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Guest Post: United States Plan B

(Larry Johnson republishes this piece by a writer with the pen name, Observer R, with his permission. A sound thought piece.)

“Plan A” is commonly used to denote a current strategy; “Plan B” is commonly used to denote a backup or alternative strategy in case Plan A does not work.

Plan A

For the United States (US), Plan A has been a form of imperialism ever since the Spanish-American War.  At that time, there was an Anti-Imperialist League in the US (1898), but it was not successful.  Imperialism was politically correct for many years, but after WWII, both imperialism and colonies became less fashionable.  Eventually, the political scientists and authors in journals of international relations began using the word “hegemony” as a replacement.  More general references to US Plan A used the terms “liberal democracy” and “ international rules-based order.”  Critics often used the term “American Empire” to annoy the Establishment.  One goal of Plan A in recent years has been regime change in Russia to bring about a government similar to the one under Yeltsin.

The Ukraine War had a long gestation period as part of the US Plan A, with an “Orange Revolution” in 2004 and alternating regime changes between those leaning toward the US and those leaning toward Russia.  The Ukraine government prior to 2014 had chosen a more beneficial economic package from the East (China & Russia) over the offering from the West (US & EU).  China wanted access to the vast grain production regions in Ukraine and Russia wanted to continue historic business and trade relations.  After the 2014 regime change, Ukraine dropped the agreement with the East and turned to the West.  The grain fields were switched from China to US financial interests.  Many factories in Ukraine that had been part of the Russian supply chain lost their business and were no longer viable.

The 2022 grain deal by Ukraine, Russia, Turkey and the UN illustrates the complex situation.  The deal was sold to the UN on the basis that Ukrainian grain was needed to prevent starvation in the poor counties of the world.  However, most of the grain went to China and NATO countries.  The poor countries got less than three percent.  And most of the money proceeds from the sale of the grain reportedly went to a large US financial investor in Ukrainian farmland.  Furthermore, the West did not live up to its end of the bargain—refusing to implement the part of the deal that would have lifted some sanctions so that Russia could export fertilizer.  Once again, the West proved to be “not agreement-capable” from the Russian viewpoint.  Russian cancellation of the grain deal managed to annoy both China and NATO countries.  However, Russia said it would provide replacement grain to the poor countries free of charge.  Following the Ukrainian July 2023 attack on the Kerch Bridge, Russia basically blocked the Ukrainian ports, told all ships to stay clear, and bombed the port facilities.  The damage is apparently severe and will obstruct grain exports for some time.

Despite US efforts, the Ukraine War is not following the original script for Plan  A.  The Ukraine army is not making headway against the Russian defenses and is losing large numbers of soldiers and weapons.  The US failed to make allowances for the need to have an extensive factory backup to produce very large amounts of weapons and ammunition.  The West is unable to produce enough replacement weapons or ammunition.  Plan A failed to adequately consider the requirements of industrial warfare.  The NATO meeting in Vilnius was a disaster from the standpoint of Ukraine.  NATO basically told Ukraine that it could not join NATO until after Ukraine won the war, and that Ukraine needed to win soon because the NATO funding and support for the war will likely run out at the end of 2023.  This essentially means that Ukraine will lose the war and not join NATO.  An explanation of the US hesitancy in sending more advanced weapon support to Ukraine can be found in the Biden & Co. announcements that the US does not want a war with Russia.  However, another reason is that the US does not want its more advanced weapons to be blown up or captured by Russia.

US Plan A contained a second component in addition to that of industrial warfare, which could generally be called financial warfare.  This entailed the well-known sanctions efforts against Russia, trying to prevent Russia from using the US credit card systems, the SWIFT money transfer system, and other such financial systems.  The US & EU also prevented Russian commercial plane flights to Europe and America, prevented export of critical materials and technology to Russia, harassed Russian businesses, and tried to confiscate some $300 billion of Russian assets.

Unfortunately for the US, neither the industrial nor the financial warfare has had the desired or expected impact.  The US is losing its proxy war in Ukraine, the US weapons appear to be inferior compared to the Russian ones, and the US factories cannot cope with industrial warfare.  Videos show the Western weapons burning up—which does not help sales of US & EU weapons to the Global South.  As for financial warfare, Russia has developed alternative systems to replace the Western ones, and conducted a massive import substitution program.  Contrary to expectations, the sanctions have had perverse impacts and actually benefited Russia.  The Global South is becoming leery of holding assets in the West, or being too dependent on Western imports or systems.  There is a world-wide movement toward de-dollarization.  It looks like the US Plan A is now failing on both the industrial and financial warfare fronts.

Plan B

There is little evidence that the US had a Plan B.  There should have been a sophisticated analysis of potential blow-backs, side-effects, boomerangs, and possible outright failures of Plan A.  Something similar to an Environmental Impact Statement should have been prepared.  A “Conflict Impact Statement” would have analyzed alternatives to the proposed action, as well as the potential side-effects of each alternative.  It is unclear whether anything like this was produced.  However, it is unlikely that many American politicians, steeped in exceptionalism and hubris, would have considered a backup plan necessary or desirable.

Nevertheless, as the looming failure of Plan A in Ukraine becomes more visible, some tentative alternative arrangements are surfacing.  One such proposal is to give Ukraine some sort of security guarantee similar to the implicit one provided by the US to Israel.  This idea is short on details and it is difficult to see how it would apply or be implemented.  No NATO country shares a border with Israel, Russia does not share a border either, and Israel is reported to have a good stock of nuclear weapons.  Another proposal is to have a cease-fire at the current line of contact, and set up a division of Ukraine as was done in Korea.  Again, it is difficult to see this working in practice, for Russia would still have a NATO proxy on its border and still have neo-Nazis and a Ukrainian army next door.  It would be doubtful if Russia would agree to something so far removed from its proposed European Security Architecture.  A third possibility mentioned is for Polish and Baltic State troops to actually enter the battle in Ukraine to offset the loss of  Ukrainian troops.  Poland would essentially occupy the western part of Ukraine and the war would end in a stalemate.  Russia has already told the Poles to not even think about it.  A fourth proposal is simply to continue the “narrative” that Ukraine is winning the war and at the same time to negotiate secretly with Russia to end the fighting.  This is a version of “declare victory and go home.”  Obviously, this would be very difficult to carry out.

In any event, these are limited proposals and do not deal with the overarching US vs. Russia contest.  With the benefit of hindsight, Plan A should have included provisions for re-shoring factories capable of carrying out industrial warfare and for research and development of hypersonic weapons.  A belated effort now to address the problems is probably too little and too late.  As for financial warfare, scholars had previously pointed out that sanctions seldom brought about regime changes and mostly hurt the common people.  Sanctions hasten the development of domestic replacement of the sanctioned items.  The lack of factories in the US and the lack of hypersonic weapons in the US should have been readily apparent in 2018 when Russia announced its new stock of “wonder weapons.”  Instead, there was initially a current of disbelief in the US that Russia was capable of such a game-changing move.  However, by December 2021, when Russia issued its Non-Ultimatum on Ukraine, the US had admitted that it was way behind in the arms race and was instituting a crash program to obtain hypersonics.  So between 2018 and 2021, the evidence was mounting that Plan A rested on very shaky ground.  The National Security Council (NSC), Defense Intelligence Agency (DIA), and Central Intelligence Agency (CIA) should have been warning high US officials of these facts.  Whether this was done is an open question.  Perhaps the analysts tried, but middle management did not want to be the bearer of bad news.  Alternatively, officials at the very top were briefed, but decided to ignore the warnings.  Whatever the case, the US went ahead with Plan A and now finds itself in a generalized fiasco.

A British general, Bernard Montgomery said: “Rule 1, on page 1 of the book of war, is: Do not march on Moscow.”  Napoleon tried it, Hitler tried it, and now Biden & Co. has tried it.  The Russians ended up in Paris, the Russians ended up in Berlin, but the Americans still have time for taking an off-ramp.  The Americans should be ruing the day that they did not take advantage of the Russian Not-Ultimatum of December 2021.  The reason is that the US still had time at that point to save at least part of its financial hegemony in the world and to jettison some baggage that was no longer useful.

Plan B — What Might Have Been Done

Going back to the period 2018-2021, a US effort to compete in industrial warfare would have required a long time to bear fruit, and an attempt to catch up in the arms race was likewise dubious.  However, the US was still in a position to engage in a “stealth” financial warfare competition, but this would have required following a set of nearly opposite or reverse policies.  The key was to support the world-wide use of the US dollar by providing incentives, rather than the disincentives that were actually imposed.  The US dollar was the number one world transaction currency, the number one central bank reserve money, and the US financial systems were number one in the world.  The trillions of US dollars held outside the US amounted to “free” money for the US and every effort should have been made to encourage other countries to hold and use US dollars.  Unfortunately, the US resorted to bullying and sanctioning other countries, which did exactly the opposite.  The US actions promoted de-dollarization.  The US passed up an opportunity to deal with its competitors by “killing them with kindness.”

A crucial factor in financial hegemony is the role of the US dollar in world trade and central bank reserves.  The  currency is used to grease the wheels of commerce throughout the world, and the US dollar is the standard for listing prices and publishing economic statistics.  When the US went off gold during the Nixon Administration, officials were prescient enough to arrange support for the dollar through Saudi Arabian oil.  Saudi oil was to be sold only in US dollars, thus the tag “Petrodollar.”  Unfortunately, later US administrations undertook activities that undercut the prime role of the dollar.  Plan B should have involved extensive and sophisticated efforts to support the use of the dollar, with the understanding that excessive reliance on Saudi oil was not a viable long-term proposition.  Support could have taken the form of encouraging all countries and enterprises to use the SWIFT money transfer system.  SWIFT should have been turned into a truly international operation with a board of directors having a fair representation from around the world.  The US should have given up control and allowed a truly neutral management to take over.  The same procedure should have been applied to credit card systems and other financial mechanisms to encourage the continued flow of dollars throughout all countries.  Instead, the US used sanctions to weaponize both SWIFT and credit card processing, with the result being the development and use of competing systems that do not need the US dollar to function.

In addition, the West never should have tried to confiscate Russian assets abroad, including the supposed $300 billion of Russian monetary reserves.  Seizing the yachts of Russian owners was a juvenile publicity effort similar to the “Freedom Fries” silliness during the Iraq War.  These and other such actions only served to undercut the reputation of the US concerning respect for property rights of foreigners.

Another area that Plan B should have covered is the storage of gold.  Over the years, many governments and banks sent their gold to the US during wartime for safekeeping.  Some of this gold was stored in the legendary Fort Knox, along with US gold holdings.  This function called for the utmost in honesty and transparency.  The US should have advertised itself as the “Safe Deposit Box for the World,” and then lived up to the marketing hype.  Any gold on deposit should have been returned at once on demand to the foreign owner, with the correct serial number on the bars and with careful checking that no gold had been miraculously turned into tungsten while on deposit.  In addition, the Safe Deposit Box should have been open to realistic audits by international experts in order to quell any unfortunate rumors.  The US dollar is supposed to be backed by the full faith and credit of the US Government, but if serious doubts are raised about the probity of US gold safekeeping, then that faith and credit will also be called into question.  Plan B should have also covered the issue of dealing with a foreign nation’s gold in the event of war or revolution which involved the US.  The rumors of missing gold in Iraq and Libya are examples of a seeming lack of proper procedures.

These ideas merely scratch the surface of potential measures to support the dollar.  Other obvious ideas concern the national debt, the federal budget, inflation, and an examination of the histories of empires.  A Conflict Impact Report would have analyzed all these and other alternatives and methods in detail so that an informed decision could be made.

Conclusion

As early as 2018, informed observers could tell that the US Establishment strategy for dealing with Russia (Plan A) was unlikely to succeed.  The reasons were: 1) The US lacked the factories necessary for an industrial war, 2) The US lacked advanced weapons to counter Russia’s hypersonics, and 3) The US reliance on sanctions would prove counterproductive.  At that point, the US should have gone to a backup or alternative strategy (Plan B), but no such plan seemed to be available.

There was a potential, but unwritten, alternative strategy: To support the US dollar by adding additional measures to compliment the earlier Petrodollar scheme, and to eliminate measures that weakened use of the dollar.  Unfortunately for the US Establishment, the US went ahead with Plan A, with the result that it not only failed to sink Russia, but also mostly ruined any chance for a realistic Plan B.  As it stands now, the US is facing another military debacle in Ukraine, a resurgent Russia, a collapsing US domestic environment, and a Global East and South leaving the West behind.  To make matters worse, one might say that there is no alternative being considered publicly that might work.

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