Jeb Bush has been sharing his thoughts with German leadership and the European press about Vladimir Putin and his aggressive moves on the Crimean peninsular. The New York Times reports Mr. Bush referring to the Russian president as a “bully” and Mr. Bush as saying that Mr. Putin’s moves should be dealt with “resolutely.” Mr. Bush believes that Russia will do what it pleases if left unchecked and Russia’s leadership, not its people should bear the brunt of the penalties issued by the West. Mr. Bush went on to define the appropriate response to Mr. Putin as one that should show the Russian president what the consequences of his aggressive actions would be versus a response that was warlike or “bellicose.”
It may be a bit too late to show Mr. Putin the consequences of his prior bad acts. According to a report in The Economist, Mr. Putin has gotten most of what he wanted and has given concessions to the West over the past year. Mr. Putin has formally annexed Crimea, introduced instability into Ukraine making the nation toxic enough for the United States to avoid, he has avoided serious economic sanctions, and his popularity has increased.
Heck, even some U.S. congressmen have expressed admiration for his boldness versus the passivity of President Barack Obama.
Mr. Bush’s views are vague which should come as no surprise given that the U.S. is under 17 months out from the presidential elections. What is also not surprising is that Mr. Bush’s views on Russia in general and Mr. Putin in particular are in line with other GOP hopefuls with the exception of probably U.S. Senator Rand Paul who has shown an aversion to anymore military adventures. Rather, I think Mr. Bush and his GOP posse should start treating Mr. Putin’s moves the way a corporation that loses a bidding war to acquire a company treat the new competition.
Let’s face it, that’s what Mr. Putin’s takeover of Crimea is. Mr. Putin calculated the rents he and his large state bureaucracy could receive from Crimea, including the claims to revenues stemming from the peninsular’s bank assets. Consider this quote from another piece in The Economist:
“In an era when most wealth comes in the form of financial securities rather than physical resources, wars of conquest would seem to be a losing proposition. Why take over territory, when its value pales in comparison to that of a few credit default swaps? The Russian treatment of Ukrainian banks in Crimea suggests an answer: the conquest of physical territory can be leveraged to acquire financial assets, such as claims to revenue from car leases.”
That Mr. Putin was able to conclude that the discount rate applied to the future rents stemming from the invasion would not be increased by a high risk premium showed his prowess in assessing America’s lack of clout with Europe and the distraction in the Middle East. It’s simply too late for Mr Obama or the next president to jack up the risk premium on Crimea. As discussed earlier, Mr. Putin already has what he wants.
If Mr. Bush became president, he would be stuck making the same half-assed moves as the current president. He could try to make Mr. Putin’s newly obtained assets toxic by trying to disrupt Russia’s energy markets, but the big buffer would be America’s European allies who are more dependent on Russia’s oil exports than the U.S. Expending the political capital necessary to get Americans to go along with any moves against Russia would require that Mr. Bush persuade the public that what Russia does in Crimea directly threatens U.S. citizens, an argument neither he, Mr. Obama, or any declared or undeclared candidates have yet to make.