Russian power continues to grow, thanks to economic realities

In the wake of the Panama Papers - the latest feeble and feckless Western attempt to destabilize the Kremlin - Russian power in Europe and the Mideast continues to grow.

The Ukraine crisis has reached a new juncture with the resignation and replacement of the unpopular prime minister and an embarrassing Dutch referendum resoundingly against Ukrainian integration into the EU. As well, in the wake of the Panama Papers exposé that president Petro Poroshenko executed shady offshore dealings as his administration buckled before the summer 2014 Russian onslaught in the Donbas, the already low public confidence and trust which plagues Kiev is likely plunging to new nadirs. As Sovietologist Stephen Cohen remarks, it's been a horrible April for the anti-Russian party in the Western ruling class (and it's not even over) - and it's beginning to really threaten with utter meltdown their pet "democracy" project to dismantle Putin's Russia.

Moscow really hasn't had to do much: it's simply waiting for the blunders of its ill-wishers to run their predictable course. No matter how long it may take, policies and strategies which are built on fundamentally false or fraudulent premises have a reliable tendency to self-destruct.

Time is on Russia's side because of not so much military or political, but economic realities. Economically, Ukraine remains a basket case in desperate need of a rapid and resounding turnaround. On the other hand, with oil prices back in the $40s, Russia isn't quite a disaster anymore, if nowhere near its former glory in the $100s. Ukraine has severed its commercial ties with Moscow at just the juncture when some of the much wealthier EU economies are increasingly tempted to dissent from Brussels on continuing the bloc's own sanctions. As it becomes clearer that Russia is a self-sufficient continental economy which can get by fine without either Ukraine or normal EU relations, even as Ukraine's capacity to flourish next to a hostile Russia is anything but sure, the balance of power will tilt further in the Kremlin's favor.

That's doubly so because the European project as a whole is increasingly exposed as a geopolitical pygmy, unable to cope with the Mideast refugee crisis precisely because cracks are undermining its brittle economic foundations. The market turmoil in January and February showed that $15 to $20 a barrel crude will sooner bring down the largest German banks than put Putin at risk of revolt; like Japan, the EU has grown so addicted to extraordinary monetary policy (QE) to prop up its finances and thereby real economic activity that it can't handle even relatively minor perturbations (which, in the grand scheme, a million or so migrants really is). This isn't even to mention the internal terrorist threat from potentially thousands or even tens of thousands of disaffected, unintegrated (and frankly, largely unwilling to integrate) young Muslim men. Or the next iteration of Grexit...or Brexit...or an Italian banking collapse and the long-term Spanish and Portuguese fiscal crises.

But even the US isn't looking so formidable anymore. The notion that we can do just fine as our rivals (China and Russia) wither away is plain ridiculous. Sure, Beijing will be squeezed by a devaluing currency (yuan), but Wall Street will get whacked as every long trade gets liquidated for shorts; sure, the Kremlin will pinch pennies with oil in the teens, but JP Morgan and Wells Fargo will get blown out of the water.

Not even our shale miracle looks so hot anymore...turns out it was mostly the hype of quick profits, new stock bubbles. and especially another orgy of investment banker underwriting fees for issuing trashy bonds. If our financier cartel wants their old margins back, they can only do so by empowering Beijing and Moscow; if they want to keep their margins from totally collapsing, they need Russian and Chinese collusion; either way, our politicians are in no position to pursue policies that effectively raid the deep pockets that control them.

The inevitable verdict: Ukraine will implement the Minsk accords as surely as Syria will form a national unity government under Assad but with significant local and regional concessions to the opposition. Both will take a while and could yet be derailed, but to speak of any significantly divergent alternative outcomes would amount to a denial of basic reality at this point. We're in a multipolar world already, like it or not: the poles may sound discordant, but that's only because they're tuning in to the same frequency.