WHY NOT GO FULL THROTTLE WITH SANCTIONS AGAINST RUSSIA?

The White House announced further sanctions today, against seven individuals and seventeen corporations that have particularly close ties to Russian President Vladimir Putin.  In the past, some politicians and political commentators have suggested that the sanctions are too little, too late.  They also ask why the U. S. doesn’t turn-up the heat all the way–and NOW?

Here’s where it is necessary to take reality into account.  Consider the following:
1.  The Russian Economy is already a basket case. Unfortunately, most Russians, who have embraced National Pride over their Country’s Military Operations in Ukraine, just haven’t realized their Country’s economic desperation yet.  We do not want to unduly punish the Russian People!
2.  Stiffer U. S. sanctions, on a unilateral basis, would not work.  U. S. Trade with Russia in 2012, for instance, was only US$ 28 Billion, as compared to European-Russian Trade amounting to US$ 370 Billion.  It would be a minor change–a gift–for European businesses to pick-up business at the expense of their U. S. counterparts.
3.  It is always wise to hold-back some options in a “game” of posturing.  If one side shows all of its cards up-front, then it has nothing more to bargain with afterward.

I believe that the gradual, calculated strategy, which President Obama is currently using, will be the best after all is said and done. The intelligent, reserved Barack Obama will show the pompous, shoot-from-the-hip Vladimir Putin how Poker should be played.

NOTE: As an analogy, during the eighteen months of the Great Recession (4Q07-1Q09), there were concerns that, since the FED had already lowered interest rates to virtually nothing, it had no more “bullets” left to revitalize the Economy.  That appears to be the case today as to how the situation is currently being played-out in Ukraine, between Obama and Putin.

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