The Mid Terms: Out of the Frying Pan Into the Fire
by John Lawrence
Voters are going to vote Republican because they don't like the economy. Really? What have the Republicans proposed to do about that? Cut social security and Medicare. Yeah, that'll fix the economy all right. Give more tax breaks to billionaires? That'll fix the economy for sure. Take away Biden's forgiveness of student loan debt? That'll really fix it. "Kitchen table" voters don't like inflation? What are Republicans proposing to do about that? The only tool in the arsenal for inflation cutting is the Fed's raising interest rates and the Fed is independent of both parties. Besides the only tool the Fed has is probably not the right tool for fixing this inflation. But it will eventually destroy what seems to be a pretty good economy despite inflation. The biggest way to fight inflation is to end the war in Ukraine which will bring gas prices down. Additionally, all the weaponry that is being "given" to Ukraine is really being bought from US weapons manufacturers and defense contractors like Lockheed Martin. This is pouring more money into the American economy at a time when money needs to be extracted from the American economy to fight inflation. The Fed's raising of interest rates is an attempt to increase unemployment which is the traditional way that the Fed fights inflation. The so-called Philips curve says that inflation is directly caused by too much employment, and, if you increase unemployment, it will bring inflation down. There is a direct correlation between unemployment and inflation. So the Fed, although no politician will say it, is trying desperately to increase unemployment. This hurts poor people the most, and, whether it will decrease inflation under the present circumstances, is debatable.
However, the war in Ukraine amounts to a protracted stalemate. As long as the west supplies Ukraine with weapons and North Korea, Iran and China supply Russia with weapons, the war will continue. No one on either side wants to talk peace. Each side wants to win at all costs. So the war will drag the world economy down into inflation and recession. Russia holds the winning cards in terms of its ability to literally destroy Ukraine from the air regardless of what is happening on the battlefield. This is not World War II where success on the battlefield was the key to winning the war. It's more like World War I where trench warfare and stalemate predominated. Territorial Russia remains virtually untouched since the rules are that the war will be entirely fought on Ukraine's territory, and the west to its credit doesn't want an expansion of the war. In the final analysis this gives Russia the advantage. Ukraine is fighting a defensive war, and Russia is fighting an offensive war. It's likely that neither party will run out of resources. That means the longer the war goes on, the more of Ukraine will be destroyed. There needs to be a peace commission and a peace process in which both sides can air their grievances and aspirations. What makes the most sense? I'm sure there is a possible way out, but neither side seems to want to compromise in the interests of ameliorating the lives of the Ukrainian people and getting back to normalcy. For each side their national pride is more important than the lives of their citizens.
Joe Biden could propose a solution to the war which would also go a long way to ameliorating inflation. Unfortunately, Biden is only interested in demonizing Putin. This is not a productive way to create peace. Biden is only fueling the war, and Putin won't back down due to pride. The more Putin is demonized, the more his hackles are raised. The west should be trying to lower Putin's hackles, not raise them. Ukrainian lives hang in the balance. Russian soldiers' lives are also in the balance although Russian civilians so far have escaped most of the suffering. Ukraine taking back real estate will not in the final analysis win the war because Russia can lob missiles into Ukraine ad infinitum. Only a peace process, compromise, consideration for civilian lives and reintegration of Russia into the world community will make it possible for people in that region of the world to again lead normal lives. Winning the war for either side is not a realistic option.
