Putin Goes All In, Trump Folds
It is all up to the gambler's fallacy, now
In the fourth year of Vladimir Putin’s genocidal war against Ukrainians, Donald Trump expressed surprise that the Russian leader had once again escalated his attacks on civilian targets in Ukraine. Over the weekend, Russia launched its largest bombardment of Ukrainian cities in the war to date. Responding to a reporter’s question, Trump indicated he would consider sanctions now because Putin “is killing a lot of people.” Senators are already pressing for new legislation that would sanction any country doing business with Russia. Europe is ramping up its defense industrial base and sanctioning Russia’s ‘shadow fleet’ into penury.
Still, Putin believes he can win, so he is all-in, a gambler doubling down to the last chip. From the beginning of the war, I have maintained that this would be Putin’s character arc, and now here we are. Frustrated in his hopes for peace, Trump defaults to the mode of the casino builder who fails. He lashes out at President Volodymyr Zelenskyy of Ukraine like the trash-talking professional wrestler he has always been. Trump was always useful to Putin as a wedge against the western democracies, but now his usefulness is almost at an end, just like the Russian economy. Trump has little power over the outcome, anymore.
“I’ve always had a very good relationship with” Putin, “but something has happened to him. He has gone absolutely CRAZY!” Trump wrote on his Truth Social platform. Predicting “the downfall of Russia!” if Putin continues trying to conquer Ukraine, Trump took offense that “missiles and drones are being shot into Cities” for “no reason whatsoever.” In the same breath, Trump blamed Zelenskyy for “talking the way he does” when his country is bombarded. “Everything out of his mouth causes problems," Mr. Trump wrote. “I don’t like it, and it better stop.” Trump has no power to make Putin stop, so he lashes out at Zelenskyy to avoid looking weak. I have identified this dynamic before.
What Zelenskyy said to prompt this response was that Putin will not stop without “truly strong pressure” and sanctions. He called on “all those around the world who seek peace” to demonstrate their “determination” to make Moscow end the war. He did not name Trump, who nevertheless feels the sting of embarrassment at his failure.
Below is a clip of Trump telling reporters that he is “not happy with what Putin is doing. He's killing a lot of people and I don't know what the hell happened to Putin. I've known him a long time.” In fact Trump merely feels that he has known Putin a long time. He has always felt an affection for Putin the autocrat. He imagined a future in which they were dictator dudebros.
But now he feels disappointed, even angry, perhaps humiliated. “Something happened to this guy and I don’t like it,” Trump says, rationalizing. The rest of the world looked at Vladimir Putin and had the same reaction as the late Sen. John McCain: they saw a KGB thug. Trump saw a potential partner in Putin, someone that he had a special connection with, but of course he was projecting. Even in 2016, this was always going to be the outcome of the bromance because Trump felt it way more than Putin. Thus the touch of anger in his voice. This was always Putin, and Trump knows it, but he thought that he was different.
As I have explained, none of this portends a congressional aid package for Ukraine. At most, Trump will adopt a passive attitude towards Kyiv, allowing the Ukrainians and Europeans to buy as much American war material as they wish in exchange for ready cash. Trump once again disowns the war, which “would never have started if I was president” thanks to his imaginary special friendship with KGB thug Vladimir Putin. He blames the war on the “Gross Incompetence and Hatred” of everyone not named Donald Trump. He thought he could disown the war and still own the peace, thanks to his special connection with Putin, only to realize at long last that Putin is not at all interested in making peace.
Something must therefore be wrong with his friend Putin that was not wrong before. Only madness could possibly explain why the career KGB thug does not want to cut a deal with his good friend Donald Trump! This face-saving explanation only works in his own mind, but we can expect his administration to adopt the talking point, nonetheless.
Putin is not insane, however. He is ideological. Putin is obsessed with making Russia great again, a theme that resonates with Trump. Putin’s Russia keenly feels the threat to its great power status from its post-Cold War decline. Destroying Ukrainians is an act of sacred palingenetic violence, the ritual from which Russian greatness now derives. With or without Putin, Russians are not about to trade this holy crusade for any amount of money.
Trump wrongly believed the regime in Moscow could be bought. He thought he understood how the world worked. He is astonished and embarrassed (“not happy”) to learn otherwise. Trump was going to end the war on Day 1 of his presidency, then by Easter, and now at Day 126 he seems to be giving up on ending the war at all. He wants Zelenskyy to stop reminding him of his failure.
The war will simply have to end through macroeconomic limitations rather than personal charisma. Whereas Ukraine lacks the manpower to liberate territory, the Russian state increasingly lacks machinery for troops to advance and conquer territory. The Russian Ministry of Defense has responded to this crisis with a firehose of rubles, but the sovereign wealth fund has shrunk down to a quarter of its prewar size, mainly consists of illiquid assets anymore, and will probably run out of money this fall.
Taxes were supposed to boost state revenues. The central bank has already raised interest rates over 20 percent, so the Kremlin has printed money, taking extreme measures to arrest the resulting inflation of the ruble. Even these measures may give way to hyperinflation soon. The tight monetary policy has effectively ended all commercial lending and investing in Russia. Without revenues, businesses will not pay taxes. Stagflation looms. Combined with volatility, that could be an economic doom scenario.
The Kremlin sacrificed consumer sectors of the economy, especially the consumer financial sector, to get this far. Today, Russians have simply stopped paying their loans and credit cards. They have stopped taking out mortgages or buying cars. Russia’s interior minister wants to ban personal bank loans altogether, ostensibly to fight fraud. Only businesses which serve the war needs of the state will have easy access to credit, anymore. Russian citizens have consequently stopped spending, stopped earning from consumer trades, and will pay less revenue to the state in taxes.
Now the EU “is considering cutting more than 20 banks from SWIFT, the international payments system, as well as lowering a price cap on Russian oil and banning the Nord Stream gas pipelines as part of a new sanctions package that aims to increase pressure on Moscow to end its war against Ukraine.” These measures will add further stress on banks that are ready to collapse. Housing and construction sectors are already shutting down for lack of demand.
Of course, dropping the oil price cap to $45/barrel would require White House cooperation. At present, it is not clear that such cooperation would be forthcoming. As I write this, global oil prices average ~$63/barrel. The Ministry of Finance had to revise revenue expectations downwards by 24 percent a month ago when revenues werere already down, year on year, producing a budget gap. Any serious hit to global oil prices right now is extremely bad for Russia. In fact, a price cap that low would make Urals crude simply unprofitable to pump.
Vladimir Putin understands his situation. He knows that the money is running out, that time is running out. He wants to re-invade Ukraine from new directions, redouble his bombardment of cities, and send a thousand motorcycle meatwaves into the Donbas rather than cash out and take his winnings. A generation of Russian children is increasingly indoctrinated for the permanent state of war. He will not quit the casino until he runs out of chips, and even then he will be back as soon as he has found a stake. This is an addiction, for him.
Trump's Ukraine Peace Plan Ends In Disappointment, Phony Putin Ceasfire
Easter is today, and there is no peace in Ukraine. Putin agreed to a ceasefire, broke it immediately, and then pretended he had never agreed to anything. Real estate mogul Steve Witkoff is exactly the wrong peace envoy for this Kremlin, for he conceives of Russia’s genocidal war in Ukraine as a mere real estate dispute.
That you couch Putin in terms of a gambler in the throes of their addiction is, actually, spot-on.