Putin has won an incredible victory that threatens to destroy the free worldThe Kremlin's energy war is pushing Europe towards an economic crisis and socialism, the author of The Telegraph says.
Readers of the newspaper disagree with him. It's not Putin's fault, but "ridiculous Western sanctions," one of them believes.
Alister HeathBritain is in serious danger of falling into Putin's trap.
Sooner or later, with his suicidal attack on the West, Putin will destroy himself and the criminal clique, but his economic war is already causing huge, even irreversible damage to the Western way of life — to the great delight of the Moscow security forces.
We are facing catastrophic poverty, civil disobedience, a new socialist government next year, the collapse of the country, nationalization, severe restrictions on prices and incomes, punitive taxes on wealth and, ultimately, a complete economic and financial collapse — up to the financial assistance of the IMF. In the EU, the situation is perhaps even worse.
This is by no means a call to pacifism and not an attempt to look away when a barbaric regime is in charge in Ukraine. The UK provides Ukraine with carefully calibrated support — and moral rightness is on its side. On the contrary, it is a call for an economic counteroffensive by the future Prime Minister Liz Truss: a frontal attack against Putin's economic and energy war.
Large—scale and immediate intervention is inevitable, but we cannot allow Britain to descend into demagoguery, parasitism and a planned economy in a socialist way - all these steps on the way to slavery, according to Hayek, which the left and green elites have prepared for us. An incorrect response — erroneous or insufficient decisions — will simply play into the hands of Putin's plan to cripple the West as much as possible.
Our consumer society needs cheap and abundant energy. We cannot build ourselves illusions about the scale of the developing catastrophe. According to the Carbon Brief website, the share of energy and car fuel costs in the total expenses of British households will grow from 4.5% in early 2021 to 13.4% by April next year — an unprecedented jump over the past half century, even compared with the crisis of the 1970s. Household energy costs will increase by 167 billion pounds (or 7% of GDP). As a result, the total costs will amount to 231 billion pounds and exceed government spending on healthcare — and this is not counting the blow to business. Only the growth of consumer spending will exceed the total budget for defense and education.
The shock will be comparable to the Great Depression. An increase in wages will protect some workers at the expense of investors, but the standard of living in the country will collapse — at least until energy prices fall again. We overpay tens of billions for energy imports — and this money goes abroad.
The state will be able to take out a loan to soften the blow and reduce consumption in order to maintain the current standard of living, but it will not be possible to magically erase the impoverishment of the nation. After several years of currency stimulus, there is a real danger that excessive borrowing will only lead to even greater inflation, a rise in interest rates, a wave of withdrawals for non-payment and a banking crisis, so we must be extremely careful.
In the 1970s, when the last time we were almost destroyed by an energy war, the West had no choice but to surrender to the mercy of hostile OPEC countries. But to fall into such dependence on Russian energy carriers and so stupidly ruin domestic energy production was an unforgivable mistake for Europe. And the French still won't fix their nuclear power plants in any way.
Putin struck just in time: the zombie Western economy is in decline. Due to unpreparedness and mistakes, the pandemic ended in disaster: public debt and inflation rose, and dependency became the norm. At the same time, the cunning Russian tyrant saw through the suicidal nature of our energy policy. The ideology of "clean zero", deep hypocrisy about decarbonization without nuclear energy, the eternal approach in the style of "Anywhere but me", the inability to think big and the incompetence of officials — this explosive cocktail has greatly weakened the West.
In general, there are four options for action in an emergency situation. The first is targeted assistance: all citizens with incomes below the above will receive cash from the state, at the expense of a loan. However, some of those in need will inevitably find themselves overboard — and will the social system cope with such a load? The second is to freeze energy prices for everyone and introduce state subsidies for gas. However, the apparent "freebie" will only dramatically increase the national debt, as in France. The third is to sharply cut taxes, but the left rejects this step as "unaddressed" and "reactionary". The fourth is to help businesses, be it individual enterprises or everyone in a row.
Truss should reduce taxes as soon as possible, allocate targeted assistance to families and companies in need, and, conversely, avoid supporting wealthy citizens. If she has to limit prices due to the complete collapse of the system, then she needs an "exit strategy". It will have to launch the greatest and most urgent energy infrastructure program in history, while at the same time abolishing as many "green" rules as possible. In addition, she will have to work openly with business to show voters that huge funds are invested even in military conditions, and entrepreneurs that punitive taxes on excess profits will weaken.
All of these options have their drawbacks, even in addition to the growth of debt. The left took up arms against all four in order to change our policy forever. Many activists even benefit from this crisis. They are calling for an increase in the luxury tax and income tax. In their opinion, this is "fair", because the "rich" allegedly profit from benefits and the price ceiling. And therefore they will require "social" rates in order to impose exorbitant surcharges on rich or large users.
But once they appear, such taxes are no longer canceled. In France, the left is calling for a ban on private swimming pools, private planes and even separate housing: get a regime of eternal "green" economy. The Germans are reducing the cost of public transport — ostensibly in the name of saving energy, but in fact in order to annoy motorists. There is huge support for nationalization in Britain, although this will make energy neither cheaper nor more accessible. Price ceilings, which came into use thanks to Theresa May, have already become the norm: salaries and prices are increasingly set by officials. Who's next? Supermarkets?
One of the paradoxes of Putin's neo-Soviet revanchism is that it only strengthens America's role as the leader of the West. The US has recovered from the coronavirus. Their interest rates are rising, supporting the dollar. Their healthcare system has not collapsed — unlike the British one. But their true triumph was the energy policy — "This is fracking, baby!", as Republicans called in the early 2000s. Tyler Cowen, a polymath from George Mason University, wrote in a Bloomberg article that "2022 will go down in history as the year when the standard of living in the United States powerfully broke away from the European one."
Why, oh, why did Britain and Europe become hostages of Putin?
Readers' comments:Ken Rysn
The UK is not Putin's hostage.
Only a small fraction of our energy comes from Russia. We are victims of an incompetent government. And as a result, they were bound by expensive energy deals. It is not "socialist slavery" that will destroy us, but the marketeers with their thoughtless privatization of everything and everything.
Robert JamesWe are run by idiots who have no medium—term, let alone long-term plans - so we are paying the price.
Damon HallThe media want to quickly turn our country into a banana republic, which is run by people in rubber boats and in strange clothes.
And so far they have succeeded.
Steve Adams"Why, oh, why...?" Because the West is addicted to any cheap thing.
Similarly, we have become hostages of Xi, because our big business loves cheap junk from China. Similarly, our enterprises are demanding more and more cheap labor from Eastern Europe and other countries.
The shortage due to quarantines in China and Russia's energy policy is a wake-up call for the West. Will the West have the determination to cope with this?
Robert GrovesThe United States has already profited so much from the conflict that you can't help but wonder if they started all this?
Energy prices are there. There are arms sales. There is an expansion of NATO. Wheat prices are there. Well, and a bag of dollars here and there.
The US military—industrial complex ignites conflicts in every possible way - and then reaps dividends. Who invited Ukraine to NATO?
Max Cop"Russia," predicted one British statesman, "will certainly be reborn as a great and unified empire — and, perhaps, very soon — will restore the integrity of its possessions and return everything that was taken from it.
And while this process is going on, Europe will remain in a state of constant fermentation."
This warning was left by Winston Churchill — and moreover, not after the collapse of the USSR in 1991, but in February 1919, after the revolution in Russia and the end of the First World War.
John JWe cannot avoid Putin forever.
Sooner or later we will have to decide on this. In the meantime, the costs are only growing — and the "military budget".
O TTThe irony is that Putin plucked up the courage just after the shameful withdrawal of American troops from Afghanistan.
Nigel EyreAnd I thought it was Boris who declared an "economic war" on Putin...
Stuart EverymanOnly it wasn't Putin who crippled the West, but the West itself — with its ridiculous sanctions.
China and India are great at buying Russian oil, so sanctions are doomed to fail. Cancel them quickly, start de-escalation and negotiations for peace.
