7 Reasons Why Russia Should Take Over The Crimea

The United States and United Nations continue to intervene with Russia taking over the Crimea. They have imposed sanctions on Russia and demand Russia return the Crimea to the Ukraine. However, Russia has 7 valid reasons to assume control over the Crimea.

Reason 1: Russia and Ukraine transferred the Crimea back and forth over their history. Roughly 50% of Crimea residents identify themselves as Russian. Many residents speak Russian as their primary language and share its culture. Although Ukrainians speak a Slavic language similar to Russian, it is not Russian. Furthermore, some Ukrainians harbor a grudge against the Russians for occupying the Ukraine during the Soviet Union.

Reason 2: Russian government stationed its navy at Sevastopol, Crimea. With the Ukrainian economy sinking into chaos, Russia must protect its naval base. The chaos could spread to the Crimea and the naval base, creating problems for the Russian Black Fleet.

Reason 3: Don't people living in a democracy get to choose which state to belong to? Over 90% of Crimeans voted to leave the Ukraine and join Russia. Of course, the caveat is the world must ensure Russia did not manipulate the vote. On the other hand, the United States have always experienced voting troubles. Illegal aliens vote in elections. In the old days, politicians stuffed the ballot boxes with fraudulent votes after the polling stations closed in the south. On election day in Chicago, the dead rise from their graves and vote at the elections. If the world takes away the people's right to vote in the Crimea, then the politicians dictate policy. Thus, the world's politicians eliminated the Crimeans' right to vote.

Reason 4: The economies of Ukraine and Russia differ. Out of the 15 former states of the Soviet Union, Ukraine made the fewest strives towards a market system while Russia adopted some changes during the 1990s to a market economy. Unfortunately, the Russian government started undoing those changes in the 2000s with President Putin being president for many of those years. Consequently, Russia has a better economy than the Ukraine's. Perhaps the citizens of Crimea want to live in an economy with more markets.

Economists developed measures and rankings to determine how free a country's markets. For example, the Heritage Foundation ranks countries on their economic freedom. The measure includes limited government, efficient regulations, taxation level, business investment freedom, and so on. Nevertheless, the ranking only provides a guide because economists have troubles measuring these things. For example, how do you measure efficient regulations or limited government?

Economic freedom differs from political freedom. United States was always ranked in the top 10 for economic freedom in the past, but we have fallen to the 12th spot in 2014. Government at the federal, state, and local are usurping control and accumulating power. Each year, Americans keep losing their economic freedom, but we still have political freedom. We can choose which idiots to represent us in government. However, the U.S., state, and national governments in the United States restrict us from opening new businesses. They regulate our investments and restrict our property rights. Hence, we continually drop in the rankings for economic freedom.

Reason 5: Heritage Foundation ranked Ukraine as 155 and placed it in the same class with Cuba, Burma, Iran, and North Korea. They ranked Russia a 140. Russia has a tad more freedom than Ukraine even though Heritage Foundation ranked it mostly unfree. Consequently, Crimea could gain a little more economic freedom if it broke away from the Ukraine and joined Russia.

Reason 6: Transparency International compiles the Corruption Perception Index for 177 countries. Economists and analysts have even more problems measuring corruption because corruption entails many forms – bribes, extortion, kickbacks, under the table payments, tax evasion, and so on. In 2013, they ranked Ukraine 144 and Russia at 127. Nevertheless, the United States ties with Uruguay at 19.

Businesses experience trouble growing and thriving in corrupt countries. Regulators and tax inspectors shake down companies for bribes, kickbacks, and extortion payments. Business leaders must form friends and pay bribes to the politicians and bureaucracy leaders. Then the politicians and bureaucrats will help and protect the companies. Consequently, Crimea could lower its corruption by joining Russia.

Many people forget history. Over the United States' history, Americans moved onto Indian lands and stole them. They established farming communities and cities. They also formed a territory government. Once the state had become large enough, they petitioned the U.S. government to join the nation as a state. For example, Puerto Rico, Guam, and U.S. Virgin Islands remain territories of the United States. If the residents vote to join the United States as a state, should Russia and other countries oppose the residents' decision? It is a hypothetical question because it would never happen. Citizens living in a territory receive all the benefits from the U.S. government without paying all the taxes and costs.

Reason 7: U.S. government must have another agenda. U.S. government and the world fear a developing and stronger Russia. Hence, they want to restrict its size and power, so the U.S. government can dictate its policies to the world. The real issue is which country gets to control the world, and the United States does not want to share control with another country. Russia as the Soviet Union was the only country large enough to challenge the United States during the cold war.

The United States and United Nations have imposed sanctions on Russia. These sanctions will push Russia into a recession along with Ukraine and Kazakhstan. Kazakhstan, another former Soviet State, has mineral and petroleum wealth. With more countries entering a recession, the stacked dominoes are tumbling across the world as economies begin crumbling. As the dominoes continue falling, it will bring the recession to the doorsteps of the United States. We, Americans, are experiencing the weakest economic recovery, and a world going into a recession will not help. A world in recession will push us back into an extended recession.

The Dead Economic Recovery

World went into recession after the 2008 Financial Crisis had struck the world. In 2014, news reporters, business analysts, and politicians keep talking about the economic recovery. Where is the recovery? It has been seven years, and the U.S. economy still has not recovered. Unfortunately, everybody forgets history.

I listed the last five U.S. recessions because every recovery has become weaker and weaker.

Name	Time	Peak Unemployment
Early 1980 recessions	January 1980 to July 1980 July 1981 to November 1982	7.8% 10.8%
Early 1990s	July 1990 – March 1991	7.8%
Dot Com Bust	March 2001 – November 2001	6.3%
The Great Recession	December 2007 – June 2009	10%

Starting in the early 1980s, we experienced two recessions back to back. Federal Reserve, our central bank, triggered the first recession. It stomped the breaks on the economy because the economy grew too fast and created inflation. Central bank contracted the money supply to combat the high inflation rates from the 1970s. A contracting money supply removes money from the economy, reducing consumers' spending. Unfortunately, a contracting money supply raises interest rates, and short-term interest rates soared to 20% over night.

We have a theory called Cyclical Asymmetry. A central bank contracting a money supply always slows an economy, and it could trigger a recession. However, a central bank boosting the money supply should spur economic growth as the central bank injects money into the economy. Consumers, businesses, and government spend more money, prodding economic growth. (Interest rates also fall that lets banks lend loans with low interest rates). According to Cyclical Asymmetry, boosting the money supply does not always expand the economy.

Then the Ayatollah Ali Khamenei staged the Iranian Revolution and overthrew the Shah in 1979. New government stopped selling petroleum to the United States, causing petroleum prices to spike. Unfortunately, the U.S. economy relied on cheap, fossil energy to power its economy and factories. Soaring petroleum price triggered the second recession, and the unemployment rate peaked at 10.8% in 1981.

Everyone forgets history especially the politicians and news reporters. The United States government, i.e. CIA, helped overthrow a democratically elected Prime Minister, Mohammad Mosaddegh, in 1953 to support the Shah of Iran. Prime Minister wanted to nationalize its petroleum industry and to keep the petroleum profits for his country. On the other hand, the Shah signed over 40% of its oil fields to U.S. companies after it took power. Perhaps the U.S. should stop trying to help the world. Our interference into foreign countries continues to backfire that creates future problems.

Experts debate whether the 1980s recession was the worst since the Great Depression. Although the 1980s recession had a greater unemployment rate, the 2007 Great Recession lasted much longer. Then the computer industry lit the United States on fire and created high paying jobs as businesses, government, and households invested in computer technology.

The United States entered a recession in 1990. The Federal Reserve tightened the money supply to reduce the inflation rate while Iraq invaded Kuwait, causing the petroleum price to soar to new heights (Similar to the early 1980s).

President Bush senior invaded Iraq and freed Kuwait. Then he withdrew the troops because he feared a long, arduous occupation of Iraq. Unfortunately, President Bush junior had started the decade long occupation of Iraq, costing the U.S. government in trillions of dollars.

U.S. economy entered a recession with unemployment rate peaking at 7.8% in 1990. Recovery had become weaker. As the economy recovered, they called it the jobless recovery. Although the U.S. economy recovered, the U.S. economy did not create new jobs. In the old days, economic recoveries always created jobs.

Then the internet and communications industries ignited the economy in the mid-1990s. Businesses and government adopted e-commerce, designed websites, and expanded communications, creating thousands of new jobs in the process. Many consider 1999 to be the best year for the workers because the United States had the greatest portion of its citizens in the workforce with low unemployment rate. I remember a gallon of gas cost less than a $1.

Then many internet companies bankrupted during Dot Com Bust in 2001. George Soros, one of the world's richest men, asked one question – how do these companies make money? We discovered the answer – they didn't make money. Subsequently, everyone learned about the fraud and illegal activities of Enron and WorldCom.

According to Table 1, we experienced a relatively mild recession with the unemployment rate peaking at 6.3%. This recovery was weaker than the previous recovery. They called it the job-loss recovery – the economy recovered, but employers kept shedding jobs. Did you notice the play on words - the jobless recovery versus the job-loss recovery? Of course, George Bush junior became president in 2000 while his father was president during the last recession.

An economic recovery should create jobs. Some experts claim the U.S. manufacturing never had recovered. Strong U.S. property bubble lifted the whole economy by creating jobs in the banking and construction industries. Then the housing bubble popped in 2007, triggering the Great Recession. Many consider the Great Recession as the most severe recession to hit the U.S. economy since the Great Depression. Although the unemployment rate peaked at 10%, the people are still feeling the recession in 2014. On the other hand, the economy rebounded strongly after the early 1980 recessions.

Remember the theory - Cyclical Asymmetry? Shrinking the money supply always contracts the economy while boosting the money supply may not expand the economy. Federal Reserve dumped trillions into the U.S economy to revive it. The Fed did not release precise details so estimates range between $2 trillion and $8 trillion. It provided emergency loans to banks teetering on bankruptcy. It bought bad mortgages from the banks. Consequently, we have witnessed the weakest recovery ever in the United States.

U.S. government dumped trillions into the U.S. economy. Federal government lent $700 billion to bail out the banks and financial institutions. President Obama signed the American Recovery and Reinvestment Act in 2009 to provide $831 billion for creating jobs. After dumping trillions into the economy, what have we seen – a nonexistent recovery?

When we study the history of the United States in the 19th century, the U.S. experienced a recession or financial panic every ten years. After every crisis, the U.S. economy came back stronger and grew faster. After the last three recessions, the recoveries became weaker as the United States has aged into an old man struggling to get out of bed in the morning.

Did you notice the number of years between recessions? United States experiences a recession every 7 to 10 years. We are in 2014, seven years after the Great Recession. We still have not recovered, but we should expect a new recession to the hit the United States between now and three years. If we never recover from the Great Recession, we will not recover from the next recession that will hit the economy anytime soon. Unfortunately, the United States has no industries to lift the economy out of its doldrums, because we have entered a period of stagnation.

P.S.: Japan entered two decades of weak economic growth after the bubbles in its real estate and stock markets collapsed in the early 1990s. Japanese government and central bank bailed out the banking industry and injected trillions of yen into their economy.