Indeed, sanctions are a double-edged weapon, and if the U.S. chooses to freeze our assets, then our equities and liabilities in dollars will also be frozen. This means that our banks and businesses will not return the loans to American partners.” (Sergey Glazyev, a Putin economic advisor, told the Voice of Russia radio)
In response to Russia’s annexation of Crimea, the Obama administration responded by levying sanctions. The spin machine has been running nonstop at the White House, claiming these are “the toughest sanctions against Russia since the Cold War.”
But the Russians have responded with sustained laughter. The hapless Obama looked like a robot as he read, “We are imposing sanctions on specific individuals for undermining the sovereignty, territorial integrity and government of Ukraine.”
He sounded unconvinced as he scolded Putin, saying “We are making it clear that there are consequences for their actions.”
The truth is that the sanctions are insignificant, and they’ll have no economic impact whatsoever on Putin. But Obama’s earlier decisions make it impossible for him to do more, and they show that the president is in fact more vulnerable than Putin.
Meanwhile, conservatives aren’t the only ones judging Obama’s response as weak. The liberal Washington Post called the sanctions a “slap on the wrist.” The problem is that they only sanction individuals, not institutions or the Russian government itself.
On the other side of the aisle, FOX News commentator Charles Krauthammer depicted Obama’s reaction as “humiliating.” He rightly told his audience that the Russians were ridiculing Obama while the entire world watches.
One of the targeted Russians, Deputy Prime Minister Dmitry Rogozin, tweeted for all to read, “Comrade Obama, what should those who have neither accounts nor property abroad do? Have you not thought about it?” (a threat?)
The real tragedy is that Obama hasn’t thought about it. The list of targeted individuals was all wrong. Several of the targeted people are actually Putin’s opponents. As Chris Agee from the Western Center for Journalism reported, there’s a real disconnect concerning the people targeted.
Agee wrote: “Leonid Slutsky and Valentina Matviyenko both held positions of power in Russia until they fell out of favor with Putin. Furthermore, Andrey Klishas is reportedly feuding with a Putin ally. The final Russian official facing U.S. sanctions, Yelena Mizulina, likely made it on the list due to her anti-gay policy positions, rather than any connection to Ukraine policy.”
And that’s not even the worst part. You see, the sanctions may actually hurt Americans, too, which proves my Obama deduction that “Obama only takes actions that hurt America.”
Sergey Glazyev, a Putin economic advisor, told the Voice of Russia radio that Russia would have to switch to other currencies to curb its dependence on the U.S. dollar; and sanctions he threatened could prevent Russia from repaying loans extended by American banks.
“We have wonderful economic and trade relations with our Southern and Eastern partners,” Glazyev emphasized. “We will find a way not just to eliminate our dependence on the U.S. but also profit from these sanctions… Indeed, sanctions are a double-edged weapon, and if the U.S. chooses to freeze our assets, then our equities and liabilities in dollars will also be frozen. This means that our banks and businesses will not return the loans to American partners.”
The U.S. dollar has remained the world’s reserve currency because it’s used to settle international commercial transactions, especially in the energy markets. But if Russia moves away from the dollar in the sale of commodities and oil, it could shake international markets. If carried out by Putin, these moves could possibly trigger a dollar collapse.
Obama is economically dependent on foreign money to keep his spending binge going. At the same time, he’s also slashed military spending and left us with little to back up his bellicose statements. In the end, such weakness always empowers a bully.
This commentary originally appeared at