12/30/14 – James Carden – The Scott Horton Show

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Welcome back to the show.
I'm Scott Horton.
This is my show, The Scott Horton Show.
On to our next guest.
It's James Carden.
He is a contributing editor at the American Conservative Magazine and at the National Interest as well.
The National Interest.
Oh, it's NationalInterest.org, not the just NationalInterest.org.
Welcome to the show.
How are you doing, James?
I'm all right.
Thanks for having me.
Good to have you on.
I appreciate you joining us today.
Your spotlight, Dangerous Escalation, U.S. Backs Putin Into a Corner, is the spotlight today on AntiWar.com, so people can find it real easy there.
And it's quite an article you have here.
And I think I'd like to begin where you begin the article, which is the fate of the Russian ruble.
Could you please catch us up to date?
What has happened to the ruble and why?
Well, since I wrote the article back on the 23rd, not really a whole lot has happened that's very dramatic to report today.
The ruble seems to be holding at around 55 rubles to the dollar.
I have to admit that I did get something wrong in the article.
I said that the Russians probably wouldn't deploy any more of their reserves to prop up the ruble.
It turns out that they did.
They spent roughly $17 billion more.
That leaves their reserves at around $400 billion.
Most of it's in gold.
And I would suspect that they will not rely on any more of their reserves going forward.
And I suspect that they will institute currency controls, or soft currency controls anyway, as a way to sort of staunch the bleeding, as they say in the FX markets.
So that's where we are with the ruble right now.
And now is it losing all its value in Russia as well, or just on all the foreign exchanges?
Is it just one or the other, or how does that work?
Well, it's sort of a mixed bag, right?
As the ruble declines, it actually is sort of a boon for their exporters.
But what they're seeing is sort of inflationary pressure.
So the prices for the average person are rising as a result.
As fast as the value of the money is going down on the foreign exchanges?
Just about.
Yeah.
Yeah, just about.
I mean, there's probably a delay of about a week or two.
But yeah, I would say that the effects of the currency markets have felt fairly quickly in terms of affecting the average Russian's expenditures, their pocketbook, and their way of thinking about how they're going to budget going forward.
And so what are they doing?
Just printing money?
Or why is the ruble losing so much value?
Well, the ruble is losing value for a number of reasons.
I would have to say that the two main reasons have to do with the first being oil.
The price of oil has been stagnating at around $40 per barrel.
And then the second has to do with the sanctions.
And the sanctions are affecting the sort of psychological mood of the market.
Russia is increasingly seen as a place that is dangerous to invest.
And so their flows of incoming investment have slowed dramatically.
So it's the perceived value of their bonds, basically, on the global market is what's declining.
Well, that's right.
It's going to make their borrowing costs a lot higher.
And that puts downward pressure on the ruble.
All right.
And so now what all do you know or do you think is behind the rapid change in the price of oil?
Well, that's a good question.
I think one of the underreported aspects of this is OPEC.
And it seems to me that the Saudis, who are, to my mind, possibly the world's most sinister regime, are intentionally putting downward pressure on the price of oil to punish Russia for not going along with the plan to oust Assad in 2013.
It seems to me that they are intentionally holding the price of oil down in order to punish the Russian economy.
And I think that this has a lot to do with Russia's stance over regime change in Syria.
I think that the price is artificially low.
And I suspect that within the next six months that there will be upward pressure on it.
And it will probably bounce back up to $80, $90 a barrel.
And that will put Russia in a better position, certainly, than it is now.
Well, you know, it's interesting.
I saw Peter Schiff, who is often right about economic bubbles in his predictions on TV.
He was saying that this is because of the end of QE and that the reason that the price has been so high is because it was an artificially inflated bubble and now it's popped.
And that the stock market bubble and the housing market bubble are to come to their correction as well soon enough.
And that the only way to prevent it is for them to go back to the quantitative easing.
But then I interviewed this guy, Patrick L. Smith, writing at Salon.com.
And he had a very interesting source that was telling him about a meeting between Kerry and I forget which Saudi prince in Jeddah, where it's exactly what you're describing, only including the Americans on the plan that, yes, what we want you to do is just keep overproducing as much as you can in order to really stick it to Russia and Iran for that matter.
But then I hear others in the media saying, no, it's all just because of fracking, because the price was so high for a long time.
It made all this shale oil and all this other oil actually profitable to go ahead and invest in recovering.
And so now we're reaping the benefit of that.
And the correction in the oil price was a long time coming for those reasons.
So I just don't know how to sort it out.
Well, I have to say that I read Smith rather religiously.
And I think that there's a lot to what he said.
I think that I think one of the things that we need to keep in mind, you hear this now all the time that the United States is now an oil energy superpower.
If that's so, and I believe that it is, then the Saudis keeping the price artificially low is also hurting us.
So, you know, that's another way to look at it.
The price of oil.
That was my first question for him is what about down in Houston?
Are they not, you know, getting their Oswald's ready to fix this situation or what?
How long are they supposed to tolerate this?
Well, I don't know.
That's that's a good question.
That's sort of the wild card, right?
It doesn't seem like it has generated very much opposition so far.
But that's sort of in keeping with the way that we Americans tend to go about things.
We're more than willing to sacrifice our own well-being and our own domestic, you know, welfare in order to, you know, meddle and make things unpleasant for regimes that we don't like abroad.
So I can't say that I'm necessarily surprised that the American media has not picked up on this.
Yeah, I guess maybe I just overestimated the influence of James Baker, the third.
I would have thought that he would have put some kind of, you know, old wasp veto on this.
Hey, hey, hey, hey, hey.
Now, these are we're talking zillions of dollars in profits.
We're talking about this shale oil is not recoverable at 60 dollars a barrel.
Yeah, I'm afraid of dollars a barrel here.
Yeah, I know I'm afraid that those days are long behind us when the wasp ascendancy actually had something to to say or when they had any actual influence on the direction of policy.
Not that I'm saying I want James Baker in charge.
Just I guess I overestimated that influence there.
I suppose that he's preferable to the crowd that we have now running the Republican Party, who are, you know, basically a bunch of bloodthirsty neoconservatives.
And I think that the Baker generation is certainly and people like Scowcroft and Bush Jr. are far preferable to the basic.
Well, you know, this might not be overdoing it too much.
The lunatics who are running the asylum now.
Yeah.
Well, hey, if you're looking at the weekly standard of the National Review, there's hardly a better term for him.
I don't know what else to say.
That's exactly right.
Well, we got bumper music playing, so we got to go out and take this break.
When we get back, we'll talk with James Carden.
He's at the National Interest and the American Conservative Magazine.
Again, more about this great article.
U.S. backs Putin into a corner and I'll ask about the sanctions and the Ukraine crisis and what's next for America and Russia.
James Carden, right after this.
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All right, y'all.
Welcome back.
I'm Scott Horton.
It's my show, The Scott Horton Show.
I'm on the line with James Carden.
He writes for the American Conservative Magazine, the anti-war right over there at the American Conservative.
And here he is at The National Interest, a very important piece, Dangerous Escalation, U.S. Backs Putin Into a Corner.
I was kind of lecturing everybody yesterday on the show, James, about, or was that earlier today, about Henry Kissinger saying what a tragedy it would be.
Henry Kissinger, of all people, talking about tragedies of any kind.
It's kind of startling.
It would be a tragedy if we reignited the Cold War when it just doesn't have to be.
And yet he's really concerned that we are entering an era of a real renewed Cold War with Russia.
Now, I know from talking with Andrew Coburn that the military industrial complex guys are excited about it, as he's reporting for Harper's.
But who in the world, besides them, besides a bunch of Lockheed salesmen and maybe some AEI think tankers, want a Cold War with Russia?
And do they even realize that they're backing Putin into a corner the way that you describe it in this piece?
Well, I think that it isn't just AEI or Lockheed, the unfortunate thing.
And the thing that makes this all very disturbing is that it's a consensus.
The neoconservative sort of fringe has basically a stranglehold on discourse in Washington.
There is now very little difference between people who call themselves liberal interventionists or Wilsonians and neoconservatives.
In fact, Robert Kagan, this is very amusing, he now refers to himself as a liberal interventionist.
Now, this is a cynical ploy on his part because he wants a job in the next Clinton administration.
But it seems to me that the real outliers now are people like Dr. Kissinger, and people like Stephen F. Cohen at NYU, and people at the American Conservative.
It's basically a few, you know, just a handful of, you know, eminent scholars like Kissinger and Cohen and Jack Madlock, who's President Reagan's ambassador, was President Reagan's ambassador to the USSR.
And then, you know, people at the American Conservative and the national interest, but these are not mainstream organs of opinion, as you know.
So it seems to me that one of a couple of things that make make this whole new Cold War with Russia very disturbing.
One is that it's completely unnecessary, as you just said, the real tragedy here with the deaths of over 5000 civilians in Ukraine and millions of refugees, is that none of this had to happen.
President Putin, in November of 2013, proposed a tripartite agreement between the EU, Russia and Ukraine, and it was summarily rejected by Angela Merkel and the EU Commission.
And when they rejected that, that put us on the road to where we are today.
So one, the first thing is that this is all completely unnecessary.
The second thing is that there's a bipartisan neoconservative consensus in Washington that does not either they are unthinking or uncaring about the consequences of this extraordinarily dangerous policy of cornering Russia.
You know, I interviewed John Mearsheimer after prominent realist theorist of the I guess you could equate him to Scowcroft and them in a way.
And they allowed him to write an article at Foreign Affairs after the editor of the journal, Gideon Rose, actually went on the Colbert Report and bragged about American responsibility for the coup.
He was big enough to allow Mearsheimer to write an article in Foreign Affairs saying that it was the wrong thing to do.
And I guess I kind of hope that with Mearsheimer saying it and with Kissinger saying it and a couple of others, well, maybe that's it, that but somehow that that'll chisel through that.
Hey, come on.
We're believing our own propaganda a little bit too much here.
America's relationship with Russia is too important an issue for it to be based on, you know, whatever Robert Kagan would have us believe when we've tried things his way for quite a while now.
And it's gotten us into this happened to be his wife who got us into this particular mess.
Yeah, I wish that I could share your your optimism.
I just don't.
That could just be.
I mean, I'm not for people respecting Kissinger, but people are supposed to disrespect Kissinger for the right reasons.
But in D.C., they respect him because of how horrible he is.
So they're supposed to listen to him.
That's right.
And there's there seems to be sort of an endless appetite for these foreign engagements that put our country at great risk down down in Washington.
And I see no evidence outside of, again, as we've been saying, a few voices like like John Mearsheimer, who that article was a real masterpiece.
But even Mearsheimer is a marginal voice now because of the controversy from last decade over the Israel Hobby book.
So in a sense, while Mearsheimer is certainly the most eminent international relations theorist that we have, unfortunately, his voice is somewhat marginalized as well.
And so it seems to me that, you know, we need to do what we can to break through this bipartisan neoconservative consensus.
But I'm not hopeful that that we'll be able to make much headway.
And I'm certainly not hopeful if the president is going to be Mrs. Clinton or Mr. Bush.
It seems like in America, maybe in D.C., a lot of this is sort of like Kissinger implied.
A lot of this sort of is imaginary and theoretical.
That's sort of how Mearsheimer's piece reads, too.
It's all about this belief system and exporting what we call American liberalism now, rather than, you know, real concrete policy.
Whereas, of course, from the Russian point of view, we're talking about a military alliance on their borders with, you know, full of Lockheed products, especially, you know, fighter planes and bombers and things.
It's a very real thing to them.
Whereas it's sort of a concept to the guys in all the journals over here.
Right.
Well, Mearsheimer said something very, as he tends to do, he said something very wise on television a few months ago.
He said that the idea that we should expect other countries to trust in our benign intentions is a remarkably foolish way to look at the world.
And we would never tolerate a military alliance made up of, say, China, Russia, India, whoever, on our border.
We're a remarkably secure country.
We are surrounded by two oceans, Canada and North Mexico to the south.
And yet we act as though we live in Grozny.
It's sort of extraordinary in a way.
And you're right.
Theory seems to crowd out reality.
And so to give you an example, right, over the past few weeks, Kiev, the new government, the new regime in Kiev, renounced their non-aligned status.
So they're paving the way for their entry into NATO.
At the same time, Russia has recently, three days ago, they revised their military doctrine.
The rule is collapsing.
The budget is being squeezed, right?
We're pushing Russia into a corner.
And what is our answer?
Our answer is to pass this ridiculous Ukrainian Freedom Support Act, HR 5859, which provides for $350 million of military aid to Kiev and provides the option for Mr. Obama to add more sanctions against Russia.
Well, you know, I don't understand this impulse to destabilize the largest country on Earth with arguably the greatest number of nuclear weapons.
They certainly have more tactical nuclear weapons than we do.
The idea that this is a good idea to destabilize Russia strikes me as extraordinarily reckless.
Yeah, well, it seems like, you know, best case scenario, from their point of view, they get rid of Putin.
It won't be a bunch of, you know, I don't know, orange revolutionaries that get rid of him.
It'll be people to his right.
It'll be, you know, militarists in Russia who decide that he's too damn liberal to face up to the Americans would be next after him at this rate, correct?
Well, that's exactly right.
One of the things that people, especially people who should know better, actually, either they pretend not to understand or don't understand is that Putin himself is surrounded by high level politics.
He, in the scheme of things over in Russia, is a moderate.
There is a hawkish faction in Russia that has been encouraging him to roll right on through to Kiev.
So we have to realize that people who, you know, you hear a lot of talk about Navalny and people like that.
Navalny is a hardcore Russian nationalist.
Sure, he's an anti-corruption campaign campaigner.
And sure, some of his ideas have a lot of merit.
But let's not forget, you know, this guy is not someone who is going to tolerate NATO on their borders.
Right.
All right.
Well, I'm sorry that we have to leave it there.
We're all out of time.
But thank you so much for your time on the show, James.
I really appreciate it.
Thanks for having me, Scott.
All right, so that's James Carden.
He's at nationalinterest.org with this one.
Dangerous escalation.
U.S. backs Putin into a corner.
It's the spotlight on antiwar.com today.
Thanks for listening.
Hey, I'm Scott Horton here.
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