Some Thoughts on the Economies of Russia and the US

INTRODUCTION
Recently, some of our correspondents have engaged each other (and Yours Truly) on the state of affairs of Russia, specifically its economy. Three thoughtful commentators in particular are the genesis for this essay. I’m sure they will recognize themselves in this and the following essay.

Some of the criticism leveled against the Russian Federation has to do with not a little animus against President Putin himself. Fair enough, he’s no choirboy. And yes, his strong-man style of centralized authoritarianism is more than a little repugnant to those of us who believe in decentralized constitutional republicanism.

These arguments are not without merit.

Having said that, I am not at all exercised by Putin’s auhoritarian leadership of the Russian Federation. Mainly because I’m an American. I’m far more concerned about our state of affairs; towit a hollowing out of the white working and middle classes. And if one is an honest liberal, you should be as well. After all, it was the degradation of the middle classes which led to the election of Orange Hitler.

RUSSIA: WHAT I SAW
Now, before I go on, I would like to say that one of Putin’s and Russia’s most vociferous critics on this blog has brought forward some interesting statistics, ones which paint a dire picture. On the other hand, as you can see by the graphic that attends this essay (below), I offer another set of statistics. These paint a far different picture, one which explains the massive popularity of Vladimir Putin. You can judge for yourself which set of statistics makes more historical sense.

Having said that, I honestly don’t remember if I commented on the Russian economy before last year. The main reason being that I’d never been there. As you all know by now, I was there last year, at exactly this time as it were. What I saw was a country in the midst of a construction boom –at least in the big cities. The hustle and bustle of these cities was no different than what I saw in London or Edinburgh, or Boston or Houston.

The countryside was different. On train ride from Moscow to Nizhni-Novgorod, I saw nothing but tens of thousands of empty but verdant plains. Some of the small towns had the feel of an American trailer park or a mestizo barrio in the Central Valley of California. In some of the larger churches that we visited there were beggars; most (but not all) were gypsies. As in Western Europe, one had to be discriminating in his alms-giving.

And yes, I saw churches being rebuilt, renovated and erected from the ground up. And no, I don’t know where the money is coming from. And I can’t stress this enough: having been involved in more than one church building project here in the States, I can honestly say that I’m impressed. More so if things are as economically dire in Russia as we are constantly told.

RUSSIA: THE ENDGAME
To be sure, the US sanctions against Russia have hurt. In 2014, there were 30 rubles to the dollar. After Russia’s annexation of the Crimea, the ruble plunged to half that, that is to say, 60 rubles to the dollar. This has certainly had a negative impact on the average Russian’s buying power, of this there can be no doubt.

The political question is why this hasn’t dented Putin’s popularity? Perhaps the reason is that the average Russian is more than willing to take a financial pinch if that’s what it takes to keep the Crimea. After all, the Northern states were willing to accept horrible human losses (and economic strains) to keep Texas and the rest of the South in the Union. Why should we be so surprised that the Russians won’t likewise accept similar conditions, especially since there has been no loss of life in doing so?

Contrast this with our own history: not only did the North pay a horrible price to defeat the Confederacy, but they lost the peace during Reconstruction, eventually leaving with their tails between their legs. Does anybody think that this is a likely outcome in the Crimea, where the people overwhelmingly welcome Moscow’s hegemony?

What’s the upside for Russia to de-annex Crimea? Will NATO pull its forces out of the Baltics or Poland or better yet, fold up its tent and say “mission accomplished”? This was Eisenhower’s wish after all: he said if NATO was still extant after 10 years, it should be adjudged a failure.

Given Russia’s historical grievances against the West –you know, the Baltic Crusades, the Polish-Lithuanian conquest of Muscovy, Napoleon, Hitler–why should Russia believe Western blandishments about “democracy”? Especially when democracy has become a code word for feminism, faggotry and Moslem invasion? Why should they accede to Western demands, especially when they were promised by the Bush 41 Administration that if they dissolved the Warsaw Pact that NATO would not incorporate Poland, Bulgaria, Hungary and the Baltics?

Why indeed?

NEXT: THE AMERICAN EXPERIENCE

1999 2013

GDP: $159 billion $2.113 trillion
Inflation: 36.5% 6.5%
Reserves: $12.6 billion $511 billion
National Debt: 78% of GDP 8% of GDP
National Pension: 499 Rubles 10,000 Rubles
Average Wage: 1,522 Rubles 29,940 Rubles

Comments

  1. Nate Trost says:

    George Michalopulos wrote
    I would like to say that one of Putin’s and Russia’s most vociferous critics on this blog has brought forward some interesting statistics, ones which paint a dire picture. On the other hand, as you can see by the graphic that attends this essay (below), I offer another set of statistics

    Before we get to George Michalopulos statistics, I must point out he has made it impossible to contrast them with the statistics he is unfavorably comparing them to, nor even merely assess the quality of these other alluded statistics. This is because George Michalopulos neither links to them or reposts the data. Hopefully he will rectify this oversight, unless it was intentional.

    Now, about those statistics we do have…

    Year 1999 2013
    National Pension 499 Rubles 10,000 Rubles
    Average Wage 1,522 Rubles 29,940 Rubles
    Inflation 36.5% 6.5%

    Do I really need to state the obvious? When your inflation rate is starting north of 36% and in the ‘best’ year is still 6.5%, listing impressive looking wage and pension ‘growth’ in non-constant figures is a quick sort algorithm for who gets to wear an economic dunce cap.

    There is a reason why economic metrics like PPP exist. Like all metrics they have their limitations, but also are a better benchmark than merely taking raw non-adjusted wage figures! And if we look at GDP/capita PPP, we see for example that yes, Russia made big advances from the nadir of the late 90s, but that slowed down by the late 00s.

    http://i.imgur.com/42k7rrt.png
    (generated from: https://tradingeconomics.com/russia/gdp-per-capita-ppp which annoyingly doesn’t let you easily link the chart time parameters)

    Year 1999 2013
    GDP $159 billion $2.113 trillion
    National Debt 78% of GDP 8% of GDP

    There are a couple important nuances for taking these figures in context:
    1) Russia had a major economic crisis in 1998. This resulted in defaults and debt restructuring in 98-00. Plus, you know, oil price trends in the 97-00 period due to the Asian financial crisis, US economic slowdown, etc.
    2) That figure is not as inclusive a picture as say, comparing to the US, due to not accounting for debts which are technically ‘private sector’ even though the firms involved are controlled by the government (this mostly applies to the financial and resource sectors). It get sticker once you attempt to account for relevant private sector debt, and even more so once you account for the detail that lots of that debt isn’t ruble-denominated.
    3) Pulling the World Bank figure for Russian GDP, I get $2.231 trillion for 2013, declining to $1.283 trillion USD for 2016. While there are a multitude of factors behind this, the elephant in the room is: if you fail to sufficiently diversify your economy during an economic boom and the price of oil drops in half, the results are…not good. To say, benchmark against another heavy exporter like Norway, Norway GDP went from $522.7 billion in 2013 to $370.6 billion in 2016, again World Bank data.

    For funsies, I did a quick backtrack of the sourcing for George Michalopulos statistics, and it appears to originate from a 2014 pro-Putin infographic, the figures from which subsequently made the rounds in English. For which I have two main critiques:

    1) In order to make an argument, George Michalopulos appears to be too lazy to actually do his own research, and instead just grabs the first set of stuff that appears to support the argument he wishes to make.
    2) Because of 1, even if George Michalopulos avoids the trap of posting incorrect data (because he has a abysmal track record at bothering to fact check his assertions), his lack of domain knowledge means he often regurgitates data, like he does here, with a lack of understanding of the glaring flaws in what he is presenting. The end result is as if he chose the patron saints of St. Dunning and St. Kruger.

  2. A Tale of Two Nations: Russia vs USA Economic Prospects
    By F. William Engdahl
    19 July 2017
    Taking the extraordinary USA and EU economic sanctions against Russia and low oil prices since 2014 into account, Russia’s economic outlook looks excellent going forward while that of Trump’s America looks bleak, to put it mildly.
    http://www.williamengdahl.com/englishNEO19July2017.php
    “In brief, the United States, when the falsified US Government economic data are stripped away, is falling deeper into debt and decay as money and Wall Street mega-banks reign supreme like Gods of Money. Russia in contrast is growing slowly but definitely out of its economic and infrastructure deficit of the past decades, in fact of the past century since the Western-backed Lenin coup d’etat of 1917. While the United States over the past five decades has been tearing down its once prospering cities, infrastructure and industry, Russia is building up its national economy on an advanced technological basis with some of the most creative scientific and engineering minds on Earth. As Moody’s or S&P language might put it, “USA economy: Outlook Negative going forward; Russia economy: Outlook Positive going forward.”

  3. Estonian Slovak says:

    Well, we in the USA have already experienced the Moslem invasion and the gay intimidation. It’s rather like the Hitler-Stalin pact. And just as Hitler turned on Stalin, so militant Islam will turn on the gays. I wonder if the gay jihadists who helped take down Metropolitan Jonah would be so bold as to take on the Moslems who have expressed desire to kill gays? Somehow, I doubt it.
    Putin is no choirboy. Neither were Churchill and Roosevelt. Lincoln certainly wasn’t. If Putin happens to be on the same side as the Church, even if his motives may be suspect, what is better? To stand with him or with our obvious enemies? Interesting, the same crowd which is blubbering about Russian interference now, had little to say when the USSR really was an evil empire.

  4. If you look at PPP it’s pretty easy to see why Russia seems to punch above it’s weight. Sanctions may hurt in the short term but I think it has the opposite effect of strengthening the local economy and industry.

  5. Billy Jack Sunday says:

    Putin sucks

    Kirill made 4 billion by importing American cigarettes and using church state non- profit tax status to be able to undercut the market. No one could beat the Patriarch’s cigs. Many went out of biz because of impossible competiton.

    Jesus fed my addictions and rewarded me with cancer? Is that how the Church is built?

    The church and Kirill have gotten wealthy from a myriad of such scams. That’s where the money comes from, George

    The Church has never learned to not become an arm of the state and thus continues to be an ongoing joke of historical proportion

    The Church of Constantinople and all its affiliates serves the U. N. and wouldn’t know the antichrist from a door knob. KGB Putin has the Orthodox Church conducting all his B.S. propaganda and the church there is reduced to a department of the state, building each other up through ill gotten gains

    I wish the chuch would let its adherents be involved in politics as individuals making their own damn decisions as they seem fit – letting their conscience lead them as they work out their salvation. I dont tell anyone how to raise their family, and I don’t accept anyone trying to force me to raise mine their particular way. It doesnt mean I’m not involved with my family. It just means no one is controlling it from the outside. It should be the same regarding Christians and politics.

    America is a pluralistic society and will never ever be an Orthodox country. Regardless, I’d like to see millions of Americans come to the Orthodox faith. It will never happen as long as the church continues its abusive marriage to the state and its spiritual leaders continue to whore themselves as useful idiots of temporary rotating temporal regimes

    • Russia is more pluralistic than “America.”

    • Bonhoeffer says:

      Careful, BJS! Those 8 billion cigarettes were “humanitarian aid”! And to write with such perilous candor about Fr. Webster’s boss(es) risks him pressuring George to throw you out, next!

      Such unflattering facts are veritates non grata around here. Getting real about отдел агитации и пропаганды the Russian Church as it actually is, is sternly frowned upon. It’s another one of those touchy subjects where honesty is all but certain to get you branded as a wiseacre, a troll. No matter how truthful, substantive and devoted to rationality and facts you may be.
      Good little Putinists get with the program, so as to avoid being smeared and accused of “false discipleship.”

      • Bonhoeffer says:

        This was a little harsh and overgeneralizing. The Russian Church is complicated, though without doubt too supine and compliant before corrupt power.

    • Anonymouse says:

      The church doesn’t tell people how to vote. However, the church has every right to point out policies and platforms that are incompatible with Christianity.

      • You mean like being greedy and charging too much for medicine?

        • Anonymouse says:

          The government doesn’t sell medicine. At least in this country.

          However, there are companies like Walmart that voluntarily subsidize the cost of many key medicines, a number of which can be picked up for free.

          Our healthcare system is far from perfect, but at least our doctors aren’t government lackeys who kill children who were misdiagnosed even if the parents are willing to pay for treatment. Unlike socialist Britain.

      • Billy Jack Sunday says:

        I would bet the vast majority of GOA members had voted for Obama, and the vast majority of Antiochians voted for McCain/Romney

    • George Michalopulos says:

      BJS, is there proof that this was the case? American cigarettes are notoriously expensive and the tariffs on them on high. That’s why we have “Indian Smoke Shops” here in Oklahoma: they undercut the local QT/7-11/Kwikimart by a significant price because they don’t pay the tobacco tax.

      As for America being a “pluralistic society” I beg to differ. Thanks to the Proglib orthodoxy that reigns, we are anything but pluralistic (if by pluralistic you mean we are free to live our lives unmolested by the state and/or preach and speak as we wish).

      Tell that to all those Christian bakers who lost their livelihoods because they wanted to make a living according to their beliefs or Kim Davis in Kentucky who spent five days in jail.

      Better yet, tell your boss that you are going to post passages from Churchill’s The River War on your company bulletin board. See how far that’ll get you.

      As for the state/church, they perform two different ministries. The state itself is a ministry whose primary duty is to protect the people of God (that means everyone, not just the Church). The present mythology of a necessary dichotomy or even hostility is a modern one, dating back to a 1942 SCOTUS case. It was never implied or explied in the writings of the Founding Fathers. (More on that later.)

      So I reject the idea that America because of its supposed pluralism cannot become Orthodox and even if it doesn’t, it does not follow that Orthodoxy can’t receive at least tacit support from the several States. Having said that, if you’re honest about your assessment then you must take it to the logical conclusion and that is that all religious properties and resources must be subject to taxation. The fact that this is outlandish to even those who preach “separation” shows how they haven’t completely forgotten history.

      The state ultimately has two choices: it can become Constantine or it can become Diocletian. That’s all.

      • George

        I’m not sure where you have got this idea that all governments will be either Diocletian or Constantine. However, Vlad the Impaler Dracula proved you can have both at the same time.

        Agreed – Coveted American cigarettes are really expensive for Russians to import and turn around and sell. Kirill was able to sell them cheaper due to the deal he had going with the Russian government. Yes, he denied any wrongdoing. But this is the same guy who denied owning and wearing a luxurious watch. That is, until a botched photoshop picture revealed that he was wearing one in an unedited portion of the picture – a reflection in a wooden table beneath his watch arm.

        Your site reminds me of another George – that being George Lucas. I’m a huge Star Wars fan, and also quite a fan of your blog.

        Like Lucas, your site is inspiring and a breath of fresh air to the old industry. You have your light speed and lightsaber moments of wonderment. Then also like Lucas, you get all Yub Nub and Binks it all up. This is one of those moments

        In the words of Harrison Ford, “You can type this [expletive] George, but you can’t say it!!”

        How can you say symphonia works?

        Symphonia never stays balanced. The church ends up being controlled by the government, or the church ends up controlling the government. Either scenario, the end results are corruption and gospel distortion. Imagine the West without the Carolinian reforms that occured for starters?

        You cannot be missional with the end goal in mind of creating a church state. This puts politics ahead of the gospel and puts missionaries at risk. Why? For one, because unbalanced symphonia can also go hand in hand with conquest. Yes, it kinda worked for Alaska. No, it didn’t work in Japan and people were butchered for fear of foreign powers. Nothing worked until Samurai were removed, anyway. However, is Japan a great Chrisrian nation today?

        America is not set up at all from its foundation for any type of symphonia – so none can be hoped for. At best, we can just work to insure that the government does not impede the spreading of the gospel. Yes, religious freedom has been impeded a little in the U.S. but so far no bull dozing churches like in China. Maybe the guillotines will come. Let’s hope and pray that day never comes.

        But lets not kid ourselves. The Orthodox here in America are 0.5% of the general population and 1.0 % of the Christian population. Thats it!! Holy crap we are so super tiny of a religious minority, and you want us to be hand in hand with the government? No one knows who we are or care to know! Symphonia isnt going to happen here. Non-Christian America is opposed to church. Christian America is opposed to the Orthodox Church.

        Americans, not America, need to become Orthodox. Otherwise, we will become frustrated misguided zealots and risk doing more harm than good.

        When I read history and see the supposed symphonia at work, its like Christianity’s special addition – a lot of it just doesn’t sit right and alters things to the detriment of the gospel story.

        BTW – Han shot first

        • George Michalopulos says:

          Thank you!

          I’m gonna write a big thought-piece on the concept of symphonia. Believe me, I understand your concerns. They’re certainly valid.

          However I would ask that you consider the opposite: namely what we have here in the West, presently. It’s completely execrable, regardless of whether we consider the Orthodox churches or the non-Orthodox churches. I mean really, we’ve gone so far off the rails there’s no way of getting back on until a massive collapse happens.

          In other words, let’s be a little charitable in our criticism of the resurgent Christianity of the former Eastern Bloc nations (and in this scenario I include the Catholic states of Poland and Hungary).

        • cynthia curran says:

          Probably true, a lot of evangelicals had a fit when Hank Hangegraff became Orthodox. Orthodoxy is so tiny in the US unlike Catholicism because there are not enough churches.

          • Cynthia, Perhaps there would be more churches so there could be more Orthodox if U. S. had a Patiarch who sold tobacco? Sigh.

            • George Michalopulos says:

              Honestly, I don’t know where the whole tobacco revenue thing came from or if it is real but if it, I’d like to borrow the words of Lincoln when told that Gen Grant was a drunkard: “Find out what he’s drinking and give a case of it to every general in the Union Army”.

              In the meanwhile, our somnolent Assembly here accomplishes next to nothing.

        • Will Harrington says:

          If Symphonia does not work and always becomes unbalanced, then we must apply this principle to ourselves. Clearly, the founding fathers envisioned a system where the several Churches in the United States were intended to have more influence over the Federal Government through the will of the people who belonged to those churches than the Federal Government would have over those churches. In fact, the federal government was not supposed to have any influence over any religious group whatsoever (the states were a different matter). If Congress could pass no law concerning an establishment of religion or the free practice thereof (notice the use of the word “an” rather than the. We are not talking about the State being forbidden from establishing a state religion, but about the state being forbidden to interfere in any way with a religion). If Congress can’t pass a law, then there is no law for the Executive to enforce or the Supreme Court to interpret. Clearly the founders believed that Religion should influence the people and, through them, the government. This has clearly been reversed with the courts considering cases based on laws passed by Congress that do, in fact, concern establishments of religion. We started on one extreme of the Symphonia scale and are swiftly heading to another. Orthodox states have not always maintained a balance power when it comes to symphonia and the state has usually exercised the greater measure of power, but clearly we have left behind the solution that our founding fathers tried to enact. One thing is clear, if there is religion, whether one or many, and there is a state, then there is either symphonia where both work together in some fashion, to create social order, however unbalanced the power relationship may be, or their is conflict. Many times there is both, as some religions are deemed unacceptable by bot the state and other religions. We do have symphonia here, it’s just not a very good symphonia for orthodox, or Orthodox, Christians.

          • Michael Bauman says:

            Will, correct. The really problem with the US is that the Constitution greatly strengthened Federal power and the supposed checks and balances rely exclusively on the integrity of the people holding those offices.

            Religion was thought to be a sufficient guarantee of morality.

            Dismally short-sighted and woefully wrong. The intrinsic instruments of power which the Constitution created have been sought and broadened over the years by everyone. George Washington being the possible exception. Always for the advance of the common good.

    • Michael Bauman says:

      Billy Jack, spoken like a true ‘mericun.

    • Anonymouse says:

      “B.S. propaganda”

      Like what? Methinks someone has had a little too much “Muh Russia.”

      • Anonymouse

        Like holding icons while pelting gays with eggs

        Not a Christian way to counter-protest a gay kissing rally, but applauded by the Russian state

        Can’t do that kind of stuff

        Besides, everybody would have their Starbucks coffee, but nothing would be left for breakfast

        • No doubt now they will save their eggs, perhaps even sticks, and bottles for “Matilda” movie attendees. Maybe they should wear the icons of The last Tsar around their necks, keeping both hands free.

  6. George Michalopulos says:

    Here’s an interesting take by Spengler. Although he’s an Israel-firster, he usually sees the big, civilisational picture in a very clear manner.

    https://pjmedia.com/spengler/2017/07/28/trumps-america-first-vs-mccains-america-last/

    Bottom line: the stupid sanctions that the “muh demokrasy” wings of the Neoliberal/Neocon Congress are starting a trade war with Russia that we can’t win. How so? By pushing the EU into Vlad’s eager arms.

    Thanks, Johnny Wet-start. We hardly knew ye.

  7. I wonder where the words of Christ “My kingdom is not of this world.” fits in?