The Fish Merchants Battle for the PC Leadership

I started my research on Frank Coleman, because he wants to be premier of this province. We haven't had a whole lot of success in that department, so a closer look is certainly warranted. In my previous post, Frank Coleman's potential conflicts of interest were outlined. They aren't his only areas of potential conflicts, and as you peel this onion a few more start to appear. I want to state from the start that this post is not about demonizing Frank Coleman. It is about shining a light on his past and current dealings for the dual purpose of informing the public, and changing our system of democracy for the better here.

Coleman has been passed off in the press as a successful grocery store business type. That's true on a very superficial level, but not nearly a complete assessment. As Coleman himself said on the CBC show "On Point", he is a long time friend of Danny Williams and Tom Marshall. That is a fact. His companies Coleman Management Services Ltd. and Humber Valley Paving gave Marshall almost $23,000 in election contributions in the last ten years, and even chipped in $2,500 for Williams. Of course that raises questions considering that Humber Valley Paving was awarded the Labrador highway project, valued over $60 million, while Marshall was finance minister. It also raises issues around Marshall resigning his seat and "encouraging" Coleman to seek it in a bye-election. However, this post deals with the history, and there is a history.

Coleman was educated as an economist. He was the senior economist for Newfoundland and Labrador Hydro (before there was a Nalcor), and had a private consulting business known as Atlantic Consulting Economists Ltd. Strangely, he wrote a study in 1993 on the economic feasibility of the Trans Labrador Highway - which his company is now paving. But there are many more twists along this road.

It goes back to the fishery, strangely enough. Back to the days of FPI. FPI was a company formed by the provincial government from the assets of a number of failed fishing companies in 1984. Then, in 1987 under Premier Peckford, FPI was privatized. Previous to the privatization, a number of fishing corporations that were competitors to FPI put forward proposals to take it over, but the government wouldn't relax the rule of a maximum 15% ownership per entity. The predecessor to Iceland Group PLC was one of them. The Risley Group (Clear Water) was another. The proposals were refused by the government, and John Risely blamed the Williams government for meddling in the deal, and killing it. http://www.cbc.ca/news/canada/newfoundland-labrador/government-meddling-hastened-fpi-s-demise-risley-1.652838

In any case, Bill Barry of the Barry Group (the other PC leadership candidate) thought he had secured a deal to buy FPI's Newfoundland assets - so much so that it was made public:  http://www.theglobeandmail.com/report-on-business/fpi-reaches-deal-to-sell-local-operations/article676850/ 

But, the Williams' government didn't go with Mr. Barry. Instead, the assets were sold off to Ocean Choice International which was owned by Ches Penney of the Penney Group. National media were so perplexed by Penney's move that they speculated he could be the front man for an Icelandic company: http://www.theglobeandmail.com/report-on-business/who-is-this-guy-and-whys-he-investing-in-fish/article1077331/
The other successful bidder was High Liner Foods Inc of Nova Scotia - which bought a plant and FPI's US marketing arm.

What was left of FPI became FP Resources Ltd. (FPR) FPR's membership is a who's who of the Newfoundland and Labrador business establishment : Peter Woodward (Woodward Group); Rex Anthony (Anthony Group); Frank Coleman (Coleman Group); and previous members John Crosby and George Furey. International players are: Iceland Group PLC; Glitner Banki hf (recently stripped of its bank status in Iceland and in the midst of serious issues); Eric Barratt (Sanford Limited New Zealand); and Randy Bishop (Whitecap International Seafood Exporters). John Risely and his Risely Group of Nova Scotia round out the list.

FP Resources took its cash from the fishery and began investing in the Caribbean. Specifically it began investing in a company called CFFI Venture (Barbados) Inc. (CFFI). CFFI in turn invested in Columbus Communications Ltd, a privately owned telecommunications company that provides retail, cable and internet services to Jamaica, the Bahamas, Trinidad and Grenada, and broadband connectivity to Caribbean countries.  Columbus is run by Newfoundlander Brendan Paddick. He was also the CEO of Persona Communications, which some of you may remember being at the centre of a $15 million contract controversy (Williams' government gave Persona an untendered  $15 million contract to deliver cable services to Labrador). http://www.cbc.ca/news/canada/newfoundland-labrador/tax-dollars-boosted-persona-for-sale-reid-says-1.678159

FP Resources also owned 19.24% of High Liner Foods, which received the FPI's old US marketing arm (many said this was the most valuable part of the company). It sold that interest in 2010 for $20.5 million.
Columbus Communications Ltd. is now worth about $1.6 billion US http://en.wikipedia.org/wiki/Columbus_Communications

I suppose you could say that Frank Coleman is wrapped up in some heavy duty business. The question is: does that mean he shouldn't run for the position of premier. He could hand that business off to a blind trust, but it can't be influenced in any way by family members - including sons - as that is not arms length as required by law. He would have to recuse himself from any decisions regarding awarding of contracts for Muskrat Falls, international cable, groceries, liquor and all the other enterprises he is involved in.

The same would be true for Bill Barry, and the fishery. Barry didn't get Williams' nod of approval for leader of the PC Party - Williams actually, and very publicly, campaigned against Barry. Of course, Barry didn't get Williams' nod to take over FPI assets either. Perhaps there is a history there, who knows.

The problem I have with Coleman is his bid for the camp services contract on Muskrat Falls. In my mind, you simply can't run for the head of government when you are bidding on government contracts, and in fact holding $60 million worth of business in paving contracts with that same government. Then there is the Emera NL directorship. Coleman says he resigned, and in an email exchange, an Emera official stated the same:

"Mr. Coleman formally resigned from ENL's board of directors on March 14, 2014. This was confirmed with the Telegram and NTV News that afternoon."

That's all fine and good I said, but why hasn't Emera, a publicly traded company, issued a press release to that effect. Also, who is Coleman's replacement on the Board? The Emera spokesman's response:

"Mr. Coleman was a member of the Emera Newfoundland & Labrador Board until March 14.  ENL is a subsidiary of Emera. Emera is the publicly traded company on the TSX. EMERA's policy is to issue announcement for board appointments and resignations to its board.  The TSX would not require such disclosure for a subsidiary board.

 A replacement for Mr. Coleman has not been determined."

So Emera's policy is to issue an announcement but they aren't in this case, and the TSX can't force them to, because Emera NL is a subsidiary. Of course that doesn't explain why the section listing Emera NL board members suddenly left its website. The question left begging is why won't Emera publicly issue a press release on Coleman's "resignation"? That's a fair question. At the same time all this went down, Coleman's company Happy Valley Paving's website went down for maintenance, and finally came back up on line on April 2nd .

In my opinion, Frank Coleman is not a good choice for premier of this province. He is more of the same old same old. He is a Merchant. For that matter, so is Bill Barry - although I'm not aware of any contracts Barry Group may have with the government. This PC leadership wouldn't matter if the winner wasn't automatically going to be premier. We've had enough Merchants. We don't need another battle between two Merchants with a history, with a third Merchant trying to get his way - as usual. It's time this province was governed by and for the people. Anything less is unacceptable.

Frank Coleman's Potential Conflict of Interest

Frank Coleman, a successful businessman in Newfoundland and Labrador, has made it official that he's a candidate for the PC Party leadership, and therefore Premier. His campaign kicked off today at a golf course, after a week holiday in the sun. Rumors abound that he is a reluctant candidate. The Telegram interviewed him, and quoted Coleman as saying:

" The Danny Question?

'Danny and I are friends going way back,' he said. 'We've been friends for many years and I discuss my potential candidacy with him and he gave me his advice on what to expect and told me to do what was right for me and my family and for the party.'

Of course that follows Williams' comments on Bill Barry's, of Barry Group, candidacy for the same job:

" Bill Barry would definitely not have my support. Absolutely not... If I see someone like Bill Barry, who I obviously have issues with his policies and the way he handles himself, I'll state that. Otherwise I'm keeping my powder dry for now." He told reporters.

It seems quite clear that Williams, who seems to have a bit of a God complex (my opinion) wasn't quite able to take his own advice of 2007:

"I find it sad when former premiers comment on current administrations...I pray to God that I never do that when I finish politics...I certainly hope that I can make a commitment to the people of Newfoundland and Labrador that I won't provide gratuitous comments or opinions on someone who succeeds you - different times, different circumstances." He said.

Well, so much for Williams taking his own advice, as all he's done since leaving office is offer opinions etc on his successors or potential successors. Be that as it may, he certainly became involved in one way or another with the Coleman candidacy.

However, Coleman has a bigger problem than that. Whether he realizes it or not, or whether he cares or not, Frank Coleman is entering the world of politics, and in politics you have no private life. What you do and have done goes under the microscope, and that's where Coleman is today. In Newfoundland it's a very, very small goldfish bowl.

Frank Coleman heads the Coleman Group of Companies. It's a big organization within the province employing about 750 people. The primary core business for Coleman's is grocery. It also owns companies like Humber Valley Paving (HVP).  Its primary company for running the business part of the Group is Coleman Management Services Ltd headquartered out of Corner Brook. Coleman is also involved in real estate, and sits on the boards of a number of companies - most notably Emera Newfoundland and Labrador Inc. ( a company formed for the Muskrat Falls hydroelectric project).

As I see it, there are a number of issues with Mr. Coleman running to be premier of this province. Firstly, and perhaps most importantly, his company HVP has an active bid in for the camp services contract for the Lower Churchill hydroelectric project. Now some erstwhile social media types have indicated a blind trust would solve this potential conflict of interest. They may be right. That would depend on who was in charge of the trust, and all those "devil's in the detail" type of stuff. Let's say everything being equal, the blind trust was sufficient to remove him from the business aspects of his company. The question remains, as it did for Williams and his offshore service companies, can he be truly unmoved by his known interest, and make a decision on the Lower Churchill project which would damage his business? That is known as a conflict of interest. Right now he is in a potential conflict of interest, because he hasn't won the PC leadership, and thereby the premiership, yet.

Then there is his directorship on the board of Emera NL. One would assume he has already reigned fro that position, but as yet I have seen nothing that would indicate that. Given Emera NL's relationship with the Muskrat Falls project this is an obvious potential conflict of interest.

Then there are the massive paving contracts Coleman has with the provincial government. His company, HVP, secured nearly $60 million in paving contracts in Labrador with the provincial government over the last 2 years - not including 2014. Is a man this deeply involved with business interests in the government able to appear to be impartial in the decision making process for highways and the like? Is he too close? Again, at this time there is certainly a potential conflict of interest.

Finally, there is a somewhat troubling issue for me. Coleman, through his company Coleman Management Services Ltd, and HVP, has been a big donor to the PC Party. It breaks down like this:

2003 - PC Party        - $5000.00     (election year)
           Tom Marshall  - $5000.00

2007 - Danny Williams - $2500.00   (election year)
           Tom Marshall    - $7500.00

2009 - PC Party NL    - $5000.00

2010 - PC Party NL    - $5000.00

2011 - Tom Marshall   - $7500.00   (election year)

2012 - PC Party         - $5000.00

You will note there are large donations to current interim premier Tom Marshall. Marshall other than a year or so from 2006 on, was finance minister for the province. He was in charge of the budget for all departments, including highways. During this period, Marshall and the PC Party accepted large donations while Coleman made large donations. What are the optics of this? What are the legalities of this? Is this the same ol same ol business as usual? Is this what we can expect from Frank Coleman as premier? It's interesting that so far, and I admit it's early, the media here has not cast any light on this at all. A man with an active bid on a Muskrat Falls contract wants to be in charge of the organisation that will make it? Etc, etc. Nothing surprises me when it comes to the cesspool of the PC Party here. However, I thought a man with Frank Coleman's experience would know when and when not to walk into this minefield. My advice to him - back out.

Russia's Battle Plan

As the last 3 weeks have ground on it has become clear that Russia's primary objective in Ukraine is two-fold: Firstly it is to over throw the over throwers in Ukraine; ans secondly it is territorial. For the last three weeks the Russians have applied a "Chinese water torture" type of strategy. They could have occupied Crimea and captured or destroyed the Ukrainian ships and garrisons there within a day if they wanted to. Instead they slowly enveloped the bases, blockaded the ships, and reinforced - at a snail's pace. What does that do? It prolongs the suffering. Instead of a quick execution, the Russians are in effect torturing Ukraine. They are destabilizing the country and at the same time paralyzing the West.

The point of this post is how what will be the territorial objectives of Russia in Ukraine and how will they execute. There has been a great amount of spin from both sides about Ukraine's unity. One side says there is total unity, and the other says the country is divided along linguistic lines. Below are some maps that give you an idea how Ukraine breaks down geographically:

The 2004 election:

 

The 2006 election:

The 2007 election:

The trend is pretty clear, Ukraine is a country divided at least politically. Then consider the linguistic breakdown of Ukraine:

It's very clear that Ukrainians are divided politically by the language of origin. That goes along way in explaining why the first act of the new Ukrainian parliament was to remove Russian as an official language of Ukraine.

Not as important as territory, but still an important factor to the Russians, is the booty that an invasion of Ukraine can yield. Here is a look at the industrial assets of Ukraine:

Mines,oil, gas fields, and coal:

  

 You will note that the vast majority of Ukraine's developed natural resources are in the east and southeast of Ukraine.

Nuclear facilities:

You will note here that 75% of Ukraine's nuclear generation capabilities are located in the east and south east of Ukraine - while the disabled Chernobyl is just in the western boundary.

Then consider the military defence of Ukraine. Even its military commands are broken down in a similar fashion:

Bottom line - Ukraine is divided along linguistic, political, economic, and even military command lines.

The Ukrainian military forces are laid out:

Ukrainian military bases are laid out:

Ukrainian Air Defense bases are laid out:

Ukraine's highway system:

Although Ukraine's military is somewhat spread through the country, most of its strategic forces are located in the western portion of the country. This could better preserve them from immediate Russian attack in the east and southeast, but leaves the both very vulnerable to quick Russian occupation.

Strategically, militarily, economically and politically Ukraine is exposed to occupation and separation in its south and east. The question is whether Russia will decide to take these areas to support its goal of territorial buffer zones with the West. The logical conclusion, given Russia's military and political moves is yes. 

The first move was securing the Crimea. This takes care of a number of issues for Russia. Firstly, it allows Russia to transfer the S-300 and 400 air superiority missile systems into Crimea, bringing all of south east Ukraine into their range. That allows Russia to clear Ukrainian skies of any airborne threats - such as planes, helicopters, and missiles of all types. Russia achieves immediate air superiority. Taking the Crimea, and blockading the majority of Ukraine's fleet in port, clears the way for amphibious operations against areas like Odessa that would otherwise be compromised by a large naval presence. Finally, Crimea flanks eastern Ukraine, creates a second front, and gives the Russians a secure start line for a southern invasion. Therefore, I see Crimea as a necessary piece in the invasion puzzle, and not as a "crown jewel" that Russia has craved to own.

The second move has been positioning and battle drilling troops along Ukraine's eastern border. For a military that has not seen conflict of any serious scope for a generation, preparation is crucial to success. Military reports indicate that Russian airborne forces have been deployed in Crimea and along the eastern Ukraine border. The strength reported is divisional, and is likely the 7th Guards Airborne Division normally situate in the Moscow area. Also, light armored personal carriers (APC's) and tanks, designed for the airborne to be dropped with them, have been sighted on transport trains headed into the area, and on the roads - also headed to the eastern Ukraine border. This element is crucial. 

There are a number of bridges in south east Ukraine that would need to be secured prior to advancing armor and infantry arriving. If the Russians don't secure these, an advance could get bogged down behind rivers. Expect to see airborne drops east of Odessa all the way to just north of Crimea, and along the Dnipro River which separates eastern and western Ukraine. This will serve the dual purpose of securing bridges for advancing troops and trapping elements of the Ukrainian military placed in the east for defence.

Armor will be a big factor in this action, as will APCs. Ukraine has vast plains suited perfectly for fast tank warfare and fast moving mechanized infantry. The Russians have moved vast numbers of tanks and APC's to the eastern border. Look for the Russians to send armor columns to Kharkov, Donetsk,  Luhansk,  Zaporizhia, Dnipropetrovsk, Poltava, and possibly Kiev. 

The south east Ukraine will see more artillery, air, mechanized infantry, marine and airborne operations. The geography of the area, and the closeness to naval and air bases in Crimea, make these options ideal for the capture of Odessa and the south east.

The occupation of east and south east Ukraine will take less than a week. When it's over everything will have changed. Ukraine, on top of its already dire economic circumstance, will have lost a vast majority of its natural resources. Its electric power grid will be significantly diminished. It will be land locked and half the size it was. Its military will be either destroyed or captured. Its civilian population will be in a state of chaos, and the Russians will likely achieve their goal of removing this group from power. That could allow them to leave.

Or, they could stay. If the Russians stayed they would have created a land locked buffer zone between them and NATO. Significantly, they would surround what's left of Ukraine on three sides - making it permanently weak. In addition, they would completely control the Black Sea, and solidify themselves between Turkey and the rest of NATO. 

Economic sanctions are not a factor in this equation. Russia has the lowest debt ratio to GDP of any of the actors, and any of its moves will cause chaos in western economies beyond the scale Russia could be affected. It is not the oligarchs in Russia that decide if Putin stays or goes. It's the other way around. Banking on this would be wishful thinking. Whether Russia stays or goes in Ukraine depends on whether it wants to re-position strategically or whether it wants to alter the world economic order at this time. Personally, I lean to a Russian occupation of the east and south east, with some areas choosing to join Russia permanently. An occupation gives Russia so many tools to influence world events that it is almost irresistible to the chess playing bunch down at the Kremlin.  

     

The Liberal Conundrum

When I left the PC Party, and joined the Liberals in 2011, the PC's were at 75% in the polls and the Liberals barely registered 15%. Yvonne Jones was the Liberal leader at the time, and a fierce opponent of the Muskrat Falls project. In fact, the party was wholly opposed to Muskrat Falls, and fought the 2011 election based on that belief. After that election the leadership changed, and Dwight Ball took over. He too was against the Muskrat Falls project. When, in 2012, the governing PCs passed the final two pieces of legislation authorizing the project, the Liberals attempted to shut it down with a filibuster. The opinion of the Liberal Party was Muskrat Falls was a disaster in the making. We even had a mascot - Winston.

That was then, and this is now. Muskrat Falls has become more than a dam. It has become a state of mind. It has become the symbol of government secrecy and manipulation. For two years former premier Dunderdale was wore down by the maintenance and defending of that manipulation and secrecy. The PCs dropped from 75% to 25% in the polls. Moral high ground was thrown from the window, and survival was brought through the back door. They hunkered down until it became obvious Dunderdale symbolized Muskrat Falls, which in turn symbolized dishonesty with the people.The first premier in Newfoundland and Labrador to be essentially over thrown. The lesson for all parties in the province was, and is, so blatantly obvious - the old school is dead.

However, I fear, the lesson may have been lost even quicker than it was taught. Certainly the PCs have learned the lesson - to an extent. They've placed a humble Tom Marshall in as interim leader, promised to revisit Bill 29 (the other symbol of government secrecy), and even fired off MHA Paul Lane (most known for organizing the fixing of on-line polls in the government's favour) over to of all people - the Liberals. And that is the essence of this blog. The Liberals.

The Liberals were the designated benefactors of the PCs decline. They were catapulted into a dominant position when the NDP blew apart after a failed coup, launched in secret, while the party leader was on holidays. The NDP regrouped, slightly, and two MHAs who refused to regroup went independent and then joined - the Liberals. Now, almost by default, the Liberals reached 52% and the PCs a lowly 25%, with 25% undecided. The fall was steady and appeared not to have a floor, but the latest  CRA poll shows a new trend which should cause concern to the Liberals. The mild mannered, gentle grandfather image of Marshall has halted the PCs fall, and even increased their popularity to 33%. The Liberals remained essentially the same, as did the undecided at 25%.

In terms of warfare, you can not defeat your enemy until you stop his advance. So, first you are on defence, and then you counter attack. If your counter attack is successful, you advance. This is where things are at. The PCs have stopped the Liberals advance. Now they are in a position to counter attack. Of course there are still many opportunities for the PCs to blow their legs off, but all things remaining equal, you can expect a counter attack and soon. The problem is, and the reason for this post is, the Liberals don't have a defence to ward off that counter attack.

After distinguishing itself as a defender of openness and accountability in the early battles over Muskrat Falls and Bill 29, the Liberal Party was viewed as an alternative that reflected what people want. People knew where the Liberal Party stood. Now? Not so much.

Case in point: Cathy Bennett. Without question, a 100% supporter of Muskrat Falls and everything it took to get it there - including Bill 29. A Danny Williams' appointee to the board of Nalcor and eventually the chairmanship. A founding member of the business pro-Muskrat Falls group, fondly known as "Millionaires for Muskrat Falls." A large financial contributor to the PC Party. Really, despite her claims otherwise, a died in the wool Williams PC. A woman who was openly berated by the audience in Gander during the Liberal leadership race for her position on Muskrat Falls and Bill 29. Now, having lost the leadership, she is welcomed into the Liberal fold as a candidate in the Virginia Waters by-election without any change in her position.

Case in point 2: Yvonne Jones. Former leader of the provincial party from Labrador that was ridiculed by her own party, and whose leadership was constantly under attack from within. She did, however, put up a brave fight over Muskrat Falls until she left that leadership. The CBC openly speculated she was offered a deal by Liberal, pro Muskrat Falls businessman Dean MacDonald, to give up the leadership for a soft landing. That was denied, but a few months later she suddenly left the leadership, became very pro Muskrat Falls, was elected as an MP, and cheer led the case for powering mining developments in Labrador with Muskrat Falls. A more stark turn of face could hardly be imagined.

Case in point 3: Dale Kirby and Chris Mitchelmore. While both were sincere and dedicated MHAs, they got caught knifing their own leader - very publicly. Unable to rally their Party's support, they both sat as Independents and then crossed the floor to the Liberals mere weeks after Lane. Given their actions against their former leader, it is hard to imagine these gents are interested in openness and accountability. More accurately, they represent the oldest of old political ideals - opportunism.

Case in point 4: Paul Lane. Lane has to be, or better put was seen to be, the most rabid PC there ever was, and that's saying something. He was caught red handed fixing online polls on VOCM, among others. He regularly called open line radio shows trashing the Liberals, and promoting Bill 29 and Muskrat Falls. He claims that he walked the floor to the Liberals, because Dunderdale's leadership was no longer tolerable, and he just couldn't live with Bill 29 after all. If it wasn't real life you could laugh for a year, but it is real life. He is the exact opposite of openness and accountability.

Just like any cake, the secret is in the ingredients. What makes a chocolate cake is chocolate. It looks like chocolate, and it tastes like chocolate. The problem for the Liberal Party in this province is the taste is being lost in the ingredients. It is becoming bland and without definition, or at least the definition it wants. In other words, people are rapidly having a hard time seeing what it stands for. Many people who I know for a fact that were considering voting Liberal just months ago are now looking elsewhere. It's disturbing.

 What does the Party stand for? That is the question, and it's only going to be honed in on by the PCs as they counter attack. What it appears to stand for is getting elected. That's not a good enough reason to exist in today's political world. People are looking for a serious, alternative way of being governed. They want to be respected, have their views respected, and have a government with a vision that is respectful enough not to harm its own people. Somehow, whether in perhaps premature confidence, the Liberal Party has become willing to accept almost anything to further its march toward power. That is where I, and many others, are staring to have an issue. It isn't sufficient to simply represent more of the same, just in a less offensive way. It is necessary to bring far more than that to the table. The old political saying is if you try to out Tory the Tories the people will choose the real Tories.

Of course, I will take a lot of heat for writing such a post. After all, criticism is considered disloyalty in the fish bowl of Newfoundland politics. But, I don't care. I'm not interested in simply replacing this government. I want a new government with a new way of doing things, that represents its people and not its own interests. Otherwise, what's the point. Power for the sake of power? Nothing could be more lukewarm than that. And you know what happens to things that are lukewarm.

Real Politic Russian Style

Putin is not a genius. He doesn't have to be.

The US and Europe tried to use economic warfare to take Ukraine out of the Russian sphere of influence. They tried to outbid Russia for Ukraine loyalty with European Economic Union membership, and an accompanying military allegiance as well. That suited those in western Ukraine, however, the East is a different story. The Europeans and Americans wanted to fight this war on the only field they could win it - the economic one. The Russians went through the tools of diplomacy, and found a different one - the military one. It's really that simple. This isn't rocket science.

Despite two decades of nauseating chest pounding, the Americans never won the Cold War. The Russians and Chinese simply decided a game of chicken with then US president Ronald Reagan wasn't worth it. They switched to economic warfare instead. Russia being the resource and technology warehouse, and China being the industrial and manufacturing warehouse. Now, today, Russia's national debt is a puny 7% of GDP, and China is set to become the number one economy in the world. That didn't happen by accident. It's also no coincidence that, despite their new "economic societies", their geopolitical goals have not changed. They just used a different horse to get there.

Yes, it's not the Russians and Chinese that don't get it. Frankly, it's the West. We've spent two decades building world trade that has almost singularly benefited Russia and Asia, and racked up massive debt for the Western World. And debt matters. Take the example of Henry the Eight, King of England. His banning of the Catholic Church, and creation of the Church of England, funneled massive wealth into England (that would otherwise have gone to Rome) and Elizabeth I used that wealth to expand the Empire. As did successive others. Dollars and debt affect nations, empires and war.

So, bringing it back to Ukraine, the Russians weren't prepared to see their military buffer zone change sides. It's a matter of national interest. It always has been for Russia, and for the West not to see that before they tried to outbid Russia for Ukraine's allegiance is almost unbelievable. So Russia set off massive military exercises and poured troops of one kind or another into the Crimea. They didn't do just that though. They took air force bases with their expensive Russian built fighters stuck on the ground in Russian hands. They scuttled a massive old battleship at the mouth of the Ukrainian naval base stranding seven of Ukraine's warships. These are big ticket items. After all, Ukraine owes Russia about $2 billion for natural gas used, but not paid for.

They did it all without firing a shot. Putin has arranged for a referendum to be held in Crimea in less than two weeks, and his parliament is pushing through a bill defining requirements for ex-states that want to become part of Russia. All the while thumbing his nose at the West, and leaving his options open to do the same to Eastern Ukraine.

The West's response is correspondingly without any teeth at all. Send a ship into the Black Sea. Send a few fighters to the Baltic States. Issue declaration after declaration. Threaten sanctions. The fact is, there are many western based corporations with big investments in Russia, not the least of which are American and British oil companies. So Russia has the mutual destruction button ready to push - the economic one that is. China and Russia have the same capability militarily against the West, and the West vs. them. There is no advantage to any party, except Russia has the military force ready to go into Europe. That is a fact. It also has the capacity to destroy the European economy over night by shutting off the taps to natural gas. Many people say that Russia would not do that, because it would suffer as well. However, people that say that are looking at the equation the wrong way.

Take China for instance. When the 2008 economic meltdown occurred, China laid off 250 million people and shipped them from the cities back to their rural communities. No revolution. No protest. No problem. The Russians are the same and have proved it in the past. They sacrificed 25 million dead in the second world war and, far more than any other ally, they bled the German army white - without which the Second world War would have in all likelihood ended differently. So, instead of viewing Russia, and for that matter China, as if they were American modeled economies and societies, the West needs to truly understand how bad its's been beaten at its own game, and what position that leaves us. My take - we are reaping today what we have sown.