Euro-Maidan, Liberal Capitalism and the Ukrainian Fiasco

I.

Almost a decade ago, the videodrome trumpeted the idea that “Kosovo,” a place that few Americans knew existed, was important to them. This place needed “independence.” The indebted and bankrupt citizen of this American empire forked over millions to support this Islamic state that corporate elites knew was one of the globe's bases for heroin and white slavery. In fact, the largest US Army base outside of the US was constructed there.

“Independence” was never defined. Since the US is opposed to nations and nationalism, rejecting all forms of “independence” or sovereignty, the system did not mean a word it said. Kosovo was placed under a join US-EU council that became its “independence.” Heroin and prostitutes continue to flow unimpeded through that area, right across the guard towers of Camp Bondsteel.

To the extent that an area is obscure, the Regime can lie about it without any fear of being exposed. Any part of the world that is potentially wealthy (Kosovo's mineral wealth makes it coveted), and yet opposed to US imperialism will soon find its people killed, bombed and gassed in the name of “human rights.”

In Ukraine, the demonically violent riots of 2014 were orchestrated by the US; that American agents in both private and public sectors were involved in organizing the “grassroots” campaign designed to destroy what was left of the country are now well known. The same exact script has been played out in Serbia, Georgia, Syria, Iran, Libya, the Gulf states,Turkey (briefly), China, parts of Central Asia and even Armenia. Not all were successful.

In Ukraine, State Department hack Geoffrey Pyatt brought US cash to begin the campaign against Yanukovitch. Radio Free Europe and the western-controlled Ukrainian media (especially the Kiev Post) began promoting rumors of a “Russian invasion” based upon the obscure issue of Kiev's desire to join the Eurasian Union. George Soros created the “Ukrainian Crisis Media Center” as both government and private cash went to building a protest movement. The veto of a European Union deal was important to the elites in New York, though probably almost totally unknown to Ukrainians, hence, the “spontaneous rebellion” began with that.

The method of public-private manipulation of media, imagery and even language in these cases is well known and several important monographs have been published about it. Yet, over and over again, the organizers of this claim that the “revolutions” are “spontaneous.” over and over again, academics and talking heads – the “instant experts” created by the System – repeat the official line.

In general, the western elite mobilizes urban, privileged elements of the population, uses their own organizers and media personnel, and create riots through the building of local organizations. They are granted cash, equipment, technology, ideology and even leaders with a script to follow. Violence is encouraged and all manner of suitable provocations are provided. A handful in the west point to the fact that a) the trajectory is identical in each case; b) way too many of the protest signs are in English and c) there is no clear ideological mission.

Corporate media then report that this obscure part of the world was run by a “terrorist” that also was a “tyrant.” For the left, the System will say that the government under siege was “conservative” and occasionally “a right-wing military regime.” For the right, they will say that the government in question was “opposed to American interests” or “harboring terrorists.”

In many cases, hundreds or more are killed. Ostensible and official enemies of the US are financed and armed. A new government takes over that immediately “privatizes” all assets that made that country a target in the first place. Constitutions are rewritten and the penal code revised to ensure no US agent is prosecuted. Afterwards, the government in question is impoverished and without legitimacy. The assets of the state have been liquidated and bought up by western conglomerates based on the “principles of the free market and the rule of law.”

Strange people are seen in cabinet posts having names without much connection with the ethnicity in question. The IMF and World Bank give dire warnings about government policy and yet, give billions that they know will never be paid back or utilized properly. Within a few months, major media begin slowly leaking documents that in fact, the protest were organized by the CIA and that the “revolution” was a failure.

As more time goes by, stories related to this “revolution” nonchalantly speak of the “popular and spontaneous revolution against the tyrant” as if it is obviously true. After several years, almost everyone spouts the original line without criticism, almost with media reports that it was all staged. The American talking head and pseudo-intellectual then carries a conceptual conflict within him that makes any real rebellion against the system psychologically impossible.

This is precisely the nature of the “Color Revolution” from Tienanmen Square to Kiev. Of course, the above is only really for successful revolutions, but the mentality is the same regardless. In Kiev, the government violently installed in power is unstable, and cabinet members are American citizens such as Natalie Jaresko, taking advantage of new laws that permit this sort of thing. None of these strange new rulers are actors or philosophers, but are all connected to investment funds and Harvard University. She owes millions in back taxes in the US, but as normal for the “rule of law,” the law does not apply. She has apparently been ordered to run Ukrainian finances to quicken the transfer of money to the US and, at the same time, steal to pay her tax debt. It might not even be necessary to mention that the penal code has been rewritten to make all this legal.

In March of 2015, three cabinet ministers in the “Ukrainian Government” in Kiev are not Ukrainian and not citizens in any moral sense. One is a Lithuanian Jew and another, a Georgian, all educated in the US (Salem, 2014). Ukrainian nationalists, for the second time in a decade, have been used and discarded. Their “nationalist” movement turned out to be a violently anti-nationalist, western, secular (if not atheist) oligarchical front, and again, believe that this is for an “independent Ukraine.” It will happen and third and a fourth time without any learning process., understanding or embarrassment.

Mercenaries and nationalist militias, condemned yesterday, are financed today to fight Russia in the east. Much of the ragtag Ukrainian army – almost entirely financed by the US taxpayer – has largely deserted. Senator Inhofe (R-OK) used pictures from the Georgian war on the Senate floor to claim that “Russia has invaded Ukraine” in hopes to spark a war. The exposure of this fraud has led to no repercussions of any kind. As the American is told that “there is no money” for unemployment, education or medical bills, the expenses of billionaire global elites, Ukrainian traitors and mercenaries are paid instead. The neoconservative rejects all forms of welfare for Americans, but advocates spending  a small fortune to keep thousands of parasites in militias, mercenary armies, settlers or political activists in business.

With all the insanity, American banks on February 15, 2015 – through the fiction of the “IMF” – sent another $40 billion to Ukraine that they know will never be seen again. Most of this is likely from bailout funds the US taxpayer was forced to give the people who destroyed their economy in 2007. The IMF is a consortium of elite banks in the west and has no relation to any government.

II.

The history of Ukraine since independence is a story of squandered potential, the results of corruption and the consequences of an amoral upbringing. As a part of the USSR, the population was raised to accept the naive materialist view of the world, that is, that technology development and the resulting changes in class interests drive history, psychology, literature and anything else you can name. Of course, this does not apply to the USSR. The Soviet system was much superior to the present chaos. Ukraine has gone from a major industrialized powerhouse to a fourth world backwater with no foreseeable future. This creates the short term mentality that encourages people to suck whatever value they can out of what's already there rather than building for the future.

A brief history of the Ukrainian economy since 1991 is required to contextualize this material. In 1991, Leonid Makarovych Kravchuk was elected president with 62% of the vote. Of course, he was from the Communist Party ranks, since anyone with a government job had to be a party member. It is always a good idea to note that Party membership does in no way imply any adherence to or familiarity with Marxist doctrine. Marxism is taken far more seriously in urban American than it ever did in the USSR. Party membership was a club that assured the member a decent standard of living.

Kravchuk had little experience in being anything other than a bureaucrat. Only a miracle was able to permit a nation to grow out of the Soviet empire. The population was divided, the economy was oriented exclusively to Russia and her military forces did not exist. State building was his primary purpose, and he failed. He lost the 1994 election. He maintained a minimal agenda because agendas made no sense. One has to have a government and social system in order to have an agenda. If anything, his view was to maintain a balance of social forces and classes for the time being. Banning the KGB was popular, but where would new cadres for Ukraine's intelligence service come from? Without any sort of plan, without any sense of how he was going to maneuver one of the most unprecedented and revolutionary upheavals in history, Ukraine was off to a bad start.

By the time Leonid Kuchma was elected in 1994, Ukraine was disappearing. The western-created program of “free markets” was a cruel joke, since a free market makes no sense when your competition has been at this for a century.  Then as now, this absurd experiment was a means to extract what was needed for western development from Ukraine. After the meltdown of the 1990s, the moderately pro-Russian Kuchma government posted some respectable numbers. Overall, 2003 saw a GDP increase of almost 9% and a 16% increase in industrial output along with a substantial increase in wages. This went up by 12% again the following year and real wages increased by an impressive 23.8% . of course, this was largely in recouping the losses of the 90s, but it remains almost utopian in contrast to today.

In terms of fixed asset investment, 1995 was 30% lower than 1994. As soon as Vladimir Putin replaced a dying Yeltsin in 2000, Ukraine's fixed capital investment increased 20%. Since most of Ukraine's trade is with Russia, the connection between the two economies is very obvious.

In 2003, this increased again by 31% and the following year 28%. However, when the west engineered its first coup, overthrowing Kuchma and installing Yushchenko, economic growth fell off. Hence, 2006 was the last year of substantial growth at 30%, but this is still a holdover from the previous year. As soon as the western banks and capitalist predators descended on a now helpless Ukraine, economic growth was a thing of the past. Today, there is no Ukrainian economy, as both local and western oligarchs have sold off much of the country to pay debt, the policy about which the present civil war began. The second western-sponsored coup against Yanukovych yet again crippled the Ukrainian economy, permitting western companies to buy up what was left of Ukraine at fire sale prices.

Kuchma was correct that a life outside the Russian orbit makes no sense. Up until a few years ago, Ukraine was entirely focused on the all-Union economy. That is unlikely to change. Hence, better relations with Russia were established, but there was no functional “Russia” in 1994. Kuchma was paralyzed at the liquidation of 50% of the Ukrainian economy by local and western speculators and oligarchs and shipped to bank accounts in Europe. This had never happened before and was being called “the free market” by conservatives and libertarians in the USA.

In 1993 alone, a full 20% of the entire Ukrainian economy was liquidated. When something is liquidated, it is not put out of existence. Money and capital don't disappear, they just change hands. The result was that a handful of highly liberal, Jewish and heretofore unknown oligarchs took over the country and used the “government” as its security service. The oligarchs were created by the west, subsidized by the west and called “the new class of entrepreneurs” until the charade had reached an absurdity that something needed to be done. Typically of the US capitalist class, blaming someone else was the option.

Kuchma had no chance. The only thing that could have saved Ukraine was a military coup or reincorporation into a Russian empire run by the Emergency Committee that failed to take over the dying USSR in 1991. Kuchma had little power since the concept of a “Ukrainian government” was a new one. Capital moves faster than a semi-existing state, so the system was restructured for him. It was Ukraine that suffered. Ukraine was exhausted, the west the worst of hypocrites, and there was no ideology, no sense of self that could replace the slogans of the USSR. Ukraine was a name only.

The west, now irritated that all the loans, aid and propaganda has been itself sent to foreign banks, the suddenly outraged western oligarchs instituted their first coup for debt repayment. A group of hacks had promised western banks that Ukraine was theirs if they could engineer a mass protest to put them in power. There was much to protest, but the point was to use their own failures to mobilize people, then tell them what they were protesting. It worked. Twice.

The American media, without the slightest clue as to what a “Ukrainian” was, pontificated on the liberal and western agenda of Yushchenko and crew, of course, having no idea if they actually espoused that or any ideology. They reported what they were told. Soon, the victor in the election – Yanukovych – was ousted for the first time and Yushchenko was installed.

III.

Nothing has changed in coup II in 2014. The results were identical, and both the journalistic and academic establishment in the west have refused to learn anything from it. The same trajectory occurs, the same economic agenda, the same secretive forces, and yet, the elites use the same slogans and purely political cover stories. The new “governments” began raping the country, selling off anything that looked valuable and shipping it to western creditors. Most of it went into secret bank accounts. The western press ceased speaking of the “Orange Revolution” as the second coup immediately sold off a full 25% of the remaining GDP of the country. Unemployment in 2005-2006 and 2015 remains at about 50% (rejecting the statistical methods of the official agencies) and steel alone was the only thing earning any money. It accounted for 40% of exports – all to Russia and China.

Today, Ukraine has no economy. It is a black market system of trading and exchanges through “informal” channels that have far more power than “formal” ones. Criminal and mafia gangs were too powerful to prosecute, so hence, their activity was no longer criminal.

Sergey Taruta and Igor Kolomoisky were quickly appointed by the western-sponsored government that took over in this second coup. Their job was to liquidate all profitable industries, especially from the eastern part of the country. This was the point of the entire coup operation. It was a debt collection operation. The east, opposing this second coup as they did the first, revolted, and the present stalemate of the civil war was all but inevitable.

The west assured any anti-Russian faction in Ukraine all the credit they needed if they were able to organized sufficiently to take power. Even in the summer of 2014, there were no reliable indicators of Ukrainian economic performance, since the black market had become the actual economy. Any sort of credit was infused from the west with the final end of weakening Russia.  However, even this proved to be a double cross as this promised assistance ws unrepayable. This gave western capital the “right” buy up chunks of Ukrainian land as if they were commodities on the open market.

Massive price increases on all staple items was the main result, along with the cancellation of anything remotely like Ukrainian independence. Kiev, being now deep in receivership, was now administered from both Brussels and Washington.

It gets worse. As of January of 2015, the IMF still refuses to release the funds it promised on the condition of a coup. This means that Ukraine has no real income and no prospects. The fact is that the initial deal was mutually beneficial: the Ukrainian elite escaped their debt and the literal disintegration of Ukrainian infrastructure while the western elites essentially had a new colony. The only people not benefited were Ukrainians. Given the massive cuts in social spending that occurred immediately after the coup, this spells disaster.

The result of this realization was yet another devaluation of the Ukrainian currency. Since the IMF had demanded that the Hryvnia  float freely, the continued failure of the Ukrainian economy, its alienation from Russia and total lack of interest in her products in the west, the currency has nothing to reinforce it. Its failure was assured when the state no longer intervened in the currency's value. At the very least, it is an accurate portrayal of the Ukrainian economy.  Without production, there can be no currency value.

Utility rates have increased on average by roughly 50% and more increases are planned. The same goes for taxes, and all of this has been at the behest of the IMF. It seems that each day, new taxes are being invented. Some new ones are an income tax on bank deposits and all real estate. In both depositing and withdrawing cash from a bank, the state takes a portion.

Pensions continue their free-fall, made worse by the fact that the Hryvnia is not worth anything. As this writer and a handful of others predicted, this second coup did what the first could not, place the entire country in the hands of western creditors. The eastern civil war is a normal and natural response to this betrayal. It might be noted that the opposite is occurring in the Crimea, where new investment has pushed wages higher and real production is increasing massively.

Last month, the post-coup Rada introduced a bill that permits the “government,” which means western capital, full access to all bank accounts possessed by any Ukrainian citizen. The treasury promises that all money will be eventually returned in the form of government securities, which proves the utter level of cynicism among the western-appointed caretakers of the country.

The strangest aspect of this is that the IMF makes lots of demands, many quite irrational, but seems to avoid any mention of dethroning the oligarchs or creating the real conditions for small business. This might be explained by the fact that time is running out. These kind of scorched earth tactics are purely short-term. Soon, the currency will be worthless and Ukraine merely a fifth world farm for raw materials and sex slaves. Any creditor must move quickly to take what remains before the entire fraud collapses into total flux and chaos.

Last year, the reward for the coup was a release of about $4.6 billion without conditions. It was a payoff. The problem there was that $3.7 billion was returned immediate in the form of interest payments on previous debt.

It comes as no surprise when the “national” bank of Ukraine admits that the decline of the basic sectors of the Ukrainian economy amounted to 9.6% and it is growing. The five basic sectors are industry, construction, agriculture, wholesale trade and retail. “The total volume of industrial production decreased by 10.7%, construction by 21.7%, retail trade by 8.6%. The only industry whose production grew, it was agriculture (2.8%) due to the record grain harvest.

As if reading a paper by a Russian nationalist, the Bank claimed that the reasons for the present failure were the continuation of the civil war, weak external demand, worsening relations with Russia and the continued depression of the western powers. All of this together leads to a population with no confidence in the future and no real economic power. The record crop in agriculture was a positive development, except that no one in the west really needs Ukrainian goods. Russia would love to be in that market, but this became problematic. The symbolic “openness to the EU market” is something added to end the report on a positive note, but this covers over the fact that the western market is saturated with its own products. Why they also need Ukrainian products made for a Russian market remains one of the mysteries of establishment economics.

The International Monetary Fund is working on designing new avenues for Ukraine's auto-dissolution. The recently appointed spokesman for the IMF, a Christine Lagarde, spoke with Le Monde and made some startling announcements. When the civil war first broke out as a result of the western-backed coup, the “smart money” held that the eastern Russophiles could not possibly last through the winter. As always, the academics were wrong, and as always, the consequences of their incompetence were as dire as they were unmentioned.

In an understatement that marks the bureaucratic personality, Lagarde stated “Today, those theories are no longer tenable. Today, we are developing new options, more specifically, giving Kiev more time to develop a reformist system.” The understatement receives its own deconstruction as she continues, “It is likely that the financial commitments the Ukraine must have will be higher than expected. . . All of that, however, depends on the situation in the east. This is the priority today. The IMF cannot be expected to support reform if a full 20% of the GDP might not exist tomorrow. The relationship between economics and the military situation is clear.”

IV.

One of the better responses to western propaganda has been the writing of V. Marcheko (cited above), the Chairman of the Ukrainian Confederation of Labor. His argument is clear and nearly impossible to debate: The western-backed coup promised what it knew it could not deliver: free elections, prosperity, human rights, a free press and a rising standard of living. The characters behind this knew it was not true, but their financial future depended on being bailed out by western capital in exchange for the labor of millions of others.

However, as any knowledgeable person was able to predict, the moment the coup took place, it was announced that all teacher salaries were to decrease while their workload increased. In addition, the number of schools would be reduced and all pensions frozen at the 2014 level. The retirement age was raised to 65 and will go up after that. No cost of living increases at all and all school meals are gone. Hospitals must pay for all meals while citizens must pay for 80% of all medical care. The most galling aspect of this was that it was known at the time this was the endgame.

This is only the beginning. These humiliating cuts will be slowly increased in exchange for IMF assistance. The entire coup was based on a lie, which also implicated every single western media organization as well. Almost 100% of western academics are – yet again – proven wrong, even when they realized they were wrong about Yushchenko. Yet for all of these people, no consequences will be imposed, their prestige will not be vitiated, and their own salaries will increase. It is as if a surgeon constantly killed patients, bled their families dry and made false claims to medicare while – as public knowledge –  they continued to received promotion after promotion as a result. Speaking of this phenomenon, Marchenko writes:

The main feature of contemporary Ukraine is that all political and economic power in the country belongs to those who organized Euromaidan, its coup d'etat and its violent seizure of power. These are the men who financed and carried out the propaganda of Euromaidan to a dazed, zombified population.

This zombification is the result of constant humiliation and the never ending sense of real powerlessness while the Orwellian machine repeats how modernity has “empowered” them. It is cognitive conflict, conceptual confusion, self-doubt and depression that leads to abulia and then, total liquidation. Ukraine is probably father alone than most nations in the world.

The events in Ukraine over the last 18 months have left far more questions than answers. The American press has proved itself so incompetent in this area that reading any treatment in the mainline sources is a waste of time. The reader will know less when finished then when he started. When a political situation is obscure, journalistic hacks can more or less say whatever they want. There will be only a few who can respond, and their response will be in a language that the average reader finds mysterious.

Ukraine is a graphic and depressing example of what the west does to its smaller, weaker allies. The USSR was not a just government, but it did provide a modicum of protection against the worst elements of liberal violence and aggression. Today, Eurasia and the Shanghai Cooperation Organization are all that exists to take its place.