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The EU-IMF Economic Agenda for Ukraine

US Imperialism and the Ukraine Coup

by JEFF MACKLER

The recent Ukrainian Maidan (Independence Square) mobilizations are a grotesque caricature of the mass protests of workers and youth in Egypt that led to the demise of the U.S.-backed dictator, Hosni Mubarak.

At the recent Kiev “mass mobilizations” of 250,000 that drove Ukrainian President Viktor Yanukovych out of the country to seek refuge in Russia, the best organized forces were those of the fascist, anti-Semitic, hyper-nationalist groupings—most prominently, the Svoboda (“Freedom”) Party, which traces its roots to the pro-Nazi Social-National Party of World War II.

These armed, club-wielding, and often Molotov-cocktail bomb-throwing beasts had been let loose by the rump Fatherland Party “opposition” Ukrainian parliamentary oligarchs. And this was accomplished with the complicity, if not overt support, of U.S. officials, who likely seized on the charge (now highly suspect) that Yanukovych had employed snipers to attack and murder 89 demonstrators and wound 100 others on Feb. 20 as the perfect moment to shift the debate over a European Union vs. Russian “trade agreement” toward a violent mobilization for Yanukovych’s removal.

A now confirmed taped phone call between the Estonian Foreign Minister Urmas Paet and European Union Foreign Affairs Minister Catherine Ashton, originally reported by a Russian press agency and then in the British Guardian and other newspapers, reveals Paet’s view that forces among the Maidan protesters had orchestrated the deadly sniper fire on Feb. 20. Paet stated in the taped conversation that “the same snipers [were] killing people from both sides. … There is now stronger and stronger understanding that behind the snipers, it was not Yanukovych, but it was somebody from the new coalition.” The call took place after the Estonian foreign minister had visited Kiev on Feb. 25, at the height of the Maidan protests. The Estonian government later denied that Paet “was giving an assessment of the opposition’s involvement in the violence.” There is little doubt, however, that U.S. officials have applied pressure on the Estonians to “reinterpret” the tape.

While the full truth may never be revealed, it is unquestionable that U.S. imperialism has never rejected using manufactured “smoking guns” to achieve reactionary ends. Need we refer to Saddam Hussein’s “weapons of mass destruction” and the Vietnam-era “Tonkin Bay incident,” both of which were consciously manufactured by the U.S. government to justify the mass murder of the people of Iraq and Vietnam—in the latter case 4 million Vietnamese? Even today, reports by independent investigators question U.S. intelligence allegations that Syrian government missiles carrying deadly sarin gas killed hundreds of civilians.*

This rump Ukrainian government, convened without the presence of Yanukovych or his Party of the Regions, cleared the streets of the official police and military in order to give free rein to the extreme right. The tiny handful of revolutionary socialists who were present, intent on trying to present a working-class and socialist alternative to Ukrainian and Russian capitalism to workers who had legitimate grievances against government corruption, violence, and the selling of Ukraine to the highest bidder, included a few Ukrainian members of the Fourth International. They and other socialists were run off the streets, their flyers torn to shreds.

Evidence of the reactionary nature of the new Ukrainian regime appears in a March 5 on-line British Channel 4 news account: “The man facing down Putin’s aggression as secretary of the Ukrainian National Security and Defence Council is Andriy Parubiy. He oversees national security for the nation, having previously served as security commandant during the anti-government protests in Kiev.” Channel 4 identifies Parubiy as a member of Svoboda and a founder of its pro-Nazi predecessor, the Social National Party. Moreover, “overseeing the armed forces alongside Parubiy as the Deputy Secretary of National Security is Dmytro Yarosh, the leader of the Right Sector—a group of hardline nationalist streetfighters, who previously boasted they were ready for armed struggle to free Ukraine.”

Other Svoboda leaders in the top echelons of the new government include Deputy Prime Minister Oleksandr Sych, Ecology Minister Andriy Mokhnyk, Agriculture Minister Ihor Shvaika, and acting Prosecutor General Oleh Makhnitsky.

Top U.S. officials visit Kiev

U.S. Republican Party firebrand and former presidential candidate John McCain had paid a previous visit to the Maidan, sharing the stage with Svoboda’s anti-Semitic leader Oleg Tyahnybok. McCain tried to rouse the crowd with cries of “democracy” and promises of “freedom and independence”—American style. But “democracy” was to be granted only after the looting government of oligarchs had approved the austerity terms that came with the European Union’s (EU) proposed “bailout” package, called the “Association Agreement.”

U.S. Assistant Secretary of State for Europe Victoria Nuland also participated in the protests—to pass out cookies, no less—in a well-orchestrated imperial stage-crafting effort to present the United States as a nation with the most benevolent and generous of intentions. She had previously boasted about U.S. funding of the “democratic opposition” to the tune of $5 billion over the past 10 years, not to mention the creation of some 40,000 NGOs to spread the “democracy” of U.S. imperialism.

Nuland has since become famous for her off-the-cuff “Fuck the EU” statement, which has been circulated by bloggers around the world. A Russian surveillance team caught her red-handed in denouncing the European Union negotiating team for its deal with former President Yanukovych. Nuland’s Russian-acquired exchange with U.S. Ambassador to Ukraine Geoffrey Pyatt called for the U.S., rather than the EU, to determine who would compose the new Ukrainian government. Yanukovych’s agreement with EU top officials from Germany, France and Poland, his third reversal regarding who would plunder and subject his country to imperial control, had him appointing top opposition leaders to major government posts. Nuland disagreed with key appointments, indicating that “Yats” was to be the U.S. choice. Indeed, “Yats,” or Arseniy P. Yatsenyuk, is today’s Ukrainan Prime Minister. Nuland preferred figures who had shown themselves to be loyal to Western interests and to IMF-type austerity.

If there is a “war” in Ukraine today, it is to determine which of the imperialist Western powers will have priority “rights” in absorbing this nation of 46 million people into its orbit to become yet another sub-colony of imperialism, along with the other nine nations that two decades ago constituted the former Soviet Union and today are largely incorporated in Europe’s capitalist economy and military alliance, NATO. With the U.S.-instigated coup, Russian capitalism has been effectively marginalized as a player in the Ukraine.

Nuland’s apology for her poor choice of words was not accompanied by any apology for U.S. moves to dominate the future neoliberal exploitation of  Ukraine, as opposed to handing over this right to longstanding U.S. competitors—not to mention to the wannabe imperialist Russian President Vladimir Putin and his billionaire oligarch regime. He and his predecessors gave birth to the Russian oligarchy some 20-plus years ago when the USSR’s wealth and resources were stolen, with U.S. complicity, by the tiny layer of former Stalinist bureaucrats who now preside over capitalist Russia, today a minor player in the world imperialist configuration.

Assistant Secretary Nuland directed her ire not against Russia but rather Germany, France, and Poland—who brokered the deal as to the future composition of the Ukrainian government and the distribution of that nation’s industrial strength and rich and fertile agricultural resources. This was an unacceptable arrangement in the eyes of imperial America.

The irrefutably recorded discussions between Nuland and Pyatt revealed their choice of United Nations “glue,” said Nuland, to cement any Ukraine deal. In that scenario, the U.S.-handpicked and subservient UN Secretary General Ban Ki-moon would be called in to negotiate” the nation’s future, rather than a more pro-EU assortment of capitalist plunderers.

On March 4, U.S. Secretary of State John Kerry visited Kiev in a further attempt to shoulder aside EU competitors in a deal. Kerry offered $1 billion in loan guarantees to the Ukrainian coup-makers and promised to send in a host of U.S. “technical experts” to help re-align the country’s national bank and finance ministry.

In today’s game of re-dividing and re-colonizing the world, the Russians are bit players as compared to the U.S. imperialists and their not-too-happy lesser competitors in the EU, ever scrambling to maintain their perceived share of the booty extracted from their former colonies and new ones to be assimilated across Eastern Europe. At the level of military power, Russia’s less than a handful of bases outside its borders pales before the 1100 maintained by the U.S. around the world and another 1000 or so stationed in the U.S.

Today’s Russian billionaires are puny compared to the multi-trillionaire U.S. bankers who looted the U.S. Treasury (the term was “government bailout”) to the tune of some $30 trillion. This was accomplished with the absolute complicity of the subservient Obama administration, which is little more than the governmental mask or façade of America’s real ruling class. In the United States, according to Oxfam International, the wealthiest one percent has captured 95 percent of post-financial-crisis growth since 2009, while the bottom 90 percent has become poorer.

Yanukovych and his government’s original intention to resolve its virtual bankruptcy via the EU austerity plan momentarily gave way to Russian President Putin’s counter-offer of $15 billion in bail-out loans to the Ukrainian oligarchs—mostly former Stalinist bureaucrats themselves—which are peanuts in comparison to the $51 billion the Russians spent on the Sochi Olympic spectacle. The latter, aimed at glorifying Russia’s pretended emergence as a great power (it came in first in the medal total in Sochi!), was a trifle as compared to what U.S. and Western imperialism had to offer to buy Ukraine’s near bankrupt government and its workers and resources. The Russians’ subsequent offer to reduce the price of oil and gas by 55 percent to the heavily oil-dependent Ukraine was nearly instantly countered by EU pledges to substitute Polish coal and other fossil fuels.

The coup regime has also agreed to a deal with Chevron Corporation for large-scale shale-gas fracking operations in western Ukraine. The Yanukovich government, before its ignominious demise, had previously signed production-sharing agreements with Shell and Chevron. The U.S. Energy Information Administration reports that Ukraine has Europe’s fourth largest shale-gas reserves.

EU-IMF economic agenda for Ukraine

The original EU offer to Ukraine (the one that Yanukovych temporarily rejected on Nov. 21) had certainly come with strings attached. These debilitating conditions were outlined by Marilyn Vogt-Downey, a revolutionary socialist with a long career as an analyst of Ukrainian and Russian politics, in a Feb. 27 CounterPunch article entitled, “An Imperialist Invasion Without an Imperialist Army: Whither Ukraine?” Her assessment rings with a truth that has rarely entered the discussion.

Vogt-Downey suggested that Ukrainian President Viktor Yanukovych might have “easily calmed the rebellion in Independence Square in Ukraine’s capital Kiev early on if he had simply told the crowds the truth about what the Association Agreement with the European Union would mean to their lives and futures.” She pointed out that the “Free Trade section alone—removing tariff barriers and export duties—would convert Ukraine into one big “free trade zone,” where the anti-environment, anti-labor, and pro-business laws would prevail. … It would create the economic devastation of the type that NAFTA has created in Mexico.

Vogt-Downey said that Yanukovych might then have “gone on to outline what the pending IMF ‘financial aid package’ would do to further worsen their lives. ” She cited the Feb. 23 New York Times report on Yanukovych’s flight, which summarized what the “EU option” would mean. “The economy will remain the greatest problem facing the country,” The Times reported, and then went on: “The International Monetary Fund remains a potential source of financing to replace the $15 billion that Russia had made available before the protests. But that comes with an insistence on austerity and economic changes that will inflict considerable pain.”

Marilyn Vogt-Downey continued: “Considerable pain, indeed!! The IMF loans will require in Ukraine, as they do everywhere, that the government undertake broad-scale privatization of resources and basic public services, cut government spending on education, health care, pensions, housing, and benefits for the needy, as well as laws that hinder the accumulation and free movement of capitalist profits. And that’s just for starters. All this will further lower the wages and standard of living of the mass of the population of Ukraine, which are already lower than the European average.”

Vogt-Downey pointed out that Ukrainian acceptance of the Association Agreement with the EU and the IMF aid package would remove any semblance of independence for the country. She listed the following points to back up her thesis:

“1. It stipulates that Ukraine cannot accept any financial support from Russia.

“2. It would make impossible any Ukrainian economic planning that did not follow the guidelines established by the IMF and other imperialist lending agencies.

“3. Because of the nature of the IMF-imposed economic agenda, Ukraine would find it very difficult to ever escape the debt cycle. The IMF mandates, for example that capitalist profits be only minimally taxed, the government provide generous financial support and tax breaks for capitalist ventures, public services be privatized, and restrictions on transfer of capitalist profits abroad be minimal. As a result, it would be difficult, if not impossible, for any Ukrainian government to raise funds for basic institutions people need to live a quality life.”

“However,” Vogt-Downey continued, “Yanukovych could not say such things. It is not just that he is not a man of integrity. The problem is that during his time in power, he—like all the Ukrainian rulers since Ukraine became independent with the collapse of the USSR in 1992—had already been pursuing measures similar to those the IMF would impose. These include measures such as privatizing public resources, cutting public spending, cutting subsidies for major industries—leading to stagnation, non-payment of wages, and benefit cuts—and imposing market mechanisms.” And while the standard of living has fallen for the majority of the population, “politicians and their cronies have managed to considerably enrich themselves and acquire vast fortunes from resources that should belong to the Ukrainian working people.”

Russian troops enter Crimea

Despite the onerous conditions that it imposed, Yanukovych’s deal with the EU was initially approved by the parliament but quickly unraveled when the fascist-led and undoubtedly U.S.-instigated protests caused Yanukovych to flee, in his own words, for his life. In a matter of hours, Ukraine’s rump parliament changed course, adopted some 21 of the most reactionary and chauvinist laws imaginable, and effectively agreed to the terms imposed by the Western powers. The super-nationalist regime now in power even eliminated the Russian language as one of the country’s official languages, disregarding the fact that half of all Ukrainians speak Russian as their primary language.

Putin’s response was to send Russian soldiers to the Crimea, a semi-autonomous region of Ukraine where Russia maintains its Black Sea fleet via a lease that expires in 2045. The corporate media initially sounded the alarm, along with the new Ukrainian regime’s proclaiming that Russia has issued a “declaration of war.”

But the real war in Ukraine is over. U.S. imperialism and its subservient EU allies have won, at least for the time being—that is, until the Ukrainian working masses absorb the lessons of imperialist exploitation and organize independently of their capitalist oppressors everywhere, in the West and in the East. Indeed, the terribly poor Ukrainian people have already tasted the effects of Western “aid.” Eighty percent of all Foreign Direct Investment in that country has been from the West, with little or no tangible results for the Ukrainian people and billions in profits, as always, for the corporate investors and financial speculators.

Clearly, Putin is alarmed at the prospect of having a slavishly pro-EU and American regime established on Russia’s border. The Western powers are salivating at the possibility of establishing oil-drilling rights on Russia’s Arctic frontier, and perhaps eventually in Russia itself. But his momentary display of “power” by sending in some 16,000 soldiers to the Crimea, according to the new Ukrainian regime, is his version of imperial stagecraft, more akin to his Olympic victory than a military threat to Ukraine. Not a single shot has been fired to date. Putin is fully capable of compromising with Western imperialism in a deal that would require him to withdraw the troops in the not too distant future. Indeed, as of March 4, Putin was already in negotiations with Secretary of State John Kerry. In truth, the future of the people of the Crimea will be determined by their own independent and revolutionary mobilization as opposed to reliance on any capitalist power, West or East.

Putin had no problem voting for the UN’s “humanitarian” resolution that paved the way for the NATO/U.S. devastation of Libya and its subsequent sequestration of Libyan oil. We hear no Russian objections to the recent U.S. declaration to send an army of 5000 U.S. troops to Libya, with that nation now reduced to warring and out-of-control fundamentalist militias.

After a few rhetorical threats, the Obama administration made clear that it had no intention of going to war with Russia—a largely defanged and pathetic world power, although one with a nuclear arsenal. The worst that the Obama administration could threaten were possible economic sanctions or staging a boycott of the upcoming G-8 conference in Sochi.

Legacy of Great Russian chauvinism

Whatever threat Russia poses to the people of the Ukraine reflects its legacy of plunder and repression, beginning with the pre-1917 Tsarist era. This was interrupted with magnificent results immediately following the 1917 Russian Revolution, which guaranteed not only the right of self-determination to all of Russia’s former colonies but the right to independence and succession. The leadership of Lenin and Trotsky during this historic period brought enlightenment, solidarity, and equality between the Russian and Ukrainian peoples. But this was abruptly ended with the coming to power of Stalin and his counter-revolutionary bureaucratic regime.

Since that time, the Ukrainian people have once again been subjected to the brutal tyranny of Great Russian chauvinism, including after the break-up of the former USSR. The very same Stalinist core of largely Soviet-era bureaucrats-cum-oligarchs that dominated the Ukraine then still prevails today. They have continued the Stalinist policy of subjugating the Ukraine, today in the name of capitalism and aimed at the enrichment of the few at the expense of the many. This is central to understanding the receptivity to pro-Western propaganda of Ukrainians who have suffered greatly under both the grotesque caricature of socialism that Stalinism always represented and the present capitalism brought in by these same bureaucrats.

The absence of a mass revolutionary socialist alternative in Ukraine, as well as in the Middle East and worldwide, weighs heavily on the world’s working masses, who have proved capable of rising up in the tens of millions time and again against the most powerful of tyrants and dictators, only to suffer setbacks and defeats because an authoritative, deeply rooted, and revolutionary mass party of all the oppressed and exploited has yet to be constructed. This is the critical task for revolutionary-minded activists everywhere.

Vogt-Downey pointed out in CounterPunch that “what is unfolding right now in Ukraine is not a revolution but imperialist consolidation of the capitalist counterrevolution by imperialist finance capital and the army of international capitalist investors who seek unfettered opportunities to milk every ounce of profit they can from the Ukrainian working class and the resources in their territory.”

For the moment, U.S. imperialism, the central player in a crisis-ridden world economy in decay, has undoubtedly scored a significant victory in the Ukraine, again at the expense of the working masses. Opposition to U.S. imperialism in all its manifestations must be a top priority of any successful antiwar movement.

Ukraine demonstrates in bold relief that oppression and exploitation can be achieved in more ways than overt military intervention. Privatized death squads and drone warfare around the globe, surveillance of the world’s people and the corporate media’s manufacture—Orwellian style—of a pseudo-democracy in America that masks mass murder, racism, and plunder everywhere are also in today’s imperialist arsenal. The imperial beast takes many forms, all aimed at advancing, by any means necessary, the interests of the ruling-class minority.

 Jeff Mackler is the National Secretary of Socialist Action: jmackler@lmi.net  socialistaction.org

*A Jan. 15 McClatchy news report states, “A team of security and arms experts, meeting this week in Washington to discuss the matter, has concluded that the range of the rocket that delivered sarin in the largest attack that night was too short for the device to have been fired from the Syrian government positions where the Obama administration insists they originated.”

In the report, titled “Possible Implications of Faulty U.S. Technical Intelligence,” Richard Lloyd, a former United Nations weapons inspector, and Theodore Postol, a professor of science, technology, and national security policy at the Massachusetts Institute of Technology, argue that the question about the rocket’s range indicates a major weakness in the case for military action initially pressed by Obama administration officials.