Sunday, May 4, 2014

Putin the Petulant: Too Much Time On His Hands

A Brief Note From Galactic HeadQuarters
If you visit, don't expect a high rise office building...

Here at MeanMesa's Galactic HeadQuarters, there is a frequent visitor, a sixteen year old boy who lives near by in the apartment complex.  Let's call him Robert.  

Robert can be seen wandering about on most days -- even those high desert days when "wandering about" is not particularly comfortable.  He is a tall, lanky kid with a winning smile and quiet manners.  Details of his life at home are murky.  His mother apparently locks him out of the apartment in the morning and only re-admits him at sun down.

Robert is impressively bright.  He got an A in his mathematics class last semester.  He's not particularly conversational, but that feature is fairly common at his age. MeanMesa recollects being quite conversational at that age, but still, Robert has that exciting, aggressive adolescent interest in just about anything once a topic is engaged.

This sixteen year old visits MeanMesa because he is hungry.  MeanMesa doesn't like the idea of hungry teen age boys, and, happily, there is an almost continuous supply of left overs lingering around the Galactic HeadQuarters' old refrigerator.  Robert is a good eater.

But, what relevance between Robert and Putin could justify beginning this post with a short picture of a neighborhood boy?

Robert has too much time on his hands.  So does Vladimir Putin.  Robert is just beginning to get into trouble.  So is Vladimir.

While simply saying that one "has too much time on his hands" may seem quite comfortable, we must still consider what is meant in each case.  With both young Robert and the frenetic Putin perhaps the first idea as to meaning is that "there are some more important things to be doing" instead of whatever is actually being done -- or not done.

Putin's Russian Federation: 
A Flimsy Minority Mandate
Maybe the Federation should consider hiring Rupert Murdoch

Politics inside the Russian Federation are not nearly as opaque as they were during the old Soviet times.  Nonetheless, the corporate American media presents a frustratingly gaseous image of political conditions inside the Federation.  You know, something along the lines of the image that media presents within this country.

In an overview, we see occasional protests, always accompanied by the typically "over reactive" Federation "security forces."  The Russian government has pulled a couple of tricks which, although apparently consistent with an autocratic oligarchy, didn't sit too well with the Russian populace.  Jailing billionaire Khodorkovsky [Ходорко́вский] for grumbling too harshly about the perpetual Putin/Medvdev "profit centered" political merry go round, the meat handed prosecution of Pussy Riot or the craven, medieval lurch back into tormenting homosexuals are a few examples of Federation government's catastrophic, political "domestic over reach."

The image this presents is no incomprehensible "alien" behavior to Americans.  We completely understand this sort of thing. In fact, we're quite accustomed to it from our own government -- especially from our sold-out Supreme Court. [Tune up on your understanding of the Russian government WIKI: Government of Russia ]

Nonetheless, the corporate domestic media in the US continues to paint the conveniently threatening picture of a vast, monolithic Russian population eager to re-establish the old Soviet hegemony. There are the predictably stilted "interviews" with Russians on the street whose faces light up with big Russian smiles as they respond to questions about the annexation of Crimea. Any American still attaching any credibility to the domestic US news story would be convinced that all the hundreds of millions of Russian citizens are just "chomping at the bit" for a Soviet Resurrection.

MeanMesa remains far from convinced on this.  MeanMesa is old enough to remember quite clearly what conditions prevailed in the old Soviet Union.  MeanMesa suspects that most Russian Federation citizens have either personally experienced or heard enough about life in the Soviet Union before, during and after WWII to live in constant dread of a return to anything remotely similar.

Russians do, however, like the improved economic living conditions provided by the Federation. There is also a passing nationalist appetite for "respect," but not sufficient to make oligarchic, colonial war mongering politically palatable for the vast majority.  Russians accept the toxic presence of the Federation's oligarchs with a surprising stoic passivity.  They seem to accept the rather brutal Federation efforts to squelch dissent about the same way.

After the Soviet days, modern Russians consider these new "problems" as an acceptable price for the opportunities of a benevolent, pseudo-market economy. [CNN - sanctions progress] In other words, these political transgressions are deemed reasonable in this way when weighed against the obvious benefits.  "The rocks come with the farm."

For the majority of Federation citizens the inevitable, final outcome of patiently "hosting" such a government has apparently not entered the picture -- yet.

A happy kid, right? [Source - Pravda blox]
So, as a result there are plenty of "more or less" satisfied and "more or less" hopeful Russian citizens willing to support the endlessly recycling Putin/Medvedev government.  Here and there, we also find a nice minority of Russians willing to rush head long into a "respect" conflict with the West, willing to fly the flag and beat the breast in favor of nationalism and expansion lubricated by the prospect of "new glory days."

Putin knows this is a boisterously vocal, but relatively small, demographic minority at election time.  We can see evidence of his nervousness in the depth and cost of the current propaganda campaigns both domestic inside the Federation and as palliatives "smoothing the ruffled feathers" of those remaining historically "gun shy" who are beginning to question the enduring wisdom of his international policy.

Further, although Vladimir was ostentatiously emboldened with the Parliamentary "rubber stamp" on his plans for nationalist annexation in Crimea, we should also remember the rather soiled record of similar such "rubber stamps" rolling out of an eagerly obedient Duma through the expansionist saliva flooded the halls of the overly ambitious Federation Council.

Just as is the case with the sold out US Congress, the inhabitants of the Russian version of a "representative Parliament" are not typically oligarchs themselves.  However, as the comparison continues, the essential structure of corrupt influence between the US scheme and the Russian scheme paints the picture of "peas in a pod."

What Else Could Vladimir Be Working On?
How is the Federation doing -- over all?

Actually, Russian Federation has all sorts of projects and needs which could be addressed almost at once.  These would be items and issues which could benefit the entire population of common people living in the Federation.  The fall of the Soviet Union might seem like ancient history in Western minds, but reconstructing and re-invigorating of an entity the size of the Federation is not to be done over night.

The unsettling rise of the Russian oligarchs has had the same economically stupefying effect in the Federation as its American version has had in the US. Interestingly, the Russian Federation and the Peoples Republic have both addressed this development with mechanisms not found in the US.  In these more or less autocratic states, oligarchs are openly tolerated, but the ultimate "oligarch" remains firmly ensconced in the bowels of state power.  In the US those oligarchs control state power.

The Federation's economy is fueled primarily by energy exports, but the wealth flowing in from those exports has been manipulated and re-directed disproportionately to  oligarchs.  Consequently the "main stream" economy of the Federation is fundamentally "cash starved."

Since the collapse of the Soviet Union, Russia has undergone significant changes, moving from a centrally planned economy to a more market-based and globally integrated economy. Economic reforms of the shock therapy in the late 1980s and during 1990s privatized many sectors of industry and agriculture, with notable exceptions in the energy and defense-related sectors. Nonetheless, the rapid privatization process, including a much criticized "loans-for-shares" scheme that turned over major state-owned firms to politically connected "oligarchs", has left equity ownership highly concentrated. As of 2011, Russia's capital, Moscow, had the highest number of billionaires of any city in the world.
In late 2008 and early 2009, Russia experienced the first recession after ten years of experiencing a rising economy, until stable growth resumed in late 2009 and 2012. Despite the deep but brief recession, the economy has not been as seriously affected by theglobal financial crisis, largely because of the integration of short-term macroeconomic policies that helped the economy survive, as well as low levels of sovereign debt. The World Bank predicts growth rates of 1.1 and 1.2 % of GDP in 2014 and 2015 respectively. These weak figures are a consequence of continued depressed domestic demand and low investment activities. The World Bank's analysis did not take into account any assumed scenario relating to the ongoing Russia-Ukraine crisis. However, the related events are considered to have led to political risks that may entail further negative economic consequences.
Links from original article remain enabled. Read the WIKI article: Economy of Russia

The Russian Federation's dilemma is not unique among autocratic nations deriving a large fraction of national revenues from energy sales.  The very nature of the industry itself tends to offer an apparently irresistible temptation to the oligarch types. There are also examples of export energy wealth being directed far more constructively to citizens' interests elsewhere. The spectrum of variation extends from perhaps the extreme case of the dismal Saudi monarchy at the low end to the remarkably, socially fluid and energetic Norwegians with their gigantic "sovereign fund" at the other. Everywhere else in the remainder of the planet, this is called "wealth inequality," and it eventually leads to all sorts of painful, culturally fracturing developments in every case.

The point here is simple. The Russian oligarchs' ambition is the usual one -- they dream of permanently controlling the Russian Federation just as American oligarchs dream of permanently controlling the US. While the oligarchs might prefer that the Russian Federation [one that, for example, included Ukraine...] were even larger when their "big day" finally arrives -- and hence, be willing to tolerate the sanctioned damages resulting from Putin's appetites -- the Federation's more common citizens shouldn't expect much benefit from Putin's expansionist moves after the drunken "victory parties" die off into an inebriated slumber.  Few Russians will feel much "new national vigor" when the hollow propaganda claims of "new respect internationally" and "a great power again" slowly evaporate to mean nothing material beyond simply richer oligarchs and even higher "defense budgets."

The Russian Federation has performed fairly well since the fall of the Soviet Union.  Because of the very rich mix of export energy revenue, the great Bush W Recession of 2008 slammed into the Federation economy a few years after it had already decimated the wealth of the rest of the world. Overall, Federation citizens have been generally satisfied with economic growth, but they have begun to wonder if conditions would have improved more with out the constant capital drain flowing to the oligarchs.

While Putin is generally lauded as an effective economic manager, the "oligarch problem" is unmistakably "sewn into his seams."  He owns it.  And even Vladimir is growing increasingly aware that it has the odor of bad politics -- very bad politics.  The Bolshevik revolution and the overthrow of the Tsar are much fresher history than what happened so long ago in Europe and the United States.

The Russian Federation is facing the same agonizingly stubborn problem found in the Peoples Republic.  Economic modernization requires an improving standard of living driven by domestic consumption.  Domestic consumption can either be the consumption of imported products or domestically manufactured products.  The former relies on distributed discretionary wealth, and the latter requires domestic investment and job growth.

All of this is precisely the inevitable "hole" left after the Russian oligarchs finish stripping their cut from the top, but this is a solvable problem given the cash rich economy.  It is just not particularly solvable when the strength of that cash rich economy is routinely diverted to a few pockets under the approving gaze of a government that thinks "it's just fine."

Painful Economy of Russian Federation [source - cartoon by Khalil Bendib]

This is what Vladimir Putin could be working on these days. And, by the way, this has a time table. The "opportunity to modernize Russia is knocking on the door," but it won't knock forever. With both the challenges and the opportunity confronting the Federation now, a good dose of statesmanship could probably move the whole, rickety thing ahead pretty impressively.

That is if the "statesman" weren't galloping around bare chested, mounted on a stallion and surrounded by photographers in the bright Russian sunlight.  Maybe Vladimir has calculated that invading Ukraine would simply be easier.

It may not be.

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