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Here’s what happened at the Putin-Erdogan summit

Russia and Turkey massively upgrade their cooperation – however, agree to differ over Syria.

Alexander Mercouris

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As is frequently the case the most information about what Putin and Erdogan discussed and agreed with each other came out of their joint news conference. The Kremlin has provided a transcript

Syria

Putin and Erdogan both said that they had not discussed Syria prior to the news conference and that their discussion about Syria would take place after.

This could be for any of various reasons: that restoring their bilateral relations was the bigger priority with the contentious issue of Syria being put off till later; that Putin and Erdogan did not want to spoil the mood at the press conference by revealing how far apart they still are on this issue; or that the discussions they were about to have on Syria touched on such sensitive topics that they did not want to be questioned and reveal information about them at the news conference.  Probably all of these reasons were in play.

Both Putin and Erdogan did say at the press conference that their positions on Syria remain far apart.  In an interview with TASS on the eve of the visit Erdogan however showed no shift in his longstanding positions on the Syrian conflict.  For example he continued to insist that President Assad had to go

“We don’t want Syria’s disintegration, but the departure of Bashar Assad who is guilty for the deaths of 600,000 people. This is the condition for preventing this scenario. Syria’s unity cannot be kept with Assad. And we cannot support a murderer who has committed acts of state terror.”

In a point that will be particularly contentious for the Russians (and one presumes for some people in the US) he even denied that Jabhat Al-Nusra is a terrorist organisation despite its connection to Al-Qaeda

“Considering that the al-Nusra front is also fighting against the Islamic State, it should not be considered as a terrorist organisation either. This is an incorrect approach.”

Other comments Erdogan made during the TASS interview strongly suggest that it was he who was ultimately behind the recent Jabhat Al-Nusra announcement that it was distancing itself from Al-Qaeda.

In a recent post the Moon of Alabama expresses bafflement that despite the Turkish rapprochement with Russia that has taken place since the coup attempt there is no evidence of any slackening of Turkish support for the rebels in Syria.  On the contrary it seems that in connection with the fighting in Aleppo that support has if anything been stepped up.  The Moon of Alabama speculates implausibly that this is being done by the CIA on Turkish territory contrary to Erdogan’s wishes.

The true position is as I have said previously: Erdogan has invested too much in supporting the rebellion in Syria over too long a time to make it possible for him to change course.  Were he to try to do so he would expose himself to criticism in Turkey from many of his own supporters that he was selling out to the Russians.  He would also risk a violent reaction from the many Jihadist fighters currently in Turkey, which at a time when the Turkish security forces are at their most disorganised following the coup would be highly dangerous.  Beyond that there is the fact that Erdogan is almost certainly sincere about his Syrian policy.  His comments to TASS suggest as much, as do his actions on the ground. 

The truth is what I said before: what we are seeing between Turkey and Russia is a strictly limited rapprochement, not a fundamental realignment.  The two countries have moved closer to each other and are developing their political and economic relations at a blistering pace.  However there will be no switch in alliances and on the question of Syria they fundamentally differ and continue to support opposing camps.  The leaderships of both countries understand this perfectly well but are not prepared to hold the improvement of their mutual relations hostage to the situation in Syria.

On one question related to Syria there may however be progress.  Erdogan’s interview with TASS shows that he is still seething at Russian allegations made earlier this year that members of his family were involved in illegal trading with ISIS. 

“I had earlier been told that these facts also pointed to Turkey.  I asked for the relevant evidence to be demonstrated. However, no one could prove it to me. Nothing of this kind can be found with regard to Turkey. They also tried to entangle my family in this. I said prove it, I’ll leave my post, if you demonstrate the relevant evidence. I turned to those who conjured up these insinuations and asked them about whether they would leave their posts, if no evidence was found. Silence followed.”

His comments to TASS suggest that Erdogan might be prepared to work with the Russians to destroy ISIS.  However the extent of that cooperation is for the moment difficult to gauge.  It is unlikely to involve Russian aircraft operating from Incirlik.

As anticipated there does appear to have been some discussion during the summit of the Russians and the Turks working together on a joint plan to end the war in Syria.  In his interview with TASS Erdogan hinted as much, also confirming that against US and Saudi opposition he is also prepared to involve Iran in this plan

“Russia is fundamentally the key and most important player in establishing peace in Syria. I believe it is necessary to solve this crisis with the help of mutual action by Russia and Turkey. If the talk is about widening the circle of participants, then I already told my dear friend Vladimir [Putin] earlier: if necessary, we’ll also involve Iran in the effort. We can invite Qatar, Saudi Arabia and America. In this regard, we can form a wide circle of participants. If not, then the Russian Federation and Turkey given our common 950-km border with Syria, can take some steps, without violating Syria’s sovereignty.”

However given the differences between the Russians and the Turks over the future of President Assad and the status of Jabhat Al-Nusra it is difficult to see at the moment how they could agree a joint position on Syria that they would be able to take forward in order to achieve a settlement of the conflict there.  Doubtless the discussions between Putin and Erdogan after the press conference touched on this question.  However given the size of the gap between the two sides it will take a long time for any consensus on the way forward between them to emerge.  Most probably it will be the situation on the ground that will decide the issue first.

The Turkish coup

Both in the press conference and in his interview with TASS Erdogan again went out of his way to accuse the Gulen movement of being behind the recent coup attempt.  I have previously speculated that Erdogan’s constant references to the Gulen movement are intended to signal that the US (where Gulen is based) was somehow implicated in the coup.  Nothing Erdogan said in either the press conference or the TASS interview refutes that speculation.  He notably failed to say that the US was not involved in the coup, or that the US is Turkey’s ally and friend.  On the contrary in the TASS interview he appeared to criticise the US for its foot-dragging in handing over Gulen

“In reality, even though we have demanded this man’s extradition. They say if you regard this man as a terrorist, then send us the documents. We will study them first and then take measures in accordance with US legislation. True, there are some documents we had sent them before. By now we’ve sent 85 boxfuls of paperwork on this case. In the near future, the Turkish justice minister, foreign minister, special envoy and a number of prosecutors and judges who were in charge of this matter will go to the United States and brief the American authorities in person.”

By contrast Erdogan went out of his way to thank his “friend Putin” and Russia for their support during the coup.  What is more than a little strange about this however is that Erdogan does not really explain what that support was.  Instead he constantly refers to a telephone call he had from Putin the day after the coup, which he says gave Turkey “psychological support”. By that point however the coup had visibly failed, making it is difficult to see why Erdogan should attach so much importance to this call.

The true reason for Erdogan’s gratitude to Putin and Russia is probably touched on in his comments to TASS about the reports of a Russian tip-off to Turkish intelligence warning of the coup

“This is the first time that I have heard such a thing. Even if it had really been so, those concerned would have been obliged to inform me first thing. I received no such information, not from intelligence, nor through any other channels. We don’t know who said what and to whom. I believe that this is a groundless rumour.”

As I have said before the Russians will never confirm that there was a tip-off even if there was one, and for that reason neither will the Turks.  Note however that Erdogan’s comments about the tip-off to TASS are very far from a denial.  Instead we are asked to believe that Erdogan of all people “doesn’t know who said what to whom” and that “this is the first time that I have heard of such a thing” despite the story being all over the Middle East media for weeks.   As I have discussed previously, this looks very much like an agreed position reached by the Russians and the Turks not to deny the tip-off but to pretend to no knowledge of it.  That makes it a virtual certainty the report of the tip-off is true.

Turk Stream, South Stream, Nuclear cooperation etc

As I discussed previously these proved the least contentious issues, allowing for rapid progress.  There is also talk of the Russians granting the Turks visa free access or at least simplified visa access to Russia. 

Two points can be made briefly.  Firstly it is clear that it is the Turks rather than the Russians who are the main drivers behind both Turk Stream and the nuclear power agreement.  Putin confirmed that the Turks continued to do preparatory work on Turk Stream even during the crisis in relations following the SU24 shoot-down in November.  Secondly it is clear that contrary to some reports the Russians are not prepared to revive South Stream and that their opposition to the EU’s Third Energy Package remains as strong as ever.   On the contrary Putin made it clear that the Russians will not participate in any pipeline project that could be construed as their agreeing to the EU’s Third Energy Package.  Moreover Putin made it quite clear that he sees the US (whom he referred to as “a third party”) as being behind the Third Energy Package and all the problems that exist in relation to Russia’s EU pipeline projects

“We have never politicised economic cooperation. In proposing the South Stream project initially, we assumed that our gas would go directly to EU consumers in southern Europe. However, at first the European Parliament made a decision that prevented the implementation of this project and then the European Commission sent a letter to the Bulgarian Government demanding that preparations for it stop, and ultimately we did not receive the permission of the Bulgarian authorities to enter Bulgarian territory.

Yes, now we see that Bulgaria would like to resume this project, but we incurred some losses due to the refusal of our European partners to carry out this project. So now we will not settle for just intentions and need absolutely rock solid legal guarantees. They have not been forthcoming. Initially we regarded the Turkish Stream not even as an alternative to the South Stream but as an opportunity to expand our gas cooperation both with Turkey and Europe as a whole. One part of the Turkish Stream was designed exclusively for Turkey’s domestic consumers given the growing economy of the Republic of Turkey. This is how we discussed the issue today. This part is beyond any doubt and its implementation may be launched very soon.

The second part related to routing our energy to Europe depends, of course, on a third party. We should work out these issues with European countries and the European Commission in Brussels. Together with our Turkish partners and friends, we are prepared to work toward this, but again we need to have an agreement with all the participants.”

(Bold italics added)

Conclusion

In summary, the Putin – Erdogan summit went much as predicted.  There is now a strong rapprochement underway between the two countries.  This goes well beyond a mere detente, which is a relaxation of tensions.  On the contrary the leaders of the two countries now publicly call each other “friends”.  It is not however a reversal of alliances.  Turkey remains a member of NATO and an ally of the US.

In my opinion this actually suits the Russians much better, at least for the moment.  They surely know that an outright attempt to detach Turkey from NATO is for the moment impossible and might actually cause Turkey to become destabilised, which is absolutely not in their interests.  However at a time of heightened East West tensions they now have the leader of a key NATO state with NATO’s second biggest army calling their leader a “friend”.  Sometimes it is more useful to have a friend in the enemy’s camp than a doubtful and unstable ally in one’s own.  That is the situation which through a combination of skill and good luck the Russians have now manoeuvred themselves into.

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Donald Trump open to lifting Russian sanctions

Comments in interview with Reuters indicate that the doors are not entirely slammed shut between the US and Russia regarding sanctions.

Seraphim Hanisch

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On Wednesday August 22, the latest sanctions set against Russia by the US go into effect. These sanctions have already exacted a toll on the Ruble sending it into the high sixties against the dollar last week. At the time of this writing the ruble has only slightly improved from the worst level since the announcement, and this round of sanctions is the most painful since the Ruble hit a crippling level of 83 to the dollar in late 2015.

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However, US President Trump indicated once again that the US is open to working with Russia and to making a deal which would ease sanctions in place.

This report, by both RIA Novosti and TASS offer some detail:

President of the United States Donald Trump would be ready to consider the possibility of lifting the US sanctions on Russia if Moscow begins taking joint steps with Washington, including on Syria and Ukraine, he said this on Monday in an interview with Reuters.

Trump said that the question of lifting US sanctions on Russia was not brought up during his recent meeting with Vladimir Putin, however, he stated a condition for its possible withdrawal. “I would consider it if they do something that would be good for us. But I wouldn’t consider it without that,” he said.

Trump added that at the meeting the parties talked about Israel, Syria, Ukraine, Crimea, and the Nord Stream 2 pipeline project.

The United States began imposing extensive sanctions against Russia in 2014 after the reunification of Crimea with Russia. Restrictions were subsequently expanded and updated many times, they concern both individuals and legal entities. In the following years, Washington found many other reasons for imposing sanctions against Moscow, including alleged interference in the presidential election of 2016, alleged involvement of Russian officials in violation of human rights. So far, there has been no substantive discussion on the removal of restrictions from Russia.

The Reuters interview had more to say about this:

ON HIS RECENT MEETING WITH RUSSIA’S PUTIN

“It was only Fake News that criticized. … We had a very good, I guess, close to two-hour meeting. We had another good meeting with a lot of our representatives there. We talked about Israel, we talked about insecurity for Israel, we talked about Syria, we talked about Ukraine.”

“I mentioned Crimea, sure. I always mention Crimea whenever I mention Ukraine. Putin and I had a very good discussion. It was a very — I think it was a very good discussion for both parties. I mentioned the gas pipeline going to Germany.”

ON WHETHER PUTIN ASKED TRUMP TO LIFT U.S. SANCTIONS ON RUSSIA

“No, he did not. He never brought it up.”

ON WHETHER HE WOULD CONSIDER LIFTING SANCTIONS ON RUSSIA

“No. I haven’t thought about it. But no, I’m not considering it at all. No. I would consider it if they do something that would be good for us. But I wouldn’t consider it without that. In other words, I wouldn’t consider it, even for a moment, unless something was go — we have a lot of things in common. We have a lot of things we can do good for each other. You have Syria. You have Ukraine. You have many other things. I think they would like economic development. And that’s a big thing for them.”

This interview was held the day before the new sanctions were to go into effect. President Trump actually made no direct reference to the new sanctions, but this series of statements brings up an interesting thought.

President Putin has been silent on the matter of sanctions, even though the lower level government officials have spoken out about the injustice that is a fact, given the nature and cause of the sanctions. But an anonymous observer offered the interesting thought that, contrary to appearances, the American president may be trying to project the image of “strength against Russia” that is vital for him to pass through the midterm elections without losing the House.

If he loses the House to the Democrat Party, the new House leadership would almost certainly bring impeachment proceedings against the President. While this, like Russiagate, would be an absolute farce, it would have the effect of severely impairing the President’s agenda. While the House remains in GOP hands, this at least will not happen. The source mentioned that with such a strategy in place, if the midterms went the GOP’s way then Trump would be able to lift the sanctions later.

While this seems to be a very speculative thought, it is interesting that it was suggested only hours before the Reuters interview became publicly known. It would seem possible that this was a very gentle signal of willingness on the part of the American President to continue seeking better relations with Russia.

One thing is certain: a lot of policy is riding on the outcome of the midterms. How they go will shape US policy and foreign policy very strongly. This is truly a critical election approaching – for the US and for the world.

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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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