Want to Help Ukraine? Boycott companies helping Russia
Russian President Vladimir Putin’s game plan is clear. Terrorize Ukraine for as long as needed until enough Ukrainians flee the country. Then parade in unopposed. If this means ethnically cleansing 40 million people, so be it. The latest examples: unspeakable atrocities committed against civilians in the city of Bucha and the bombing of a train station in Kramatorsk, which killed 52 people and injured more than 100.
Once Ukraine is in Putin’s grasp, he’ll no doubt swap a piece to the Hungarians for agreeing to quit NATO and the European Union (EU). He’ll also cut a deal with Marine Le Pen to leave NATO, if she wins the upcoming French election. Either way, it will be on to “liberate” Lithuania, Latvia, Estonia, Romania and Poland — likely with Donald Trump’s benign neglect if he’s reelected.
It’s clear that Ukraine’s negotiating with Putin, without including an explicit U.S. guarantee of Ukrainian sovereignty, is a dead end. Putin is this century’s Hitler. As the Polish prime minister made clear, you don’t negotiate with Hitler. You either kill Hitler or get his people to do so when they realize he’s not worth the price. And you make clear to his generals and consiglieres that they will be dead within minutes of launching even a single weapon of mass destruction against Ukraine, the United States or any of our allies. President Biden urgently and publicly needs to draw this red line.
The West is slowly but surely raising the price of Putin’s war of aggression. Russia has lost access to the world’s financial system; lost, likely forever, the bulk of Russia’s massive foreign reserves; lost Aeroflot’s and other Russian airlines’ ability to fly through or land in much of the developed world; lost Russia’s ability to export or import a range of non-energy products to most of the developed world; lost Russia’s ability to export oil to the U.S. and UK; and lost Russia’s ability to export coal to the European Union (EU).
Putin has also been forced to default on Russian debt and to nationalize foreign-owned assets. This feels like Lenin in 1918 — an act that will chill foreign investment in Russia for years after Putin has been put to rest.
Russian GDP is in a free fall, with a 15 percent annual decline predicted for 2022. Hyperinflation – prices are now rising at an annual 20 percent rate – is the rule of the day. Bank capital controls mean that Russians will see the purchasing power of their only partially withdrawable checking accounts and other nominal assets fall by one fifth.
And that’s just this year.
Moreover, tens of thousands of Russians are being laid off. To be clear, a 15 percent GDP drop is five times the peak GDP decline during the Great Recession. The last time the U.S. witnessed so large a GDP decline was during the Great Depression.
That’s the hopeful long run. But the long run is too late. Stopping Putin before he decimates Ukraine requires Germany and other EU countries to immediately ban their $100 billion in annual imports of Russian oil and gas.
How to get the Germans to come around? How about embarrassment? Let me hereby call on Elon Musk to start a GoFundMe campaign that pays the German government whatever has been collected conditional on its banning all Russian imports. Surely, the embarrassment of people across the world paying for Germany to do the right thing will get it to quickly do the right thing.
But here’s my favorite proposal. We should all immediately stop buying Brawny paper towels. These are produced by Koch Industries, which is arguably the most prominent American company continuing to do business in Russia. If sales of Brawny paper towels plummet overnight, it will signal to all companies still operating in Russia that they too will face boycotts unless they pull out immediately. Indeed, Germany will get the message that Americans can quickly move from boycotting paper towels to boycotting German cars if they continue providing Putin with blood money.
To ensure this boycott works, this column needs to go viral. Forward it to everyone you can. Do it now. Let’s show Putin the economic power of the American people.
Laurence Kotlikoff is a professor of economics at Boston University.
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