Welcome to my first newsletter!
I’m sorry to begin the series with such a terrifying article, but there is no bigger issue than Ukraine — for ourselves, our children, and our parents, not to mention our allies and the brave people of Ukraine.
In recent weeks, I’ve written four columns — three for The Hill and one for Forbes on the best strategy to respond to Putin’s war on Ukraine. The links are at kotlikoff.net.
How is an economist equipped to discuss foreign policy let alone offer advice?
Actually, an entire field of economics — game theory — considers how to optimally set strategy in situations of economic, political, and, indeed, military conflict. I’ve studied game theory and used game theory in a few papers co-authored with game theorists. But I’m certainly not a game theorist. However, in writing my most recent column for The Hill, I consulted a half dozen of the world’s top game theorists, four of whom are Nobel Laureates.
I copy that column below while first considering where things currently stand. I particularly want to discuss President Biden’s statement that the U.S. would respond “in kind” to the use by Russia of nuclear, biological, or chemical weapons.
Biden made his statement in response to a reporter’s question. Whether he misspoke, which is his habit, or proclaimed actual U.S. policy, the statement may well encourage Putin to believe he has a green light to further terrorize the brave Ukrainian people via the use of weapons of mass destruction.
Before proceeding to explain why I view Biden’s statement as so dangerous, let me express my overall opinion about the President’s handling of the situation. I think Biden has done a truly tremendous job galvanizing NATO members and other freedom-loving countries to support Ukraine. The economic sanctions imposed on Russia, particularly freezing large portions of Russia’s foreign reserves, go miles beyond what one might have expected. And the supply of weapons and other materials from the US and other NATO countries have permitted the incredibly courageous Ukrainians to fight the Russian army to a standstill in parts of the country.
But Putin’s strategy — bombard Ukraine from long-range, indeed, thousands of miles away, into submission — will ultimately succeed unless Biden takes a far tougher and very public stance. Putin writes like Adolf Hitler, sounds like Adolf Hitler, and acts like Adolf Hitler. Hence, it’s high time we assume he is Adolf Hitler, indeed, Adolf Hitler with weapons of mass destruction.
Putin and his henchmen are not just armed with these weapons, they are routinely threatening their use. Rather than make clear that any use of unconventional weapons will lead to the immediate deaths of Putin and his top generals and advisors, Biden is signaling that NATO will respond proportionately. That, after all, is what “in kind” means.
Is Biden saying that if Putin nukes Kiev we’ll nuke Novosibirsk, while letting Putin and his generals survive to nuke, say, Prague, after which we nuke Nizhny Novgorod, after which … ?
The only appropriate statement, which Biden should publicly make and do so immediately, is that the use of any unconventional weapons will lead to Putin’s and his generals’ immediate demise, wherever they may be hiding and by whatever means is necessary. If Putin isn’t suicidal, this unequivocal policy, will take Putin’s use of unconventional weapons off the table. If Putin is suicidal, the policy will make clear to his generals that Putin is a far bigger danger to them than is Ukraine or NATO. They will, surely, act accordingly.
Having seemingly given Putin the green light yesterday to use nukes, albeit at, what for him, is likely a moderate price, Biden appeared today (March 26th) to walk back his statement, declaring that “Putin cannot remain in power.”
But then the White House immediately clarified, saying, “The President’s point was that Putin cannot be allowed to exercise power over his neighbors or the region. He was not discussing Putin’s power in Russia, or regime change.” So now we have the Administration on record saying that Putin can remain in charge except if he exercises power over his neighbors and the region, which he’s already doing in real time.
What is this Administration really thinking and trying to communicate?
The only thing that Putin understands is power. Yet, President Biden, with these muddled statements, is signaling weakness and suggesting that limited nuclear war is acceptable.
Contrast what President Biden is saying with what President Kennedy said, during the Cuban missile crisis, about any use of nuclear weapons by Cuba.
It shall be the policy of this nation to regard any nuclear missile launched from Cuba against any nation in the Western Hemisphere as an attack by the Soviet Union on the United States requiring a full retaliatory response upon the Soviet Union. . . .
President Biden has made some very tough statements and taken exceptionally tough actions. But he is, on balance, sounding more like Neville Chamberlin than Winston Churchill. It’s time for Biden to tell Putin and the Russian military elite that their lives will end within minutes of launching a nuclear, biological, or chemical attack. Biden must also make clear NATO’s limit to the extermination and forced expulsion of Ukrainians. Otherwise, Putin will continue doing what he’s doing — pretend to have limited objectives, hunker down his troops, but maintain his rain of death. If that rain of death doesn’t eliminate or clear out enough Ukrainians quickly enough, he may well go nuclear. He and his spokesmen have repeatedly said as much. Let’s believe him and explain what “in kind” actually means. Let’s also make clear the point at which NATO will declare and enforce a no-fly zone, which includes employing our technology to end Putin’s rain of death on civilians.
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Now for what I wrote in The Hill.
Russian President Vladimir Putin's criminal war on Ukraine is an existential threat — to Ukraine, the U.S. and all of Europe. With 6,000-plus nuclear warheads, Putin can end our world as we know it. But doing so would guarantee his immediate demise and that of his generals, not to mention tens of millions of Russians. Russia, like the West, would be rendered a vast, glowing cemetery.
Is Putin that crazy? No one knows. Has he overplayed his hand and is he now looking for an exit ramp? No one knows. Is he serious about recreating the Russian empire, his so-called Mother Russia? No one knows.
All we can do is develop the best strategy in light of the possible scenarios. In recent days, I've consulted with several game theorists, including a Nobel Prize winner for work in this field. Game theory is a framework for understanding choice in situations among competing players.
Several specialists felt that the mathematical formalism of game theory was too abstract to provide real direction. Others, particularly Sandeep Baliga, of Northwestern University, and Nobel Laureate Roger Myerson, of the University of Chicago, were eager to discuss alternative responses to Putin.
Baliga speculated that Putin never intended to invade Ukraine, which in his view explains Russia's poor military performance thus far. Instead, Baliga believes Putin expected to obtain concessions simply via threatening military action. Baliga also suggested that the sanctions response was well beyond what Putin could have anticipated, in large part because it was voluntary and uncoordinated (e.g., McDonalds pulling out of Russia).
In any case, Putin's current strategy appears to be a) hold back his conventional forces and bombard Ukraine into a "negotiated" settlement or b) bombard Ukraine into self-ethnic cleansing in which most Ukrainians flee the country. Under the first scenario, Ukraine would declare permanent neutrality, demilitarize, cede large swaths of Eastern Ukraine, including Crimea, to Russia and languish under Russia's constant threat of renewed terror. In short, Ukraine would become a vassal state.
Under the second scenario, tens of millions of Ukrainians escape to the West — a number that NATO nations are hardly prepared to absorb. Note that a Ukrainian
insurgency, on which some are counting, would have no impact against Russian conventional and hypersonic missiles fired from thousands of miles away. Under either scenario, Putin would likely consolidate his "achievement" and wait for President Trump's reelection. At this point, given Trump's apparent desire to dismantle NATO, Putin could reabsorb the Baltics, Moldova, Finland and most of western Poland — all part of the former Russian Empire.
Regardless of which scenario is at play, both Baliga and Myerson agreed that more sanctions are needed. Germany and all other NATO members must immediately terminate all imports of gas, oil and anything else from Russia. We should also make clear to China and India that they can either trade with Russia or NATO countries, but not both.
Germany's planned construction of its first LNG terminal should be coupled with a decision to return to and expand the use of nuclear power until the crisis is permanently resolved. In addition, Germany could also pledge to blow up the two Russian gas pipelines within weeks if Russia does not cease fire. This would give the Russians an incentive to settle quickly and make clear the likely long-term cost of their aggression.
The tougher the sanctions, the more incentive Putin will have to cut a face-saving deal, one that could entail the formation of East Ukraine, which would consist of Crimea and the Donbas, a neutral, militarily strong Ukraine, a NATO guarantee to defend Ukraine against future attack by Russia and a critical carrot — the elimination of all sanctions on Russia and Russians. This deal needs to be articulated by President Biden to give both Putin and Ukrainian President Volodymyr Zelensky political cover.
From NATO's perspective, this deal would simply concede something to which it has implicitly agreed — Ukraine will not become a NATO member. Putin would be able to claim he's protected and extended Mother Russia. And Ukraine would be safe against future Russian aggression.
The game theorists believe Biden should quickly and publicly lay out the parameters of this deal. But the president should also make clear, as part of the same declaration, that there is a limit to NATO's tolerance of Putin's genocide. He needs to make clear immediately that the continued slaughter of Ukrainian civilians will lead to NATO's intervention.
A final, paramount point. We need to focus intensively on the worst-case scenario — one where there is no negotiated settlement and the U.S. ends up at war with Russia.
No one expected we'd go to war with Germany in 1939 when it invaded Poland. But the writing was on the wall (actually in Hitler's book). He stated in black and white his goals, but few took him at this word. Then, like now, we were dealing with a vicious psychopath with deranged racist views and delusions of grandeur. And, like Hitler, Putin has described in black and white what he's after — Ukraine, Poland, Latvia, Lithuania, Estonia, Finland — anywhere that might have or once had a Russian speaker or could be resettled with Russian speakers.
We must take Putin at his word and closely regard his actions. His use of a hypersonic missile to attack Ukraine sends a message that any interference by the U.S. in Ukraine might, for example, be met with the elimination of all 11 U.S. aircraft carriers in the course of 11 minutes.
President Biden needs to speak publicly and directly to Putin's generals and inform them that Russia's use of unconventional weapons will be viewed by the U.S. as equivalent to a nuclear attack and that they, personally, would be our first targets. Putin may be suicidal, but his generals are likely not. They need to understand in unequivocal terms their need to restrain Putin from actions that will get them killed.