(Click on image to enlarge)
Political Will
You have no idea how trade works, do you?
There are people out there who will buy your stuff when they know they can sell it on with a profit.
That’s just how it is. Was. And always will be.
— Koskovics Zoltán (@KoskovicsZ) September 15, 2024
Brooks: “When someone tells you that sanctions can’t and won’t work, that’s basically pro-Russian propaganda. Are we seriously to believe that nothing can be done to stop the shameful flood of transshipments to Russia via Central Asia? Come on. This is just about a lack of political will.“I am pretty sure that “someone” is me because we have gone round and round on this.When someone tells you that sanctions do work. Ask them for evidence.
Didn’t you declare victory on these sanctions?
Here’s the deal: China and India will always buy. And they should. It’s in their best interest.
— Mike “Mish” Shedlock (@MishGEA) September 18, 2023
A Cynical Discussion
Robin, it’s hard not to be amused about your inability to learn anything.@robin_j_brooks
Lesson of the Day: Sanctions Don’t Work Because They Create New Marketshttps://t.co/AWr8QqDLIw https://t.co/eZl1igDfqN
— Mike “Mish” Shedlock (@MishGEA) September 10, 2024
Other Replies to Brooks(Click on image to enlarge)
My favorite reply to Brooks was: “Is this satire?”A close runner-up is “You have no idea how trade works, do you?”The unfortunate answers are No, and Yes, in that order.Thanks to @USRoute41, @Grizzen13, @robin_j_brooks, @KoskovicsZ
Capital Flows
“In this age of global capital flows sanctions don’t work.”
Give this man a cigar!
Heck, even without flows or where flows are minimum, when have sanctioned ever worked?
— Mike “Mish” Shedlock (@MishGEA) September 10, 2024
Point Worth Discussing
But doesn’t it take a lot of time to develop those new markets, the opportunity cost is still significant. And some things like technology can’t be duplicated–at least not as effective or efficiently.
I read an article about Tether and that is definitely a new market, as you say
— Grizzin13 (@Grizzen13) September 10, 2024
What About Time?Thanks for an excellent question. Time is an excellent point worth discussing.First, please note that we did not drive Castro out of Cuba, Maduro out of Venezuela, get Iran to back off nuclear weapons, or get Putin out of Ukraine.Recent sanctions did drive China, Russia, and India closer together.But we did impose short-term hardships on Russia. Russia had to develop new supply routes to India and China. That took time.But ultimately, who suffered more, Russia or the EU?And instead of western companies collecting insurance on tankers, Russia bought tankers from Greece. Brooks supported those insurance sanctions and now complains they are not working. What a hoot.In the case of Iran, Trump’s own advisors and the EU said Iran was honoring the agreement. Trump tore the agreement up, imposed sanctions, and now Iran is close to building a nuclear weapon. Perhaps Iran already has.The US put sanctions on China. So instead of China buying NVDIA chips, China has developed its own chip making capacity. Yep, China is still far behind, but is that a victory of sanctions? For how long?
When Trade Ends, Wars StartOne of the was the US cut off Japan’s access to oil and natural resources. War became inevitable. Japan chose to strike first.The US and China are in a global trade war. And the EU is on the verge of joining that trade war, egged on by the US.However, the end game is easy to spot. Either China will be successful at advanced chip production at a pace that satisfies China, or China will move to take Taiwan by force.
All It TakesAll it takes is the political will of: Brazil, India, Germany, Poland, Greece, the US, Dubai (on NVDIA access), Australia (on NVDIA access), Poland, Italy, Austria, Hungary, and Kyrgyzstan.India and China also have to agree to pay higher than necessary prices for coal, natural gas, and oil.Q: Is that all?
A: NoThe EU is structured such that it takes unanimous agreement to enforce sanctions. So every county in the EU would have to have the “political will”.To top it off, hard enforcement would be to the detriment of many of the above countries.Thus, not only does Brooks fail to understand how trade works, he fails to understand how the EU works.
Sanctions Don’t Work Because They Create New MarketsSeptember 19, 2023:
A person who touted a buyer’s cartel sanction success, now complains the buyers cartel leaks like a sieve.
It seems we needed to review that.September 4, 2023:
Trump and Biden both tried to cut off China’s supply of advanced microchips. So China is now producing its own.
Yep, China is still far behind. But we prodded China to makes its own chips and they are of increasingly good quality. That will take time.December 29, 2023:
Unprecedented US and EU sanctions against Russia have had no impact on Russia’s oil exports or revenue. Who’s the beneficiary?
May 21, 2024:
Just three years ago, the Chinese company Xiaomi decided to build cars. It succeeded where Apple failed.
June 4, 2024:
The US is restricting China’s access to advanced microchips. The US will regret the move in one of two ways. China will become self-reliant or there will be a real war.
June 11, 2024:
Hello sanction lovers. What are you going to do about this?
August 26, 2024:
The US has blocked export of Nvdia chips to China. But where there’s profit, there’s a way.
When Have Sanctions Ever Worked?I cited Venezuela, Iran, Cuba, Russia, and China as examples of sanctions that failed.I then asked Brooks for examples where sanctions achieved the political goals.I am still waiting for a response from Brooks.
SynopsisPeople like Robin Brooks sit in their ivory towers, with no understanding of how trade works, no understanding of how the EU functions, oblivious to the message of the recent , oblivious to the message of the recent , oblivious to the message of the recent , oblivious to the reality that German Chancellor Olaf Scholz’s approval rating is a record low 18 percent (and why that is), then demand other countries pay a huge price when their leaders are getting booted for doing that, just to appease what Brooks in his ivory tower, at no cost to himself, thinks is fair, when citizens in the US would much rather money be spent here, and the overwhelming message from the EU is people are sick of the whole damn thing.Dear Robin Brooks, thanks for inspiring the longest sentence I have ever written.Now please study up on how trade works, how the EU functions (and doesn’t), and why sanctions don’t work. Then get the out of your ivory tower demanding others pay a huge price for your wishes when they, not you, are paying the price.More By This Author:Germany Back In Stagnation, IFO Leading Economic Indicator Sinks AgainHome Builders Are Sitting On A Lot Of Supply They Struggle To Sell 21 Million Renter Households Spent Over 30% of their Income on Housing Costs
