Russia has good reason to remember the Nazi German invasion of 1941. By the time Soviet troops reached Berlin in April 1945, no less than 27 million Russian soldiers and civilians had perished in battle and as a result of calculated savagery by the Nazis whose perverted creed was to treat the Russians as subhumans.
Though Russia’s immense size and extreme weather defeated both Hitler and 133 years earlier Napoleon, the specter of invasion remains a real one. The Soviet state built its powerful so-called military-industrial complex on the basis that it was threatened by the United States and other NATO countries. NATO always denied this, protesting it was purely a defensive alliance against a Soviet invasion of Western Europe. Despite the relatively few Dr. Strangelove figures in the US who believed that communism was a contagious disease that should be destroyed in detail, NATO almost certainly was a defensive alliance, with no ambition to seize back the Soviet satellite states of Eastern Europe that formed the Warsaw Pact, let alone attack the Soviet Union itself. It stood by and did nothing while pact troops crushed uprisings in East Germany and Hungary. Had the Western alliance been configured to assault Moscow, either event would have presented an excellent excuse.
However, there has clearly been a change in NATO’s view. When the Soviet Union collapsed, its armed forces went into serious decline. Naval ships rusted in port, air force planes were grounded for lack of spares and the army was starved of money and equipment. The nadir for Russia’s military came with the loss of the nuclear submarine Kursk in the Barents Sea. The tragedy was probably caused by defective equipment and poor training. At this time of Russia’s weakness, it would have been sensible for NATO to begin to scale down its agenda. But it did no such thing. Though inviting in Russian monitors, the alliance pressed ahead with giving membership to all the other former Warsaw Pact states. Now instead of having these countries as a buffer, Moscow finds NATO’s tanks parked right on its border. President Bush’s determination to recruit Georgia to NATO convinced the Russians that they had to call a halt to what they understandably see as encirclement. Hence the nasty little war last August and Russian backing for Abkhazian and Ossetian separatists.
NATO characterized the conflict as bullying and the current military exercises the organization is holding in Georgia are clearly a demonstration that the West will not stand for such behavior. Quite legitimately that is not how the Russians see it. Moscow is still smarting at its inability to stop NATO’s bombardment of Serbia into submission over Kosovo. It is trying to draw a line in the sand and yesterday’s impressive Moscow parade of military might is meant to show just what stands behind it. So why did NATO force what some predict will be a new Cold War? Could it be that the West’s own military-industrial complex feared the economic consequences of peace, so ensured the opportunity was thrown away?
Obama’s ‘stress test’ of US banks
The prying eyes of the Obama administration have made the US banks come clean, said the Christian Science Monitor in an editorial yesterday. Excerpts:
Lest it be forgotten, Barack Obama’s first crisis as president on Jan. 20 was a fast-failing bank system. Now, four months later, his “stress test” of the nation’s 19 largest banks serves as much as a test of an FDR-like ability to dispel fear about banks as it is to help bind up their wounds. So how’d he do?
Obama opened a new accountability within these large institutions. For that, he wins more than a toaster. Along with Treasury Secretary Timothy Geithner and Fed chief Ben Bernanke, the president walked a narrow path between playing a heavy government hand and letting the banks continue to play their previous high-risk games.
The test was clever in helping restore some confidence in the banking system, especially these 19, which command two-thirds of American bank deposits. Here’s how the test worked: Government regulators went mucking about in the banks’ books to see how they might stand up to a scenario in which the economy tanks next year. (Strictly hypothetical, mind you.) One aside: The test was just the type of exercise that government should have been doing long ago to head off the kind of near-meltdown of the financial system that happened last year. It should become a regular ritual. The test results? Nine of the 19 banks passed by having enough capital to weather that hypothetical storm while the other 10 were given six months to come up with a combined $75 billion in new capital to buttress their books. (Two banks, Bank of America and Wells Fargo, must come up with more than half of that total amount.)
Not only does raising the $75 billion seem doable in what appears to be a rising economy, but even if a few banks falter, the government has enough money left in the Troubled Asset Relief Program (TARP) to make up any difference without going back to Congress for more.
