A recession for sure, nuclear war a possibility: Our world just got more frightening

I remember shortly before the pandemic struck North America, a Phoenix radio host was making jokes about it – something about coronavirus and Corona beer.

He had no idea that a bug then plaguing mostly China and northern Italy would soon be on our doorstep. That it would disrupt American lives more than any other event in our generation and kill over a million people in this country.

Sometimes things far away and barely understood can wreak destruction on us.

In the last two weeks, two events, one deep beneath the Baltic Sea and one in the more prosperous and metropolitan parts of Russia, have emerged and presented that kind of threat.

They have the potential to bring home troubles that are well beyond our daily concerns.

Combine that with a looming global recession and we find ourselves at one of those historic junctures in which events could soon mess with our lives in unimaginable ways.

Our country is changing. We all know that. Change has arrived with political polarization and extremists left and right who want to define what America will be tomorrow. Opinion polls register our angst almost weekly as we wonder what comes next.

The world is also changing.

A Russian autocrat is a threat to us

On Sept. 21, the Russian government announced that it is mobilizing young men to join the ongoing “special military operation” in Ukraine. These men would be conscripted not from the rural and ethnic heartland, but from the more prosperous metropolitan regions, cities such as Moscow, St. Petersburg and Rostov-on-Don.

The war in Ukraine is finally coming home to middle-class Russians, an unmistakable sign that Russia, one of the great powers of the last century, is in trouble and that its leader, Vladimir Putin, is desperate.

Putin made one of the great blunders in modern history when he invaded Ukraine on Feb. 24, thinking Russian tanks could quickly bridle the Ukrainian people who see their future in democratic Western Europe, not Putin’s autocratic East.  

That Putin would now call for mobilization of some 300,000 men, a number many Russians suspect is really a million, is an admission that Russia has stumbled badly in this war. It’s also an enormous gamble on his part that he can take control of four of the most resource-rich regions of Ukraine, call a truce and wrap up the conflict before his own people turn on him.

At the moment, Russians are growing more nervous and irritable. Protesters have burned a number of recruitment centers, and someone shot a recruitment officer. The Russian people refer to the call-up as the “mogilizatsia,” a combination of the word “mobilization” and “mogila” or “grave,” reports Foreign Affairs.

While the Russians are soothed daily with Kremlin happy talk, the high price of Putin’s war is coming into focus. In August, some 70,000-to-80,000 Russian troops have been killed or injured fighting the Ukrainians, according to Pentagon reports.

As Putin announced his mobilization and annexation, he called for a “holy war” against the West and rattled his nuclear warheads at Western Europe and the United States.

He taunted Western powers with his reminder that the United States set the precedent for using nuclear weapons when it bombed Hiroshima and Nagasaki.

To understand how he got here, you have to understand the public humiliation Putin has endured, the undressing of his vaunted Russian army by the Ukrainians, and the public rebukes from friendly world leaders.

On Sept. 10 when Putin was on Russian TV christening a new 460-feet high Ferris wheel in Moscow, his troops were suffering a humiliating defeat in the city of Izium, which the German news magazine Der Spiegel describes as critical to Russian strategy for taking control of the Donbas region of Ukraine.

“The images from Moscow were ... disastrous,” reported Der Spiegel. “A commander-in-chief dedicating a Ferris wheel as the front disintegrated was not a good look.”

Russian army veteran and former Federal Security Service officer Igor Girkin, writing under his pseudonym “Strelkov” on the social media app Telegram, said that apparently Moscow is celebrating the transfer of Izium to Ukraine.

A week later, Putin had begun to feel the cold shoulder of world leaders in the geographic East such as China’s Xi Jinping and Indian Prime Minister Narendra Modi. The latter issued a public warning that “Today’s era is not of war.”

Putin’s mobilization is a stark development in the Russian-Ukraine war. It fundamentally alters his regime, reports Der Spiegel.

“It contradicts the system of rule he has built over the decades, one rooted in the principle that Russian citizens should not be unduly troubled. For years, the regime has demanded little from its people – it expected obedience, but no expressions of loyalty. In contrast to Soviet times, membership in organizations loyal to the Kremlin has been voluntary, as is participation in official demonstrations. If you don't interfere in my politics, then I won't interfere in your private life: That was the pact between Putin and the Russians.

"After two decades of demobilizing his citizens politically, Putin has now terminated that contract. It is no longer enough for the regime if the people stay out of political protests. The state is demanding more now.”

Strange seismic readings in Scandinavia

On Sept. 26, seismic stations in Scandinavia picked up the tremoring lines of some kind of powerful event beneath the Baltic Sea. Almost immediately pressure began to drop to zero in Nord Stream 1 and 2, a series of four pipelines built to carry natural gas from Russia to Germany. In what most European authorities now believe was an act of sabotage, explosives destroyed three of the Nord Stream lines, making them inoperable.

Meanwhile the leading consensus in Europe is that it was the Russians, either using a submarine, underwater drone or ship to place the charges, perhaps months before they were detonated.

Further consensus suggests that the Nord Stream sabotage is so sophisticated, it almost certainly was carried out by a state actor. If it was Putin, and it is hard to imagine any other world leader with the technical capability who is so willing to infuriate and disrupt the West, he was likely sending a message that Ukraine's Western allies and their critical infrastructure are touchable.

Some Americans have begun to raise doubts.

Columbia economics professor Jeffrey D. Sachs told Bloomberg Financial News he believes the United States possibly with Poland sabotaged the pipelines. Retired U.S. Army Colonel Douglas Macgregor told Andrew Napolitano on his podcast that it is preposterous to believe the Russians did this.

As the world awaits the results of ongoing investigations, Sachs said we find ourselves in "the most unstable geopolitical era in many decades."

"We’re entering the first escalation to the nuclear precipice in 60 years, 60 years exactly this month was the Cuban Missile Crisis, and this is the most dangerous moment since the Cuban Missile Crisis. It’s an extraordinary overload and we see no attempt to tamp this down, to quiet it down."

A tyrant with the world's largest stockpile of nuclear weapons is an existential threat to the globe. When he is embarrassed by his own flagging war he is a powder keg capable of anything.

It’s not yet kitchen table talk in American homes, and even the U.S. media have been slow to awaken, which prompted American journalist Matthew Yglesias to tweet, “Everyone is surprisingly chill about the clearly elevated risk of nuclear war.”

The New York Times' Ross Douthat has noticed. “The world is probably now closer to the use of nuclear weapons than at any point in decades.”

The coming global economic crash

We have already felt the Russian invasion of Ukraine in America through the disruption in global supply chains and high price of gas and other goods.

While hardly the only reason for our present inflation, it has exacerbated the problem, especially with soaring oil prices. Much of the inflation we’re experiencing today comes from years of suppressing interest rates following the Great Recession and during the pandemic.

With inflation rising rapidly, the Federal Reserve has finally begun to raise interest rates to try to put the brakes on soaring prices. The correction back to normal could take a decade. Bank of America has published research that shows between the years 1980 to 2020, inflation that rose above 5% in rich economies took roughly 10 years to return to 2%, The Economist reports.

The Fed is expected to reach its benchmark rate of 4.4% by the end of 2022, says its chairman, Jerome Powell. In raising interest rates, the Fed estimates that 1.2 million people will lose their jobs, reports CBS News.

"I wish there were a painless way to do that," Powell said. "There isn't."

A 2023 recession could be 'really bad'

"We're in deep trouble," billionaire investor Stanley Druckenmiller said at CNBC’s Delivering Alpha Investor Summit in New York City Wednesday. “I will be stunned if we don’t have a recession in ’23. I don’t know the timing but certainly by the end of ’23.

“I will not be surprised if it’s not larger than the so-called average garden variety,” Druckenmiller said. “I don’t rule out something really bad.”

Druckenmiller explained that “extraordinary quantitative easing and zero interest rates over the past decade” led to an asset bubble. “All those factors that cause a bull market, they’re not only stopping, they’re reversing every one of them.”

Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., told a conference that “storm clouds” are moving in. “I said they’re storm clouds, they’re big storm clouds here. It’s a hurricane.”

At the moment we’re in a lull, he said. “It’s kind of sunny, things are doing fine. Everyone thinks the Fed can handle this. That hurricane is right out there down the road coming our way. We just don’t know if it’s a minor one or Superstorm Sandy. And you've got to brace yourself.”

A broken American political culture

If we do face a crashing economy, we’ll do so with a political culture that is deeply divided. Americans are already on edge with conservatives accusing liberals of rigging elections and liberals accusing conservatives of semi-fascism.

How would such a tinder-dry culture manage an economic crisis with a federal government that has fewer tools to buffer the impact than in crises past? How would it manage the twin burdens of inflation and unemployment?

Economic pressures could severely stress our brittle system and provoke even greater conflict.

The world has always been a dangerous place

Every generation faces its crises, from WWII to ICBMs to Vietnam to Sept. 11 to COVID-19. We are creatures hardwired to worry about the future, to let our imaginations run wild.

In the coming weeks and months we’ll need to focus on how we cope with a Russian tyrant who has 6,300 nuclear warheads. We'll need to think about how we would weather a recession without losing our minds.

Our 30th president Calvin Coolidge had some coping skills to deal with this. “If you see 10 troubles coming down the road, you can be sure that nine will run into the ditch before they reach you.”

The trick is to do all you can to help them find the ditch. 

Phil Boas is an editorial columnist with The Arizona Republic. Email him a phil.boas@arizonarepublic.com.