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Living the Dream – Latvia, NATO and the EU

NATO membership makes Latvians feel less secure, whilst material gains from EU membership have been unspectacular.

Patrick Armstrong

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This article was first published by Russia Observer and is republished with the permission of the author.

This essay is an attempt to discuss the consequences of Latvia’s membership in both NATO and the EU. I chose Latvia simply because I found data for it. Membership in either standard bearer of Atlanticism, let alone both, would have been unimaginable for any citizen of the Latvian Soviet Socialist Republic and, for many, a glorious dream.

North Atlantic Treaty Organisation

Because Latvia joined it first, I will consider the NATO half of the dream first. Latvia became a full member in April 2004 (“From now on, 26 Allies will be joined in a commitment to defend each others’ security and territorial integrity. This is the strongest, most solemn commitment nations can undertake“).

There is a widespread meme that the new NATO members eagerly sought membership because of popular concerns about Russia but the truth, in Latvia at any rate, is that public opinion required some time (and lots of American GONGOs) to develop the preference. And while EU membership followed a referendum, NATO’s did not. In an opinion poll in 1998 we find a slight preference for neutrality “In Latvia, the larger group of population believe that the neutrality best guarantees Latvian security and stability (29%). The second option – NATO and EU membership together (26%) while NATO membership is the third option (15%). 10% of Latvian population believe that EU membership alone can guarantee stability and security for Latvia.” The same poll found that if there were to be a referendum on joining NATO in the three Baltic states “Latvia has the lowest number of the supporters for the country’s membership in alliance: 37% would vote for, 29% against, while 34% of Latvian population has not decided yet.” Not much enthusiasm there.

But Latvia has been a member for a decade now and one has to wonder whether Latvians feel secure. One would think that Article 5 of the NATO treaty gave as indisputable a security assurance as could be wanted. “Collective defence means that an attack against one Ally is considered as an attack against all Allies.” So, if Russia were to attack Latvia it would be the same as if it had attacked the USA, Canada or Germany; there would be no need for American, Canadian or German troops to actually be there. And yet there are always calls for more money to be spent and more troops to be stationed. And the recent NATO summit agreed to do so. Outsiders with weapons to sell Latvia have their interests in playing this up as when a BBC program in February 2016 had Russia invading Latvia. Propagandists keep the pot boiling: “Counting Down to a Russian Invasion of the Baltics“, “Reinforcing Deterrence on NATO’s Eastern Flank: Wargaming the Defense of the Baltics“, “If Russia Started a War in the Baltics, NATO Would Lose — Quickly“, “Russia’s aggression in Ukraine is part of a broader, and more dangerous, confrontation with the West“; War games show NATO’s eastern flank is vulnerable. To deter Moscow, the United States will need to deploy heavy armor on a large scale, a new study says.” And so on. There are sceptics, to be sure: “Why on Earth Would Russia Attack the Baltics?“, but the subject is omnipresent and the Warsaw communiqué is full of Russian “aggression”, “destabilising actions”, ” military intervention”, “provocative military activities near NATO borders” and so forth. (And, lest we forget profits: “We welcome Allied efforts to address, as appropriate, existing dependencies on Russian-sourced legacy military equipment”). Indeed, NATO is back in business at the old stand.

All this scare-mongering is having its effect. A recent Gallup poll finds 42% of Latvians seeing Russia as a potential threat. A 2015 poll finds 69% of Latvian speakers seeing a threat from Russia. We see these op-eds: “The society has fear“. “Who’s Afraid of the Big, Bad Bear?“, “Latvians fear elections could let Kremlin in by back door“, “Panic in Latvia: Trump Will Hand Ukraine, Syria and the Baltics to Putin“. “Russia’s Annexation Of Crimea Worries Baltic Nation Of Latvia“. “Baltic Russians could be the next pawns in new cold war“. In short, Latvians are becoming nervous.

Nonetheless, the cynic who really thinks about it understands that the foreign troops are wanted not because of some perceived immediate Russian threat, but because of a lack of confidence that, when it came to it, the NATO allies would stand up. Indeed, we have a poll that suggests just that: “NATO’s European Allies Won’t Fight for Article 5“. Another poll finds that not even Americans are very willing to fight for Latvia. So, the deployments probably owe less to the “Russian threat” than to the “indifference threat”. We are reminded of George Kennan’s prescient remark: “We have signed up to protect a whole series of countries, even though we have neither the resources nor the intention to do so in any serious way“.

It has to be said that the comparison between Crimea and Latvia (or the other two Baltic states) is rather forced. A thousand years ago, Crimea was clearly part of the Byzantine/Rus culture – indeed Vladimir the Great, ruler of Novgorod and later of Kiev, was baptised in Khersones in Crimea. Conquered by the Mongols in the 1200s, it became an appanage of the Ottoman Empire and was reconquered by Russia in 1783. The Russian Black Sea Fleet was then founded and has been based there ever since. In 1954 Khrushchev transferred Crimea from the RSFSR to the Ukrainian SSR (illegally it appears). When the USSR broke up, the Black Sea Fleet remained under treaty between Moscow and Kiev together with up to 25,000 Russian soldiers and sailors. In the 2014 referendum well over 90% voted to (re)join Russia and the Russian troops provided security; there was no “invasion”. As to the Donbass: when the president you voted for is ousted, the party you voted for is declared an enemy, the central government sends the army at you and your home is renamed the “Anti-Terror Operation Zone“, there’s no need to invent a “Russian invasion”. Latvia’s history is quite different: it has been ruled by Germans, Poles, Lithuanians and Swedes until absorbed by the Russian Empire about the same time Crimea was reacquired. Despite a substantial Russian minority, it has never been considered part of the “Russian lands” and there are no Russian troops there. So the parallels are very contrived – propagandisticly contrived – indeed. And, if Latvians are really concerned that a crafty Moscow may use the Russians inside Latvia as some sort of lever, then they might consider giving them full citizenship. (An idea, it is interesting to note, that seldom occurs to the reporters who write pieces like this one: “Latvia, with a large minority of Russians, worries about Putin’s goals“).

So, one could make the case that one part of the Latvian dream – NATO membership – has not in fact given the Latvian population a greater sense of security. Indeed, an effect of the non-stop anti-Russia campaign may be that Latvians feel less secure today than they did when they were neutral.

And, as a further irony, Latvian soldiers are back in Afghanistan: under a different flag this time but with much the same results.

European Union

Latvia became a full member of the EU in May 2004 after a referendum (“We welcome a country that naturally belongs to us and we trust, that Latvia as the others future Member States, will enrich and strengthen the European Union. Welcome home, Latvia!”) . It joined the Eurozone in January 2014 (no referendum then: support only about 20%).The source for most of what follows is “Latvia in the EU – Ten Years Later. A Different Latvia?” which is a fairly detailed assessment of the first decade’s experience. The purpose of the authors is described: “We intend to take a snapshot of the moment when Latvia joined the EU, and compare it with a snapshot of the country taken today”. It was published in May 2014, too early to show any effects of Eurozone membership; neither had the refugee criss bitten. A very quick summary of the various tables follows.

In the period defence expenditure declined and the armed forces became smaller. (We’ll see what effect the Russia scare will have on them). The unemployment rate improved, got a lot worse and is now about where it started. The service sector is larger, the industrial sector smaller, labour productivity significantly up, applications for high-tech patents down. The crime rate is much improved across the board with the exception of drug offences. The population has decreased (the authors don’t tell us how much). There are significantly fewer non-citizens, more foreigners live in Latvia, tourism is up quite a bit, the proportions of native Latvian speakers (73%-71%) and native Russian speakers (27%-27%) unchanged. The number of students is down, but those studying abroad is up, the proportion of the population with higher education has increased. The average net salary has better than doubled and GDP per capita has increased from about half the EU average to about two-thirds, the poverty rate is significantly down, agricultural production is significantly up. The population is a little more satisfied with the “quality of democracy” but trust in governmental institutions (including the EU) is down a bit, electoral participation is down nearly ten percentage points but the traffic police expect bribes significantly less. Life expectancy is up about 3 years, infant mortality is down, generally speaking health seems to be better (but a significant increase is reported for malignant tumours) although both doctors and hospital beds are down. Latvia is either “greener” or it isn’t, depending on what indicator you choose to emphasise. The authors sum it up as “in the course of ten years Latvia has become more secure and prosperous.”

So, altogether in the decade, there have been improvements in Latvia’s economic situation, health and crime. But these are not dramatic and, of course, there is no way of telling what the numbers would be if Latvia had taken some other course (cf Belarus, for example). The declining esteem in which institutions are held (trust in government down from 28% to 20%, parliament 20% to 15%, EU itself 39% to 36%) and drop in electoral participation (national from 72% to 59%, municipal 53% to 46%) argues a certain lack of enthusiasm for present circumstances.

The authors mention the population decline but don’t give the numbers.Wikipedia tells us the population in the EU decade dropped from 2.277 million to 1.995 million. It was 2.651 million in 1991. That’s a drop of a quarter; a significant decline indeed. “Demographic disaster” some say, “We are dying out“. If I were Latvian, I’d worry about that a lot more than about imaginary Russian invasions: at this rate, if they really wanted Latvia’s beaches, all the Russians have to do is wait fifty years or so to peacefully occupy an old folks’ home surrounded by vacant real estate.

Conclusion

It would appear that there are good reasons to argue that NATO membership has made Latvians feel less secure because they have been sucked into the NATO anti-Russia hysteria. In the ten years of EU membership there have been real gains albeit none very dramatic. There is no way of knowing where Latvia would be today had it adopted a different membership package.

So, it while it would certainly be wrong to call the dream a nightmare, it’s not proved as happy a dream as was no doubt expected. Improvements to be sure, but none of them dramatic and all overshadowed by depopulation (Latvia and Bulgaria are the only countries in the world with a smaller population today than in 1950.)

The downstream costs of the Euro and refugees – both direct consequences of EU membership – as well as pressures for greater defence expenditure from NATO are as yet uncalculated.

So, a bit of a wash altogether.

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Denmark As A Model For American Socialists?

In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high.

The Duran

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Authored by Lars Hedegard via The Gatestone Institute:


Here are some facts to consider before American “democratic socialists” look to Denmark for guidance, as Senator Bernie Sanders did during the 2016 presidential campaign.

First of all, Danes actually pay for their brand of socialism through heavy taxation. In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high. If you receive public support and are of working age and healthy enough to work, the state will require that you look for a job or it will force a job on you.

The willingness of all the Danes to pay high taxes is predicated on the country’s high degree of homogeneity and level of citizens’ trust in each other, what sociologists call “social capital.” By and large, Danes do not mind paying into the welfare state because they know that the money will go to other Danes like themselves, who share their values and because they can easily imagine themselves to be in need of help — as most of them, from time to time, will be.

Whenever politicians propose tax cuts, they are met with vehement opposition: So, you want to cut taxes? What part of the welfare state are you willing to amputate? And that ends the debate.

Danes, in contrast to American socialists gaining ground in the Democratic Party, are increasingly aware that the welfare state cannot be sustained in conditions of open immigration. A political party agitating for “no borders” could never win a Danish election. Danes do not suffer from historical guilt: they have not attacked any other country for more than two centuries and have never committed a genocide.

Moreover, there is an even deeper truth to ponder: Denmark is not really socialist but constitutes a sui generis fusion of free-market capitalism and some socialist elements. Denmark has no minimum wage mandated by law. Wages, benefits and working conditions are determined through negotiations between employers and trade unions. 67% of Danish wage-earners are members of a union, compared to 19% in Germany and 8% in France. Strikes and lockouts are common, and the government will usually stay out of labor conflicts unless the parties are unable to agree.

It is uncomplicated for enterprises to fire workers, which gives them great flexibility to adapt to shifting market conditions. To alleviate the pain, the state has in place a number of arrangements such as generous unemployment benefits and programs to retrain and upgrade redundant workers.

Danish companies must make ends meet or perish. They generally will not get handouts from the government.

Denmark is more free-market oriented than the US. According to the Heritage Foundation’s 2018 Index of Economic Freedom, Denmark is number 12, ahead of the United States (number 18). Venezuela is at the bottom, one place ahead of number 180, North Korea.

Mads Lundby Hansen, chief economist of Denmark’s respected pro-free-market think tank CEPOS, comments:

“Very high taxes and the vast public sector clearly detract in the capitalism index and reduce economic freedom. But Denmark compensates by protecting property rights, by low corruption, relatively little regulation of private enterprise, open foreign trade, healthy public finances and more. This high degree of economic freedom is among the reasons for Denmark’s relatively high affluence.”
Trish Regan recently claimed on Fox Business that Danes pay a “federal tax rate” of 56% on their income. This is misleading. The 55.8% is the levied on the marginaltax for the top income bracket, only on the part of their income above DKK 498,900 ($76,500). Any income under DKK 498,900 is taxed at lower rates. And the 55.8% marginal rate does not represent a “federal” or “national” rate. It represents the total of all taxes on income: national tax, regional tax, municipal tax and labor market tax. It does not, however, include Denmark’s 25% value-added tax (VAT), paid on all purchases.

Regan also claimed that Danes pay a 180% tax on cars. While it is true that there was once a maximum tax of 180% on care in Denmark, the vehicle tax rates have been lowered in recent years. Today, the first DKK 185,100 ($28,400) of the price of a gas- or diesel-powered car is taxed at 85%, and if the car’s price is above DKK 185,100, the remaining amount is taxed at 150% — which is of course bad enough.

Denmark’s total tax burden amounts to 45.9% of GDP, the highest of all countries in the Organisation for Economic Co-operation and Development (OECD).

As pointed out in the Fox Business segment, all education for Danes is tuition-free, all the way through to a Ph.D. Not only that; the state will, within certain time constraints, pay students to study. For students at university level no longer living with their parents, the monthly cash grant comes to almost $1,000 per month. No fewer than 325,000 students out of a total population of 5.6 million benefit from this generous arrangement setting the state back to the tune of DKK 20.9 billion or 1% of GDP (latest 2018 figures just in and supplied by Mads Lundby Hansen). Denmark even pays student support to 20,000 foreign students.

Attempts by fiscal conservatives to cut down on payments to students have been successfully resisted by the vociferous and influential student organizations; at present it would appear impossible to muster anything like a parliamentary majority to limit the student handouts.

Fox Business is right that a great many Danes are on public transfer payments. Government figures from 2017 indicate that 712,300 Danes of working age (16-64) — not including recipients of student benefits — get public financial support. But Regan’s claim that most Danes do not work is ludicrous. According to Statistics Denmark, 69.9% of Danes aged 16-64 are active in the labor market.

How can Denmark pay for its comprehensive welfare state, which includes free medical care regardless of the severity of your condition? Regan claims that Denmark is “heavily in debt.” Not so. As it turns out, Denmark is among the least indebted countries in the world, even when compared to other Western countries. The Danish government’s gross debt stands at 35.9% of GDP. Compare that to, e.g., The United Kingdom (86.3 %), The United States (108%), Belgium (101%), Canada (86.6%), France (96.3%), Germany (59.8%), The Netherlands (53.5%), Italy (129.7%), Spain (96.7%) and even Switzerland (41.9%).

Comparing Denmark to the US, Madsen notes that the latter has a problem with fiscal sustainability that may necessitate tax increases. Denmark enjoys what he labels fiscal “oversustainability” (“overholdbarhed”).

At a time when socialism appears to be popular among certain sections of the American population, its proponents would do well not to cite Denmark as a model. The Danish fusion of free-market capitalism and a comprehensive welfare state has worked because Denmark is a small country with a very homogeneous population. This economic and social model rests on more than 150 years of political, social and economic compromises between peasants and landowners, business-owners and workers, and right- and left-leaning political parties. This has led to a measure of social and political stability that would be hard to emulate in much larger and more diverse counties such as the United States.


Lars Hedegaard, President of the Danish Free Speech Society, is based in Denmark.

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Ron Paul: Protectionism Abroad and Socialism at Home

One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians.

Ron Paul

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Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity:


One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians. For example, government interference in health care increased health care costs, making it difficult or even impossible for many to obtain affordable, quality care. The effects of these prior interventions were used to justify Obamacare.

Now, the failures of Obamacare are being used to justify further government intervention in health care. This does not just include the renewed push for socialized medicine. It also includes supporting new laws mandating price transparency. The lack of transparency in health care pricing is a direct result of government policies encouraging overreliance on third-party payers.

This phenomenon is also observed in foreign policy. American military interventions result in blowback that is used to justify more military intervention. The result is an ever-expanding warfare state and curtailments on our liberty in the name of security.

Another example of this is related to the reaction to President Trump’s tariffs. Many of America’s leading trading partners have imposed “retaliatory” tariffs on US goods. Many of these tariffs target agriculture exports. These tariffs could be devastating for American farmers, since exports compose as much as 20 percent of the average farmer’s income.

President Trump has responded to the hardships imposed on farmers by these retaliatory tariffs with a 12 billion dollars farm bailout program. The program has three elements: direct payments to farmers, use of federal funds to buy surplus crops and distribute them to food banks and nutrition programs, and a new federal effort to promote American agriculture overseas.

This program will not fix the problems caused by Tramp’s tariffs. For one thing, the payments are unlikely to equal the money farmers will lose from this trade war. Also, government marketing programs benefit large agribusiness but do nothing to help small farmers. In fact, by giving another advantage to large agribusiness, the program may make it more difficult for small farmers to compete in the global marketplace.

Distributing surplus food to programs serving the needy may seem like a worthwhile use of government funds. However, the federal government has neither constitutional nor moral authority to use money taken by force from taxpayers for charitable purposes. Government-funded welfare programs also crowd out much more effective and compassionate private efforts. Of course, if government regulations such as the minimum wage and occupational licensing did not destroy job opportunities, government farm programs did not increase food prices, and the Federal Reserve’s inflationary policies did not continuously erode purchasing power, the demand for food aid would be much less. By increasing spending and debt, the agriculture bailout will do much more to create poverty than to help the needy.

Agriculture is hardly the only industry suffering from the new trade war. Industries — such as automobile manufacturing — that depend on imports for affordable materials are suffering along with American exporters. AFL-CIO President Richard Trumka (who supports tariffs) has called for bailouts of industries negatively impacted by tariffs. He is likely to be joined in his advocacy by crony capitalists seeking another government handout.

More bailouts will only add to the trade war’s economic damage by increasing government spending and hastening the welfare–warfare state’s collapse and the rejection of the dollar’s world reserve currency status. Instead of trying to fix tariffs-caused damage through more corporate welfare, President Trump and Congress should pursue a policy of free markets and free trade for all and bailouts for none.

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In Monsters We Trust: US Mainstream Media No Friend of the American People

Over 300 US newspapers ran editorials on the same day denouncing Trump, an event in itself that points to some high degree of collusion and groupthink.

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Authored by Robert Bridge via The Strategic Culture Foundation:


Over the course of his turbulent presidency, Donald Trump has accused various media companies, with special attention reserved for CNN, as being purveyors of ‘fake news.’ In one early-morning Tweet last year, he slammed the “FAKE NEWS media” as the “enemy of the people.”

This week, over 300 US newspapers ran editorials on the same day – an event in itself that points to some high degree of collusion and groupthink – denouncing Trump’s insensitive portrayal of them, as if the notion that journalists were not in the same sleaze league as lawyers, politicians and professional con artists never crossed anyone’s mind before. Even the peace-loving Mahatma Gandhi recommended “equality for everyone except reporters and photographers.”

But is the MSM really an “enemy of the people?”

First, it cannot be denied that the US media, taken in all its wholesomeness, has been overwhelmingly consistent in its ‘style’ of reporting on Donald Trump, the 45th POTUS. And by consistent I mean unprecedentedly critical, misleading and outright aggressive in its guerilla coverage of him. If one is not convinced by the gloom-and-doom Trump stories featured daily in the Yahoo News feed, then a study by the Media Research Center (MRC) should do the job. From January 1 through April 30, evening news coverage of the US leader – courtesy of ABC, CBS and NBC – were 90 percent negative, which is pretty much the same incredible average revealed by MRC one year earlier.

The study looked at every one of the 1,065 network evening news stories about Trump and his administration during the first four months of 2018. Total negative news time devoted to Trump: 1,774 minutes, or about one-third of all evening news airtime. That’s pretty much the definition of a circle jerk.

“Nearly two-fifths (39%) of the TV coverage we examined focused on Trump scandals and controversies, while 45 percent was devoted to various policy issues,” MRC wrote in its report.

Meanwhile, the farcical Russia ‘collusion’ story was consistently the main grabber — clocking in at 321 minutes, or nearly one-fifth of all Trump coverage. Of the 598 statements MRC calculated about Trump’s personal scandals, virtually all of them (579, or 97%) came out of the media wash cycle tarred and feathered.

If this represents an orchestrated attack on the Commander-in-Chief, and in light of those numbers it would be difficult to argue it isn’t, the strategy appears to be falling flat. Despite, or precisely because of, the avalanche of negative media coverage, Trump’s popularity rating smashed the 50 percent ceiling in early August and continues to remain high.

In Monsters We Trust

Although it can be safely stated that the MSM is an entrenched and relentless enemy of Donald Trump, that doesn’t necessarily mean it’s an “enemy of the American people,” as Trump argues it is. Let’s be a bit more diplomatic and say it isn’t our friend.

One yard stick for proving the claim is to consider the steadily mounting concentration of media holdings. In 1983, 90 percent of US media were controlled by 50 companies; today, 90 percent is controlled by the Big Six (AT&TComcastThe Walt Disney Company21st Century FoxCBS and Viacom control the spoken and printed word from sea to shining sea).Although many people are aware of the monopolistic tendencies of the US mainstream media, it’s important to understand the level of concentration. It means the vast majority of everything you see and hear on any electronic device or printed publication is ‘democratically’ controlled by six average white guys and their shareholders.

However, keeping track of who owns what these days is practically impossible since the dozens of subsidiary companies that fall under each main company are themselves fiefdoms, each with their own separate holdings. In fact, the already short ‘Big Six’ list is already dated, since National Amusements, Inc. has gobbled up both Viacom and CBS, while 21st Century Fox merged with Disney this year. As for the 350 US newspapers that penned tortured editorials decrying Trump’s critical opinion of them, many of those ‘local’ publications get their marching orders from either the Hearst Communications or the Gannett Company on the East Coast.

Now, with this sort of massive power and influence lying around like dynamite, it stands to reason, or unreason, that the corporate and political worlds will succumb to the law of attraction and gravitation, forging powerful and impregnable relationships. It’s no secret that the politicians, our so-called ‘public servants,’ are mostly in the game to make a fast buck, while the corporations, desperate for ‘democratic representation’ to control regulation and market share, have an inexhaustible source of funds to secure it. Naturally, this oligarchical system precludes any sort of democratic participation from the average person on the street, who thinks just because he remembers to yank a lever once every several years he is somehow invested in the multibillion-dollar franchise.

As far as media corporations being ‘private enterprises’ and therefore free to demolish the freedom of speech (even censoring major media players, like Infowars, simply because they whistle to a different political tune), that is quickly becoming revealed as nothing more than corporate cover for state-sponsored machinations.

“In a corporatist system of government, wherein there is no meaningful separation between corporate power and state power, corporate censorship is state censorship,” writes Caitlin Johnstone. “Because legalized bribery in the form of corporate lobbying and campaign donations has given wealthy Americans the ability to control the US government’s policy and behavior while ordinary Americans have no effective influence whatsoever, the US unquestionably has a corporatist system of government.”

Meanwhile, it cannot be denied, from the perspective of an impartial observer, that the mainstream media is nearly always positioned to promote the government narrative on any number of significant issues. From the media’s unanimous and uncritical clamoring that Osama bin Laden was responsible for 9/11 (even the FBI has admitted it has no “hard evidence” that bin Laden carried out the attacks on the World Trade Center and the Pentagon), to its gung-ho enthusiasm for the 2003 Iraq War, to the sycophantic cheerleading for a war in Syria, the examples of media toeing the government line are legion. And if US intel is in bed with Hollywood you can be damn sure they’re spending time in the MSM whorehouse as well.

Is it any surprise, then, that public trust in the US media is reaching all-time lows, while news consumers are increasingly looking to alternative news sites – themselves under relentless attack – to get some semblance of the elusive truth, which is the God-given right of any man? Truth is our due, and we should demand nothing less.

As Thomas Paine reminded the world in the face of a different foe: “Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives everything its value.”

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