Glenn Greenwald
Politics • Writing • Culture
FLASHBACK: Ukraine's Inevitable Loss: Revisiting Key Developments In The Ukraine War
Video Transcript
October 18, 2024
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Flashback: As Ukraine’s loss becomes inevitable, travel back with us to some of the key moments of System Update’s coverage of the war.

Featured in this ‘System Update Flashback’ are previous interviews with John Mearsheimer, Michael Tracey, and John Diesen.


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Most Americans are now turning against this war. They do not want any more of their taxpayer dollars going to this war. Congress has already authorized over $110 billion, and there's just no end in sight to this war. The only possibility – if the United States doesn't withdraw or forge a diplomatic solution finally – is just to keep spending tens of billions and hundreds of billions of dollars more to destroy Ukraine, to kill Ukrainians, and eventually probably have to then pay for the reconstruction of that country through all kinds of private hedge funds and investment funds, like BlackRock and JPMorgan and others, which are very excited as well about this war. 

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Public opinion makes no difference. They sufficiently propagandized the public to get the public onboard at the start of the war in a bipartisan way and the fact that Americans are now wanting to get off their ship does not mean that this ship is stopping to let them off. In fact, it is escalating in terms of how quickly it seems to be moving. From the Associated Press earlier today, the headline “Biden will ask Congress for $13B to support Ukraine and $12B for disaster fund, an AP source says.”

So that's $25 billion. You'll notice they pared the war spending with a disaster fund so that that way anybody opposed to the spending package will instantly be accused of opposing the $12 billion in humanitarian spending. Here are the details. The AP

 

WASHINGTON (AP) – President Joe Biden on Thursday will ask Congress to provide more than $13 billion in emergency aid to Ukraine, another massive infusion of cash as the Russian invasion wears on and Ukraine pushes a counteroffensive against the Kremlin’s deeply entrenched forces, a person familiar with the matter told The Associated Press.

 

The last such request from the White House, made in November, was met and then some — Congress approved more than what the Democratic president had requested. But there’s a different dynamic this time. (AP News. August 10, 2023)

 

In fact, you'll recall that in May of 2022, President Biden originally requested an allocation of $33 billion for the war in Ukraine. Congress received it, arbitrarily threw another $7 billion on, just locked it up to $40 billion, and just rounded it up by $7 billion to $40 billion. And that was really the only time Congress was required out in the open to approve a standalone expenditure. That was when every single Democrat – as well as every single Democrat-leaning independent, such as Bernie Sanders in the Senate, the entire squad in the House, every last Democrat – every single one of them, voted YES, and, as usual, they got enough support from the Republican establishment, from the neocon and pro-war wing of the Republican Party to pass that $40 billion expenditure by a very lopsided bipartisan majority. They had already approved it very early in the war, $14.9 billion, which they were drawing down rapidly. So, before you even blinked the United States has spent $60 billion on the war, which is almost equal to the total military budget for Russia for the entire year, which is $65 billion. 

So, in a matter of three months, the U.S.  blew through $60 billion and the same thing happened in November when Biden had made a request and then Congress not only approved it, but lost a bunch of money on top of it, and the Associated Press says: 

 

A political divide on the issue has grown, with the Republican-led House facing enormous pressure to demonstrate support for the party’s leader, Donald Trump, who has been very skeptical of the war. And American support for the effort has been slowly softening.

 

The White House also is expected to ask for $12 billion to replenish federal disaster funds, according to the person, who was not authorized to speak publicly about a request that had not yet been made public and spoke to The Associated Press on the condition of anonymity. (AP News. August 10, 2023)

 

Note here, just as an aside, this rotted journalistic practice that they just give in an email to anybody without even bothering to pretend to have a reason for doing so. The justification here was they were given anybody in order to speak about a matter not yet public, but obviously, the source was authorized to leak this. They wanted to kind of do a test case. It's not like some inside the government whistle-blower. This is just a Biden official going in wanting to announce it through the Associated Press and not wanting to be named. And of course, they immediately grant that anonymity so that government officials can do everything in secret. 

 

Biden and his senior national security team have repeatedly said the United States will help Ukraine “as long as it takes” to oust Russia from its borders. Privately, administration officials have warned Ukrainian officials that there is a limit to the patience of a narrowly divided Congress – and the American public – for the costs of a war with no clear end. (AP News. August 10, 2023)

 

As you likely know, we've been reporting on this for a while, as the public support for the war has been eroding – or softening, in the words of AP – the attempt has been made propagandistically to convince Americans that there's this great counteroffensive coming and all you have to do is hold on a little longer. The counteroffensive is going to be this explosive momentum change in the war. The Ukrainians are going to break through these incredibly entrenched defensive lines the Russians have spent months entrenching and building and that is going to finally be what enables the Ukrainians to expel Russians from their land. Remember, Russia occupies more than 20% of the Ukrainian territory, including Crimea, which they have had possession of since 2014. I don't know how you perceive it, but for me, I have a very hard time envisioning Ukraine driving Russian soldiers entirely out of Eastern Ukraine, all of those provinces in eastern and southern Ukraine, that they are now very aggressively occupying, as well as Crimea. 

The problem has become that both sides – Russia and NATO/U.S. – have asserted absolutist goals as their non-negotiable, uncompromising demands for ending this war. The Russians have made unequivocally clear that they will never accept being expelled from these territories in Eastern Ukraine, which they claim has been used to oppress and mistreat Russian-speaking ethnic Russians, as well as to allow all sorts of Nazi battalions to fill up in that region and to threaten Russia as well with the presence of NATO on their soil. Meanwhile, the U.S.  has said we will never allow this war to end if it means the Russians gain even an inch of Ukrainian territory as a reward for this invasion. And so, the war by design, in terms of the framework that has been imposed, the framework asserted by Western leaders is almost designed never to end. If it does end, it's going to be a very long time before it does. Joe Biden is saying, as are the Democrats, that we're going to keep putting money into this war for as long as it takes. That is, by definition, an endless war. 

So, this $110 billion on top of, now, this $25 billion that Biden is seeking, is just a very starting point for what the U.S. will end up spending if, in fact, Joe Biden gets his way and continues to have the authorization to spend as much of your money as he wants to fatten up the armed industry to launder money through the CIA, to pour all this money into the most corrupt country in Europe – a country, by the way, where Joe Biden and his son Hunter, and his family, have not only been aware of the corruption but participated in that with Hunter Biden making a huge amount of money in Ukraine in order to sell his father's influence and access to his father during the time that his father was vice president and basically running Ukraine. 


US Exploits Navalny Death

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It'd be one thing if Alexei Navalny were some sort of gigantic figure in Russia. The only reason you know the name now is because the West has turned him into this mythological figure. There was a documentary made about him. It won the Academy Award for Best Documentary in 2022. All of Hollywood stood and cheered for this documentary about the hero Alexei Navalny. In Russia, he's a minuscule figure. He's not some giant of the Russian political stage. He is useful to the West for propagandistic purposes, and that is why you have this incredibly inflated imagery of what he is. 

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 Do you remember when the proof of Russia's totalitarianism was that the opposition leader was barred from the ballot and then imprisoned? Isn't there a situation similar to what we have in the United States? Isn't it the case that the primary political opponent of the current government in Washington is in the process of being stricken from the ballot because of judges and Democratic Party leaders bringing cases to have him struck from the ballot and is in the process of being criminally prosecuted by Democratic Partizan prosecutors like Fani Willis in Georgia, Alvin Bragg in New York and the Obama DOJ? Why is it that when we hear that Russia is banning from the ballot the primary political opponent of Vladimir Putin and then trying to imprison him, we make one conclusion, but then here in the United States, the exact same thing is happening with an actual significant political figure—not like Navalny, but Donald Trump was actually the president already, narrowly lost in 2020 and is leading almost every opinion poll for 2024. When he is struck from ballots, when he is threatened with in prison, a completely different narrative about that is presented, even though the same acts. I know a lot of people just intuitively believe this is what propaganda does; this is what tribalism does. We just inherently believe that when it seems like the two things are the same, the fact that one is happening in the United States and the other is happening in Russia means they're completely different. Question whether or not that's what you believe, because you're an American, because you were born in the United States, because you've been told from childhood, but that's how you should see the world. 

Here is Reuters. Now this is not R.T., this is not Sputnik, this is not Tucker Carlson—whoever you want to dismiss as some sort of pro-Russian source. This is Reuters, in 2018 which said the following:

 

Putin nemesis Navalny, barred from election, tries political siege

 

Opinion polls put Navalny's support at less than 2 percent and many Russians, who still get much of their news from state TV, say they do not know who he is. (Reuters, February 21, 2018) 

 

He's incredibly more famous and more notable and more popular in Western political capitals than he is in Russia. The idea that he's a threat to Vladimir Putin, in any way, is laughable. Let's try and remember as well a couple of things about who Alexei Navalny is—the new hero of Western liberals. 

From Yahoo News, yesterday:

 

Alexei Navalny's 'far-right racist' past back in spotlight after Putin-critic's death

 

As world leaders pay tribute to Russian opposition leader Alexei Navalny, some have drawn attention to some inconvenient aspects of his past. (Yahoo News UK, February 18, 2024)

 

Really? What's inconvenient? 

 

…as Western politicians pay their respects, some more uncomfortable aspects of Navalny's career have been brought back to the surface.

 

"Navalny took part in the Russian March, an annual demonstration that draws ultranationalists, including some who adopt swastika-like symbols," Rahman tweeted.

 

Oh my, that is uncomfortable. 

 

 "He has never apologized for his earliest xenophobic videos or his decision to attend the Russian March.

 

Rahman appeared to be referring to a notorious video from 2007 in which Navalny appears to compare Muslim immigrants in Russia to "cockroaches" as he advocated for gun ownership.

 

In another video, he is dressed as a dentist and appears to compare migrants in Moscow to tooth cavities, Radio Free Europe reports. He says: "I recommend full sanitisation. Everything in our way should be carefully but decisively be removed through deportation."

 

Shortly before releasing both clips, Navalny was expelled by the liberal Yabloko party over his "nationalist activities", having participated in the Russian March, an annual rally associated with ultra-nationalist far-right groups chanting slogans such as "Russia for ethnic Russians". (Yahoo News UK, February 18, 2024)

 

Anyone in the United States who has a past like that, who called immigrants cockroaches, who advocated handing out guns as a way to exterminate them, as cockroaches should be exterminated, who attended an actual neo-Nazi march—I don't think they would be described as having an inconvenient or uncomfortable past. Yet it is amazing, just like we find in Ukraine with all the neo-Nazi militias that the American liberals love and want to arm, that if you're somebody who doesn't love the Democratic Party in the United States, you will get called a Nazi and a fascist and a white nationalist, and American liberals and Western liberals try to have you barred from the internet and fired from your job and basically expelled from decent society in every way. And then Western liberals encounter actual Nazis. People with actual neo-Nazi ideology, with actual overt ties to white supremacist, neo-Nazi groups and they want to embrace them. They want to arm them. The hero Navalny.  Here's the hero Navalny, in 2007. 

 

(Video. Alexei Navalny. 2007)

 

Alexei Navalny: Hello. Today we have to talk about insect control. No house is safe from cockroach infestation. Eeeww. Or a fly gets in through an open window. We all know the cure against flies. A fly swatter, a slipper against a roach. But what to do if cockroaches are too big and fly too aggressively? In such cases, I recommend a handgun (as he shows a handgun). Yes, to allow firearms. 

 

Anybody involved in an ad like that in the United States would be deemed a Nazi for the rest of his life. The Western media looks at this, and because of his propagandistic value, they turn him into some kind of like civil liberties leader. Of course, the same exact thing has been happening for the last two years in Ukraine. For the last decade in the Western press, every time the Azov Battalion has been referenced, it has been described as a neo-Nazi group, as a group with Nazi ideology. And to this day, you see, the Azov Battalion, their leaders and their soldiers, they have all kinds of neo-Nazi insignia on them. 

Here's how The New York Times tried to grapple with this, in June 2023.

 

Nazi Symbols on Ukraine’s Front Lines Highlight Thorny Issues of History

 

Don’t you love these words? Oh, uncomfortable, inconvenient, thorny—when they're talking about actual neo-Nazis.

 

Troops’ use of patches bearing Nazi emblems risks fueling Russian propaganda and spreading imagery that the West has spent a half-century trying to eliminate.

 

So far, the imagery has not eroded international support for the war. It has, however, left diplomats, Western journalists and advocacy groups in a difficult position: Calling attention to the iconography risks playing into Russian propaganda. Saying nothing allows it to spread.

 

Even Jewish groups and anti-hate organizations that have traditionally called out hateful symbols have stayed largely silent. Privately, some leaders have worried about being seen as embracing Russian propaganda talking points. (The New York Times, June 5, 2023)

 

That is how The New York Times has grappled with the fact that we are arming actual neo-Nazi militia groups in Ukraine. 

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As I said at the start, there is a similar case to Navalny’s dying in prison. Although this is a case where the person who died in prison was an American citizen, his name is Gonzalo Lira. We covered this case on last week's show when we interviewed his father. You may recall that Gonzalo was in Ukraine, he married a Ukrainian woman, in 2016, and he was an outspoken opponent of President Zelenskyy and of the war. Because of that, he was twice arrested. The U.S. government never once uttered a word of protest about this American citizen being arrested, even though he posted a video pleading for the government to help, and he warned that if he were arrested a second time, he would die in a Ukrainian prison. And he did die in the Ukrainian prison, just as he predicted, at the age of 55. And he was in prison solely because he criticized President Zelenskyy and the NATO-U.S. narrative about the war. And you would think that when it happens to an American citizen who dies in a Ukrainian prison after criticizing President Zelensky, all these people who are so deeply concerned with civil liberties in Russia, might have something to say about that. After all, this is not a Russian citizen, this is an American citizen, and it's not done at the hands of a foreign government on the other side of the world that is our enemy but an allied state that we are funding and financing. They killed an American citizen for the crime of speaking out against the war and there's barely any media coverage of this. It happened just last month. Because that has anti-propagandistic value because it shows what a joke it is the claim that Ukraine is a democratic state. 

One of the very few outlets that covered the death of Gonzalo Lira in prison was the liberal tabloid Daily Beast. They ran this article in January 2024. 

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It's a repulsive, repugnant headline designed to justify Gonzalo's death.

 

Gonzalo Lira, a blogger who pushed Kremlin propaganda in Ukraine, died after apparently coming down with pneumonia.

 

Lira was arrested in Ukraine’s Kharkiv region in May 2023 and charged with spreading Russian propaganda by posting videos that cheered on the Kremlin’s acts of aggression against Ukraine. After being released on house arrest, he was jailed again in July after fleeing while out on bail, though he claimed in hysterical tweets to followers at the time that it was all part of an attempt by Ukrainian authorities to “disappear” him.

 

Right-wing pundits back home in the U.S. soon seized on his unfounded claims to criticize the Biden administration’s support for Ukraine, holding Lira up as a “journalist” they said had been unfairly persecuted by authorities in Kyiv. (The Daily Beast, January 17, 2024)

 

In other words, Gonzalo Lira deserved to die in a Ukrainian prison because he had the wrong views about the war in Ukraine. He was a pro-Russian propagandist, therefore, he deserved to die. And if you think I'm exaggerating, even though I just showed you this repulsive Daily Beast headline that was obviously designed to stir up hatred and contempt for Gonzalo Lira.

Here is Mark Thiessen, who used to work in the Bush White House and is now a columnist for the Washington Post. Classic warmongering neocon, the kind that cheered the Iraq War and the War on Terror and every single war since. You know that type. He was one of the few people in the media who actually acknowledged the Gonzalo Lira’s case, and this is what he said, to distinguish it from what happened in Russia. 

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How is it that the people who pretend to be so upset, so angry, so enraged by the fact that Vladimir Putin imprisoned somebody for their political views and then allowed them to die in prison, can turn around and justify the same exact thing when done by Ukraine, but this time to an American citizen. He's essentially saying Gonzalo Lira deserved to die in prison because during wartime he criticized the government. That's exactly what Vladimir Putin's view of Navalny is. We're in war time, and we're not going to allow people to criticize the government, our war effort, after all, says Mark Thiessen, no country could possibly allow during wartime any free speech. These people do not care in the slightest about civil liberties. They don't care about that at all. It is a pretext, a tool to bludgeon foreign countries that we want to demonize, to continue wars against. And the way you know that it's a pretense, that there's no sincerity or authenticity in the belief is that they will turn around and justify the same exact acts by the United States government or our allies, as I just showed you, they'll say they'll either ignore it because they don't care about it or they'll say Gonzalo Lira deserved to die because he had the wrong views. Exactly what Vladimir Putin says about Alexei Navalny.


Interview with Prof. John Mearsheimer 

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G. Greenwald: You've referenced a few times, not just a few times, but a few times, even in this conversation, many times since, including your article, that the Russians regard NATO expansion into Ukraine or significant Western influence into Ukraine as some grave threat to their security as basically an existential threat. And you also talked about how the Russians believe the West can't be trusted. One of the big agreements that are often cited by people like yourself, even leftist scholars like Noam Chomsky, as well, is the fact that when Germany reunified, which is obviously a huge threat to Russia, they agreed to accept that, provided that NATO never move one inch east beyond Germany. And of course, NATO has repeatedly moved well east closer and closer to the Russian border. But the argument is we did do that. NATO did move east toward the Russian border. Russia never went to war over that. What is so uniquely threatening about Ukraine from the Russian perspective that they consider this particular kind of expansion to be an existential threat? 

 

Prof. Mearsheimer: Well, it's right on their border and it's a huge piece of real estate. The first tranche of NATO expansion, the first major tranche, took place in 1999, and it involved Poland, Hungary and the Czech Republic. Now, it's important to understand that the Russians screamed bloody murder about that expansion, that first tranche, but they couldn't do anything about it. They were too weak in 1999. This is before Putin even becomes president. Yeltsin is the president at the time. So, the Russians were too weak to do anything about it. But furthermore, Poland, Hungary and the Czech Republic are quite a distance away from the Russian border. The second big tranche takes place in 2004, and this is when the Baltic states come in. This is when Romania comes in, Slovenia and a few other countries. The Russians again scream bloody murder, and there's not much they can do about this one either, because they're still too weak. This is 2004. Putin has been in power for four years. The Russians are coming back from the dead, but they're not all the way there yet. Furthermore, although the Baltic states are close to the Russian border, they're really not a meaningful threat in any way. Then the next big expansion is going to be Ukraine and Georgia. That's the third big trudge. And the Russians put down their foot and they say that this is not going to happen. And just to focus on Ukraine, you want to remember, Ukraine is a big piece of territory right on Russia's border. And the idea that that's going to be a NATO member and that the Americans may be able to put missiles that can hit Russia on Ukrainian territory is unacceptable. Furthermore, there's a very important naval base in Ukraine, in Sevastopol, which is located on the Crimean peninsula. And from a Russian point of view, the idea that the Crimean peninsula is going to become part of NATO and that Sevastopol may become a naval base is just unthinkable. This, again, is why Bill Burns, who's now the president of the CIA, the head of the CIA, said in 2008 that Ukraine was the brightest of red lines. It really was or is of major strategic importance to the Russians. It's just very different than the Baltic states. It's very different than Finland, Poland and so forth and so on. So, the Russians are deeply committed to making sure that Ukraine never becomes a member of NATO, or if it does become a member, it's a dysfunctional state and basically useless for NATO. 

 

G. Greenwald: So, the argument of people who see the world through the NATO and EU and U.S. perspective is twofold. One is that no one was really talking about putting Ukraine in NATO. Secretary Blinken, when the Russians objected, defended this principle, this open-door principle that we're never going to close the door on anybody, that everyone has the right to join NATO if we want them to. We're not going to tell Ukraine they're forever out. But that there was no real movement to put Ukraine into NATO and that secondly, even if Ukraine did become a NATO state, NATO is purely a defensive alliance that doesn't have a history of attacking anybody. All that it would do is be extending its defensive umbrella over Ukraine at Russia’s feet. The Russians’ fear of NATO on the other side of the border was illusory because NATO isn't the kind of military alliance that historically has gone and invaded other countries or conquered them. What do you make of those two claims? 

 

Prof. Mearsheimer: This is simply not true. After the Biden administration moved into the White House, in January of 2021, on a number of occasions over the course of 2021, and early 2022, they made it unequivocally clear that the commitment or pledge that was made in April of 2008 in Bucharest was alive and well. They said it in a statement that was made at the Brussels NATO Summit, in June of 2021. They said it in a very important strategic document. It was issued in November 2021. And when the Russians wrote a letter, on December 17th, 2021, asking President Biden to put in writing, that Ukraine would not become a member of NATO, Tony Blinken made it clear to the Russians that we rejected that request and that Ukraine would become a part of NATO. That's part one of the story. Part two of this story is that Ukraine was effectively a de facto member of NATO by early 2022, the Russians made it clear that they appreciated this fact. We were arming the Ukrainians. We were training the Ukrainians. We were recruiting, including them in military exercises that we ran, that NATO ran. We were obsessed with interoperability between Ukraine and NATO fighting forces. So, Ukraine was well on its way to developing the military capability to be a NATO member. This idea that there was no chance that Ukraine would ever become part of NATO is a fiction that proponents of the war have invented to defend themselves. It makes no sense at all. Now, with regard to your second point that NATO's a defensive alliance is very important to be clear. […]

 

G. Greenwald: That's not my point. That's the point of people who would be arguing against you. But go ahead. 

 

Prof. Mearsheimer: Okay, sorry. The second point is the argument that NATO is a defensive alliance. It's not an offensive alliance. There's a very important concept in the international relations literature. It's called the security dilemma. And the security dilemma says that it's virtually impossible to distinguish between defense and offense, whether you're talking about weapons or military strategy, or military plans. So, you can have an alliance that you think is defensive in nature but if you're standing on the other side of the line, it does not look defensive in nature. It looks offensive in nature. Just let's go back to the Cold War. NATO had what I believe was a defensive strategy, but that defensive strategy involved lots of German and American and British armored divisions and mechanized infantry divisions. And in a crisis, what we planned to do was take all those NATO mechanized divisions and armored divisions and move them up to the inter-German border, close to where the Soviet and Warsaw Pact forces were. Well, if you're a Warsaw Pact general or a Soviet general sitting on the other side of the inter-German border, and all of a sudden you see German armored divisions and American armored divisions marching towards the border, are you going to say to yourself, those are defensive divisions? I don't think so. Are you going to be able to distinguish whether they're defensive or offensive divisions? I don't think so. The result is what we have with regard to narrow expansion into Ukraine is a situation where on the Western side we think this is a defensive move, whereas on the Russian side, they think that it is an offensive move, whereas we think we are containing the Russians, the Russians think we are encircling them. This is the security dilemma. And people who make arguments about particular weapons or particular strategies or particular alliances being defensive in nature are whistling in the wind. It's a meaningless argument to make because you can't distinguish between defense and offense. 

 

G. Greenwald: Let me ask you about the change of government in 2014. We all have heard the secret tape recording that's no longer secret, where Victoria Nuland was speaking to the U.S. ambassador to Ukraine at the time, and she expressed her very strong views about who ought to be the new president now that the democratically elected leader was removed from office before the constitutional termination of his term – obviously, with a lot of U.S. aid, the U.S. senators marched to Kyiv and made no secret of the fact that they were […] that effort and we have this little scandal that gets talked about as a domestic scandal where Hunter Biden, Joe Biden’s son, was on the board of Burisma for $50,000 a month because they wanted his help in dealing with some of their potential legal problems. And instead of paying a son of a Ukrainian official, they paid the son of an American official in recognition of that who wielded real power in Ukraine, especially after the change in this government. How did that look, this change of government in 2014 and the subsequent influence of the United States in Ukraine to Moscow? 

 

Prof. Mearsheimer: Well, I think that what happened in 2014 with regard to ignoring Victoria Nuland’s behavior was seen by the Russians as a mortal threat. It's important to emphasize here that the Russians are deeply concerned about NATO expansion into Ukraine, for sure, but they're also concerned about EU expansion into Ukraine, and they are also deeply concerned about a potential color revolution in Ukraine. This is where Ukraine becomes a liberal democracy that's allied with the West. So, if you actually think about the West’s strategy vs of Ukraine, it has three prongs to it, right? First is NATO expansion. Second is the EU expansion. And three is a color revolution. And the Russians worry about all three. And what happened with Victoria Nuland and the events in February of 2023 is that the Russians were spooked, not by NATO expansion per se at the time, but by a potential color revolution and also by EU expansion. Those were the two big issues on the table at the time, and the Russians clearly view this as a mortal threat, and that's why they took Crimea and that's why the war, in effect, or the conflict in effect, started back then. So those events in 2014 in which the United States was involved, exactly how much involvement we had is unclear at this point in time. There's no question we were involved but the level of involvement remains to be determined. But the Russians saw that as a threat, and that's what precipitated the crisis in February of 2014. With regard to Joe Biden's son, I don't know enough about that to have a strong opinion. I don't know enough about what Hunter Biden did, what Joe Biden did, or how the Russians view it. So, I have to plead ignorance on that particular issue. 

 

G. Greenwald: But regardless of the specifics of that case, it is true, that after that 2014 change of government, the United States played a much bigger role in the internal affairs of Ukraine. 

 

Prof. Mearsheimer: Oh, absolutely. There's just no question about that. No, we're joined at the hip with the Ukrainians. You were talking about Barack Obama before, being smart enough not to arm the Ukrainians. And you're absolutely correct. It was Donald Trump in December 2017 who decided to arm the Ukrainians. But Obama agreed to train the Ukrainians. Obama wanted to put limits on our involvement, for sure. He was a cautious man. And I think deep down inside, Obama understood that this whole situation was a potential disaster. But you don't want to underestimate the extent to which Obama moved the United States and Ukraine closer together after 2014. And again, Victoria Nuland worked for President Obama. And by the way, it was now President, then-Vice President Biden who handled the Ukraine portfolio in the Obama administration. I don't think most people realize that. But Obama delegated the Ukraine portfolio to Joe Biden, and Joe Biden worked closely with Victoria Nuland in 2014 and afterward. And this is why when Joe Biden moves into the White House, in January 2021, he really turns the pressure up on the Russians over Ukraine. 2021 is the year when the really big trouble starts and it's Joe Biden who is in the White House, starting in January 2021.


Michael Tracey Interviews Glenn Diesen

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M. Tracey: One thing I've been struck by is that if you survey some of the coverage in the West, in the U.S., UK, etc., there's this note of triumphalism about how Russia has now suffered the most far-reaching invasion since World War II, and that's supposed to be inspiring optimism about the trajectory of this conflict. Whereas my instinct is okay if that is true, and I think it probably is, you can correct me if I'm wrong, then that should really be extremely foreboding and ominous, just in terms of the potential for this now to escalate. I mean, if we really are making direct tactical comparisons between the current status of this war to World War II, then maybe people ought to brush up on the history of World War II just in terms of the epic cataclysm that it was for humanity, especially in terms of the psychic impact, it's hard to gauge or quantify, but given the strength of World War II lore in Russian society and how it's used to justify this current war effort, I've heard Putin even try to kind of situate the Ukraine conflict into the broader spectrum of Russian history that kind of connects it or puts it in a continuum with World War II. And if that is true, and then, yeah, this latest development can further bolster that kind of thematic tie between World War II and the current conflict, that really should make us all a bit apprehensive or concerned, shouldn't it, about what this could potentially result in, rather than something to celebrate, which is kind of the tone that you see in most of the Western media. 

 

Glenn Diesen: Yeah. The celebration is very strange because, besides the civilians which they killed, a lot of the Russian troops killed – they were part of the special military operation. There were, as you said, that were conscripts serving in the army here on the Russian territory. So, celebrating kind of shows how the war mentality has become much uglier, I guess, over the past two and a half years. But also Kursk, the historical similarities – I saw what I thought was a retired German general, at least top officer, making this comparison as well, that this is where they suffered in World War II and almost framed it as a do-over. It was quite absurd. You also have German military leaders arguing that because the Ukrainians have had such success in Kursk, they need to send extra weaponry to support this. So, they’re very openly participating now, actively becoming part of this war and not in the defense, but then in the offense into Russian territory. No one can argue Russia did the same to Ukraine and all this is all fine and well, but this is NATO's indirect involvement in the invasion of Russia. And, one has to look at the perspectives of the Russians as well, because this now puts us in the category of Napoleon and Hitler. We don't have to agree with these comparisons, but the perceptions do matter in international politics and this is how more and more Russians are actually seeing this, that this is a fight for, that this has always been an existential fight and this has only been proven over the past two weeks. And, that there doesn't seem to be much appreciation of what we have done. I mean, Washington and Brussels, what this all mean? If you look at the incoming, the new foreign policy chief of the European Union, she argues that “We can't have diplomacy with Russians because, you know, they're bad people” and also, a possible victory could be defined as breaking Russia up to many parts is just very, very radical [in] the way we're talking. What's most unsettling about this is once these World War II, comparisons were made, it's not done with shame. It's such self-righteousness and virtue behind it “that we're fighting this good fight” but a large part is because key facts about this war from day 1, in 2014, has kind of been scrapped from the narrative. So, if we look at what we actually have done over the past decade, it's quite reckless and dangerous. You're not really allowed to make this argument in Europe, because if you criticize our side, that means you're taking the Russian side. It's all narrative driven so it's very difficult to have any sensible discussion about. I'm also very much taken aback by this, now, comparisons to World War II. If it's just the Russians making it will be one thing, but when these comparisons come from the West as well, it's very concerning. 

 

M. Tracey: Well, even going back to the early stages of the invasion of Ukraine, you had lots of indications on the part of American elected officials of the legacy of World War II, we need to ramp up our, quote-unquote, “arsenal of democracy” which was the famous Franklin Roosevelt slogan for funding the military-industrial complex to wage World War II. The U.S. Congress passed a Lend-Lease legislation which was actually never utilized, as far as I know, which is sort of strange, but they did it maybe as a symbolic showing of solidarity. They passed the Lend-Lease legislation, which would have enabled the U.S. to basically just send armaments to Ukraine without ever potentially being repaid. Now, Congress decided instead to enact these incremental supplemental funding bills that were not structured as a loan. But now, like even Donald Trump is saying, “Oh, gee whiz, it's going to be so great, because now we can structure all of our further provisions to Ukraine as a loan.” So, the World War II iconography and rhetoric have kind of been a feature of the U.S. depiction of the war for quite some time, but, obviously it takes on a different tenor when we're talking about an ongoing invasion. 

One thing I wanted to ask you about that adds to the sense of the potentially impending doom is the situation in the Middle East, in particular, the relationship between Russia and Iran. We've heard lots of reports about increasing operational ties between Russia and Iran with Russia supplying some of these showerheads, I think they're called drones, to Russia for use in Ukraine and also Russia pledging certain resources to Iran in turn. There was a report, maybe last week or a few days ago, of Putin issuing a cautionary note to Iran to limit the scope of its potential retaliation against Israel and, obviously, the relationship between Israel and Russia is also quite complicated. So, what is the role of Russia in kind of managing this potential upcoming escalation that we've been told for now, a couple of weeks could be imminent at any moment, between Hezbollah and Iran retaliating against Israel for the assassination of Ismail Haniyeh, the leader of Hamas, in Tehran, and also the assassination of the Hezbollah commander in Beirut? Because it could be another potential theater in a more wide-ranging conflict that could have ominous echoes of World War II or a more globally oriented conflict. So, what's the role of Russia, as far as you can see in the Middle East conflagration that could be potentially imminent? 

 

Glenn Diesen: Well, a part of it you can link to what's next in our forecast. Well, great geostrategic shifts of Russia from greater Europe to greater Eurasia and greater Europe simply means that for the past 300 years, since Peter, the Great, whenever Russia wanted to modernize, it's always looking towards Europe, to Europeanize Russia more. And even since the days of Gorbachev, they wanted to create a common European home or a greater Europe. This was effectively canceled with NATO expansion and the West toppling the government in Ukraine, in 2014, putting the final end to it effectively because this showed that Ukraine could not be a bridge that would gradually integrate Russia into the West, instead, it would be a frontline. So, this was why was very dramatic. And this is when Russia began to diversify its economy over the past 10 years, in which it would then integrate more towards Eurasia. So, China, India and all the others, Iran as well, for that sake. And then, not just diversify but decouple a bit from the West, by creating new economic infrastructure, with China obviously taking the lead. 

This is quite relevant if you want to look at the partnership with Iran because, if you only go back to 15 years ago, the Russians would have used that partnership or friendship with Iran as a political currency, they would put sanctions, they would trade away this relationship if they might get an entry ticket or whatever the West will dangle in front of them. But this was a way of trading to get closer to the West. Since 2014, Russia has now pursued what they call greater Eurasia and this is very different. 

Of course, Iran is elevated to one of the strategic partners because when Russia looks east, they can only integrate with the Chinese, as the Chinese economy is much, much stronger. Now, India, Iran, all these countries have much more importance. You saw that, after the Russian and Iranian cooperation in Syria, which was very limited, the Russians and Iranians looked towards how they could expand this to a real strategic partnership, along the lines of Russia and China. And, I think, this is something that has really developed over the past two and a half years, because Iran has sent these Shi'ite drones and assisted Russia in many ways, as in this, you know, most dire time when Russia sees itself as fighting an existential war. Meanwhile, the Israelis, with whom Russia has always had very good relations and always tried to manage and show respect for their mutual security concerns and interests, Israel turned out to supply weapons and training to the Ukrainians, which then destroyed that partnership. So, you saw a huge shift: the partnership with Israel declined and Iran is now elevated to her strategic partner. So, this is a huge shift, which will also impact the wider region. 

How Russia responded to the attacks on Iran and the conflict in Gaza is that they have taken a very strongly sympathetic and aligned themselves very closely with the Palestinians and also given Iran a lot of support. Their main concern is that, once the Israelis strike Iran and continue these provocations, that, yeah, this is a way of, essentially provoking an Iranian response to drag the Americans into this war because they're in very deep trouble at the moment. They're stuck in Gaza, they're in a conflict that they don't want with Hezbollah, which is very difficult to manage, and now they want to go out to Iran as well. So, they really need to pull in the Americans. This is effectively the dilemma for the Iranians do they restore their deterrent to strike hard, or do they avoid taking this risk which pulls the Americans into a wider war? So, for this reason, the Russians have been urging restraint from Iranians, but as you can expect, the Iranians maybe don't want to take that lesson from the Russians because look what happened to the Russians, they showed restraint with NATO and NATO only responded by then being more and more emboldened to escalate further and further. So, this is a concern for Iran. If they take the Russian advice and they'll strike back, then, you know, why wouldn't Israel bomb Tehran again tomorrow and kill some other top officials? So, this is the main concern. But that being said, the partnership between Russia and Iran obviously continues to grow economically and then the military sphere is also now institutionally with the SCO and BRICs. 

 

M. Tracey: And finally, obviously, we're in the middle of a presidential election cycle in the U.S., and that's the frame through which much of what goes on in Russia is viewed in the U.S., for better or worse. Obviously, there's this long-standing caricature of Trump as somehow collusive in hock with Russia. I think anybody who's rational probably should realize that that was nonsense at this point, but it kind of continues to linger. And then as far as Kamala Harris is concerned, we don't know what her independent policy views are on virtually anything. Obviously, you could infer that she has this association with the Biden administration in which she has been vice president but in terms of her own personally articulated views, despite her being coordinated into the Democratic nominee, through sort of backhanded maneuvers, she's yet to really articulate a policy platform for any appreciable extent. So, how does that impact, I guess, your general assessment of the current state of affairs? Trump was just, once again, bragging, yesterday, how tough he is on Russia, how Putin actually complained to him that Trump was excessively, quote, “brutal” on Russia by imposing sanctions by killing the Nord Stream pipeline. Obviously, there's been some news lately about the ultimate fate of that Nord Stream pipeline but Trump takes credit for economically ending the Nord Stream pipeline even before Biden took power. And you have people like Mike Pompeo who are in the orbit of Trump, who are basically talking about a quote-unquote “peace deal” in Ukraine that would involve escalation in Ukraine. Obviously, the status quo with the Democrats is to support Ukraine for as long as it takes, as much money as it takes, whenever escalations come to pass, without any real, discernible policy objective in sight other than this kind of inference that one can make about apparently aspiring for some version of regime change. So, it seems like a pretty disastrous muddle for both parties at this point which, you know, maybe explains why Russia doesn't seem to have quite as strong of a preference this time around. Obviously, it's hard to tell with any precision. But what's your sense now of the Russian perspective of the 2024 U.S. presidential race? 

 

Glenn Diesen: Well, as you said, I don't think they see it as mattering that much. Obviously, Kamala Harris will be a continuation of Biden. She doesn't say much about foreign policy, which means that the people behind Biden would likely continue the policies. They're behind Kamala Harris as well. I wouldn't expect any big changes. So, it's, continue doubling down this continued escalation in this proxy war with the Russians. With Trump, it's a bit different. Again, he's spoken many times about the need to end this war and how horrific it is, how not achieving their objectives is a waste of money, and again, he really wants a return on investment in terms of empires. Also, the selection of Vance as his VP, I think that's also quite indicative of the direction he wants to go on Ukraine. 

That being said, he said a lot of this already, back in 2016. He was getting along with Russia, would be a good thing, but what did he really do? He continued a lot of the economic coercion, he contributed to the military escalation with the javelins, which then, you know, Obama said he didn't want because it could lead to war. So, he didn't really – I'm not sure what good policies, how he improved relations with Russia and I think this is a problem. I don't think it really matters that much if his a Democrat or Republican. Keep in mind that this is a big boulder which has been rolling since 2008. In 2008, was Republican Bush who pushed for NATO to offer future membership to Ukraine despite the Europeans warning strongly against it, that this will trigger where we are now. After that you had Obama, he also didn't want to escalate, but again, he contributed to escalation. Then you have Trump. He, also, with the javelin continued escalation. Then you have Biden where things really heated up very quickly. So, it could be a good idea to get Biden out because both him and his family have too much influence or at stake in this Ukraine war for the past decade now. So, it could be positive to have him out. But overall, I think the Russians learned the most that it doesn’t really matter who sits on the throne, that this limits to how much the policies can change. Yeah. That being said, I think if you look at their statements, obviously, Trump's advance ticket would be much more favorable to Russia but, as you suggested, Trump markets himself as this great dealmaker, he will come to the Russians and present a deal. This is not a deal that the Russians will likely be able to accept because in any good deal, you need trust and why would they trust anything that the U.S. and NATO put forward? Because we already sabotaged and undermined every agreement we had with them, every peace agreement to Ukraine over the past 10 years. So, what are the Russians going to do? They're gonna demand to hold strategic territory to prevent it from falling into the hands of NATO in the future and irrespective of Trump being genuine in this effort, will walk away from Ukraine and allow it to be neutral, I think, you don't know who the next administration will be. The next government will come in, they will again rip up all the agreements – that has been done before – and they might have to fight this war all over again. So, I think, in the absence of trust, that the Russians will have very hard demands. And I don't think that will be easy for Trump to accept. So, he will do what he usually does, which is max pressure, and, again, that will contribute to further escalation. So, I wouldn't necessarily look towards the American election for a solution to this conflict.

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Hey @ggreenwald ,

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South Korean Economist Ha-Joon Chang on the Economic World Order, Trump's Tariffs, China & More
System Update #410

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We focus a lot on this show on international relations and foreign policy from the perspective of what often shapes them – things like wars and militarism, conflicts and perception of external threats – but at least as important is the world economic order: which countries are rich, which ones are poor, which ones are developing and aren't and how that system is maintained as well as the truth about rising economic powers like China and its potential to undermine American dominance and the dollar as the reserve currency. 

Ha-Joon Chang is a leading economist known for his sharp critiques of international economic institutions and their defense of neoliberalism. No matter how often it fails, as well as for his advocacy for economic pluralism, he has become quite a growing sensation online with his lectures. 

He's a professor at the SOAS University of London and a former Cambridge lecturer. He's probably best known for his 2002 book, “Kicking Away the Ladder,” which examines how wealthy nations traditionally have blocked economic progress in developing countries. His recent book, “Edible Economics,” from 2022, uses food to explain economic ideas. 

In addition to these topics, we sat down with him last night and he helped us understand the likely implication of Donald Trump's proposed tariffs and protectionism as a basis for his economic policy, as well as the reason basic economic literacy is so important in democracy and how often it is deliberately made inaccessible through things like jargon and excessive statistics and a reliance on all sorts of terms that are designed to keep people away. He has made it a life work to elevate economic literacy. I found the conversation with him very interesting. I think you will as well. 

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The Interview: Ha-Joon Chang

G. Greenwald: Professor Chang, thank you so much for taking the time to come on and talk. One of the reasons we were so interested in having you is we have a lot of conversations now about geopolitics and international relations. So often it focuses on things people can easily understand, things as wars and various types of conflicts. A huge part of geopolitics in the international order is the scheme of wealth – that various countries have or don't have – and has always been. 

A lot of your work has become quite popular. I think “Kicking Away the Ladder,” the 2002 book, is among your best known and, for me, that provides one of the best explanations to understand why some countries are rich and why some are poor and kind of how there's a system to ensure that stays the same. Can you talk about that for people who haven't read that book or are familiar with your work? 

Ha-Joon Chang: Yes, the book was published in 2002, so it's quite a bit old now. But there I was pointing out that this was the high noon of neoliberalism when rich countries were lecturing developing countries “Oh, don't use that stupid things like protectionism, don't use that state-owned enterprises that don't have a government meddle with business.” But then I tried to show that these are actually exactly the policies that the rich countries themselves use in order to get where they are today. Telling the developing countries not to use these policies is like someone using a ladder to climb to the top and kicking the ladder away so that other people cannot follow. 

The most famous and most robust argument for using protectionism is known as the infant industry argument. That argument says the government of a developing nation needs to protect and nurture its young industries until they grow up and compete in the global market. Exactly in the same way that we protect and nurture our children until they grow up and can compete in the adult labor market. Of course, in poor countries, a lot of children work from the age of five or six, but you know, this means that they cannot get educated, they cannot acquire high skills and so on. So, if you can do it, it pays to send these kids to school rather than sending them to work. 

Very interestingly, this logic of infant industry protection was invented by an American and not just any American. He was called Alexander Hamilton, the very first Treasury Secretary of the United States of America. He invented the term “infant industry protection.” Initially, a lot of Americans were not convinced by this, especially people like Thomas Jefferson who said this guy is insane. We can export our cotton and tobacco, of course – I never mentioned the slaves – and import manufactured goods that are cheaper and better – even considering the considerable transportation costs – than what these Yankees can produce. So why should we subsidize these inefficient Yankee manufacturers? 

So, it was initially rejected, but over time the Americans figured out that actually this was what they needed and yeah, from about the 1830s until the Second World War, most of the time over that 120-year period, the United States was the most protectionist country in the world. So, I was revealing this history. It wasn't just the U.S. I mean, Hamilton got his ideas from British practices, Germans later developed Hamilton's theory and used protectionism quite heavily in the late 19th century. The Swedes and later the French and the Japanese and more recently Koreans and Taiwanese and so on. 

So, I was basically pointing out this hypocrisy in which these countries are actually telling developing countries not to use the exact same policies that they used in order to climb to the top. It wasn't just protectionism. It wasn't just tariffs, there were a lot of other policies like the use of state-owned enterprises, strict regulations on foreign investments and other things. So yeah, I mean, that caused a bit of a wave in the international policy debate because developing countries could tell the rich countries, “Look, why are you telling us not to use these policies when these are exactly the policies that you guys used in order to get where you are today?” 

G. Greenwald: You know, it's interesting when you kind of take those principles that you just described, these historical and economic principles, and apply them to specifics, I think sometimes people can see them better in a kind of more modern sense. And one of the things I find so interesting is that you have now a lot of billionaires who became that wealthy because they developed companies in the wake of the internet that became public companies, became very large and successful, who are now essentially insisting that the only way for innovation to happen is to have massive cuts in government spending, even though the internet itself was the byproduct of massive government investment, some of whom will acknowledge that. So, is that the kind of dynamic that you're describing where there's kind of this propaganda that government spending impedes economic growth, whereas so often it's what spurs it? 

Ha-Joon Chang: Yeah, I mean, it's in a way the most obvious in the United States. You know, it wasn't just the internet, but the computer itself, microchips. I mean, these are all financed by the U.S. government, especially the U.S. military: the internet, the GPS system, what makes our modern information economy possible, these were all invented with government money. And there's a reason why Silicon Valley is where it is because this is where a lot of U.S. defense research, specially built around the jet propulsion laboratory, was conducted. And yeah, this is like, once again, people rewriting history in the most convenient way. I mean, they lived on government support in the beginning, and then now that they are bigger and don't need the government as much, although they still need government, the U.S. government is still pouring huge amounts of money into military research, which spills into the civilian industries. I mean, it gives a huge protection in the form of the patent system and copyright system, without which these companies wouldn't have the monopoly they have. So, actually, they still need the government, but of course, they only want protection and not the obligations. So, now they say the government is bad. 

G. Greenwald: Yeah, in fact, most of those companies, not only exploited the technology developed by the government, but continue to rely on massive government contracts, particularly with the military, but with the intelligence, you know, you have Palantir and all these adjacent companies that are on this kind of austerity kick. Everyone needs to lose their benefits, every government agency needs to be cut, except for our massive contracts with the CIA and the Pentagon that are worth many, many billions of dollars. 

The enforcement scheme – you were describing earlier, how rich countries sort of dictate this economic dogma to poor countries, that they know themselves the rich countries aren't what produces growth. The mechanisms by which they do that have been these kinds of international institutions like the World Bank and the IMF. Oftentimes the message is, well, we've fostered this dependency, you're relying on a bunch of our loans and bailouts and, as a condition, we kind of demand that you just cut all services for your citizens and investments in your society. We want to see massive austerity and no more government spending. 

Is that done, do you think, with the intention to maintain these countries in a sort of dependence state, or is it just a misguided but well-intentioned way of trying to help these countries grow? 

Ha-Joon Chang: Yeah, it's a mixture of things, you know, because there is a lot of misguided goodwill. There are people who truly believe that the United States and other rich countries are developed on the basis of free trade and free market; there are economists who believe that government is bad and so on. So yeah, some of it is misguided goodwill. But you have to ask the question, if it's so misguided and has produced terrible results – because the World Bank and IMF programs have basically wiped out economic growth, increased inequalities, and created all sorts of problems in almost all the developing countries where they were involved – then, at that point, you will have to ask: okay, I mean, misguided goodwill or not, if these programs are not working, why do they keep repeating the same thing again and again and again? I mean, maybe you could say that these people are mad. As Einstein said, the definition of madness is repeating the same thing again and again and expecting different results. But it's not madness that they are doing this. They are allowed to repeat these policies that are not working only because they are basically backed by the rich countries, which benefit from this kind of thing. 

G. Greenwald: One of the more interesting disputes that arose in the last decade, it was about a decade ago now, maybe a little more. I don't focus primarily on economic policy or macroeconomics or anything, but I follow the story quite closely when the Greek economy was sort of on the verge of collapse. The Greeks elected a fairly populist, aggressive government that tried to stand up to primarily France and Germany insisting that the Greeks impose a sort of rigid austerity like we were just talking about. The Greeks tried to be very confrontational and resisted and didn't really work out well for Greece in the end. Are there ways that underdeveloped countries that are put into these positions have to defy these institutions or are they pretty much captive to what they're told to do? 

Ha-Joon Chang: Well, yeah, Greece was really crushed by the European Commission, basically France and Germany. I mean, people say that in that episode the IMF was telling the Germans and the French that they were going too far but what happened there was this mistaken belief that the way to revive the economy is to cut government debt, which means cutting spending. The trouble is that when you cut spending, the economy shrinks and the tax revenue falls and, as a result, even while the spending was cut brutally, public debt, as a proportion of GDP, was still rising because GDP itself was shrinking very rapidly. And there was a huge unemployment –especially youth unemployment reached over 40%. So, it was a total disaster.

But there are instances where the countries defied these international institutions [audio failed] …the Asian financial crisis and yeah, instead of signing these austerity agreements with the IMF, Malaysia suspended capital outflow for like a year. And yeah, there was a huge uproar. You know, they said, “Oh, when this ban is lifted, you know, 70, 80 billion dollars will flow out of the country.” But what happened was that because of this ban, because the money couldn't flow out, they stayed and then started doing something, so the economy got revived. When the government lifted the ban one year later, only six or seven billion dollars flowed out, which is a kind of normal amount. 

So, you know, there are these instances. And also, you know, look at the successful economies in East Asia: Japan first and then Korea, Taiwan, now China. I mean, these countries never really followed the advice of the World Bank and the IMF. (laughs) So, the proof is that they're steering you right into your face but apparently, you know, the people refuse to understand it. Was it the Canadian American economist John Kenneth Galbraith who said that if someone's salary depends on not understanding something, you can never make that person understand anything? It might have been often unclear but, basically, these institutions, these governments, they are refusing to accept this reality because it means that they have done wrong, it means that they have to do something that benefits them less. 

G. Greenwald: That is interesting, this emergence of this kind of new economic power based in Asia, obviously led by China. As you might know, our program is based in Brazil. Brazil had for a long time been kind of under the thumb of the United States. It's in what the United States considers its backyard, which is all of South America. But then Brazil became a founding member of the BRICS alliance and the Brazilian president Lula da Silva has said several times now that he wakes up every day dreaming of de-dollarization. Is the emergence of things like BRICS or the attempt to move away from the dollar as the dominant reserve currency potential paths to undermining this system that you're describing? 

Ha-Joon Chang: Yes. Of course, if you zoom out, the history of Capitalism has been a history of domination and resistance and military invasion and colonization, gunboat diplomacy that led to unequal treaties. And so, it's been a constant struggle between different countries and societies that are located in different parts of the global economic hierarchy. 

So, yeah, I mean, in the '60s and '70s, with decolonization, a lot of developing countries that wanted to be kind of independent of the U.S. and European domination, they wanted to be allowed to change their positions in the global economic hierarchy and, yeah, they called for the new international economic order, they organized a non-aligned movement. Unfortunately, all of this was crushed in the '80s and '90s with the third world debt crisis starting with the Mexican [  ] of 1982 and, yeah, especially countries in Latin America and Africa basically kind of being forced to implement these World Bank-IMF policies, which basically created decades of stagnation and social unrest. 

Now, with the recovery from that phase and with the rise of China, with the kind of revival of some of the developing economies in the 21st century, these countries have started demanding a different arrangement. So, there's BRICS, also G20, which was created when rich countries were in big trouble, after the 2008 financial crisis. There has been the creation of new developing country-focused financial institutions, very often led by China, the Asian Infrastructure Bank and the New Development Bank. Yeah, so things are quite different. 

In the '80s and '90s, if you didn't agree with the World Bank, you didn't get money because there was only one bank in town, and it was called the World Bank. Now, there are different banks. Now, there are different countries with slightly different views about development, like, say, South Korea giving foreign aid and China is rising, Brazil is becoming quite assertive and South Africa, in its own way, is trying. So yeah, I mean I think this is a time of great global geopolitical shift. 

But when it comes to dollar dominance, I'm afraid that it's going to be a while before it can be changed because once you become the dominant currency, it gives you so much kind of extra power even without you trying. So, it's very difficult to change that. It has been changed only once with the rise of the U.S., you know, Britain had to see the position of the home of the dominant currency. But even that took decades. And this time around, even with the creation of the euro and the rise of China and so on, it will still take some time before the currency domination can be changed. But in other respects, the World Bank is now almost irrelevant, the IMF is kind of less domineering, [  ] credits changed its practices a little bit, not massively. So yes, I think the world is in a very interesting place. Unfortunately, it means that it can be a very dangerous place because now the Americans and Europeans are desperate to stop China's rise and they are doing a lot of things that could create quite a lot of collateral damage for weaker countries in the process.

G. Greenwald: Your work has become quite popular in various sectors online, as I'm sure you know and one of the viral clips that I saw circulating several times was one where you were talking about how modern-day economic thinking and language are sort of comparable to Catholic theology in the Middle Ages. 

And the thing that I thought of when I heard that was the very first U.S. presidential election that I really paid close attention to – it was in my young adulthood – was the 1992 presidential election where you had the Democrat Bill Clinton and the Republican George H. W. Bush who were in full agreement on the virtues and the sanctity of free trade. And then this was the time of NAFTA and the like. And then you had this third-party candidate who was kind of treated as a crazy person, Ross Perot, a Texas billionaire, who was saying NAFTA will gut out industrial jobs and factories and good paying middle-class lives for Americans. And then, you know, 20 years later, everyone agrees that the major problem is that we have massive deindustrialization, all these towns are shuttered, the middle class has kind of withered. Very prescient. 

At the time I didn't know who was right, but it seems very clear that the NAFTA opponents were. And yet any attempt still, even after all of that, to question the tenets of free trade and the necessity of having full-scale free trade drives people insane like it's some kind of an outrage.

Is that the sort of thing you were talking about with this “Middle Age theology”? And can you kind of expand on what more you mean by that? 

Ha-Joon Chang: Yeah, well, yeah, Ross Perot's giant sucking sound from the South. Yeah, no, no, absolutely. 

Well, it's not just in relation to free trade that economics has become the modern equivalent of Catholic theology in Medieval Europe. I mean, it is basically now a doctrine that justifies the existing social economic order. So, it's basically telling us the world is what it is because it has to be. However, unjust, irrational, or wasteful, you think that it might be the “science of economics” is saying – or in the old days, “the words of God,” especially as interpreted by the Vatican – it is something that you have to accept. 

So that now, you know, I mean, of course, that, you know, in the capitalist economy, economic considerations have always been dominant, but especially in the neoliberal age, when, you know, economic considerations are the ultimate and very often the only logic that you have to accept. I mean, economics has become basically the language of power. 

Of course, when I say economics, I must qualify that. There are different types of economics, you know, not all economists believe in the free market; not all economists think nothing else matters other than the market. But, you know, economics as it is practiced today is like that. Therefore, it has become a very important kind of obstacle to changing the world because it says that this is the best of all possible worlds and that anyone who tries to challenge it is either misguided or has a hidden agenda to enrich himself, empower himself, but really don't care about the rest of the world. 

So, yeah, I'm afraid that it's become like that and to extend the analogy a bit further, you know, economics as it is practiced has become basically impenetrable to ordinary citizens because it uses a huge amount of jargon, lots of mathematics, you know, lots of statistics. And yeah, I mean, ordinary people find it difficult to understand. So, it's become the Latin of the Middle Ages. I mean, it's the language of the ruling class. And if you don't know Latin, you are not even allowed to debate anything and the Vatican made sure that no one other than the priesthood and sons of some very rich people understand the Bible, by preventing the translation of the Bible into vernacular languages. So, later during the Reformation, it became a big deal that the Bible was translated into English, German, French, and so on. Because now it meant that a lot of people could read it. So, yes, I'm afraid that this analogy is not as frivolous as it might seem. 

G. Greenwald: Well, it's interesting, though, because although that's clearly accurate in terms of how economic theory and economic thinking has gone, especially in the West and in these institutions we've been describing, probably even globally, you now have a new American president who ran on a campaign very hostile toward free trade and very favorable to protectionism and tariffs and explained it in a way that enough people could understand it. They voted for him, believing that tariffs would protect American industry, would enable its reemergence, the return of jobs and you have these establishment economic outlets like The Wall Street Journal and those types – the neoliberals and sort of, you know, classic conservative economic dogmatists – who are horrified and outraged by what is coming out of the Trump White House with regard to protectionism and free trade and tariffs. What do you make of his administration's approach to these questions? 

Ha-Joon Chang: Yeah, well, first of all, most of his tariffs are used to get concessions on other things than straightforward economic things, so, the use of the threat of tariffs to Canada and Mexico to kind of intensify their border controls. But insofar as it is used for economic purposes, I think it's very poorly conceived and will backfire most immediately, it is going to increase inflation. Especially if you impose a tariff on Chinese imports, which account for a big proportion of U.S. consumer products, then it will have an immediate inflationary effect. 

I mean, this is why initially he talked about a 100% tariff on Chinese goods, but now it's only 10% because even he and his people know that could spark inflation. But, you know, in the long run, this importation of cheap, good-quality consumer products from China has been one of the most important factors in the modern neoliberal American political economy, because wages have been suppressed for the last 50 years. The U.S. median wage fell from the mid-70s till the mid-90s, and then it started rising again but it recovered to the ‘70s level only a few years ago. And in that story, of course, another important role was played by the ballooning of credit cards and other consumer debts, but the availability of these cheap Chinese goods was very important. 

Now, if you impose a tariff on Chinese goods, you'll have to pay your workers more. How are you going to cope with that? So, it actually could undermine the whole neoliberal economic system. 

Now, he says that this will rebuild the U.S. industry, but I'm afraid it's not going to happen like that, because protection, as in the infant {industry} protection story, protection only creates this space in which improvement can happen and in order for that to happen, companies need to invest, they need to do research and development to innovate, they need to recreate the skill base of the American workforce and so on. And there's no plan to do it through deliberate industrial policies. 

So, he's basically leaving it to American corporations to do it, but then these corporations are actually not interested in rebuilding the economy because the U.S. now has – yeah, this really started in the '80s, but that really came into full being in the 21st century – the U.S. now has a parasitic financial system, which is not interested in long-term investment. 

In the last 25 years, the American stock market sucked out money from corporations rather than putting money in, which is supposed to be their job. Now these companies, in order to satisfy these short-term-oriented shareholders, have to do huge stock buybacks, sometimes borrowing money to do stock buybacks, because they want to do stock buybacks that are bigger than their profits, giving away huge dividends. So, in the last 25 years, 90% to 95% of U.S. corporate profit has been given back to these shareholders. 

So, these companies are like leaky buckets. You create more water by temporarily protecting your economy from foreign competition. These companies get more resources because of that because now they don't have competition, they can charge higher prices and so on. But this money is going to leak out of these corporations. I mean, look at the way that Boeing has been destroyed, all because of this parasitic financial system. 

So, I'm afraid that it's not going to work. It's not to go back to the infant industry analogy, although in the current U.S. case, it's not an infant, it's the revival of an old person. I mean, it's not enough to go to school, the kid has to study. You have to provide incentives and punishment to the kid so that he puts adequate hours and concentration to study. I mean, what Trump is doing now is sending the kid to school, but letting the kid decide what he wants to do. So, when he goes to school, he will skip classes and not concentrate. So yeah, I mean, good luck with the revival of the U.S. industry. I'm afraid I don't see it happening. 

G. Greenwald: I just have a couple more questions. I want to talk about what you just said and what you talked about before in this comparison to Catholic dogma and theology and the like, which is that if you had a set of pieties or orthodoxies in a particular field that was producing positive outcomes, you could almost understand why there weren't a lot of people questioning it or challenging it because it's working. 

Here in economics, especially international finance, you have not just the destruction of jobs and the middle class throughout the West in the United States, but also the 2008 financial crisis, what you were just alluding to, in a lot of ways, that wrecked the economic security and future of a couple of generations of people and countries all over the world. And you would think it would prompt a reexamination of a lot of these unchallenged premises and yet one of the things you describe is this kind of oligopolistic system of economics to prevent these principles from being challenged, I suppose, because they actually have worked well for a certain group of people who have an interest in perpetuating them. But how does that work, this oligopolistic system to preserve these pieties and make sure there's no challenge to them? 

Ha-Joon Chang: Yeah, so the most shocking is how poorly the neoliberal system has performed. I mean, of course, it benefited hugely a tiny group of people at the top. But, you know, compared to the days of the so-called “mixed economy,” the period between the 1950s and '70s, when there was a lot more government regulation, you know, the U.S. was 92% in those days – and there was a lot of strong state involvement in economic development, industrialization, all over the world, not just in developing countries, in the U.S., in Europe. Compared to those days of the so-called mixed economy, neoliberalism has not only produced higher inequality and more social problems, which even many of the advocates of neoliberalism admitted might happen, but it has produced much less growth. In the earlier period, the world economy was growing at about 2.8%. In the last 40 years of neoliberalism, it has been growing at half the rate – 1.4%, 1.5%, both in per capita terms per year. So, if it cannot even produce growth, why do we have this? That's the biggest mystery. 

Of course, those who benefit from it have all the interest in the world to defend it. So, you know, basically, the kind of politicians who support their agenda is more blatant in the U.S. because there's a lot of money flowing around in the U.S. politics legally. In other countries, it's a bit less, but those who have money have a huge influence on government policy, they control the media and they make sure that people are kind of indoctrinated into believing that this is the best of all possible worlds by making sure that the right kind of economists are given the Nobel Prize, the right kind of economists are given faculty positions in top universities, the right kind of economists that write in the financial press and pontificate on what is a good economic policy. And, yeah, above all, they have basically found a trick in diverting people's attention away from economics by creating all kinds of single-issue debates on gun control and abortion and the culture war and wokeism. 

So, yes, I'm afraid that this is why I have been on a personal mission in the last couple of decades to propagate mass economic literacy because in the kind of society we are living in, without everyone knowing at least some economics, democracy is meaningless. It becomes like voting in a talent show. Oh, I like the look of that guy. I mean, he has a beautiful voice or whatever. I mean, that is not about the substance, because those who have power and money do not want people to think about the substance. 

G. Greenwald: Well, with my last question, I'd love to have you back on, because it's been super enlightening, which I expected it to be, but I want to ask you about China. I remember in the 1980s in the United States, or into the 1990s, the overwhelming economic discourse was about fearmongering about Japan and its rising economic power: they're buying all of our buildings, they're taking over our industries, there's no stopping them. Apparently, there was some stopping them, because none of these scenarios that were depicted really happened. 

But now we're hearing the same thing, the same kind of rhetoric, about China – that they're rapidly growing, so fast that they're going to have parity with the United States in terms of purchasing power, they're going to be this unstoppable economic force. There's a lot of talk about them having to be our implacable enemy and at least a Cold War-type competitor or adversary. What do you think from a Western perspective and an American perspective is the right way to understand what one might call the threats or challenges posed by a rising China? 

Ha-Joon Chang: I must declare at the beginning that I'm not a fan of any country. I'm a citizen of South Korea. Korea has been bullied by everyone around us for the last few thousand years, Chinese, Japanese, the Mongols, the Manchus, the Huns, and later Russians and Americans. So, whatever I say about Japan, China, and so on, it's not because I'm particularly fond of or hate that particular country. I hate all the countries equally if you want me to put it that way. (laughter)

The rise of Japan was halted partly because Japan got bullied into opening the financial market and accepting a huge revaluation of the currency in the 1985 Plaza Accord. Once that happened, there was a huge financial bubble, it burst, the Japanese didn't manage the aftermath very well and then the economy went into a permanent kind of depression, and it was seen off in that way. And that happened, well, maybe mainly, if not even partly, because Japan was dependent on the U.S., on the military. When they lost the Pacific War, they were forced to sign this constitution which prevented it from having a sizable army and then the U.S. military is stationed in Japan. 

So, in that sense, even though it was rising economically, [Japan’s] political position was subordinate to that of the U.S. China doesn't have that problem. And actually, from China's point of view, the U.S. is the aggressor because basically China is surrounded by U.S. navy and army bases, almost all across this South border, except the one they did with Russia. You have the U.S. army stationed in South Korea, as well as the air forces; the South China Sea is kind of covered with U.S. Navy presence and you name it. 

So, China is not going to play that game that Japan had to play. So, it's not going to accept financial liberalization, which is the easiest way to undermine the rising economy because China does not have the kind of financial power, and I'm not just talking about money, but the financial institutions and the skills that people who work in the financial industry has and so on, that you can mobilize to fight the American financial power. Whereas you can and it is fighting the American power in terms of production and international trade and so on. 

My prediction is that China will not play that game, which means a big problem for the U.S. because first of all, it's not as if this is, as some people argue, the second Cold War. In the real Cold War, there was no real economic relationship between the Soviet bloc and the U.S. bloc. This time, China and the U.S., these economies are deeply intertwined. China is the biggest trading partner with the U.S. after the EU and the NAFTA countries. I mean, it owns 13% of the U.S. Treasury bills. As I mentioned earlier, the role as a source of affordable, good-quality consumer goods is very, very critical to the American political economy. 

So, the U.S. cannot push it around in the way that it could with Japan. More importantly, what the U.S. has been doing in the last several years – and this is not just Trump, I mean, even from the days of Obama, but more clearly, Biden – it has been actually pushing China into catching up faster. With all these restrictions on the high-grade microchips and key technologies, China – they say this is the model of invention – China has come up with these ways of doing the same things with less resources and lower technologies. 

So, when Biden made the Dutch companies and German companies export lithographic machines that make the circuit board for semiconductors, Americans thought, well, now this will make it impossible for the Chinese to have the latest microchips but, lo and behold, within a couple of years, it found a way to make the latest seven-nanometer chips without using the latest machines from the Dutch and the Germans. I mean, lately, this Chinese AI company DeepSeek has kind of created an economic earthquake by creating an AI with a fraction of the cost that American companies are using. 

So, I mean, if the U.S. really wanted to push back China, it should have started 20 years ago. Now it's too close. Putting more pressure on China will – not necessarily, but most likely – bring forward a day when it catches up with the United States and the rest of the world. This is why the U.S. and the EU are panicking and breaking all the rules of the WTO and other international institutions that they were so insistent on upholding because now they are desperate to [ ] China. But without a coherent industrial strategy and without reforming the leaky parasitic financial system, I'm afraid that they are not going to be able to do that. 

G. Greenwald: All right, Professor Chang, it's always good to have one's economic literacy raised and in the spirit of doing that we will show everybody who's watching where they can follow your work. We really appreciate you're taking the time to talk to us. We'd love to have you back on as well. Thank you so much.

Ha-Joon Chang: Thank you.

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Rumble & Truth Social Sue Brazil’s Chief Censor Moraes in US Court; DC Establishment Melts Down Over Trump's Ukraine Policy
System Update #409

The following is an abridged transcript from System Update’s most recent episode. You can watch the full episode on Rumble or listen to it in podcast form on Apple, Spotify, or any other major podcast provider.

System Update is an independent show free to all viewers and listeners, but that wouldn’t be possible without our loyal supporters. To keep the show free for everyone, please consider joining our Locals, where we host our members-only aftershow, publish exclusive articles, release these transcripts, and so much more!

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There were two main segments on this episode:

First, we discussed the lawsuit filed by Donald Trump’s media company – which owns his social media site Truth Social – jointly with this platform, Rumble, against Brazil’s notorious chief censor, Supreme Court Justice Alexandre de Moraes. 

We were the ones who broke this story on the front page of Brazil’s largest newspaper this morning – Folha de São Paulo – and we’ll explain the story’s significance and its implications for a free internet. 

Tthen: President Trump significantly escalated his rhetoric against the West’s long-time darling – Ukrainian president Volodymyr Zelenskyy – after Zelenskyy made critical comments about Trump, which in turn followed Trump's endorsement of the need for elections in Ukraine. After all, if you're fighting a war in defense of democracy, that country you're defending probably should have elections. Instead, Trump slammed Zelenskyy as a “modestly successful comedian” who “talked the U.S. into spending $350 billion for a war that couldn’t be won,”. He also accused Zelenskyy of presiding over missing money in Kiev and suffering from deep disapproval among his own people, labeling him, “a dictator without elections.” All of that was in the context of Trump's arguing that the war must end – not only for the sake of the United States but also for the Ukrainian people. 

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We have reported many times on the increasingly repressive censorship regime imposed by not just the Brazilian government, but more so by a single judge on the Brazilian court. It’s something we've covered for lots of different reasons, including the fact that your free speech rights, if you're in the United States, are absolutely affected and threatened whenever censorship regimes are imposed and accepted in parts of the democratic world. They become the new bar that other countries can then hurdle over. We've seen that many times. There have been extreme examples of this in Brazil, including the banning of X, forcing them to comply with and obey every censorship order issued by a single judge. And it's just so extreme. 

Now, as you probably know, Rumble had operated in Brazil for a long time and began receiving this tsunami of censorship orders demanding that they close the accounts or block accounts of a whole long list of people, one after the next, always in secret court orders with no due process, no trial, no notice to the other person being censored. Rumble began complying but then got to the point where they said, “We created our site to be a site that defends free speech. We're not going to sit here and unjustly censor” and so Rumble decided that they would not be available in Brazil rather than comply with unjust censorship orders. 

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Germany's Repressive Speech Crackdown Intensifies | U.S. & Russia Meet in Saudi Arabia and Open Cooperation | Plus: An Amazing Hate Crime in Florida is Buried
System Update #408

The following is an abridged transcript from System Update’s most recent episode. You can watch the full episode on Rumble or listen to it in podcast form on Apple, Spotify, or any other major podcast provider.

System Update is an independent show free to all viewers and listeners, but that wouldn’t be possible without our loyal supporters. To keep the show free for everyone, please consider joining our Locals, where we host our members-only aftershow, publish exclusive articles, release these transcripts, and so much more!

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First: The German-based journalist, James Jackson, has been covering free speech attacks in Germany extensively and he will be here with us tonight to explain all of them. 

Then: Several top national security officials of the Trump administration – including Secretary of State Marco Rubio and Trump envoy, Steve Witkoff – met today in Saudi Arabia with senior Russian officials including Foreign Minister Sergey Lavrov. It was the first real dialogue between high-level officials of both countries – by the way, the world’s two largest nuclear superpowers – that took place in many years and there is every reason to celebrate even, indeed, – to breathe a sigh of relief – over the fact these two countries are now agreeing to maintain open dialog and work together, cooperatively, not only to end the devastating war in Ukraine but on numerous issues of common interest beyond Ukraine as well. 

Plus: there was a bizarre and extraordinary hate crime that took place in Miami over the weekend that you likely heard very little about. A Jewish American man who identifies as an ardent Zionist shot and tried to kill two people solely because he thought they were Palestinian. The two men he shot were actually Israeli. 

For their part, the two victims also mistook the ethnic background of their shooter: they announced on social media that he was Arab and that he tried to kill them just for being Israelis and then added on their social media accounts, “Death to Arabs.” 

There's a lot to say about this incident, especially the reaction to it or, more accurately, the very subdued lack of reaction.

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The interview: James Jackson

The issue on which our show has mostly focused over the last year or so has been the relentless assault on free speech after October 7. It resulted in all sorts of executive orders in the U.S., purporting to ban criticism of Israel or activism against it, the shutting of pro-Palestinian groups on campuses and even the shutting of TikTok as one very prominent senator admitted over the weekend: the true impetus for shutting down TikTok in the United States was that it was perceived to permit too many criticisms of Israel. 

Meanwhile, throughout Europe, the targeting of Israel critics and pro-Palestinian activists, particularly people engaged in activism against the Israeli war in Gaza, has been even more severe. While it's taken place throughout Europe, undoubtedly the country where it has been most extreme is Germany, which has furnished immense amounts of arms to Israel that it used to bomb and destroy Gaza and therefore has a very intent motive to prevent anyone from claiming that those are war crimes or genocide because it would make Germany complicit – a strain Vice-President JD Vance did not mention when criticizing Europe for the attacks on free speech at the Munich Security Conference, last week. 

James Jackson is an independent journalist and broadcaster from the United Kingdom who is based in Berlin. He hosts Mad in Germany, a current affairs podcast. He has previously covered news, business and culture in Germany and Central and Eastern Europe for publications like the BBC, Sunday Times, and Time Magazine. He has really become one of my top two or three go-to sources for understanding events in Germany, particularly these assaults on free speech. We are delighted to welcome him to his debut appearance on System Update. 

 

G. Greenwald: James, it's great to see you. Thanks so much for taking the time to talk to us. I know it's late there. 

James Jackson: Hi Glenn. Thanks so much for having me on here. You know, long-time reader and follower of yours. So, really great that you've picked up the free speech cause in Germany particularly because it's not something that has got very much attention until, of course, the vice president of the United States and “60 Minutes” as well brought it to the world's attention. But it's been something I've been trying to get the message out on for a while. So, I'm happy that it's gone global, but as you said, the most egregious attack on free speech JD Vance did not mention and that is the assault in Israel. I think we understand why, you know, politics plays a very important role in this. 

G. Greenwald: Right, sometimes politicians do constructive or positive acts or take constructive and positive steps even if it's always not for the best motives. And who knows, you know, JD Vance is politically constrained. I've never heard him defend or demand censorship of pro-Palestinian activism but in any event, he certainly did end up generating a lot more attention to this issue. 

I want to just step back from current events taking place in Germany which we'll get to in a minute including what happened today at this film festival. I think one of the very first articles I ever wrote when I became a journalist or a blogger back in 2005, 2006, was precisely about the fact that there is a vastly different tradition in Western Europe when it comes to perceptions of free speech than there is in the United States. One of the few unifying views in the United States was, at least until recently, the idea that even the most horrendous political views are permitted to be expressed. The state can't punish you for them. And I remember what prompted my article was a conviction in Austria of the British historian David Irving for having engaged in revisionism and denial of the Holocaust. He was criminally convicted and sentenced to a prison term. I essentially wrote that these things are unimaginable in the United States but they're common in Europe and in Germany in particular. After World War II, you could even say, for understandable reasons, there emerged these restrictions on speech particularly when it came to denying the reality of the Holocaust, its magnitude, trying to revise what happened, as well as praise for Adolf Hitler and the Nazi party and the Nazi ideology. And so, you started off with this kind of exception to free speech justified by these extreme events of World War II and they've obviously, as we're seeing now, have expanded aggressively as censorship usually does. That's its trajectory. It starts off justified by some extreme event that people can get on board with and then before you know it, it's a power that is being used all over the place. 

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