Weekend Update #3 - Ukraine gets its hands untied

Plus, presidential history, and global shipping runs aground

Jun 03, 2024

The Elephant in the Room

Donald Trump is now a convicted felon, and the first president to be convicted of any crime. This was the first of four cases that have been brought against the former president:

In New York, Trump has been convicted of concealing hush money payments to Stormy Daniels as legitimate legal expenses to influence the 2016 presidential campaign. Trump had an affair with the former adult film star in 2006 while married to his third and current wife.
In Georgia, he is accused of leading a criminal conspiracy to overturn the results of the 2020 presidential election. This is for the documented systematic effort by Trump, Rudy Giuliani, and others to intimidate and harass election officials, and arrange alternate slates of fake presidential electors, among other actions.
In one of two federal cases, Trump is accused of mishandling classified and top-secret government documents. This stems from the 2021 raid on Trump’s Mar-a-Lago estate where he was storing boxes of materials in highly insecure locations, including a bathroom. He refused on numerous occasions to return the documents, leading to the charges.
In the second case, he is charged with leading a criminal conspiracy to defraud the United States by overturning the 2020 election results, and committing numerous crimes pursuant to that conspiracy. Among them, instigating the January 6th capitol riot, assembling false elector slates, and harassing and intimidating local and state officials.

All along it has been in the Republican party’s best political interest to ditch Trump, regardless of how you weigh the ethics of his behavior and the validity of the criminal cases brought against him. Each indictment, the recent conviction, the two months following the November 2020 election, and January 6th itself were all opportunities to wipe the slate clean. And each one of them has been refused.

My observation is, for whatever reason, that the base of the Republican Party is motivated by hatred of their political opponents more than any particular policy goal. Why else hold on to a candidate who continues to lose but who hates the right people? True, the far-left has shown an anti-semitic streak, but so too has the far-right. Compared to the Republican Party, there is not an equivalent hatred in the base of the Democratic Party.

In the short term, this will widen the political divisions in the country. Republicans have clung to their position and will tolerate increasingly more and more extra-legal means to hold onto power, which will make the 2024 elections interesting. Anyone who thinks Donald Trump will concede peacefully in failure, and act magnanimously in victory is not making a good bet based on past performance.

We could be walking into an ugly time for domestic politics in this country while an informal axis, including China, Russia, Iran, and North Korea, is challenging the world order on multiple fronts. Most of the internal discord we face is, in my view, the result of decades of abundance and American global dominance. Americans are finding things to argue over the absence of any real problems, and this pettiness is starting to create genuine problems that the next generation of leaders will have to deal with.

Ukraine Gets Help

Another consequence of American global dominance in the last 30 years is our grand strategy muscles have atrophied. We have settled into a reactive posture to global events, which is a luxury of the powerful. This, in my view, has led to the policy of trying to “manage escalation” in Ukraine, rather than setting the conditions for strategic victory.

Rather than allow Ukraine to use American weapons as they see fit, and use this as the strategic distance to avoid a confrontation with Russia, the Biden Administration has placed restrictions on the use of these weapons to prevent escalation and facilitate eventual negotiations. This might be a good strategy for a small regional conflict, such as those we’ve faced in the Middle East.

However, it is a poor strategy for full-scale interstate warfare between two industrialized nations. In this context, it signals strategic weakness to Russia that emboldens them to push the envelope in other regions. By limiting Ukraine’s usage of weapons to their territory, we’ve de-facto ratified the current lines of control and handed a strategic victory to Russia before any negotiations have started.

A better approach is to apply maximum pressure and force Russia into a position where continuing the war in Ukraine has a significant strategic cost that outweighs any potential benefit. This would signal to Russia and to the broader axis supporting it that the use of force to enhance their strategic position at the expense of the United States will not be a viable option.

That is how you secure a long-term peace.

The U.S. has been successfully pressured by its European allies who have a stake in the conflict. The list of countries that have green-lighted the use of their weapons on Russian territory includes Sweden, France, the U.K., Czechia, and others. Now, some American weapons can be used to destroy Russian military assets across the border directly engaged in attacking Ukraine’s Kharkiv Oblast. This still excludes long-range weapons such as ATACMS missiles.

Europe is asserting its interests, and pulling America into the current geopolitical reality.

More Presidential History. . . .

Mexico has elected its first woman president. As if this wasn’t novel enough, President-elect Claudia Sheinbaum Pardo is of Jewish heritage, the granddaughter of Jewish immigrants from Eastern Europe. She also holds a PhD in energy engineering with an extensive academic record. This is certainly a different profile from previous Mexican presidents and a complete sea change from the current president, the bombastic populist firebrand Andrés Manuel López Obrador (AMLO).

Mexico has been drifting in an authoritarian direction, with murders of journalists spiking under Obrador’s leadership. AMLO himself has been antagonistic to the press and called journalists out by name in his daily press conferences. It is unknown whether the mild-mannered Sheinbaum will provide a genuine change in direction, or simply continue the policies of her predecessor and mentor.

Red Sea Shipping Sinks

The global shipping industry is facing significant challenges due to ongoing conflicts, highlighted by the attacks from Houthi rebels in Yemen. These incidents have caused a 60% reduction in commercial shipping through the Red Sea. Insurance costs for transiting the strategic Bab el-Mandeb Strait have surged, and the increased insurance premiums, now approximately 1 percent of a ship's value per transit, reflect the heightened risks and economic strains placed on maritime operators due to regional instability.

As the traditional Middle Eastern routes become riskier, attention is shifting towards the Arctic's Northern Sea Route. It could significantly reduce travel times and shipping costs between Europe and Asia. However, the Arctic route features extreme weather conditions, limited search and rescue capabilities, and difficult navigation due to shallow waters near the coast and dense ice further out. Additionally, geopolitical tensions, particularly concerning Russia's control over the route, complicate its viability.

Despite the theoretical advantages of the Arctic route, real-world geopolitical and logistical challenges dampen its immediate potential. Russia's firm grip on the route and the region's harsh environmental conditions make it a less feasible option for now. Meanwhile, China, recognizing the strategic significance of the Arctic, is expanding its presence there, although its efforts remain limited.