It’s Time The US Gave Putin A Financial Ultimatum

It’s Time The US Gave Putin A Financial Ultimatum

Joe Biden’s one-on-one with Vladimir Putin in Geneva is the marquee event in the new week.

In a rare display of competency (and common sense) by an American president, Biden won’t dignify Putin with a joint press conference. Instead, Biden will address the media by himself after the summit, which will consist of a working session followed by a more “intimate” chat.

“We expect this meeting to be candid and straightforward, and a solo press conference is the appropriate format to clearly communicate with the free press the topics that were raised in the meeting,” a White House official said.

Stating the obvious, Michael McFaul, former ambassador to Russia in the Obama administration, told NBC that joint pressers present Putin with asymmetric opportunities. “I think there’s only upside for Putin [in a joint appearance] and only risk for Biden,” McFaul remarked.

Making a list of the ten most harrowing moments from the Trump years is about like making a list of the ten best players in NBA history: You’re sure about the top three or four even if you can’t quite decide on the order, but past number five, there are so many to choose from that the task becomes mostly impossible. Trump’s press conference with Putin following the Helsinki summit may not be a “top” five lowlight, but it has a solid claim on a six through 10 spot.

Trump was obsequious (audibly and visibly) when he addressed the media alongside Putin in 2018, a performance that was almost universally panned as a historic embarrassment. But the truth is, it’s perilous for any American president to meet with Putin, let alone address the media with him, live on television.

Putin is, almost without equivocation, the most formidable geopolitical antagonist of the post-War era. You can count on one hand the number of people he considers to be his strategic equal, and Trump incinerated one of them 18 months ago. The only saving grace for the West is that, as I put it earlier this month, Russia is a rickety remnant of a bipolarity that died decades ago. Putin doesn’t preside over a superpower.

It’s true that Putin’s legend is overstated even by serious observers, never mind the silly memes of him riding grizzlies and walking calmly away from things that just exploded. And it’s also true that the Kremlin works to perpetuate the same image, even as Moscow simultaneously insists Putin isn’t nefarious at all.

That’s a silly balancing act. In an interview with NBC last week, Putin shrugged off Biden’s “killer” label as “Hollywood macho,” but his own staged photo shoots are nothing if not Hollywood-esque. Consider the passages (below) from The New York Timescoverage of this year’s choreography,

There are photo shoots, there are presidential photo shoots — and then there are Vladimir Putin presidential photo shoots. Rarely has the leader of a global power embraced the staged publicity still with such creative, yet clichéd, fervor, not just feeding the global desire for a caricature of himself, but actually creating it.

In a series of photos of Putin on a weekend jaunt to the snowy Siberian taiga, the 68-year-old president is shown in his usual favorite outdoor setting, displaying his connection to nature, manly toughness and appreciation of country. In the vastness of the largely empty landscape, he looms large. At least that was probably the idea.

Silly? To Western audiences, yes. But no one should harbor any delusions. There isn’t anything silly about Putin outside of social media jokes.

Just as you and I are irrevocably shaped by our life experiences, so too are world leaders and celebrities. We insist they should let their offices, public profile and/or “responsibility” to humanity reshape them, but that’s not realistic. Putin is cut from a different cloth than modern US politicians. Matching “wits” (where “wits” here means conniving contrivance) with Putin is impossible for American officials. It would be challenging for a CIA operative. To be in the room with him is to be taken advantage of. Angela Merkel is somewhat better equipped but, again, that’s down to life experience.

The dynamic is different when Putin meets with other strongmen, especially those who, like him, aren’t to be trifled with. But even the likes of Mohammed bin Salman and Recep Erdogan are at a disadvantage in direct dialogue. I’d argue that only Xi Jinping can approach strategic alliances with Moscow confident he won’t be crossed.

For the US, rapprochement with Putin’s Russia is a lost cause. The West should abandon even the pretense. Cyber attacks that can be definitively linked to Russian actors should be met with Treasury sanctions on the Russian state. The closer the link between such attacks and the Kremlin, the more draconian the sanctions. The same with Putin’s posturing in Ukraine. And the same with election meddling.

The Biden administration has already gone this route, but the measures taken in April were far from oppressive. Trump’s (at times misplaced) crusade against Iran demonstrated (again) that curtailing access to US dollars can intensify internal strife and bring a country to its knees. Tehran insists Trump’s efforts were unsuccessful, and that’s true depending on your definition of “success.” But between the misery brought about by Steve Mnuchin’s economic noose and the assassination of Qasem Soleimani, the administration severely degraded the IRGC’s operational capacity.

It might seem out of character for me to advocate for the weaponization of the US dollar. After all, I’ve said repeatedly that the biggest threat to the dollar’s reserve status is US foreign policy and specifically the haphazard use of Treasury sanctions to punish strategic rivals. On June 3, in a mostly symbolic move, Russia’s wealth fund said it would pare the entirety of the fund’s dollar assets in favor of euros and a mix of yuan, pounds, yen and gold.

During remarks for a teleconference in St. Petersburg last week, Putin reiterated that Russia doesn’t want to stop using dollars, but the US “uses its national currency for various kinds of sanctions,” which “forces” Russia to abandon the greenback. He said the US would eventually regret “sawing the branch on which they sit.”

That’s duly noted, but it’s Putin who’s perpetually hacking away (figuratively and literally) at the branch he sits on. At some point, the US has to leverage the tools at its disposal to make him kneel. Every other week it’s something else. Some new hack. Some fresh affront. Another stick in the eye. (Oh, you’re sympathetic to the Kremlin’s narrative? Well how about when you’re on vacation with your family down South and you can’t drive home because a pipeline was hacked and there’s no gas?)

“Stick in the eye” might seem rather quaint as a description of an ongoing campaign to destabilize Western democracies, but I think it’s particularly apt. Consider the contrast between Putin’s Russia and Xi’s China. China has an agenda. Xi has clear designs on usurping the US as the global hegemon and he arguably has the financial, economic, military and technological wherewithal to do it. Putin has none of those things.

Russian malign activity is, in many cases, mischief for mischief’s sake. Lacking the clout necessary to mount an “on the merits” assault on the contention that democracy is the best form of government, Putin’s Russia resorts to outright chicanery, sometimes on a grand scale (e.g., the 2016 election) and other times via schemes that amount to little more than petty larceny. And unlike the current awkward situation with China, there’s something the US can do about it.

With the exception of nuclear arms control, there’s little utility in engaging with Putin. The US should simply give him an ultimatum which amounts to the same message Trump sent to Moscow’s ally in Tehran. In essence, that message is this:

We’re all bad actors. But like everyone else, you need to join the charade, where that means adopting a facade that at least gives you some plausible deniability while pretending to be a responsible global citizen. Nobody is saying you actually have to be a responsible global citizen, but if you can’t even be bothered to pretend, then we’re going to have to cut you off from the global financial system until such a time as you feel like you can play along.


10 thoughts on “It’s Time The US Gave Putin A Financial Ultimatum

  1. Our national defense needs to step up our cyber defense units. Present day attacks initiated against the US for economic gain or with the goal of paralysis (pipeline, electric grids etc.) to elicit a certain behavior response from the US will primarily be done through cyber attacks.
    We are sitting ducks at this point.

  2. You are correct H….. We are all bad actors and this crisis is existential for Russia as well as other participants . The battle will be fought by a new set of rules everyone advantaging themselves .. The rest it is opinion and History will be the judge depending on who writes it .

  3. I think I read someplace that the most widely circulated currency bill in Russia is the US $100. If we were to suddenly change that design and force substitution of all currently circulated hundreds we could do a lot of damage to three parties, Putin’s Russia, global terrorists, and major drug kingpins who would have to turn in their Benjamins to keep them. A new hundred with a short exchange period and no warning could kill a lot of bad birds with one stone.

  4. I’ve done a fair bit of programming for oil, mining and power generating companies over the decades and I can tell you that these people take cyber security seriously. Most control system networks are air gapped ( isolated from the corporate network and the internet ) and access is heavily restricted. Those not air gapped are firewalled and use secure VPNs. So when I hear that the Russians are hacking US infrastructure I have to throw the bullshit flag. If they are getting into corporate networks and control systems, someone is letting them in the door. Who could that be? Follow the money and don’t forget our history of false flag operations from the Boston tea party to Saddam’s weapons of mass deception.

    1. I wouldn’t put false flag operations as the number one priority. Yes they’re standards for critical infrastructure, but a payment scheduling system such as what was brought to its knees in the colonial pipeline system, is not such a system. That and the penchant for false economy of no regulation emanating from Texas and other red States, leads one to the high likelihood that these systems are not secure as these high Fidelity systems referenced above. The systems referenced are either US government or insurance company regulated.

      1. You nailed it! “the penchant for false economy of no regulation emanating from Texas and other red States, leads one to the high likelihood that these systems are not secure” Now we know who left the door open and shut down a critical system. Now tell me who profited from it. Bet it wasn’t the Russians.

        1. Please refrain from positing conspiracy theories in the comments section. I realize it’s not your intent, but whether you realize it or not, this kind of speculation and conspiratorial musing only serves to perpetuate Kremlin propaganda. This isn’t the platform for that. I’m closing the comments section on this article.

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