Why Vlad Putin’s Re-election is Good for the West

by John Brian Shannon

Western leaders should be pleased that Russia’s President Vladimir Putin has been returned to power in Russia’s March 18 presidential race capturing 77% of the vote in what appeared to be an easy win for the four-time Russian president.

From the West’s point of view, the worst thing in the world would be a weak president in Russia (or any nuclear power) who could be replaced with a known or completely unknown person in the midst of a political crisis.

Even worse from the West’s point of view, would be a military coup. Western politicians simply don’t understand the mindset of normal Russians or their politicians, let alone the Russian military mindset!

Note: Vlad Putin also served one year as Russia’s Premier (1999) and a full term (2008-2012)

Vlad Putin’s Foreign Policy

While no one can deny that Mr. Putin is in business for Russia and that he wants to build the country into an economic powerhouse, he has delivered surprisingly moderate foreign policy that allows it to compete with other industrialized nations and he has played a helpful role in the verbal altercation between North Korea and the United States.

He continues to be an active force for good in institutions such as the United Nations, the BRICS countries, the SCO (Shanghai Cooperation Organisation), OPEC, the GCEF (Gas Exporting Countries Forum) and more.

Here’s a nice graphic that shows how important the BRICS economies are to the overall global economy.

Russia and BRICS members

The combined GDP of the BRICS countries (Brazil, Russia, India, China and South Africa) will outpace the G20 countries prior to 2050, by the way.

Blame Russia!

Unfortunately, Russia-bashing is popular in some foreign capitals and it seems centred around Russia’s infinite resource wealth and jealousies over a total land area that makes it the largest country in the world by a significant margin.

Russia’s 17.1 million square kilometres easily make it the world’s largest by area. In fact, if Russia were to lop off 7 million square kilometers, it would still be the largest — and the lopped-off section would still rank seventh overall! — WorldAtlas.com

For those who complain about high military spending in Russia, it continues to run double-digit defence budgets (69 billion in 2016) while countries China runs triple digit-defence budgets (215 billion in 2016) and the United States runs triple-digit defence budgets (611 billion in 2016) even surpassing quadruple-digit defence budgets during the Iraq and Afghanistan wars.

Infographic: The Top 15 Countries For Military Expenditure in 2016 | Statista You will find more infographics at Statista

Vlad Putin’s Domestic Policy

His domestic policy has improved the lives of older Russians who suffered the hardships of two world wars, the Cold War, and the ever-present brutal weather, building Russia into what it is today. Yes, Russia’s senior citizens love Vladimir Putin who would vote him President for Life if it weren’t for the term limits on presidential office.

It’s a credit to Mr. Putin that he didn’t attempt to change the constitution of the Russian Federation in order to serve more than two consecutive terms as President, instead serving as the country’s Premier from 2008-2012 until he was once more eligible to run for the country’s highest office.

Even during the 2008 global recession and following an unprecedented downward spike in the global oil price, the Russian economy continues to perform better than expected and Putin has created hundreds of thousands of jobs across the country in almost every segment of the economy.

Any election where the incumbent wins 77% of the vote, that person can only be considered a hugely popular and unifying figure, and there is a bit of ‘Putin-mania’ during elections in Russia. The other candidates just can’t compete with that level of popularity even if they have decent or even enlightened policies on offer. Which says it all, doesn’t it?


The citizens of the relatively new Russian Federation (managed democracy) experiment and its predecessor the (communist) Soviet Union have lived an utterly different reality than the West since 1917. While Russians may look like us and even act like us, their society is different from Western society in many ways.

And that’s especially true during a crisis of any sort where Russians drop their differences no matter how strident their positions and view any outsider as an enemy of the state and as a deeply personal enemy.

It’s easy to see this in action. Every time someone in the West attacked Vlad Putin publicly, his popularity rose by another 10 per cent. Maybe Vlad will send his political enemies in the West a nice bottle of champagne to thank them.

But whether Western politicians are jealous of Putin’s constantly high polling numbers, his landslide election result, the size of the country he leads, or the astonishing resource wealth of the country, every politician in the world should breathe easier knowing that we’ll be dealing with the same Vladimir V. Putin for the next 6 years — and not someone unknown.

We know who Mr. Putin is and although we might not always agree, we know he doesn’t care to press nuclear buttons, or start brushfire wars in faraway places to boost his popularity.

Not that we should ever kowtow to Mr. Putin. But we know who we’re getting. And minor irritations aside, the West should breathe a huge sigh of relief and be thankful that a new Russian president didn’t arrive on the scene wanting to turn modern-day Russia into an amped-up Soviet Union — for just one example of how it could go bad for the West.

Congratulations to President Vladimir Putin on another successful run for presidential office, for knowing what is important to the people of Russia, and for working his pragmatic plan to give it to them. Три приветствия! (Three cheers!)


Brexit + Commonwealth & NAFTA Trade = Economic Powerhouse

by John Brian Shannon

Timid minds are wondering whether the UK should continue along the Brexit path that British voters approved in 2016.

But just imagine what kind of world it would be today if Winston Churchill had given in to timidity during WWII, or if Albert Einstein was too small a man for the job, or if Franklin Delano Roosevelt was too afraid of failing and thereby didn’t pursue his plan to ‘put a chicken in every pot’ in Depression-era America? We’d be living in a far different world now, wouldn’t we?

There is a thing about leaders and it’s this, if they don’t actually Lead they are useless baggage. And that’s all that needs to be said about that.

Prime Minister Theresa May was given a mandate by voters to take the UK out of the European Union, and whether it rains too hard on Sunday, or if Manchester United can’t seem to win a game, or even if the Russians are scaring us, Brexit must remain at the forefront of Britain’s To-Do List and everything else must be considered a distraction until the job is done.

How the UK can fulfill its proper role in the world

With a strong UK government the chips would fall into place rather quickly and completely bereft of excuses, the following would occur:

  1. Brexit (even a WTO or so-called ‘Hard Brexit’) or a sweet-for-both-sides Brexit would occur by the designated date of March 29, 2019.
  2. The UK would apply to join the (by then) recently renegotiated NAFTA accord — or perhaps all the parties would agree they’d be better served by partial UK membership in NAFTA. Hey, you never know until you try, but magic occurs when people of goodwill meet-up to plan mutual success!
  3. The UK would enter into trade negotiations with every Commonwealth member nation to see what the UK can offer those nations (expertise, financial services, high-tech) and what those nations can offer the UK (agricultural products, oil and gas, metals and minerals, perhaps even a source of low-cost seasonal labour for UK farms) and so much more! Again, you never know until you try!
  4. And remember, Theresa… the goal isn’t to say; “Well, at least we tried.” The goal is to secure a standardized free trade agreement, or a standardized low-tariff trade agreement with the Commonwealth nations and every non-Commonwealth nation — especially the NAFTA ones.

What’s to Gain?

By accomplishing those steps in the proper order, the UK economy would grow 5% over existing projections — or the government is doing it all wrong.

India alone will have 1.3 billion consumers by 2019, and the United States, the highest-consuming nation in the world, will have 331 million consumers by 2019.

Post-Brexit does not mean five or ten years after Brexit — it means one year after Brexit.

These goals are eminently achievable and there can be no excuses for not hitting these metrics by 2020.

Orchards full of apples will be missed for the sake of handfuls of grapes if the UK government is too ‘small’ for the job, or if it suffers from low ambition, or if because of timidity, it can’t grab the brass ring of destiny.

The time is now for the UK to take control of its future and to stop being distracted from the oft-stated goal of Building a Better Britain.

More power to Theresa May’s government for as many days, months or years they strive to meet the will of voters and continue to work to fulfill the UK’s rather obvious destiny!

Is NAFTA a ‘Bad Deal’ for America?

by John Brian Shannon

There seems to be only one man in all of America who thinks the NAFTA agreement between the three North American economies is a bad deal for the United States. Which would be a very ordinary thing except that man happens to be the president of the United States of America. At least for now.

The one great thing about the American electoral system is that U.S. presidents can serve only two concurrent terms in office, so no matter how bad or popular a U.S. president is, he or she can stay in office for a maximum of 8 years. Although nothing prevents them from running for their old job once another president has served, other than the fact that American voters have never returned a previous two-term president to office.

That law is a tiny part of what makes the United States exceptional in the world. The most meritorious or most popular presidential candidates rise to the top — but unlike other countries where leaders can serve several terms in office — the American system is refreshed by new leadership every 4 or 8 years. And that’s what makes America great.

‘New blood’, a ‘new vision’, a ‘breath of fresh air’, or however you wish to describe it, occurs at regular intervals. No wonder America is exceptional! It’s too bad they don’t do the same thing with members of the Senate and Congress — and yes, even the office of Mayor in every U.S. city. If they did, the United States would be twice as exceptional on account of all that new blood and fresh enthusiasm.

Alas, because only one office in the land is refreshed regularly, America is great from the top down only — not up and down and in the middle — at least where governance is concerned.

Where Donald Trump is Wrong

President Trump arrived on the scene 13 months ago and with no particular government experience behind him, declared that many things are wrong with America and he’s just the man to fix it. And he may be that man, but only time will tell.

Yet, we’re seeing a man who sees symptoms and sincerely wants to treat the symptoms instead of wanting to solve the underlying condition that created the symptoms in the first place.

Certainly no one can fault Donald Trump for being enthusiastic about America, about America’s history in the world, and no one can deny he’s a breath of fresh air to the Oval Office.

But we need to have a conversation about the present symptoms in order to ascertain what the underlying condition may be in present-day America, and for that, we must travel back in time to see how America lost its way.

When Henry Ford was right: Creating the American middle class by filling a transportation need

Henry thought that ‘everyman’ should own an automobile, instead of only railway barons with their obscene personal wealth able to afford motorized transportation. During a downturn in Ford company fortunes, Henry decided to increase the pay of his workers to $5.00 per day, and was thereafter able to cherry-pick whatever workers he wanted from Louis Chevrolet, Buick, General Motors, Cord, Packard, and others.

Once Henry had created a whole new economic classification which later came to be called ‘the American middle class’ so many people bought Ford vehicles that 16.5 million Model T’s were produced in less than 20 years of production.

The moral of this story? Paying higher wages created ‘the middle class’ — a growing cohort of workers earning good wages and able to afford a car, which catapulted Ford’s fortunes into the stratosphere.

The Post-war Boom

Early in the 20th-century, the U.S. became the most powerful manufacturing nation in the world and surpassed even longtime patent leader Germany as the country that received the most annual patent applications.

This occurred only because of strong patent law in the United States. Any inventor with a worthwhile invention brought their idea to America for one reason — because out of all the countries in the world only the U.S. offered the maximum level of legal protection for their idea, design, system, or machine.

Even German scientists brought their ideas to America to have them registered with the U.S. Patent Office!

For countries other than America, the existence of a strong U.S. Patent Office created a ‘brain drain’ in their own countries, meaning that all their scientists and inventors headed to America instead of registering their contraptions in their home country.

Having received their patent protection in the United States, it was a natural step to have their inventions manufactured in America. Although not its primary mandate, the U.S. Patent Office was often excellent at matching inventors with such suppliers or manufacturers as they required.

It was a clear case of the American government passing the right legislation at the right time to attract the best and brightest in the world.

The moral of this story? Not a tariff in sight!

Because the postwar economy was booming and expectations were high, the Baby Boom generation went on a buying spree that is unparalleled in history

All of which worked to make all those patent-holders and their manufacturing companies obscenely rich. And good for them! When you work hard, you should see a positive return for your effort.

The favourable consequence of powerful U.S. patent protection combined with a huge and growing manufacturing base, created a booming economy and concomitant high consumer confidence which provided an unexpected result — usually about 9 months later.

Yes, during the boom times when one family member earned enough to support an entire family, the birthrate in America skyrocketed, creating even more demand as Americans began to have more children per fertile woman.

The moral of this story? When one breadwinner could support a spouse and up to 4 children, afford a new car every 3 years, a couple could own their own home via a 10-year mortgage and enjoy a refreshing vacation every year, the American economy was operating at full output!

American Foreign Policy in the Postwar Era

In the 41 years leading up to 1974, the Saudi government had been selling their oil to America for only the price of production (sans profit) as their contribution to the Cold War effort.

Interestingly, they were allowed to reinvest their cost of production payments in crude oil deliveries and refined oil products — so although they made zero profit on the crude oil as it came out of the ground — they were able to amass considerable wealth by speculating on oil stocks.

But that ended when it was perceived by the Saudis in 1973 that America was favouring Israel, a country that had never delivered billions of barrels of free oil to America.

When America’s oil supplier felt slighted, they decided that they wanted to get paid for their oil after all. ‘Oh, and, we’re pulling back on our Cold War commitment too.’

Which is why the Soviets thought they could successfully invade Afghanistan and tone the world’s opium supply down to almost zero.

When the Saudis suddenly wanted to be paid for their oil and they simultaneously lowered their Cold War commitment to America, the U.S. economy slowed.

With 20/20 hindsight, the ensuing economic disaster was only a symptom of a bungled foreign policy that caused a dramatic increase in new car registrations of foreign cars (with their better gas mileage) moving from 4% of all U.S. new car registrations in 1970 to 65% of new car registrations by 2017. Not only that, but up to 75% of the parts used in today’s American cars are made in Asia.

Therefore, the problem clearly isn’t NAFTA which came into effect in January 1994.

Here’s how that looks expressed as a math equation:
America -10 trillion dollars Japan +10 trillion dollars
(If you’re not into math, the symbol means ‘therefore’)

It could be argued that the United States took a highly principled stand on account of the people of Israel, but it was America’s decision alone, and it cost America 10 trillion dollars and poisoned relations with their oil-producing and Cold War ally, Saudi Arabia.

The moral of this story? The problem of offshoring American manufacturing jobs began in 1973 due to an American foreign policy decision which took place long before NAFTA had been created. Blaming Japan for American capital flight since 1974, or blaming NAFTA (which wouldn’t be created for 20-years) is disingenuous.

Social problems in 1960’s and 1970’s America: Racism, weak civil rights for women, and the Vietnam War worked to reverse America’s earlier gains

A lost generation occurred in the 1960’s where The People lost faith in their elected representatives, but they didn’t lose faith in the institutions of government.

President Carter worked to restore the faith the American people felt toward the executive branch of government by working on some very noble causes and meeting with some success. President Reagan moved things forward by strengthening the U.S. economy, infusing Americans with newfound confidence by offering loan guarantees to struggling American automobile manufacturers and dramatically increasing military spending.

The moral of this story? President Carter and President Reagan didn’t fix America by blaming other countries — they did it by empowering American citizens with tax changes and supporting American industry with loan guarantees to at-risk corporations, with huge defense spending increases, and plenty of positive exhortations about what made America great in the first place.

Every American, Canadian, or Mexican captain of industry wanted NAFTA back in 1994

If NAFTA was so grievous to be borne, why did almost every CEO in North America want NAFTA?

GDP growth Since 1993 - NAFTA enacted January 1, 1994

GDP growth in NAFTA countries since 1993 – NAFTA enacted January 1, 1994. OECD.

But some American Congressmen and Senators were nervous on account of the many U.S. job losses since 1974 and were concerned that even NAFTA could go wrong. And let’s face it, some members created a negative stir so that new U.S. president Bill Clinton would feel compelled to direct more federal funding to their districts in case NAFTA failed.

In reality, the only U.S. and Canadian companies that lived in fear of NAFTA were ones that didn’t keep up with the times. In the booming 1980’s and 1990’s economy, some companies decided they wouldn’t modernize and consequently continued to spend millions per month on electricity costs (for example) instead of reinvesting their (then record) profits in newer, energy-efficient factories or foundries.

For other corporations in the mergers era, it seemed a time to slow capital spending in order to maintain high profit margins and pay record-high dividends to their shareholders. But when the bull market finally came to its end, many businesses were suddenly cash poor and couldn’t afford a new, energy-efficient factory or foundry. Which was brilliant tactical thinking, but abysmal strategic thinking.

So… the question is; If corporations employ poor strategic thinking, should taxpayers be forced to bail them out?

Why should U.S. taxpayers bail out industries that choose high shareholder returns over sound financial management?

In the 1970’s and 1980’s, some American automakers needed the federal government to subsidize them with billions of taxpayer dollars to save them from implosion. That’s only one example out of thousands of U.S. companies that accepted or have lobbied for federal subsidies. Canada is just as bad as the United States on this point. Governments in both countries spend more on corporate welfare than they do on citizen welfare — times two!

Now in 2018, President Trump wants American taxpayers to pay even more for their cars (and anything else made of steel or aluminum) via a 25% tariff on steel imports and a 10% tariff on aluminum.

For one example, Trans Canada Pipeline will be forced to pay the tariff on the steel pipe for the proposed Keystone XL pipeline. Although steel is a small part of the overall cost of building a pipeline, the cost of the multi-billion dollar project will now rise by 5% or more. Just for comparison, 5% on 10 dollars is 20 cents — but 5% on 5.4 billion dollars adds 270 million dollars to the overall project cost.

The moral of this story? While Donald Trump’s motives are obviously ultra-pure, tariffs are simply a de facto form of taxation that U.S. citizens will pay because a few American corporations preferred high profits/high shareholder returns over competitiveness

Is there ever a good case for tariffs?

In a word, yes. Everything that’s imported into the U.S. (or any country) should face a globally standardized 5% tariff because every government needs money to improve port facilities, to streamline customs, and to maintain the transportation corridors that are essential to trade flows.

Even countries with free trade agreements like the NAFTA countries should institute a standardized 5% tariff on every good that crosses their border — and be required by legislation to use that money to improve transportation corridors and border security.

Consumers would find that presently high tariff items would drop in price, and zero tariff items would rise by 5%, but the trade-off would be astonishingly better roads, bridges, tunnels, rail links, airports and seaports, complete with better security. Every citizen would like to spend fewer hours per week stuck on congested highways, in airports, and enjoy faster and more secure delivery of goods.

Suddenly we wouldn’t be talking about ‘trade wars’ we’d be talking about improved trade, improved infrastructure, and a complete standardization and levelization of tariffs between every country.

And instead of heated rhetoric from politicians, we’d become more efficient throughout our countries and less efficient corporations wouldn’t continue getting rewarded for not re-investing in their businesses.

March 2018
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Prime Minister’s Questions March 14, 2018

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