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Wed Nov 12, 2014, 02:42 AM

Putin has plunged Russia into a vicious cycle of economic decline

It seems like Putin is pursuing a Dubya like approach by using a war to try to distract Russians from his economic failure at home. Yet, Putin is seen as a strong leader with great approval ratings while President Obama is portrayed as a weak President at home.

http://www.vox.com/2014/11/10/7175641/putin-russia-ruble-economy

The Russian economy is in bad shape. On Monday morning, Russia's central bank announced that it expects the Russian economy to grow zero percent in 2015 and 0.1 percent in 2016. The value of Russia's currency, the ruble, plummeted more than 8 percent in the past week alone — and it's down more than 40 percent since the beginning of this year.

The fall in the ruble appears to be mainly the result of two factors: a sharp decline in global oil prices and sanctions that Western countries put on Russia in retaliation for invading Ukraine. Those two things might not appear connected, but in a sense one led to the other. Many Russia-watchers believe that, when Russia's economy began weakening, and, thus, so did Putin's approval ratings, Putin responded in part by trying to increase his popular support by stirring up nationalism. That is likely one of the reasons why he invaded Ukraine, which also distracted from the poor economy.

If that's right, then that would mean that the sanctions meant to weaken Russia's economy are also a result of Russia's weak economy. And that, in turn, should prompt questions about what Putin might do to shore up his support in the face of this new bad economic news.

* * *
Many observers believe that Russia's involvement in the Ukraine was due in part to the slowing economy, as Putin whipped up nationalism and anti-Western fervor to distract from the stagnating economy. If that's right, then the strategy that Putin used to distract from the weakened economy has actually weakened the economy even further.

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Reply Putin has plunged Russia into a vicious cycle of economic decline (Original post)
TomCADem Nov 2014 OP
Cha Nov 2014 #1
davidn3600 Nov 2014 #2
DetlefK Nov 2014 #3
jakeXT Nov 2014 #4
pampango Nov 2014 #5
davidn3600 Nov 2014 #6
hrmjustin Nov 2014 #7

Response to TomCADem (Original post)

Wed Nov 12, 2014, 02:55 AM

1. I feel for the Russian People.. not the dictator.

Mahalo TomCADem

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Response to TomCADem (Original post)

Wed Nov 12, 2014, 03:26 AM

2. I found this part of the article interesting...

 

In other words, the political strategy Putin used to distract Russians from their stagnating economy has ended up making the economy even worse. And yet those sanctions and the economic damage that they caused fit perfectly with the narrative of Russia standing bravely against the hostile forces of the West. That may mean that the sanctions could have the unintended consequence of strengthening the nationalist populism that prompted the invasion in the first place.


Almost sort of the effect Germany had right before WW2. The economy was a mess due to Versailles treaty and it provoked extreme nationalism making it very easy for the Nazis to grip total control. The Russian government seems poised to follow down the same path where it stokes fear of the west in order to justify more and more power and war and control. It ends up tearing down economic and political freedom. It causes the cycle to keep repeating. It's basically runaway nationalism.

Russia's government doesn't have the type of built-in mechanisms that are common in western governments to prevent this kind of problem. So unless politicians or the people in Russia put a halt to it themselves, this is going to be very difficult to stop...and may be impossible to stop from the outside.

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Response to davidn3600 (Reply #2)

Wed Nov 12, 2014, 05:13 AM

3. Germany? I'm thinking more of Venezuela.

Nationalism and oil. And policies based on propaganda, patriotism, us-vs-them...

I'm not saying that Russia will have an economic collapse of the magnitude happening in Venezuela, I'm saying that the Russians will get angry at Putin anyways at some point.

Almost 25% of russian intellectuals, entrepreneurs, artists, scientists are unnerved by Putin's repressive policies and seriously ponder leaving Russia. What will happen if the qualitiy of living goes down while the trend goes toward even more nationalism?
Just a few weeks ago I talked with a russian scientist who now works in Australia. It's entirely possible.

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Response to DetlefK (Reply #3)

Wed Nov 12, 2014, 06:04 AM

4. They still have to work...

Indeed when you look at how Russia’s labor market has performed since the beginning of 2013 you get a much better idea of why Russians aren’t out on the streets: because most of them have to be at work

http://www.forbes.com/sites/markadomanis/2014/11/11/russias-labor-market-is-still-healthy/

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Response to TomCADem (Original post)

Wed Nov 12, 2014, 06:05 AM

5. Neocons - ours or Russia's - don't care as much about the economy as they do about the military and

restoring 'national pride' - linked to nationalism.

How Russia's president resembles the American hawks who hate him most.

Ever since Vladimir Putin invaded Crimea, American pundits have strained to understand his view of the world. Putin’s been called a Nazi; a tsar; a man detached from reality. But there’s another, more familiar framework that explains his behavior. In his approach to foreign policy, Vladimir Putin has a lot in common with those very American hawks (or “neocons” in popular parlance) who revile him most.

1. Putin is obsessed with the threat of appeasement


To Kristol, McCain, and their ilk, the United States is a nation perennially bullied by adversaries who are tougher, nastier, and more resolute than we are. ... In his (Putin's) view, it’s Russia that has been perennially bullied by tougher and nastier countries—in particular, America and its NATO allies. “They have lied to us many times, made decisions behind our backs, placed us before an accomplished fact,” he explained in a speech announcing Russia’s incorporation of Crimea. “They are constantly trying to sweep us into a corner.” But now, finally, the era of appeasement is over. “Russia found itself in a position it could not retreat from,” Putin said. “If you compress the spring all the way to its limit, it will snap back hard.”

2. Putin is principled—so long as those principles enhance national power

For Putin, an anti-Russian government in Kiev is illegitimate regardless of how it takes power. For many American hawks, the same is now true for a pro-Chávez government in Latin America or an Islamist government in the Middle East. ... In the United States, both hawks and doves like to claim that they’re promoting cherished principles like democracy and freedom. The difference is that doves are more willing to acknowledge that these principles can undermine American interests. For most hawks, by contrast, the fight for democratic ideals must serve American power.

3. Putin doesn’t understand economic power

This indifference to the economic aspects of statecraft was a defining feature of the Bush administration, where treasury secretaries played a marginal foreign-policy role ... Seeing “economics” as separate from “foreign policy issues” is precisely what Clinton decried in the 1990s, and it’s the weakness in Putin’s strategy today. But it’s a weakness that many American hawks share. For decades now, Kristol and McCain have insisted that America relentlessly expand its global military footprint and relentlessly boost its defense budget. I’ve never seen either make a serious effort to explain how this should be paid for.

http://www.theatlantic.com/international/archive/2014/03/vladimir-putin-russian-neocon/284602/

Like American hawks Putin sees a strong and assertive military as a symbol of national power. "For Putin, too, overcoming appeasement requires overcoming the soft, unmanly culture that made Russia unwilling to fight. The fall of the Soviet Union, he argued last year, “was a devastating blow to our nation’s cultural and spiritual codes” that led to “primitive borrowing and attempts to civilize Russia from abroad.”

Like American hawks if Putin likes a government he supports into matter how it came to power. If he does not like it, it matters little how it came to power.

Like our hawks he cares little about economics and the quality of people's lives.
Pressuring or invading weak neighbors - Granada, Panama, Georgia, Ukraine - is more their style since it enhances national power and prestige, at least in the eyes of fellow hawks.

Putin has been very effective in pursuing Russia's "national interest". If he has been similarly successful at enacting new domestic social legislation or progressive taxes, I have missed it. What he has done domestically is sign repressive legislation against gays, dissidents and separatist movements within Russia. IOW, he has been very effective from a "hawk" point of view but he is no liberal.

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Response to pampango (Reply #5)

Wed Nov 12, 2014, 08:21 AM

6. It's somewhat a different culture though..

 

Over the past 1,000 years Russia has been invaded by practically every major threat from Genghis Khan to Napoleon to Hitler.. So they've collectively formed a sense that they need security. And they feel as though a strong, intimidating leader who focuses on nationalism, pride, and military power will put fear in any potential enemy. This is the reason Putin is so popular and only seems to gain popularity the more he antagonizes the west. The Kremlin does not trust NATO whatsoever. In their view, they see NATO creeping up to their doorstep and if history is any guide, will eventually attempt to destabilize Russia just like every other threat that kept up to their door.

On the other hand though, Putin seems to be oblivious to his neighbor's concerns for security. Ukraine, Georgia, the Baltic states, and most of the other former Soviet Republics fear Russia far more than they fear the west. So Putin has sort of pushed them away and are all begging to join NATO. And now his response is try to get them back by force and intimidation. That's not going to work. It's going to create an even bigger mess. As you said, Putin is cold-warrior raised by the KGB, not a diplomat or economist. And that is a big weakness on his part that may very well lead to economic ruin. But he views it as a means of defense. Unfortunately, we also have not yet moved beyond that cold war mindset. We don't trust the Russians any more than they trust us.

So where relations stand today is sort of the culmination of some bad decision-making on both sides since the fall of the Soviet Union.

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Response to TomCADem (Original post)

Wed Nov 12, 2014, 08:23 AM

7. Putin is a horrible leader and has given his people nothing but misery.

 

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