Authored by David Stockman via Contra Corner blog,

Honest injun. We’re not useful idiots here at Contra Corner!

We do think, however, that the entire Ukrainian crisis is a Washington-confected con job. And we came to that conclusion without relying on a single scrap of information peddled by Russki propagandists appearing on Strategic Culture Foundation or Zero Hedge.

Actually, we thought it up all by our lonesome! Well, we’ll grant we did have a fair amount of help from Google, which insofar as we know works for the CIA, not the Russian SVR (foreign intelligence service).

In any event, at the very center of the crisis is the Washington claim that the rule of law and the sanctity of sovereign borders are on the line in Ukraine and that, therefore, Russia must not be allowed to encroach a single inch into sacrosanct Ukrainian territory.

That is to say, it is not a matter of America’s national security interest in the precise Ukrainian geography, which happens to lie cheek-by-jowl on Russia’s border, but the very governance of the entire planet: Conform to the “rule of law” as articulated by Washington or get sanctioned, outlawed, pariah-ed, and even invaded, if worst comes to worst.

We hear this refrain repeatedly from Secy Blinkey and national security advisor Snake Sullivan. But we find ourselves doubled over with laughter each time, knowing practically by heart the list of coups, regime change plots, invasions and occupations Washington has foisted upon other sovereign nations over the last 70 years.

For want of doubt, however, we recently Googled in pursuit of the exact list and came up with a systematic study by a young scholar named Lindsey A. O’Rourke. Here’s her summary conclusion:

Between 1947 and 1989, the United States tried to change other nations’ governments 72 times; That’s a remarkable number. It includes 66 covert operations and six overt ones.

Most covert efforts to replace another country’s government failed.

During the Cold War, for instance, 26 of the United States’ covert operations successfully brought a U.S.-backed government to power; the remaining 40 failed.

I found 16 cases in which Washington sought to influence foreign elections by covertly funding, advising and spreading propaganda for its preferred candidates, often doing so beyond a single election cycle. Of these, the U.S.-backed parties won their elections 75 percent of the time.

My research found that after a nation’s government was toppled, it was less democratic and more likely to suffer civil war, domestic instability and mass killing. At the very least, citizens lost faith in their governments.

And, yes, we did check her resume to make sure she wasn’t a Russian troll, and from the appearance of the thing you’ve got to think, no way.

She got an undergraduate degree from Ohio State, an MA and PhD from the University of Chicago, did post-graduate studies at the Dickey Center for International Understanding at Dartmouth College and a pre-doctoral fellowship at the Institute for Security and Conflict Studies at George Washington University. Since 2014 Ms. O’Rourke has been an associate professor in Boston College’s political science department and in 2018 published a book called “Covert Regime Change: America’s Secret Cold War” at the prestigious Cornell University Press, which is the basis for the above quote.

So either the Russkies have got one hell of a brainwashing operation going on throughout the length and breadth of American academia or professor O’Rourke is actually citing real history, not Putin’s talking points.Besides all that, she doesn’t look like a Russki, either.

Self-evidently, therefore, not all borders are sacrosanct—just the ones Washington designates as inviolable. But even that sweeping qualification leaves you high and dry when it comes to the “borders” of Ukraine.

That’s because the current ones were drawn by Czarist tyrants and communist dictators!

That’s right.

The modern borders of Ukraine were finally fixed—sometimes at gunpoint—by Lenin, Stalin and Khrushchev, respectively—between 1917 and 1991. The resulting corpus then got declared an independent nation in 1991 when the Soviet Union was swept into the dustbin of history.

In fact, even then the resulting borders for the 14 new republics—including Russia, Ukraine and Belarus—were the handiwork of the last gasp of the Soviet Union. On December 26, 1991 it was Declaration 142-Н of the the Supreme Soviet’s upper chamber, the Soviet of the Republics, which recognized the self-governing independence of the former Soviet republics, formally dissolving the Union and seconding the old borders of the Soviet Socialist Republics to the newly christened entities.

Talk about the hurly-burly of history at an inflection point. There are few in all of history that come even close to the sudden, complete and spectacular demise of an empire that occupied the better part of the planet’s landmass and more than 485 million peoples.

Stated differently, is it possible that the spectacular crackup of the old Soviet Union was so tidy or thoughtful as Secy Blinkey would have you believe? That it was so wellfounded that the very global “rule of law” depends upon it preservation?

Surely, the 11th hour “gift” of Crimea to Ukraine by Khrushchev (see below), for instance, might have better been returned to its long-time (171 years) and rightful owner, Russia.

Likewise, given the opportunity the huge Russian speaking population of the eastern Donbas region would have raised the Russian tricolor at the drop of a hat, given even half the chance.

Yet the dubious paternity of Ukraine’s modern borders is barely the tip of the iceberg.

The truth is, if you take the word of Google/CIA for it you can scroll through the last 1,100 years of history and still not find a Ukrainian border that lasted more than a few decades, and certainly no settled nation-state worth expending American blood and treasure upon.

Indeed, according to Google/CIA it all started before 1000 AD with the arrival of the “Rus” — the people whose name got tacked on to Russia. They were originally a nice bunch—Viking warriors, traders and settlers— who raped and ruined their way from the Baltic Sea through the marshes and forests of Eastern Europe down toward the fertile river-lands of what’s now Ukraine.

The first major center of these “Rus” was at Kiev, established in the 9th century. In 988 the original Vladimir, a prince of the Kievan Rus, was baptized by a Byzantine priest in the old Greek colony of Khersonesos on the Crimean coast. That is, Russia got long pants and Christianity in Crimea—the place they allegedly stole back 1,026 years later (2014).

As it happened, Prince Vlad’s conversion marked the advent of Orthodox Christianity among the Rus and remains a moment of great nationalist symbolism for Russians. In fact, Putin invoked the original “Vladimir”in a speech upon Crimea’s reunification with Russia after a 90% referendum vote by the 80% Russian speaking population of Crimea in March 2014.

In any event, successive Mongol invasions beginning in the 13th century supplanted Kiev’s influence, and led eventually to the ejection of the Russians from their Crimean/Ukrainian homeland. At length, most of the “Rus” settlements moved to the north, including Moscow.

In their place, the Turkic descendants of the Mongol Golden Horde formed their own Khanate along the northern rim of the Black Sea in what is designated in the map below as the “Crimean Khanate”. And as we explain below, that became the Turkish territory that Catherine the Great purchased in 1783 as part of the Czarist quest for a warm water port to base its Black Sea Fleet.

Prior to this re-russification of Crimea, of course, the surrounding lands now called Ukraine lay on the margins of competing empires. It was a region of permanent struggle and shifting borders. The Polish-Lithuanian Commonwealth—which, at its peak, encompassed a huge swath of Europe—had dominated much of the land. But Ukraine also experienced the incursions of Hungarians, Ottomans, Swedes, bands of Cossacks and the armies of successive Russian czars.

As these meandering borders appeared and disappeared repeatedly through the 17th century, Russia and Poland (Polish-Lithuanian Commonwealth) eventually split much of the territory of what’s now Ukraine along the Dnieper River, as shown in the map below. Approximately 355 years ago (1667), to be exact, the areas to the east of the Dnieper, which now include the Donbas, were acquired by Russia and incorporated into the Russian State.

So, yes, the current day rebel provinces in the Donbas, which were giving partial autonomy from Kiev by the Minsk Agreements of 2015, have actually been “Russian” for more than three and one-half centuries and “Ukrainian” for about 31 years. Or as Blinkey would say, because it’s borders.

In any event, the aforementioned Russian advance continued during the subsequent century under the rule of Catherine the Great. Not surprisingly, she imagined her domains along the Black Sea constituted “Novorossiya” or “New Russia”. As also shown in the map above, these Ukrainian lands to the west of the Dnieper were acquired by Moscow between 1772 and 1795 at the time that the various European powers were dismembering Poland, wiping it entirely from the world map for the next 125 years.

No less than Grigoriy Potemkin, the legendary evil genius behind Catherine the Great’s rule, left little doubt that Crimea was to once again become Russian and redound to Moscow’s glory evermore.

“Believe me, you will acquire immortal fame such as no other sovereign of Russia ever had,” said Grigoriy Potemkin, a prominent adviser to Catherine the Great, when offering the empress counsel in 1780 on plans to wrest Crimea away from Ottoman suzerainty.

“This glory will open the way to still further and greater glory.”

Meanwhile, the above mentioned partitions of Poland in the late 18th century (1795) led to the far western city of Lviv—once a major regional hub and a center of Jewish culture in Eastern Europe —being transferred from Russian sovereignty to the AustroHungarian empire. It was there in far west of today’s Ukraine during the mid-19th century where Ukrainian nationalism finally began to take hold, rooted in the traditions and dialects of the region’s peasants and the aspirations of intellectuals who had fled the stifling rule of Russian Czars.

Still, as the 19th century drew to a close there really was no sovereign state of Ukraine. The lands had been divided between the Russian Empire to the east and the Austro-Hungarian Empire to the west. Had America’s ruling class back then wished to police the borders of the world, which they assuredly did not, there would have been no Ukrainian borders to police!

So the mystery question recurs. Who created the modern borders and state of Ukraine, then?

Why, holy moly, it was the aforementioned commies themselves!

Simply take a gander at the Google/CIA/Washington Post map below. Both the Russian Empire and Austro-Hungarian empires collapsed in the bloody trenches of the Great War, and subsequently disappeared from the pages of history. But their brutal successors in Moscow busied themselves in a multi-step evolution that resulted in what today passes for Ukraine.

First, near the end of World War I, the new Bolshevik government was desperate to end hostilities with Germany and its allies and signed a treaty in the town of Brest-Litovsk in 1918 ceding Russia’s domains west of the Dnieper (darker brown area) to the Central powers. That is to say, they agreed to sacrifice what was understood by all to be “Russian” territory in return for surcease from German attack.

Of course, the terms of this desperate 11th hour treaty were nullified by Germany’s defeat later in the year, but the respite from Russian rule did spark the rise of a renewed Ukrainian nationalism like elsewhere in eastern Europe at the end of the Great War. Accordingly, independence movements of various stripes sprung up in cities like Lviv, Kiev and Kharkiv, but were eventually all swept away amid the wider struggle for power in Russia.

That struggle was mightily fueled at the misbegotten Versailles “peace” conference where the long dead nation of Poland was revived by Woodrow Wilson. The latter nearly single-handedly resurrected the nation of Poland, doing so with a keen eye not to the historic maps of Europe but to the polish vote in Cleveland, Detroit and Chicago.

Soon thereafter a revived Poland reclaimed Lviv and a chunk of what’s now western Ukraine on the grounds that this was sacred Polish, not Ukrainian, territory.

In any event, the region became a key battleground of the Russian Civil War, which pitted Bolshevik forces against an array of White Russian armies, led by loyalists to the old czarist regime as well as other political opportunists. After a lot of bloodshed — and other battles with Poland — the Bolsheviks emerged triumphant and officially declared the Ukrainian Socialist Soviet Republic in 1922.

At long last, therefore, the maps of the world now at least had something that roughly resembled modern Ukraine—even if it was wrested by Bolshevik rifles.

As shown in the map below, the tiny principality of Ukraine as of 1654 (dark blue area) had not been much to write home about until the Russians—Czars and Commissars, alike—bestirred themselves with nation-building. Russian nation-building, that is.

The yellow areas being the winnings of Catherine the Great and other Russian Czars over 1654-1917, while the added territories won by Lenin’s Red Army are represented by the purple area of the map below. The latter territory, in fact, even today is far more Russian-speaking than Ukrainian.

Later came the rest of Ukraine proper via added gifts from Stalin’s Red Army (light blue area, 1939-1945) and the previously mentioned gift of Crimea (red area) by Khrushchev in 1954.

In short, it needs be recalled that America’s borders were established by democratic politicians and have stood the test of 167 years of time during which they have been perfectly fixed. By contrast, today’s Ukraine depicted below is the hand-work of tyrants and commies, which changed by the decade.

So the question recurs. Who in their right mind would select the historical mongrel depicted below to bring the world to the brink of nuclear war in order to establish the universal rule of law and sanctity of borders?

Indeed, we’d say it’s only folks who have lost their minds to the TDS (Trump Derangement Syndrome). This entire imbroglio, in fact, is not about the nation of Russia, the rule of law, foreign policy or the genuine safety and liberty of the American homeland.

To the contrary, it’s about a single member of the 7 billion-strong human race—the utterly demonized, vilified and reviled Vladimir Putin. The Biden mainstream of the Dem party is still not over the shock of November 2016, and apparently mean to do battle permanently with the ogre of Moscow whom they falsely hold accountable for their own self-inflicted defeat.

As it happens, their endlessly repeated mantra that Putin’s expansionist intentions were revealed when he “seized” Crimea in 2014 tells you all you need to know. That claim is so hypocritical, threadbare and tendentious that only minds possessed with TDS would even dare to peddle it.

That’s because it amounts to saying is that the dead hand of the Soviet presidium must be defended at all costs — as if the security of North Dakota depended upon it!

As previously mentioned, however, the allegedly “occupied” territory of Crimea was actually purchased from the Ottomans by Catherine the Great in 1783, thereby satisfying the longstanding quest of the Russian czars for a warm-water port. Over the ages, Sevastopol then emerged as a great naval base at the strategic tip of the Crimean peninsula, where it became home port to the mighty Black Sea Fleet of the czars and then the Soviet Commissars, too.

For the next 171 years Crimea was an integral part of Russia (until 1954). And that’s a fact that you can look up in the Google/CIA archives!

In fact, that span equals the 170 years that have elapsed since California was annexed by a similar thrust of “Manifest Destiny” on this continent, thereby providing, incidentally, the United States Navy with its own warm-water port in San Diego.

While no foreign forces subsequently invaded the California coasts, it was most definitely not Ukrainian rifles, artillery and blood that famously annihilated The Charge of the Light Brigade at the Crimean city of Balaclava in 1854, either; They were Russians defending the homeland from invading Turks, French and Brits.

At the end of the day, security of its historical port in Crimea is Russia’s Red Line, not Washington’s.

Unlike today’s feather-headed Washington pols, even the enfeebled Franklin Roosevelt at least knew that he was in Soviet “Russia” when he made port in the Crimean city of Yalta in February 1945.

Maneuvering to cement his control of the Kremlin in the intrigue-ridden struggle for succession after Stalin’s death a few years later, Nikita Khrushchev allegedly spent 15 minutes reviewing his “gift” of Crimea to his subalterns in Kiev.

As it happened, therefore, Crimea became part of the Ukraine only by writ of the former Soviet Union:

On April 26, 1954 The decree of the Presidium of the USSR Supreme Soviet transferring the Crimea Oblast from the Russian SFSR to the Ukrainian SSR. Taking into account the integral character of the economy, the territorial proximity and the close economic and cultural ties between the Crimea Province and the Ukrainian SSR…

In fact, the Kiev government’s current Washington-supported brouhaha about “returning” Crimea is a naked case of the hegemonic arrogance that has overtaken Imperial Washington since the 1991 Soviet demise.

After all, during the long decades of the Cold War, the West did nothing to liberate the “captive nation” of Ukraine — with or without the Crimean appendage bestowed upon it in 1954. Nor did it draw any red lines in the mid-1990s when a financially desperate Ukraine rented back Sevastopol and the strategic redoubts of Crimea to an equally pauperized Russia.

In short, in the era before we got our Pacific port in 1848 and even during the 170-year interval since then, America’s national security has depended not one whit on the status of Russian-speaking Crimea and the Donbas region of eastern Ukraine. The fact that the local population of the former in March 2014 chose fealty to the Grand Thief in Moscow over the ruffians and rabble that have seized Kiev amounts to a giant, “So what?”

Still, it was this final aggressive drive of Washington and NATO into the internal affairs of Russia’s historical neighbor and vassal, Ukraine, that largely accounts for the current dangerous showdown. Likewise, it is virtually the entire source of the false claim that Russia has aggressive, expansionist designs on the former Warsaw Pact states in the Baltics, Poland and beyond.

The latter is a nonsensical fabrication.

In fact, it was the neocon meddlers from Washington who crushed Ukraine’s last semblance of democratic governance when they enabled ultra-nationalists and crypto-Nazis to gain government positions after the February 2014 coup, which threw-out Ukraine’s legitimately elected, Russia-leaning president.

In this context, moreover, the history of the 1930s and 1940s must never be forgotten here. Stalin decimated upwards of 15% of the Ukrainian population during the Holodomer (starvations) and then moved huge numbers of Russian-speakers into the Donbas to safeguard its chemical, steel and armaments industries from the defiant locals who were sent to Siberia.

Thereafter, when Hitler’s Wehrmacht came charging through Ukraine on its way to the bloody battle of Stalingrad, it had no trouble recruiting hundreds of thousands of vengeance-seeking Ukrainian nationalists to its ranks to do its dirty work: That is, the brutal liquidation of Jews, Poles, Gypsies and other untermenschen.

In fact, during the fall of 1941 began the mass killings of Jews that continued through 1944. An estimated 1.5 million Ukrainian Jews perished, and over 800,000 were displaced to the east; at Baby Yar in Kyiv nearly 34,000 were killed in just the first two days of massacre—and all of these depredations were assisted and often executed by local Ukrainian nationalists.

Then, of course, the tide turned and the Red Army came marching back though the rubble of Ukraine on its way to Berlin. After their victory over the Germans at the Battle of Stalingrad in early 1943, the Soviets launched an equally brutal scorched earth counteroffensive westward, searching high and low for traitors and collaborators among the Ukrainian population who had allegedly aided the Wehrmacht.

The Germans thus began their slow retreat from Ukraine in mid-1943, leaving wholesale destruction in their wake. In November the Soviets reentered Kyiv, where guerrilla activity intensified amid bloody revenge killings which claimed huge numbers of civilian victims. By the spring of 1944 the Red Army had penetrated into Galicia (western Ukraine), and by the end of October Ukraine was a bloody wasteland, once again under Red Army control.

So it may be fairly asked: What Washington lame brains did not understand that triggering “regime change” in Kiev in February 2014 would reopen this entire bloodsoaked history of sectarian and political strife?

Moreover, once they had opened Pandora’s Box, why was it so hard to see that an outright partition of Ukraine with autonomy for the Donbas and Crimea, or even accession to the Russian state from which these communities had originated, would have been a perfectly reasonable resolution?

Certainly that would have been far preferable to dragging all of Europe into the lunacy of the current military showdown and embroiling the Ukrainian factions in a suicidal civil war.

Then again, it is not now—and never has been—about a foreign policy matter than can be resolved through goodwill, negotiations and a decent regard for the history of a godforsaken patch of real estate that has perennially been a meandering set of borders in search of a nation that no one in the neighborhood really wanted.

Instead, it’s all about a sickness called TDS that has afflicted the Dem ruling elites, and much of official Washington, too. And that can be cured only by the American electorate, which is exactly what we expect in November, next.

And not a day too soon.

by Thomas J. Penn (excerpt)

Editor’s Note: It started with Saddam Hussein, who declared, shortly before 2003, that Iraq would be selling its oil only for euros or gold. He paid for that defiance with his life and Iraq lost its sovereignty. Next was Gaddafi, who announced the same in 2010; furthermore, he was actively working to set up a pan-African currency backed by gold. He was gone on short notice. Iran is still on an On-again Off-again footing with accepting/not accepting dollars for its oil; and so is the rhetoric of war and sanctions against Iran. It is now the mighty Russia and China who are putting their weight together to leverage it against the dollar. Hence the despair of the sore loser hegemon.

Why is the US-led West trying to instigate a crisis in Ukraine? Those who understand how Washington derives its real power know why – it’s all about money

For months now we’ve been hearing Washington ring alarm bells regarding what they have cited as an “imminent Russian invasion of Ukraine.” According to the latest so-called US “intelligence,” a full-scale invasion would take place this week. Yet, as some of us have for months insisted would be the case, no invasion has transpired, nor, I believe, is one likely.

Moscow, which has announced that its troops are pulling back from Russia’s border with Ukraine, has consistently denied that it has any intention of invading. But Washington, with its repeated accusations regarding an imminent false-flag incident, to its stationing of troops in Eastern Europe, has appeared desperate to goad Russia into making such a move. The more Russia’s President Vladimir Putin refuses to take the bait, the greater the despair in Washington.

Why is Washington – and by extension NATO and the EU – so obsessed with Ukraine? What is it that they hope to achieve? Once one understands the mechanism by which Washington derives its real power, its actions in relation to Russia become easier to understand.

Let’s put aside all the bluster Washington spews regarding human rights, democracy and sovereignty, because these are just issues which it uses as cover and which it routinely disregards itself in order to achieve its aims. What is it that Washington really wants?

It wants to conflate and stoke the Ukraine issue in order to contain Russia. Why does it want to contain Russia? Well, Washington derives its global power through its control of the US dollar, also known as the world’s reserve currency. This special status enables Washington to amass obscene deficits that do not in any way reflect America’s true productive capacity.

The US dollar has been utterly dominant as the currency used for international trade since it replaced sterling in the 1920s. Commodities such as oil, gold, base metals and agricultural products are priced in, and paid for, in dollars. This created large worldwide demand for the greenback, adding massive value to its worth, and created strong demand for US Treasuries. All this enables the American federal government to print dollars by the trillions, borrow without limit, and spend with abandon.

The dominance of the dollar has afforded America great global power, but it is now under threat as never before as Russia, China and others economically challenge the US. Many are now seeking to ditch their dependence on the dollar as Washington has continued to abuse it’s status as issuer of the world’s reserve currency over the decades.

Russia and China have, in particular, drastically cut their use of the dollar. In 2015, around 90% of their bilateral transactions were conducted in dollars. But since the start of the US-China trade war, that’s fallen to 46% and is rapidly declining further. Even US allies and partners, like Turkey and India, have begun trading in their respective national currencies when it suits them. Countries are questioning why US financial institutions should serve as the intermediaries for international banking.

Beijing is actively encouraging the use of its currency, the renminbi, in trade transactions, especially under its massive Belt and Road Initiative. With China recovering more strongly than the other big economies from Covid-19, foreign capital has been flooding in, too, as Beijing opens its financial markets.

Alexey Maslov, director of the Institute of Far Eastern Studies at the Russian Academy of Sciences, has told The Nikkei Asian Review that the Russia-China “dedollarization” was approaching a “breakthrough moment” that could elevate their relationship to a de-facto alliance.

This alliance, and its threat to the supremacy of the dollar, deeply worries Washington. “The current dollar-centric system cannot continue forever,” says Barry Eichengreen, Professor of Economics and Political Science, University of California, Berkeley. “A multipolar international monetary and financial system is coming, as the United States accounts for a declining share of the global economy.”

Goldman Sachs strategists have predicted that there are now “real concerns around the longevity of the US dollar as a reserve currency,”while billionaire US fund manager Stanley Druckenmiller has warned that the dollar could cease to be the predominant global reserve currency within 15 years.

Ironically, America’s growing use of severe sanctions against countries it doesn’t like, such as China and Russia, has fuelled this trend, as countries seek new ways of financing trade without Washington having the ability to seize their money. “The U.S., by continuously using sanctions, is beginning to cut off its nose to spite its face,” Anuradha Chenoy, formerly the dean of Jawaharlal Nehru University’s School of International Studies in New Delhi, has said.

Any nation that does not abide by Washington’s edicts and refuses to play the dollar game is met with a color revolution, a coup, a false flag or brute military force. Washington knows that if more and more of those dollars held in foreign reserves become superfluous, they will make their way back to the US to compound inflationary pressures there. This is the main reason, for example, why Washington is so vehemently against the Nord Stream 2 gas pipeline: because the Russians and the Germans together will determine the pricing mechanism, not Washington.

The nations of the world should have the sovereign right to choose which currency they choose to trade in and not be forced, at the barrel of a US gun, to use the US dollar.

This is the real reason Washington is hell-bent on drawing Russian forces into Ukraine. Washington must attempt, by any means possible, to contain Russia and then to try to force her into subjugation, i.e. full and total acceptance of US dollar hegemony upon her.

But, after decades of abuse, the current dollar-based monetary system is running on fumes. Interest rates have been artificially manipulated to zero, western central banks are monetizing debt via quantitative easing at pace, and consumer prices are skyrocketing as a function of inflating the monetary base.

Washington will continue to do anything required to continue the dollar’s supremacy, including using Ukraine and the Ukrainian people as cannon fodder in its efforts to provoke Russia and force dollar hegemony on her. Washington wants to further isolate Russia from the West by painting her as a violent aggressor. I am confident Vladimir Putin will not be lured in.

by John Ross, senior fellow at Chongyang Institute for Financial Studies, Renmin University of China, and former director of economic and business policy for the mayor of London. He lived in Moscow from 1992-2000.

New figures show that on trade, economic growth and inflation, China’s comprehensively come out on top and US sanctions have failed miserably

The news that US inflation has reached its highest level for 40 years, at 7.5% in January, is the most explicit indicator of serious problems in its economy. The monetary tightening that will be used to attempt to bring this under control will both slow the US economy and inevitably spill over into major effects on the world economy.

This very high inflation is particularly significant when compared to 1.5% inflation in China, its main economic competitor, in the same month. US inflation is five times higher than China’s. These relative inflation levels have extremely restrictive effects on American economic policy – it will be forced to implement measures to slow its economy. In contrast, China, whose economy is already growing faster than the US, has room for a further economic stimulus without damaging inflationary pressures.

But this is only one of the symptoms that the US has suffered in a severe economic defeat in its competition with China. This, in turn, has major political consequences both in the US and internationally.

Analyzing first the domestic US political situation, unsurprisingly this high inflation has led to falling living standards for the overwhelming majority of the population, and has drastically undermined support for Biden’s administration. The latest average opinion polls show 54% of Americans disapprove of the Biden government, compared to only 40% approving.

The economic situation is the main driving force behind Biden’s fall in support. Polls show 68% of Americans consider the economy the most important problem confronting them, almost twice as many as those who cited Covid (37%).

Behind these political problems is the reality that the US has suffered a serious defeat in the economic war it launched against China. In 2018, America began its trade offensive by unilaterally imposing tariffs against Chinese imports. The aim of this was to reduce the US balance of trade deficit and to rebuild its manufacturing industry. But data makes it clear that the US has not achieved either.

In 2017, the last year before the US launched its trade war, its balance of goods trade deficit was $792 billion; by 2021, this had risen to $1.078 billion.

More narrowly regarding China, the US, despite its tariffs, succeeded in only slightly reducing its bilateral goods trade deficit – from $375 billion in 2017 to $355 billion in 2021. Simultaneously, the US deficit in goods trade with the rest of the world ballooned from $417 billion to $723 billion. In short, the US attempt to cut its trade deficit was a complete failure.

Neither did the US succeed in damaging China’s overall trade. Beijing’s trade surplus rose from $420 billion in 2017 to $676 billion in 2021. Last year, China’s exports and imports rose by 30%.

This comprehensive US defeat in the trade war was accompanied by equally great failure in its overall economic performance compared to China. Between 2017 and 2021, the US economy grew by 7.3%, while China’s grew by 25.1% – three times as much as the US. Since the beginning of the Covid pandemic, America’s economic performance relative to China deteriorated further. Naturally both economies slowed due to the pandemic, but since 2019 China’s economy has grown by 10.5% and the US by 2.1% – China has grown five times as much as the US.

There is no mystery regarding the reasons for this US failure. Paradoxically, the world’s supposed “number one capitalist economy” is now actually creating very little capital. Instead, the US has become an economy overwhelmingly dominated by consumption – short-term gratification instead of long-term investment in development. By 2020, the latest available data shows that US net capital creation, after taking depreciation into account, was only 1% of US Gross National Income. This is less than 10% of its level at the height of the US post-war boom in the 1960s. Such a level of investment means that the US is scarcely expanding its capital stock – consequently its economic growth is very slow.

There are rational and well-known technical ways to tackle these problems. But they would require sharp changes in Washington’s foreign and domestic policy.

The huge level of US military expenditure, $905 billion in 2021, higher than the next seven countries combined, could be sharply cut, releasing major resources for investment – but that would require an abandonment of aggressive US foreign policy.

Abandoning trade tariffs against China, which costs every US household hundreds of dollars a year, would reduce inflation – but would require abandoning the aggressive trade war against China.

The grotesquely inefficient US healthcare system, using 19.7% of GDP but creating one of the lowest levels of life expectancy in any advanced economy, could be rationalized, releasing huge resources for investment – but that would require confronting and defeating entrenched special interest groups in the US.

As long as the US is not prepared to undertake such major changes, it will suffer slow growth. Meanwhile, China’s economy will continue to grow much more rapidly. The economic defeat of the US by China in the trade war, and the way it has dealt with the economic consequences of the Covid pandemic, are just the latest expressions of this.

Regrettably, this economic win by China is unlikely to reduce US hostility. Like a cornered tiger, America may become even more aggressive – as shown in its recent policies on Ukraine and Taiwan. There is no point in trying to reason with a tiger and showing any weakness will simply increase its attacks. The only successful policy is to use strength to deter and impose defeats on it. That’s what China has achieved in its ongoing economic victory over the US.