RUSSIA CANCELS MORE UKRAINIAN AIR DEFENSES WHILE THE U.S. ADMITS THE ECONOMY IS STALLING

Russia continues to pummel Ukrainian positions throughout the country and Ukraine continues to insist that it is shooting down Russian missiles and that the Russian attacks are inconsequential. Well, as Chris Berman of ESPN was fond of saying, “let’s go to the video tape.” The following video provides clear evidence that Ukraine’s air defense system is not working (you can see the launches from Patriot or IRIS batteries) and that Russia is blasting the Ukrainian air defense system into smithereens. Focus on the lower left hand quadrant of the video.

Ukraine launched a few missiles and they disappeared into the night. At the .17 second mark you will see the first massive explosion on a position that had been launching missiles. Given the size of the explosion the Ukrainian units at a minimum suffered significant damage. Take a look at the 1:39 mark on the video. Ukraine apparently tried to launch a missile that failed to intercept and fell back into the city of Kiev and exploded.

Ukraine does not have the weapon systems capable of doing the same thing to Russia. All Ukraine can do is fire artillery rounds at civilian targets along the border. Killing Russian civilians reinforces the Kremlin’s view that Ukraine is no long operating as a conventional military and must be treated as a terrorist threat. That means we can expect Russia to expand its attacks on “decision making” centers in Ukraine, which means targeting Ukrainian leadership responsible for military and intelligence activities. I am sure the West will howl with outrage but there is little it can do to compel a change in Russia’s strategy.

The ability of the West to continue its open ended support for Ukraine is being eroded by a string of negative economic news. The European Union as a whole is slipping into recession. Philip Pilkington reports:

Last week Germany announced that, after the government statistics agency revised its recent GDP figures, it was clear that the country was in recession. In recent history it has tended to hold up well as the global economy softened relative to some of Europe’s weaker economies. But this time it seems that Germany is leading the pack into recession.

This is because the recession that is currently looming over Europe is fundamentally different from previous iterations. The coming recession is no simple turning of the business cycle. Instead, it could be the beginning of the deindustrialisation of the European economy, which no longer has access to cheap Russian energy.

The United States also is showing signs of weakness. The Bureau of Labor Statistics revised previous optimistic reports with a more gloomy assessment:

Nonfarm business sector labor productivity decreased 2.1 percent in the first quarter of 2023, the U.S. Bureau of Labor Statistics reported today, as output increased 0.5 percent and hours worked increased 2.6 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) Labor productivity was revised up 0.6 percentage point, the combined effect of a 0.3-percentage point upward revision to output and a 0.4-percentage point downward revision to hours worked. From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.8 percent, reflecting a 1.4-percent increase in output and a 2.2-percent increase in hours worked. (See table A1.) The 0.8-percent productivity decline is the first time the four-quarter change series has remained negative for five consecutive quarters; this series begins in the first quarter of 1948.

A moment of reckoning looms on the horizon. The United States and Europe will not be able to sustain its financial and military support to Ukraine regardless of what Ukraine achieves in its highly anticipated offensive. The United States has made a fatal mistake by assuming it could conduct or encourage military operations as it did in Iraq and Afghanistan without creating a war economy. Washington’s support of terrorist attacks inside Russia is hardening Moscow’s position towards the West and makes it more unlikely that there can or will be a negotiated settlement to the war in Ukraine.