If Russia does that, we think it will boost prices a little bit, and not only for the U.S., but the whole of Eurasia.
U.S. oil, on the other hand, shows that they are willing to pay a heavy price for what is essentially a bargain. In 2010, the U.S. government slashed subsidies to refineries in the nation’s oil-dependent Northeast, in the process supporting the Keystone XL pipeline, yet had no intention of supporting those in the state of Montana. Instead, Congress sent three drilling companies to protest the federal regulations and ended up making little progress on permitting. Nowadays, the price of Brent crude has come down to $40 a barrel, because the U.S. producers pay for their own pipelines. If oil prices are going down, and some major companies are getting shut-up, and there are protests on both sides of the Atlantic, the United States has the leverage to force those price hikes. If the U.S. is going to be a partner in this effort, why not put in place a set of rules that promote competition to make sure these prices don’t come down?
This comes from a group of economists who have asked people to look at the history of American government policy towards the Russian Federation. Now, I want to highlight that it doesn’t make sense for the United States to focus its energy policy on Russia, either. It’s an open country, where people can go to the grocery shop and make their own bread and milk. (Here, I’d argue a simple, state-level ban on Russian imports would help avoid another cold war situation.) Well, look what happened. During the Soviet Union’s Cold War years, everyone was treated like a “little communist,” and the U.S. government refused to pay a penny of subsidies to Russia. This is a terrible model of what should be done. (And it’s not a model at all. The United States is one of the world’s largest exporters of defense-related goods, and Russia has a major ally who is making an effort to help stop the war.)
The same is true of NATO. The United States has not been one of the main military allies of NATO, despite our efforts during the Cold War to get peace talks and to stop Russia from ever breaking out of the SALT treaty. It also has a number of other bases around the world, and we do not have to rely very heavily on it to do anything right, but this is a model that American policymakers should be working on in real time that can help make U.S. and allies better partners. Here’s where the story becomes interesting. When America, China, and Europe made a deal in March, 2014, they gave U.S. firms a three-month extension that included closing all U.S. and NATO bases in two more countries within 14 days in order avoid paying large tariffs. But that move failed, because once those bases were closed, the next six months were in the hands of the U.S. military, not to speak. When Russia made their biggest move in January, they paid large tariffs and then started trying to buy back these bases as quickly as they could. If that hadn’t been the case, then even in February, the U.S. would have been free to negotiate a new deal, because it would be cheaper to shut down all the U.S. military bases in a month than it is now to build back up bases and build up a third of the NATO base-by-base basis. The same goes for the U.S.-Russia relationship, because it would be cheaper to negotiate an agreement that would force NATO to do another deal with Russia, not force it to give up it’s bases in January rather than as quickly as possible. Or maybe that’s why Putin is so excited about it: He’s been told we were going to be able to move more American aircraft to and around Russia, especially when the NATO alliance is trying to get rid of it.
Now, at this point, the big question is if that’s really going to work. And maybe it isn’t quite as simple as a nuclear war. We are a weak power, a strong military, and the United States would have to come up with an extraordinary deal to win a war against an anti-access-to-information (ARINT) country, if it were to win that war. And if it wins, people will be upset, and we will pull them by the scruff of the neck. And if you don’t have something like that, the only strategy you have is a preemptive strike against Russia; but not a direct preemptive strike. on NATO. I talked to U.com’s Mark Peterson, and Linton, andinton, andinton andinton,inton andinton