Removing Time from Putin’s Side

Hi Everyone,

Here’s a column I just published in The Hill plus an addendum I added about Putin’s demand that the West buy Russian energy with rubles. Please share this piece with all your contacts, but particularly your elected representatives. Putin's strategy may never have been to fight a conventional war with Ukraine. He may have always planned to put Ukraine under siege via bombardment from the air. The invasion may represent the pretense of running a conventional war to detract attention from his real plan — sit back and destroy Ukraine from the air. This represents a plan to systematically depopulate Ukraine either by killing its citizens or forcing them to flee the country.

Here’s the column.

Russian President Vladimir Putin thinks time is on his side. And, as of now, he’s right. He can, as he’s doing, pull back his troops and pulverize Ukraine from the air — for weeks, months or years until the country’s brave people all exit to Poland or other receptive nations. Once this ethnic cleansing has done its job, Putin can resettle the country with Russians. Having done that, he’ll find another part of “Mother Russia” to force into his embrace. 

NATO appears to be running out of sanctions to pressure Putin to stop his criminal war. But NATO has more cards to play. For starters, Germany and other NATO members can stop importing oil and gas from Russia and all other products from Russia (the U.S. has effectively already done so). But they can do so based on a time schedule. 

For example, every week Russian troops remain in Ukraine, Russian energy imports could be cut by 25 percent. And for each week the genocidal bombardment continues, Germany could dismantle a quarter of Nord Stream 2 — the newly built second gas pipeline that can deliver gas directly from Russia to Germany. I’m talking about the part of the pipeline that lies within Germany’s economic zone. Denmark, Sweden and Finland could follow sequentially after Germany. Nord Stream 2 also runs through their economic zones. 

For its part, Ukraine could announce a schedule that increasingly slows the flow of gas through its Russian-gas pipeline. Every child killed by Russian bombs or missiles would lead to another turn of the dial. As for the existing sanctions, the West can make clear that the longer the genocide and de-facto ethnic cleansing continues, the longer the West will wait to remove economic sanctions once a peace settlement is achieved. 

What about the U.S.? It can immediately announce the permanent stationing of U.S. armies in the Baltics, Poland, Romania and Hungary whose numbers will rise with each week Russia continues its rain of death. A similar schedule could be announced for the deployment of anti-missile systems, tanks, aircraft and other military equipment to those countries. Putin says he fears NATO. Let him understand that the longer he stays in Ukraine, the larger will be the NATO presence that’s directly on his doorsteps.

President Biden should also make clear that his patience with the genocide has a time limit, after which the U.S. and its NATO allies will impose a no-fly zone, including no flying of missiles, across all of Ukraine.

Most important, Biden needs to give Putin and his generals and Putin’s other close associates no time whatsoever to personally survive any use of nuclear or other unconventional weapons. Putin, but more important, his top brass, must understand that a U.S. “in kind” response would include their extremely timely departure. This is likely the only credible threat that can prevent Putin and co. from using weapons of mass destruction. 

All this and more will change the tables — the timetables. Instead of time being on Putin’s side, time will become his enemy. 

Addendum

Let me comment on Putin's demand, which he, today (March 31, 2022), declared absolute, that the West use Rubles to buy energy from Russia. This demand appears os purely cosmetic. Germany, et. al. are now using euros to buy Russian energy. This leaves Germany, et. al. with the energy and Russia with the euros, to buy whatever it can still purchase using hard currency. Under Putin's "use rubles" requirement, Germany, et. al., would buy rubles from Russia with euros and then swap the rubles for Russian energy. Either way, Germany, et. al. ends up with the energy and Russia with the euros. There is no increase in the global demand for rubles as the extra demand from the West is offset by an equal-size reduction in ruble demand from the Russian energy companies who would otherwise be swapping the euros they would have earned for rubles. 

What can we make of this ostensively cosmetic demand?

Either a) Gasprom, Russia's big energy supplier, is hoarding hard currency and Putin is, for some reason, loath to force them to swap their euros for rubles, 2) Putin doesn't understand the purely cosmetic nature of what he's requiring, or 3) Putin wants to force the West to stop importing energy since Germany, et. al. won't indulge Putin's dictates no matter their economic vacuity. 

Whether Russian companies are hoarding hard currency, whether Putin is making yet another supremely stupid move (My view, we're dealing with an evil idiot, not an evil genius.), or whether Putin wants to sanction the West's import of energy, NATO's strategy is clear -- take steps to make time Putin's greatest enemy, not his biggest friend.

Laurence Kotlikoff is a Boston University Economist, a NY Times Best Selling Author, President of maxifi.com, and Author of Money Magic.

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