On January 9, The Telegraph reported,
Ukraine and the United States are planning to sign a “prosperity” deal to rebuild the country at a gathering of world leaders in Davos.
The prosperity plan is aimed at bringing in around $800bn (£600bn) over a decade to rebuild Ukraine and kick-start its economy, Ukrainian officials say.
Mr Zelensky said the deal would provide “for economic recovery, restoring jobs and bringing life back to Ukraine”, in a briefing with reporters late last year.
It is understood to pave the way for a series of loans, grants and investment opportunities from private companies to deliver the funds.
A few days after that announcement, on January 23, RT News reported,
BlackRock CEO Larry Fink has joined US President Donald Trump’s Ukraine team as a “prosperity adviser,” US envoy Steve Witkoff has announced. After a similar project failed last year, Fink will once more be tasked with pulling Western capital into Ukraine.
This is Trump’s textbook Keynesian plan for Ukraine. It reeks of cronyism. Why Keynesian, and why cronyism? John Maynard Keynes, in his General Theory of Employment, Interest, and Money, gave the following example to generate employment and income (growth):
When involuntary unemployment exists, the marginal disutility of labour is necessarily less than the utility of the marginal product. Indeed it may be much less. For a man who has been long unemployed some measure of labour, instead of involving disutility, may have a positive utility. If this is accepted, the above reasoning shows how ‘wasteful’ loan expenditure[8] may nevertheless enrich the community on balance. Pyramid-building,
earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better…
If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.
To see the absurdity of Keynes’s idea of generating employment, we need to carry out a reductio ad absurdum exercise on his line of reasoning. If we follow Keynes’s logic to its end and employ all Americans in digging up bottles filled with dollars for a year, then, at the end of that year, we will end with piles of bottles and everyone having a few dollars in their hands.
Yes, nominally speaking, we did generate jobs, but for what? Jobs are not for the sake of working only. Work is only meaningful if it produces economic goods that we want to consume because consumption is the final aim of every economic activity like labor. In Keynes’s bottle case, we end up producing bottles only. What are we going to eat after one year? Glass bottles? What are we going to drink? Glass bottles filled with dirt? Where are we going to live? In glass bottles? What are we going to wear? Glass bottles? The opportunity cost of implementing Keynesian policies is enormous.
Trump’s Ukraine plan is nothing but Keynesianism. The US government—with the help of NATO—first destroyed Ukraine by pushing NATO boundaries closer to Russia and sparking this war, and now they’re wasting tax dollars on so-called reconstruction calling it a “prosperity plan”!
This is Bastiat’s broken window fallacy from start to finish. If Zelenskyy is so worried about the Ukrainian economy and jobs, then he should have never started this war to begin with. He should have refused to be a puppet of NATO. Without this war, there would be no need for any economic recovery, restoring jobs, or bringing life back to Ukraine.
After sacrificing millions of young Ukrainian soldiers in this war, talking about bringing life back to Ukraine sounds hypocritical and ridiculous. Zelenskyy found sudden piety after a life of sin? Without this war, Ukraine would be still standing with all its physical and human capital intact. All the money that was spent/wasted on fighting this war could have been spent, saved, or invested. There was no need for the US to spend $800 billion more on any reconstruction. No life would have been lost. No jobs would have been lost. After breaking the Ukrainian window, fixing it isn’t creating more prosperity. Millions of lives are lost and cannot be brought back. The tragedies of war cannot be fixed.
Why is it cronyism? Cronyism is defined as political favoritism for politically-connected businesses that benefits both parties at the expense of taxpayers. Bringing BlackRock’s Larry Fink in as a “prosperity adviser” is a classic case of cronyism where big corporate interests are working hand-in-hand with governments to rip people off.
BlackRock is a quintessential military industrial complex firm. It manages some $12-13 trillion dollars globally. Its money is invested in defense companies across the world, for example, in the United States, Lockheed Martin, Boeing, RTX, Northrop Grumman, L3Harris, GE Aerospace, Kratos, in Italy Leonardo SpA, in United Kingdom BAE Systems, Rolls-Royce (defense engines(, in France/Germany Airbus SE, Rheinmetall (via global/European ETFs), in Sweden Saab (via European defense ETFs), in Israel Elbit Systems (via global funds), and in China CSIC/CSSC affiliates (through offshore funds). This means they made money selling weapons in this ongoing war, and now they will make more money fixing Ukraine—which they themselves helped destroy. This is a case of the Keynesian “dig the ditch, and fill it up again!” BlackRock is the epitome of merchants of death.
President Trump promised he would end all wars as soon as he assumed office. We see no end to any wars. Instead, he has opened up more war fronts in the Western hemisphere. He wanted to drain the swamp, but it looks like the swamp swallowed him whole.
