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Putinomics: Stagflation Hits Russia

The economy is primed to fail as Vladimir Putin looks to distract with show trials.

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April 20, 2013 - 12:00 am

Remember “stagflation,” the knight in shining economics that slew the USSR dragon? It’s back with a vengeance. Russian GDP growth has fallen consistently for the past two years; the pattern has continued for the first two quarters of this year.

Even Kremlin mouthpiece Russia Beyond the Headlines admits the dire reality:

Energy prices were the only reason why Russia avoided a recession trough [so far]. Despite all the promises, or, to use the government’s rhetoric, “strategic plans” to reduce oil sales proceeds to 5.6 percent of GDP, its share is still at least double that.

Ksenia Yudaeva, Putin’s representative to the G-20, now says that Russia is probably already in a recession. And oligarch Mikhail Prokhorov, owner of the New Jersey Nets, also believes the Russian economy has lost forward momentum.

As economic growth has been plummeting, inflation has been soaring. It is now double what it was a year ago, a startling 7.5%. The lowest level of consumer price inflation recorded by the Putin economy in the last two years is roughly the same as the highest recorded level in the U.S., a level Americans would view as cause for panic.

Russians simply can’t afford this kind of inflation bite. Although Americans and Russians spend about the same amount each week on food and drink, for Americans it accounts for less than 10% of the weekly budget. For Russians, it is a stunning 40%.

Radio Free Europe reports:

A 20-year-old man in Russia has just a 63 percent chance of reaching the age of 60, as compared to a 90 percent chance in the EU.

The New York Times reports:

The blue-glass skyscrapers of Moscow City — fragments of Russia’s boom-time dream — are visible from the Kremlin walls, within which there was once hope that those towers could supplant the West’s financial centers. When the sun sets behind them, you can see that many of the offices lie empty. In fact, the real hubs for Russian banking are in other countries.

Another Kremlin mouthpiece, Russia Today, admits that fully half of Russia’s workforce has now gone underground to avoid Russia’s morass of taxation and corruption, and now dwells in a vast shadow economy that rivals the one the USSR used to nurture.

Putin is starting to feel the heat. For the first time since it began asking the question in 2004, the respected Levada polling institute was told by a majority of Russian respondents that Putin having unlimited power was not good for Russia’s future. Russians didn’t stop there: For the third time in the past year, a clear majority told Levada that they did not want to see Putin claim a fourth term as president in 2018.

Is Putin panicking? He has launched a bloodcurdling wave of attacks — echoing the behavior of Stalin — on nongovernmental organizations that receive foreign funding or criticize the Kremlin. In doing so, he polarized former Russian friend Germany, catching a blistering earful from the German chancellor on a recent visit.

Putin is also spewing neo-Soviet rhetoric in response to the Magnitsky blacklist drawn up by the U.S. Congress. The blacklist bans the most egregious Russian human rights offenders from America’s shores.

The clearest sign of Putin’s panic has been the launch of two shocking criminal trials. Putin has put deceased corruption-fighter Sergei Magnitsky — for whom the congressional blacklist was named — on trial in a pathetic effort to prove him deserving of torture and murder in the Kremlin’s dungeons. He also has put the still-alive opposition leader Alexei Navalny on trial for embezzlement — the charges bear an unmistakable resemblance to the ones that sent Putin foe Mikhail Khodorkovsky to prison for a decade.

All signs point to Putin not caring a whit what the people of Russia may want. Roses or thorns, Putin plans to stay in power as long as Brezhnev did — that is, as long as he is able to live. The fact that the country may, as it did after Brezhnev, spiral into collapse means nothing to Putin.

If Brezhnev had communism to fall back on, Putin has the Russian Orthodox Church: it bears just as terrifying an ideology. Archpriest Vsevolod Chaplin, who oversees the Church’s public relations, told RIA Novosti recently:

Even some scientists suggest that the sun and the entire universe rotate around Earth, not in a physical sense, but in a logical sense. According to Chaplin, this theory means that the world is created so that intelligent life inhabits space that is proportionally small compared to the size of the universe.

Not one to be outdone, Patriarch Kirill, the Russian pope, chimed in:

I find very dangerous this phenomenon, which is called feminism, because feminist organizations proclaim a pseudo-freedom of women that should in the first place be manifested outside marriage and outside the family. Man turns his sight outward, he should work, make money. While a woman is always focused inwards towards her children, her home. If this exceptionally important role of a woman is destroyed, everything will be destroyed as a consequence — family and, if you wish, the homeland.

If God is with Putin, who can be against him?

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Matthew 18:18
Matthew 18:18

New International Version (NIV)

18 “Truly I tell you, whatever you bind on earth will be[a] bound in heaven, and whatever you loose on earth will be[b] loosed in heaven.'

Christian getting rid of atheist cobwebs and agnostic lazy head when he sees so much power in his hands must pray for great humility and protection not to use these great power at his finger to wound the lambs of God I believe
1 year ago
1 year ago Link To Comment
So, the Russian Orthodox Churches claims that the Sun metaphorically revolves around the Earth and that women should be caretakers, while men are providers?

This is supposedly dangerous?
1 year ago
1 year ago Link To Comment
Be careful you don't begin to romanticize Alexei Navalny as some martyr or hero. Navalny is a pariah even among his "allies" at Yabloko.

Also, remember, every time we pour onto that "anti-Putin" rhetoric, we are giving ammunition, steam, and legitimacy to his main opposition...the Communists.

We heard a lot about Mikhail Prokhorov, but very little about the Communists. Gennady Zyuganov, the Communist, came in second after Putin - not Prokhorov.

Another reminder, Putin was one of the only foreign leaders to put up a memorial to honor the American victims of 9/11 and Putin was right about Syria. And, the margin of victory that Putin won by means that he is not likely to be proved "loser", even if many of those votes were illegitimate.

Granted, neither Putin nor his United Russia party are "the heroes." I'd much rather see Right Cause (a sort of libertarian/conservative party) gain dominance in Russia. However, it does us no good in America when, in our rush to berate Putin, we prop up Russia's most virulently anti-American leftist factions - like Navalny.
1 year ago
1 year ago Link To Comment
I do believe the last several Popes all agree with Patriarch Kirill. Feminism has long since been perverted from trying to improve the lives of women into trying to turn women into caricatures of men.
1 year ago
1 year ago Link To Comment
Puting politics aside China's economic growth has hit a snag also, though, their trend line was such that a snag leaves it in the 5.0% plus range currently. Russia is no different, as are European and North American nations economies.
1 year ago
1 year ago Link To Comment
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