Friday, August 4, 2017

THE COMPLEX MESS: Economic Sanctions on Russia Will Hurt the US More Than Russia

Richard A. Epstein, the Laurence A. Tisch Professor of Law at New York University School of Law, the Peter and Kirsten Bedford Senior Fellow, the Hoover Institution, and the James Parker Hall Distinguished Service Professor of Law Emeritus and Senior Lecturer the University of Chicago, explains the complex situation:
As a political matter, sanctions are always a tricky tool to operate for all the usual reasons.  The sanctions are imposed only by the United States, with the partial cooperation of our allies.  In any event, their impact on Russia is doubtful, since Moscow is an old hand at ducking sanctions and can obtain needed resources and services from third parties, often in convoluted transactions that evade detection. In addition, sanctions hurt the U.S. and its partners by causing a reduction in their trade.  Worse still, it is a messy business to decide which domestic companies will bear the brunt of these sanctions, which usually has to be determined by divisive internal political processes.  As a first cut, the best way to hurt Russia is by opening the spigot that allows American firms to sell cheap products, e.g. natural gas, in ways that force down Russian prices, reduce Russian hard cash reserves, and create good will with new and old trading partners alike.  Nations that benefit from buying our goods and services at lower prices have no incentive to defect in the long or short run.

Alas, economic sanctions cannot do the job alone, which means that in general a wide variety of direct sanctions have to be brought to bear on such matters as the movement of cash through the financial sector, prohibitions on the sale of strategic goods, and the removal of Russian operatives. Just to mention the endless permutations involved in putting these sanctions into place, suggests that the key government officials will have to weigh complex strategic options, without any firm compass to guide their path.

Note that Epstein writes above:
 Nations that benefit from buying our goods and services at lower prices have no incentive to defect in the long or short run.
Does this not apply to Russia? Economic sanctions just intensify hostilities and complex financial sanctions send hostilities over the top.


No comments:

Post a Comment