Last week we solved the problem of reforming a defective Affordable Care Act in a simple and brilliant manner. Alas, not all the changes Americans want – and voted for – will be so simple to effect. For example, let’s turn to:


Although President Obama entered office promising to “reset” America’s relations with Russia, he left office with Russo-American relations at their lowest point since the Cold War. Given the importance of Russia to American interests in Western, Central and Eastern Europe, to our interests in a volatile Middle East, and to our interests in containing China, this was a diplomatic failure of large proportions. And we’ve paid a large price, especially in Ukraine and the Crimea, in Syria, and in the recent US Presidential election.

Of course, it wasn’t all America’s fault. Vladimir Putin is an autocratic, volatile leader whose aggressive actions in Georgia and the Crimea infuriated the Obama Administration, as well as the leaders of most countries of Western and Central Europe. This led to the imposition of economic sanctions on Russia and on individual Russian officials, which undercut a Russian economy that was already reeling from the drop in oil prices and which, of course, led to a further decline in relations.

But just for the hell of it, let’s try to look at Russia’s actions not through the annoyed lens of America or democratic Europe, but through the much darker and apprehensive lens of Russia itself. And let’s use as our guiding spirit the notion that nations, like people, tend to behave badly when they are threatened. Russia is, to be sure, paranoid, but even paranoid nations have enemies.

Ever since the Russian state was formed in the 9th century, Russia has been surrounded by powerful enemies who, should they take a mind to invade Russia, have had few geographical obstacles in their way. No sooner had the Russia state arisen, for example, than it was invaded and destroyed from the east by the Mongol Golden Horde. In more modern times Russia has been repeatedly invaded from the west by the likes of Napoleon and Hitler.

Today, Russia continues to be surrounded by enemies. To the west sit the great Western European nations, among the wealthiest and most powerful countries in the world. To the southwest lies the MENA Region (Middle East North Africa), a hotbed of radical Islam so threatening to Russia that Putin  has entered the Syrian Civil War on the side of Bashar al-Assad and against ISIS. To the southeast lurks China, Russia’s ancestral enemy. Just off the Russian southeast coast sits Japan, with whom Russia fought a war in 1904-05 and again in 1945. Oh – and 55 miles across the Bering Sea to the east sits the biggest, baddest enemy of them all, the United States of America.

You might suppose that America’s leaders, being, surely, astute students of history and geopolitics, might conclude that maybe Russia was feeling threatened enough. And you might especially suppose this because, once the USSR collapsed and Russia lost its Central European colonies, Russia was no longer in any position to challenge the US for global hegemony. Russia’s population is not even half of that of the US (and is declining) and its economy is a mere one-thirteenth that of the US.

But if you supposed these things you would be wrong. No sooner did the late, unlamented Soviet Union collapse than the EU began gobbling up former Soviet satellites. And in case Russia didn’t get the message, many of those former satellites promptly joined NATO, a military alliance whose only real purpose is to face off against – you guessed it, Russia. German and Belgian (NATO) troops are now in Lithuania, the US military (NATO) is in Poland, Canadian (NATO) troops are headed to Latvia, and British (NATO) troops are heading to Estonia. If you look at military map of Europe, it looks like a giant pincer aimed straight at Russia’s heart.

While we’re at it, let’s not forget that it was NATO’s pledge to expand into Georgia that set off Russia’s invasion of that country. And it was the West’s encouragement of the so-called Euromaidan Revolution in the Ukraine – which, by the way, overthrew a democratically-elected leader and which had virtually no support from eastern Ukraine – that led to Russia’s annexation of the Crimea.

And as a not entirely irrelevant aside, while many western Ukrainians no doubt legitimately believed in the Euromaidan movement, some of its instigators were anti-Semitic neo-Nazis. Among the largest political parties supporting Euromaidan was the ultra-nationalist Svoboda party, whose leader called for the liberation of his country from the “Muscovite-Jewish mafia.” Americans and Europeans, drunk on our post-Soviet triumph, looked the other way.

In case some of my readers might imagine that I’ve become an apologist for bad Russian behavior, I have one word for you: Cuba. If you want to know how a glorious liberal democracy like the US responds to feeling threatened, let’s walk back in history to 1959, when Fidel Castro and his band of fashionista revolutionaries overthrew Cuban President Fulgencio Batista. A mere two years later, terrified by what was happening on this tiny Communist island, America launched the Bay of Pigs invasion, designed to overthrow Castro.

The invasion failed miserably – I served in the US Army with men who fought at the Bay of Pigs and who couldn’t stop talking about how they were “sold out” by the Kennedy Administration. But trying to invade a sovereign nation wasn’t enough for us. A mere year later the US was so unnerved by Cuba that President Kennedy took the world to the very brink of nuclear annihilation over the island. Putin’s behavior has been annoying, to be sure. But we have short memories about our own behavior.

Donald Trump also claims to want to “reset” relations with Russia, and I have no idea whether he will succeed or not. But this is one of those “changes” that has nowhere to go but up.

Next up: Loose Change, Part 5

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Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.

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