Trump Stumbles

President Donald Trump has had a remarkable string of domestic successes ranging from the new tax reduction/reform package to the appointment of Justice Neil Gorsuch to the dismantling of the ruinous Obamacare. Along the way there has been a concerted effort to reduce government regulations and encourage business and employment growth. Even the confusion that exists around immigration reform has been beneficial in raising the issues to a point where Congress must act rather than just talk and complain.

Mr. Trump’s foreign policy has been a combination of harsh actions coupled with an open door to negotiate. The success of that strategy will be learned over the next six months or so. It stands in marked contrast to the status quo foreign policy presided over by a succession of Yale educated lightweights who can think of a hundred reasons for appeasement and not a single one for confrontation. That attitude was most pronounced under former President Barack Obama who hosted an apology tour, allowed the invasion of the Crimea by Russia, desecrated our military capability, allowed the rise of the particularly blood thirsty ISIS, backed down on the “red line” for Bashar al Assad’s use of chemical weapons in Syria, negotiated the worse possible nuclear weapons agreement with Iran (including the transfer of billions of dollars to Iran for its use in support of terrorism globally) and abandoned Libya in the aftermath of Muammar Gadaffi’s ouster and execution.

Mr. Trump appears to enter these foreign policy entanglements with the assumption that personal chemistry can overcome political enmity. Thus you see Mr. Trump’s approach to a series of world leaders, including President Xi Jinping of China, President Emmanuel Macron of France, Crown Prince Mohammed bin Salman of Saudi Arabia, Prime Minister Benjamin Netanyahu of Israel, Leader Kim Jong Un of North Korea and President Vladmir Putin of Russia. In virtually every case Mr. Trump has been upbeat at the conclusion believing he has opened the door to further negotiations – right down to bon homme handshakes and post-meeting compliments. Having negotiated in hostile situations myself, I can vouch for the idea that, at the outset, you park your enmity at the door and seek common personal ground before engaging in the negotiations.

But when your opposite number is a bona fide and brutal criminal and/or lies with impunity, the gloves come off immediately. And that is where Mr. Trump stumbled with Mr. Putin. Mr. Putin is a thug who will not hesitate to use force, violence and even murder to advance his agenda. He is a practiced and prolific liar as are most sociopaths. However, he is the head of a country that possesses over nineteen hundred active nuclear warheads and the delivery capacity to launch most of them. It is in the United States best interest to engage with Mr. Putin and for Mr. Trump to take his measure.

In the aftermath of the meeting with Mr. Putin and at the conclusion of Mr.Putin’s string of lies regarding virtually everything, Mr. Trump should have politely said that he was pleased with the opportunity to meet with Mr. Putin and to hear his views but that it is obvious that we disagree in many areas not the least of which is Russia’s interference in our elections and Russia’s violations of economic and military sanctions imposed on Iran and North Korea. Mr. Trump should have continued by requesting additional discussions regarding resolution of all our disputes. Upon returning to the United States, Mr. Trump should have ordered economic and tariff sanctions against Russia, Mr. Putin and the Russian oligarchs who support him. He should have also note that the sanctions would continue until we are able to reach a verifiable agreement regarding Russia’s conduct.

You may be thinking that economic sanctions against a rogue regime like Mr. Putin’s is pretty lame but, trust me, done right, done immediately, and done thoroughly, economic sanctions will break Mr. Putin’s back and just as importantly the backs of the Russian oligarchs who support him. A recent article in Deustche Welle described the state of Russia’s economy thusly”

“Russian President Vladimir Putin, who secured a fourth term in March in the March 18 polls oversaw a period of economic growth during his first two terms in office (2000-2008), boosting incomes across the country.
Those years were perceived as a welcome change from the financial instability of the 1990s, when many Russians lost their savings.

“But Putin’s third term in the Kremlin, which began in 2012, saw a decline in ordinary people’s quality of life.

“Russia has seen its purchasing power decrease continuously for the past four years after the world’s number 11 economy was hit with Western sanctions meant to punish Moscow for its annexation of Crimea and the Kremlin’s role in the ongoing Ukraine conflict.

“But the far-reaching sanctions were not the only, and indeed not the most important, factor behind the decline. What hit the Russian economy hardest was rapidly falling oil prices, which considerably reduced the country’s revenue from oil exports.

”As a result, Russia’s poverty rate, which had fallen from 29 percent in 2000 to 10.7 percent in 2012, inched back up to 13.5 percent in 2016, according to the most recent annual figures.

“Rising poverty rates have contributed to the stark contrast between the poor and the rich in the country.

“According to a study by Credit Suisse, the most affluent 10 percent of Russians control 77 percent of the wealth, placing the country on the same level of inequality as the United States in a ranking of developed nations.

Although the Russian economy returned to growth in 2017, seeing GDP expand by 1.5 percent, medium-term forecasts don’t exceed 1 to 2 percent-growth per year, far from the leaps of the early 2000s.”

I believe it was Rep. Trey Gowdy (R-S.C.) who recently noted that from an economic standpoint, Russia was basically Mexico with nukes. (Most recently Russia has been ranked 12th and Mexico 15th in Gross Domestic Product (GDP) while they are respectively ranked 9th and 10th in population.) Better said, Russia is Mexico without the beaches. The point is that Russia is basically a third world economy that currently teeters on collapse because of its undue reliance on oil exports. (Mexico has embarked on a process to broaden and, therefore, stabilize its economy.)

Currently, Saudi Arabia and some of its closest allies are keeping the price of oil low so as to limit the economic ability of Russia to continue to interfere in the Middle East – particularly with regard to Syria. (The same is true with regard to Iran.) As noted above the repression of oil prices coupled with economic sanctions are keeping Russia on the verge of economic calamity. Swift and extensive economic sanctions will tip the scales and Mr. Putin and his criminal enterprise will be awash in unhappy Russian citizens – more importantly they will be awash in unhappy oligarchs who are just as dangerous and ruthless as Mr. Putin. But to make it succeed the countries of the European Union must cooperate – particularly Germany by increasing its trade with Great Britain for oil and gas from the North Sea reserves and eliminating its growing dependency on Russia and the new Nord Stream 2 pipeline. Unfortunately former German chancellor Gerhard Schroeder is leading the charge for the pipeline and drawing his former party the Social Democratic Party (SDP) into the mire. (It has a familiar ring to it except the name Clinton is America’s disgraced moneygrubber.)

The liberal/progressives in America always seem to frame these foreign policy struggles in terms of appeasement or war but, in doing so, they miss America’s greatest power and that is economic power. Crushing Russia’s economy is not that difficult and could be done in a relatively short period of time. The same could have been said of Iran until former President Barack Obama bailed the mullahs out with $150 Billion (including $1.8 Billion in cash) as part of the Joint Comprehensive Plan of Action – the Iran nuclear arms deal. Side deals inked by Mr. Obama also let Iran back into the international banking channels.

Regardless, the threat of armed conflict is always real, but the most important weapon is strong enforced economic sanctions – something that Mr. Obama and the rest of the liberal/progressives will never understand because they will never understand how wealth is created.

But Mr. Trump has the opportunity to correct his mistake. His invitation to Mr. Putin for a second meeting in the Fall is his moment to face down Mr. Putin and, as President Ronald Reagan once famously did with former Soviet Union leader Mikhail Gorbachev, demand that Mr. Putin cease and desist. (Just as a reminder, Mr. Reagan ignored the advice of the Yale pussyfooters at the State Department in doing so – God Bless Mr. Reagan.)