President Donald Trump attacked Germany for spending billions on Russian gas to fulfill its energy needs as undermining NATO’s core mission. While I assume the farce was intended to put further pressure on German Chancellor Angela Merkel to increase military spending, his comments demonstrate a remarkable misunderstanding of basic economic principles.
Oddly, the Kremlin seems to understand what our President does not:
“As for Germany’s dependence (on Russia) as a major gas buyer we cannot agree with this premise,” Peskov told reporters on a conference call.
“Supplies of pipeline gas do not lead to dependence of one country on another but to complete mutual dependence. That is a guarantee of stability and future development.” (Reuters)
And this is true. Trade creates relationships predicated upon mutual benefit and mutually assured destruction. The United States can no more wage war against China, than China could wage war against the United States. Why? Because neither nation could afford to fight a war while simultaneously crippling their own economies.
Trump’s assertion that Germany is completely controlled by Russia (CNN) makes as much sense as the idea that the United States is completely controlled by China, or vice versa. If Trump is right about Germany, then by implication, the United States is merely a Chinese Puppet State.
The laws of economics affect both capitalist and socialist nations alike. Trade is necessary for nations like Russia and China to prosper and the surest way to ensure that Russia and China remain peaceful and productive members of the international community is to increase trade with them. Besides, when Russia acts badly, sanctions are one of the most effective measures we can take to force them to either back off or back down.
While I’m sure President Trump is merely playing 146D Chess with the rest of the world, it is somewhat annoying to watch him contribute to the American People’s general ignorance of economics.
