rick, while we're speaking, there's news, breaking news. The New York Times reported that Russia said it would stop attacks near Kiev because they were close to an agreement with Ukraine on a ceasefire and now the Ministry of Foreign Affairs of Russia, and we have to say the only they are saying this now, say that Ukraine is ready to become a neutral state unable to own nuclear weapons with internationally guaranteed independence. That these guarantees will not be extended to Donbas region or Crimea, which would mean that Kiev formally abandons the idea to annex them, that they are part of Russia. Ukraine would be unable to have any military presence including NATO and Russian forces, it doesn't say where, and Kiev is requesting a final treaty to be signed by Russian and Ukrainian heads of state. This is from the Ministry of Foreign Affairs. It could be Rick that the United States realized their sanctions weren't working. They know what side of the ledger they're on in terms of this massive change in economics in the world. And they did not stop Zelensky from agreeing to this. These were the three conditions that Russia put forward about 10 days ago. Michael, you wanted to comment on that or what we were discussing before? I will comment on that. I want to put what Rick was saying in perspective. And it's a 50 year perspective that goes back to the Bandoone Conference in Indonesia in 1974 when President Sikarno moved with India and much of the global south to create a non-aligned nations. The attempt going back way to 1974 and was to realize that the United States was acting as an exploiter of third world countries that it's investment did not aim at helping them grow just to safe and off what they could from their raw materials and to take over the government and make the financial sector, the planning sector, not the government sector. Well, the Bandoone Conference and the third world were not able to go their own way because they didn't have a critical mass. But the United States started a racist revolution in Indonesia. A millions of Chinese were killed and the rivers ran red, I'm told, with ethnic cleansing. There was regime change in the United States ever since the overthrow of Indonesia, which was the bloodiest internal, you could call it a fascist war up to that time outside of Europe. This has been the model ever since and the United States continued to push the model. They thought they could do to Russia what they did to Sikarno and they could do the same to China. There have been discussions in America as I know you and Rick both know, let's divide Russia into a number of countries like divide Iraq into a number of countries. Let's break China into a number of countries by pushing the West to succeed. All of this was their attempt to divide and conquer. And yet the United States didn't take the scope into consideration that there's now a critical mass that is Rick pointed out, doesn't need the United States. They can be self-sufficient without. But the West, the United States plus Europe to Japan, the new access somehow is going to find itself left out of the cold. And yet the stock market is soaring from all of this and it's soaring because energy prices are going to go way up in the US, the NATO countries, much to the benefit of the oil industry. Food prices are going to go way up benefiting American agriculture. Arms purchases by Europe are going way up. So the irony is that the United States itself is benefiting largely at Europe's expense going its own way while the world is dividing. Regarding the last thing you mentioned about the news that came about, I know that all along Zelensky has been asking for a ceasefire so that his neo-Nazi groups can continue their assassination programs and bombing of civilians. So I don't know if there is a ceasefire that Russia agrees to, it must have completed clearing out the as of battalion from Mariupol. And if they've really cleared out the neo-Nazi groups there, now they've achieved exactly what President Putin said his objectives were from the day that he moved in to protect the Russian speaking population in the Donetsk. Not only did they clear him out on Mariupol, but it seems as they're decimating the 60,000, the best troops Ukraine has that were lined up along the Dumbass confrontation line that appeared to be starting an offensive which brought Russia into this eight year civil war to begin with. I wanna turn quickly to the question of the cost to the United States economy, to American voters, to Western, especially Europe. How have they suffered? I'm gonna turn to Elizabeth Voso who has a couple of questions on that score. Rick, I'll go to you because you have to leave. Yeah, thanks Joe. I just wanted to ask really quickly about the fact that Biden had mentioned that food shortages would become a reality. Do you think that that's likely? Do you think it'll be significant and how extensive would that be? And secondarily to that, do you think that the domestic effects of this in the United States will lead to some sort of widespread protest? I mean, how much more can the US public take before reaching a breaking point with these higher gas prices, higher food prices on top of the economic fallout from the COVID-19 pandemic? Okay, that's quite a mouthful there Elizabeth. Let me try to at least deal with some of it. I'm very leery of the attempt too closely to link the inflation here in the United States to Ukraine. All that the Ukraine is doing is maybe making it worse, making it last a little longer, but everyone needs to remember that the inflation was well underway before February 24th when Russia moved into Ukraine. So it cannot be, although it is already being blamed in some sense, it allows a connection to be made that somehow the domestic inflation is Russia's fault along with everything else that is attributed to Russia. We have an economy that is in very deep trouble. Mr. Biden as the presiding president has to keep saying, it's really okay. This is silly. Trump when he was running against the Democrats for president said that their claims, the economy was great, we're all bogus. As soon as he became president, the Democrats accused him of being bogus about his celebration. They were right again, just as he had been right before. And now we have to play that role against Mr. Biden and the Republicans no doubt will do that as well. But that's very superficial, that doesn't get at anything. We have an economy that is extraordinary from the point of view of both classes, the employer class on the one hand and the employee class on the other. For the employees, we think about it. The years 2020 and 2021 could be argued as among the worst for the working class in American history. They suffered two catastrophes, a public health disaster as big or bigger than any in American history and the arguably second worst economic collapse, a little statistic, more than 80 million Americans had unemployment for some part of the last two years. Some for only a couple of weeks, some for the whole period, but that's more than half the working class. That's more than half the labor force of this country. That means everybody, 50% of our working class experienced unemployment and it's spectacular what was done to these people across two years. And then as they think, and we don't even know if it's true yet, that they're emerging from the pandemic and all of that, they get slapped across the face with an inflation running now officially at 8% and likely at least two or 3% worse than that if you take into account how the numbers are calculated and so on. This is an extraordinary level of pain to inflict on a working class. And you know it because just this week, the release of the findings of the University of Michigan Survey of Consumers indicates, for example, 32% of Americans think right now that their economic future is worse than the condition they're in today. That's the worst number in that survey since it started in the 1940s. We've seen a catastrophic experience while the president who slips and says regime changes on the agenda tells us about a robust economic recovery. I mean, it's not me that's questioning it. Those surveys of the University of Michigan indicate that the American people must believe that Mr. Biden is off his rocker with this kind of talk. What is the world is he talking about? So when the American people being squeezed, watch huge sums of money shipped off to the Ukraine. And with all due respect, Americans are feeling for the pain and the suffering of the people going through war. I understand that my family has gone through war. I know that real well, but they're going as they think about it to wonder about billions over there and we don't have what here in terms of our situation. It is an extraordinary time. Now, the fuel price increase. I don't know what's going to happen to that. Even a peace deal depends on a lot of detail. Are the sanctions going to be reduced? Are they not? Are they going to be reduced quickly? If at all, what in the world is going on? A lot of that we can't know even from the headline that Joe just read. I mean, we just don't know enough. And if in the absence of that and given what was happening anywhere, once an inflation like this gets built in, once every employer sees this as a rising level of cost, he wants to get ahead of it by raising his prices. This gets built in, that's already happening. We're facing an inflation that is going to take the lower half of the American people into levels of economic contrition and difficulty that we can't predict the political outcome. At this point, it'll work only to the advantage, as I see it, of the Republicans in the election because the Democrats have literally painted themselves into a corner. And if Mr. Biden can't be sitting up on the big horse going to war with all the drama that those guys can do, if that rug has been pulled out from under him by the Russian foreign ministry or whatever deals have been made here, I don't know what the guy's gonna run on. He's got, I mean, he's looking like a disaster on a scale that frightens me mostly about where it takes American politics. Go ahead, Michael. Yeah. Well, I think the implication of what Rick says is that President Biden has indeed got a regime change, but the regime change is in the United States itself. Biden said last week, well, we've got to make, Americans got to make a lot of great sacrifices to support the Nazis in Ukraine, to support the ISIS that are fighting there. If we're going to support ISIS and the Nazis in their fight against civilization, you've got to make sacrifices. But who's the we? The sacrifices that the public is making, as Rick has explained, are a great benefit to, there's another side of the balance sheet. The sacrifices he's talking about are huge, huge profits for the oil companies. Look at the stock market soaring for the oil companies. Look at the Raytheon and the military industrial complex and Boeing soaring prices. And what he describes as a disaster for the American consumers that are squeezed is a bonanza for centralized capital. Last night on the news in here in New York City, they had a listing by boroughs of the evictions that are taking place. There's an, if you can't pay, meet your basic budget of covering your fuel costs, your utility costs, your food costs. You're going to be behind in your payments and a lot of people are going to lose their homes, either their renters or even owners. There is a huge agglomeration of private capital companies waiting to come in and pick up all of this real estate and turn America away from an owner occupied economy into a rental economy, a landlord economy. Biden really may succeed in rolling back the economy to the mid-19th century. And that basically is not just Biden, of course, it's the people around him and ultimately it's the deep state. Whether you're a Republican or the Democrats, their policy is identical. They have the same campaign contributors and I'm sure Rick agrees with that. All that voters can do is keep throwing the rascals out of power, but they're the same rascals basically. So the United States doesn't seem to have much of an opportunity to have a real alternative and you'd mentioned the absence of an anti-war demonstration. There isn't any anti-war demonstration here or in Europe. In Europe, the only anti-war demonstrations are the nationalist right wing. The whole left wing in Europe has been so corrupted by CIA meddling in the national endowment for democracy, basically turning the labor parties and the Tony Blairism and social democracy and to neoliberalism that the only protest you're getting is not from the left at all, which I think as you said earlier is pretty much evaporating but it's from the right. So the hope for the change is going to be the model that you're having basically in China and Central Asia finally saying we are not going to let American finance dictate how our society develops. We're going to develop our society for the population as a whole. So Western democracy has not been very successful in creating this prosperity. It looks like you need a government strong enough to check financial power and strong enough to check the power of the 1% and that's not being done under Western democracy. You're watching CN Live. We're talking about the economic fallout from Ukraine war with Professor Michael Hudson and Professor Rick Wolfe. It looks like the United States, if this peace deal that we just discussed briefly actually works, I think the Americans have lost this war. I've argued that they needed this invasion and they helped spur it on with that offensive in Ukraine and it goes all the way back to the 2014 coup and even further back to the nineties of the NATO expansion to this moment because they needed the war in order to unleash the economic warfare, the guerrilla warfare which they hoped if Russia occupied for a long period of time they could unleash and of course the information war. And now if there's really going to be a peace deal here I think that's not only disastrous for the US is long-term goals which were to bring down Putin and that was of course what Biden really meant but it will hurt also as you mentioned Michael the defense industry or the military industries to oil companies is if the war ends they don't need to supply any more ordinances do they? Rick, I wanna move on because you're gonna go in about 10, 15 minutes. I wanna move on to China now. They won't be able perhaps if the war ends to link China to this war in Ukraine. We saw this bubbling up a couple of weeks ago where they were making accusations that China was helping, interiorly helping Russia in the war in Ukraine whereas Russia has committed very little of its military to that operation but they wanted to split Russia from China. The United States understood what they're up against. So what would happen? Let's just hypothetically say if the US put similar sanctions on China what would the impact be a country that holds a trillion dollars in US treasury securities? And the American imports $500 billion a year and goods from China. Could they actually try to do such a stupid thing as that? Well, if what we're saying is got a good grain of truth to it if particularly we're right about the acceleration of the decline being the outcome of the effort to prevent the decline of the horrible irony for the US of that situation then one could wonder whether maybe some sort of lesson has been learned. Trump's efforts against China went absolutely nowhere. Now the even bigger efforts against Russia don't seem to have won although I'm sure all of this will be presented here as a great US victory but it's not gonna wash real well for me, I expect trouble. I expect that if Ukraine was a useful pretext for the events we've just gone through then we already know Taiwan, the US Navy and the South China Sea. I mean, one can see all manner of situations that could justify in the sense that the US does this whatever kind of economic warfare since they're obviously afraid of nuclear warfare at least that much sanity they have but I'm afraid I expected. I mean, look, for 25 years China's GDP has been growing at roughly three times the rate of the United States. This is unheard of for a quarter of a century. That's why they are what they are today. That's why the predictions that before this decade is out they will have the larger economy. The United States is in a sense caught. It can't do nothing because the direction of the change is very scary and it can't do something because that's very scary. It is very hard to figure out which way to go when both routes look to be fraught. But I worry that the people who will carry the day are the ones who say every minute that we wait shifts the framework of the struggle in our enemies favor. And therefore, we may not win now but we're sure as hell not gonna win 10 or 20 years from now given what the last 25 years have produced. There is no problem having a struggle with China but it is already, I think this is the verdict of history although obviously, with all the usual caveats I think it's too late. I think the United States is in a position where it can perhaps bemoan that it didn't do something earlier. It can perhaps bemoan that Kissinger reopened the connections with China when he did. But people do things that later turn out to have been very strange. I like to remind people that the United States had a hand in making Mr. Putin the leader in Russia. And they sure as hell had a hand in making Mr. Zelensky the leader in the Ukraine. These are two products of active American diplomacy that we know of and Lord knows what we don't know of and they're fighting. And all of this is a result of miscalculations, misunderstandings, lack of historical framework refusal to deal with the complex realities living in a bubble of a war against socialism or communism which never really was that anyway throughout the long 20th century which had to pretend that it was. You make mistakes like that for a long period of time and you're the dominant country what tends to happen is you lose your dominance. It's like Britain, the sun never sets on our empire. It will, you know, you're crazy if you think the reality doesn't change. And we are in that moment I think and the Ukraine is just another punctuation mark however horrible and painful. By the way, there is, I forget her name and I'm sorry about that. Carolyn Elkins, it comes back to me. She's a professor at the Harvard I believe the Harvard Business School and she's just written two books on the collapse of empires. It's a timely book, it's about the British empire but half of what she writes is a commentary on what is happening to the US today. And I think that's the necessary framework to understand what would we are overreaching like Russia in Afghanistan had to learn it can't run an arms race with the West and finally give its people the level of consumption they want and control Africa, you can't do it. It's the tragedy of every empire misjudges the situation over reaches and collapses. I think the United States is closer to that situation than at any time in its history. Michael, can you add to that? Yes, the fighting in Ukraine may be over but the sanctions are going to continue because the sanctions are what, as you just pointed out in your introduction led to the fighting. America had to prod Russia by defending the Russian speakers so that it would attack so America would have an excuse to say look how bad Russia is impose the sanctions. So the sanctions are the important thing that the ultimate cause fighting was the variable. Now regarding what Rick says, let's look at exactly how this end of the empire works out. When America spends its dollars abroad on its 780 military bases surrounding Eurasia, these dollars in the past have been turned over to local recipients, they're turned into local currency for local spending. The dollars end up in the central banks of Eurasia. In the past, the central banks have said what are we going to do with these dollars? Well, we'll put them in US banks, we're going to put them in the treasury bills so that we can intervene on the foreign exchange markets to stabilize our exchange rates. Well, none of this, even if the fighting ends that you cannot walk back the enormous grab. America is not going to say gee, Russia's not defending itself against Ukraine anymore. So we're going to give it back all the money that we've grabbed. There's nothing that you can do to roll back the money that you've taken. That means that in the future, as America spends its money abroad and from the 1950s, 60s and 70s, the entire US balance of payments deficit, the deficit that forced America off gold was military spending. That was, I've produced all the charts in my books of imperialism. And now this foreign exchange is going to be not recycled to the US to support the dollar. It's going to be spent on gold and on mutual currency swaps. Well, what that means is that the dollar no longer has the free ride, no longer has the free support and other countries will protect themselves against the depreciating dollar by doing what the United States did against Germany in 1921 after World War I by a century ago by imposing special tariffs against depreciating currencies. So the game is over and it's not over because Russia and China and India and Iran have defeated it. It was the self-defeating policies of this blindly arrogant, greedy, Republican, Democratic, deep state philosophy. Therefore, the fact that the Indians have bought Russian oil and rupees and the Saudis have said they might buy oil or sell oil in one, that's a consequence of US policy. But they are significant moments, however, in this process, isn't it? When we start seeing settlements of oil payments not in the Petro dollar anymore, but the Petro one. It's an old story, Joe. Every empire that went down, the Greek, the Roman, the Spanish, the Dutch, the British, the German, the earlier Russian, they've always had a debate between those who want to believe that the cause of the decline was external. Remember those terrible Gauls who undid the Roman Empire, those barbarians as they were called. You know, it's always the barbarians over there. The truth is, as every sober evaluation of all those empires has shown us, is that there's plenty of causation coming from inside. And we shouldn't get lost in the American need to project always the outside agitator. I think Michael is right. The major cause of all of this is the evolution, the internal contradictions, if you allow me, of American capitalism that lie at the base of its trajectory. I do have to leave. This is a very important conversation. I want to congratulate you, Joe, for producing it and you, Michael, for all your contributions, past and present. But the most important thing, get this out there. Get these conversations out there, circulate them. That's the biggest contribution we all can make to a better outcome than might otherwise occur. Well, Elizabeth, and I thank you very much, Richard, for coming on. Michael, can you stay a few more moments? Sure. Put a bow on this. Thank you very much. Thank you, Rick. Bye. Bye, Rick. I was thinking about Britain took over Egypt simply by taking over their treasury. They didn't really have an invasion. And that led ultimately to the revolution of 1911, I believe, and then NASA and the non-aligned movement. Today, it seems like that kind of gunboat diplomacy or just seizing the treasury of a country, it's evolved, hasn't it? And that's my first question. My second one is... Let's do one question at a time. All right, I'm gonna forget the other one, so I'll write it down. Go ahead. Go on. Okay. What you were talking about was called the ruin of Egypt at the time. And it wasn't only Egypt, it was the port. I mean, the Turkish, the Ottoman Empire, of which Egypt was a part. And Turkey was ruined, Egypt was ruined. The whole area was ruined through finance. What the United States has realized, and the last, I think, since World War II, is you can control whether, you don't need to go to war with other countries, you can control them financially, as long as you're willing to impose University of Chicago style free market, where, meaning you have to kill everybody, every academic professor who advocates an alternative. You have to treat the world like Chile. And what the free market has realized in Chile is if you can kill every labor leader, every land reformer, every intellectual, then you'll have Margaret Thatcher's dream there is no alternative. And that's the US policy, there is no alternative. And so financial power backed by the targeted assassination, Operation Gladio in Italy, the fight against the Greek anti-Nazis, who of course were mainly the communists, trying to produce a monarchy, the overthrow of the Iranian government, the mass assassinations after Pinochet and the spread throughout Latin America, that all along the United States has posed a military of the threat of violence. And that's all that it can do today. It can't invade an army with its own draft. It can only drop bombs. It can only impose sanctions. And the crazy theory is if you can make the pop, it's the former secretary, Madeleine Albright theory. If you can punish a population and especially if you can hurt their children and starve them and make them sick, if you can make them so unhappy, they will overthrow their government and say, okay, we don't want this anymore. We'll do whatever you want. And of course that hasn't worked. It didn't work. The fact is Madeleine Albright simply wanted to kill little children. She wanted to kill the population. I mean, it's all an excuse. They don't, it didn't work at all, but you get the sadistic perverse people in the deep state here and that's where they're at. They're working out their own personal anger. And that obviously this is not a situation that can succeed into Eurasia. The Americans are the barbarians at the gate. That's, and they're being perceived as that throughout the world as I think you've written often enough. But Michael, I don't see American, especially leadership really seeing themselves that way. Obviously they don't understand how the world sees themselves unless there are a few who are cynical and know exactly what they're doing. But I think there are a lot of true believers in government too, aren't there? Well, but they say it's worth it. They say, yes, all of, they marginalize the fight against the population. They say, yes, the population is going to suffer. That actually is going to lead them to make an economic choice to give up their ideals, give up their self determination and simply do what we tell them to do because they don't want to be bombed or sanctioned or starved anymore. So there's an idea that you motivate people by hurting them instead of by offering an opportunity to develop. And the problem is that the United States strategists don't know how to develop because they're neoliberals. And neoliberalism is all about grabbing unearned income, grabbing other people's property, grabbing other people's income without working. That's what America is. You pointed out at the beginning of the program that the American economy is shrinking. And if it's shrinking, how are you going to support American living standards and voters? You can only get this by exploiting other countries by imperialism and other countries are realizing do we really want our economic surplus shifted off to the United States so that they can live well at our expense? That's the issue that, how the issue is perceived and the rest of the world outside of US, NATO and Japan. Yeah, when does it ever work? Cuba has been on the sanctions since 1960 or so and Castro survived it all. So my second question, let's imagine post-imperial America. When you look at Europe, when their empires collapsed, after a while looked inward and created national health insurance systems and a social welfare system in Britain, for example. Right after the war, they voted Churchill out and we had the NHS within a few years. And in Spain and Italy, all these countries developed a robust social democratic system which has been eroded with neoliberals and no question over the last 20 years or so. But could that happen in the US? If the US finally, whatever it's going to take to realize and maybe this defeat, and I think this is a defeat in Ukraine, if this peace deal goes through, more defeats like this and China continuing to grow and a whole new separate economic and financial system. Can the US come to terms with losing its world power and would that translate into a better social system for the people of the US? Or am I dreaming? I think you're dreaming. It's a nice dream. It's a nice hope. I don't see it because you're a pad along socialist tradition that the United States did everything to grab and squeeze out. But America does not have a tradition like that. America has always privatized its basically infrastructure, not left it in the sign of the public hands. And so given the fact that almost all of American healthcare is privatized, you're not going to deep privatize healthcare like Bernie Sanders wants, because that's bonanza for the health insurance industry. You're not going to nationalize oil and the global warming issue is also important. The key America is opposing any kind of opposition to global warming. You could say that American foreign policy is based on accelerating global warming because as Biden said, the future is oil and coal. And that's what we can control. And if other countries were to adopt renewable resources, they would lose the dependence on the American oil and gas industry and food that has been enabled America to have a stranglehold over them. And if they were to shift from export crops to feeding themselves and growing their own grain, that would reduce America's ability to sanction them and say, we will starve you if you don't do what we want. America is not going to give this up because the America isn't the American people. The America is basically the blob, the State Department, the CIA, the national security state and that is central shifting its ideology is to shift economic planning away from government to Wall Street and other financial centers in England and France. And I don't see that financialization and neoliberalism is changing. That's the new religion and you're going to have, instead of the reform that you'd like to see, you're going to see an increasingly violent, vicious fight against anyone proposing this reform, just as they fought against Alende and Shelley and against Cuba and are fighting against China and Russia today. Well, let's assume that the sanctions will continue, as you said, even if there's a peace deal tomorrow. Will they still try to target China? There already are sanctions on China, we know that. But I mean, there's kind of serious ones and what consequence, they must understand they can't do that, right? What would happen to the world economy if they tried to sanction China the way they've sanctioned Russia? The United States, again, there will be a polarization in the United States between the 1% and the 99%. The 99%, what you call the economy, of course will suffer. The 1% will increase their power over the 99%. So for them, it's a win-win game. And also don't discount the fact that when you talked about the US, NATO and Japan, you're talking about basically white racism against the whole non-white world. And there's that racist hatred of China. In New York, the news broadcasts usually lead off with Chinese women being pushed in front of the subway yet again and again and again. And my wife has been threatened, she's Asian, has been threatened again and again on the streets, on the subway. There is a visceral hatred of the yellow peril in the United States. And you can't discount that just as there used to be the hatred of Germany. And the hatred of Russia goes back to the fact that the Tsars oppressed the Jews and Stalin was anti-Semitic. And that the people who are leading the anti-Russian fight are literally, I've known them for 50 years since I worked at the Hudson Institute. They are fanatics filled with hatred for what the Tsars did and Stalin did to the Jewish population. And they are working out this ethnic hatred. So I don't see them putting the concerns of the 99% over their own personal proclivities and over their campaign financers on Wall Street and the corporate America and the monopolies. And you speak about the 1% increasing their power over the 99%, but at what point does, and I asked this of Richard earlier, what point does the American public or the US public reach a breaking point? And we see really violent protests or widespread unrest. At what point do we see that? I think about 1990, it's at least 70 years away. Give it a couple of generations. There's nothing, they will be like a frog boiling. They're willing to go down and down and down because they believe there's no alternative. Because if you look at the news, look at the news we've been seeing on Ukraine. There's only, you don't get any side of what Russians in the rest of the world say. You don't get any side of what the neo-Nazis are doing against other civilians there. It's like there's a complete, I've never in my life seen such a total control of the news by the right wing censorship. So you're finding the same thing at economics. I stopped teaching economics because, economically, because there was no way I could fit reality into the curriculum. How are people going to understand the dynamics that we've just been discussing for the last hour? I don't know how it can be done. Yeah, and can you comment on that a little further on the censorship we've seen of Russian media in the US and in the UK, just how extreme it's been. And how much you think maybe the Russiagate narrative played into the ability to implement censorship in such a widespread, severe way? Well, that's part of the fake news as we're seeing now. And the fact that at the time it was obvious that this was cooked up between Hillary's campaign and British intelligence. That's British intelligence job, the white helmets. That's all sort of a problem we're getting propaganda. We're in an Orwellian world. The important thing is the rest of the world is not in an Orwellian world. So my main academic linkages are now with China, not with the United States, because they're looking at the broad economy, the broad movements of history. And neoliberalism is basically short term. They really don't care about the long term. They think, well, let's just get by this fiscal year. We'll make our profits. And if there's a mess, we're gonna come out ahead because the wealthy people always come out ahead. We can always somehow survive any grab bag. And so they're willing to make a grab bag out of the whole situation. And the grab bag will be at the 99% since the cleanse, lower home ownership rates. Not there's going to be further privatization of what remained of Medicare and Medicaid. It does not look good at all. I would, and usually in other countries, such as Rome, when Rome fell apart, you had a defection of people from the Roman Empire to the barbarians who, of course, were the socially minded, communalistic groups that welcomed more of the population. You had a flight from Rome and a depopulation there. I would imagine that America will end up sort of like Japan. Shrinking population, unlike Japan, there will be emigration, but where can Americans emigrate to not speaking foreign languages? They're almost trapped. I don't see any solution. I see shortening lifespans. And one last question for me before I hand it back to Joe. Why is Europe going along with the US on this? I mean, economically, on the economic front, how on earth do they think that they could survive an economic war with Russia and China, potentially? Well, they don't care. They're bought. I've talked to officials in the US Treasury. They say, we can simply buy foreign politicians. We can simply pay them. When you say Europe, what you really mean are the foreign politicians that are getting enormous financial support from various US State Department agencies. And they're after, they're opportunists. They're like Zelensky. They're after their own wealth. Europe is not led by politicians that have Europe's interest at heart. They're just as corrupt as they are in any other part of the world. If not more so, I've met many of them. I just can hardly believe the venal greed that they have. It's almost like they're a Democrat. Michael, did you, the US Treasury officials you spoke to today tell you or have you heard that the Treasury was never consulted on the central bank sanctions against Russia? Is that right? Nor was Wall Street really consulted about what the impact of these sanctions would be? That's probably true. I mean, the banks are trying to figure out, wait a minute, we've since the 13th century, banking has made one of its major businesses been financing foreign trade. And so as long as the oil trade was conducted in dollars, that meant it had to be conducted via US banks. And it's called receivables financing. You buy oil, you borrow the money a bank promises payment and it charges money for this. It advances the money to the seller. The money's paid with interest when the oil or other export is delivered. Now that whole foreign dollarized foreign trade policy financing is going to disappear for American banks. They may make a lot of money on the arbitrage trade, economies fall apart, but you're also going to have a huge third world Southern Hemisphere debt crisis this summer. What we've described for American consumers is through of Latin America and Africa and other countries that have to pay more money for their oil, more money for their food. They're not going to have enough money to pay foreign debt. So they're going to be huge debt defaults occurring and that's going to traumatize the world market. That's another long discussion that's independent, but you can see the people who did the sanctions didn't discuss the treasury because they didn't want to be told that there's some problems here. You know, didn't want to know. So Michael, you made an interesting comment that the US is an Aurelian society and much of the rest of the world isn't. In 1984, Winston Smith's job was to go into the archives of the times and go back. And if there had been a prediction of the wheat yield in the five year plan and it didn't actually make it, he'd go back and change the article in the archives to the actual number. But we're seeing that in real time now. Then I go back into the archives. We're seeing right now the excise from the Ukraine story of the coup in 2014, the existence of neo-Nazis that are part of this state military and the war of eight years against the Dumbass. That is not mentioned at all, even though into 2014, major media did a lot of stories about the neo-Nazis, gone. Absolutely excised the most frightening thing you said, you never expect, you never saw it worse. I'm in the news business, I have never seen it worse. I never thought I'd ever see it as bad. And that's why consortium news exists and CN Live to plug those holes to explain this conflict. Of course we're going to be attacked, as I'm sure you are Michael, as I'm sure Rick has been as being some kind of stooge of the Kremlin and that's the first resort. They don't want to debate you because they know they'll lose so they go right to the first thing as a smear. But we have consortium news, we have Elizabeth Boss, we have our executive producer, Kathy Vogan and myself and guests like Michael Hudson and Rick Wolf to discuss in detail this crisis in Ukraine and its economic fallout. And I thank you again, Michael, for coming on. And I- Good discussion, thanks for having me. Okay, and I thank our viewers and for CN Live. This is Joe Lauria and we'll be back soon with a new show, goodbye. Get out your notebook. If you are a consumer of independent news and the first place you should be going to is consortium news and please do try to support them when you can. It doesn't have its articles behind a paywall. It's free for everyone. It's one of the best news sites out there and it's been in the business of independent journalism and adversarial independent journalism for over two decades. I hope that with the public's continuing support of consortium news, it will continue for a very long time to come. Thank you so much.