Annals of Vladimir Frolov, Pathological Neo-Soviet Liar
Surely one of the most shamelessly mendacious Russia commentators in the world is Vladimir Frolov; you know all you need to know about him when you know that regularly publishes his pro-Kremlin propaganda tracts on Russia Blog, which we’ve repeatedly discredited as the blatant Putin shill it is, and Russia Profile, which is actually operated by the Kremlin itself. We’ve previously exposed the relentless torrent of lies issued by Frolov (indeed, that Publius Pundit piece appears on the first page of the Google return when Frolov’s name is searched on their engine), but on September 22nd, Frolov, seething with neo-Soviet hatred and bile, published an op-ed in the Moscow Times in which he plumbed new depths of dishonesty.
Frolov called the U.S. Secretary of State “bizarre” for suggesting that it was a bad idea for Russia to isolate itself. He argued that, quite to the contrary, isolation is a fine idea, and proclaimed: “Russian leaders are taking sweeping measures to insulate the economy from the financial contagion that is now sucking the United States into an economic black hole.”
Frolov is, of course, lying. His frenzied pathology of anti-Western loathing and jealousy, needing to use words like “bizarre” and “contagion,” is plain for all to see, as is the extent to which it blinds him not only from basic facts but also from the ability to see how embarassingly transparent the resulting lies really are.
He’s lying about the relative peformance of the U.S. market, which reached a historic peak near 14,200 on the Dow Jones index in October 2007. In May 2008, as the Russian stock market reached its own record high near 2,400 on the RTS index, the DJI crested above 13,000. The DJI is currently near 11,400 and down 12% since May, 14% from a year ago, and nearly 20% off its record high. But the RTS is now barely above 1,300 — down 45% from its record high in May. In short, the performance of the Russian stock market over the past six months has been more than three times as bad as its American counterpart. The Russian market is currently more than twice as far from its historical high as the American market is from its own. As economist Streetwise Professor has stated:
Even if Russia muddles through the current situation, there are still reasons to doubt the benefits of Putinism. For those whose horizons are defined by the Soviet period or the 1990s, Russian economic accomplishments of the Putin era do indeed seem nearly miraculous. Those, however, are very low standards indeed. What Putin has essentially created is an economic and social purgatory–certainly an improvement on hell, but hardly the best outcome that can be envisioned, and one that it is difficult to escape for something better. The prospects for moving beyond the purgatory of the natural state to something more dynamic, modern, and self-sustaining are poor.
And that’s to say nothing of the relative values of the two markets, which are flatly incomparable. Relatively speaking the U.S. stock market is the Sahara Desert, while Russia’s market is a kiddie sand box.
And Frolov is lying about the economic fundamentals of the two economies. By all rights, the Russian stock market should be blowing the doors off its American counterpart right now, since the keystone of the Russian economy is oil prices and those prices are currently stratospherically high. As MT columnist Alexei Bayer notes:
For all the anti-U.S. rhetoric coming out of the Kremlin, Russia has emerged as a full partner of the American consumption spree. Russian oil output has jumped by about 4 million barrels per day over the past decade. It now vies with Saudi Arabia as the world’s top oil producer. Meanwhile, U.S. oil consumption has risen by 2 million barrels per day. The United States burns more oil than the Russians and the Saudis jointly pump. Also, Moscow has been lending Washington money to keep importing oil, as evidenced by the rise in its Central Bank and stabilization fund holdings from virtually nothing to $750 billion.
Russia’s economy, in other words, is a gigantic Potemkin Village. It is dependent upon oil revenues in the same way a heroine addict is dependent on his drug, lacking the ability to support itself by any other means. And it can’t simply cut itself off from the outside world. To do so would mean its utter destruction, the same thing that happened to the USSR.
Finally, Frolov is lying about the significance of the Russian government’s move into the market. Far from being a sign of Russian strength, this move is (as any thinking economist can readily tell you) a sign of the Russian apocalypse. You can’t simply decree artificially how low stock values can drop and then forbid trading. You can’t simply buy all the stocks yourself and then pretend the demand proves others want them. You can’t because, well, if you could then everybody would. And everybody doesn’t. The USSR tried this kind of thing, and the USSR no longer exists. The editorial from the prestigious economic journal the Financial Times which we republish today has plenty more information exposing the fundamental hollowness of the Russian economy, but Frolov doesn’t care about any of that, just as nobody ever did in the good old USSR. The FT also points out that Russia is enmeshed in a massive banking crisis it shows no signs of being able to solve despite massive infusions of cash. These are the same circumstances that led the U.S to the Great Depression.
So who is this Frolov, exactly? The MT identifies him only as “president of LEFF Group, a government relations and PR company.” Russia Profile has a bit more information: “He received his first degree from the Moscow Defense Institute of Foreign Languages and earned a Ph.D. in political science from the Moscow Diplomatic Academy. Mr. Frolov had a distinguished career in the Foreign Service, including postings at the Russian Embassy in Washington D.C. before serving as the Deputy Staff Director of the State Duma Committee on Foreign Affairs and Counsel to the Deputy Chief of the Presidential Administration for Foreign Policy. He is married with two children.” Like Yuri Mamchur, publisher of Russia Blog, then, Frolov graduated from a university run by the Russian government for purposes of carrying out its policy. Unlike Mamchur, however, Frolov has actually worked for the government itself as its agent — and now he’s doing PR on the government’s behalf.
Little wonder that he’s so ready with words like “contagion” and “bizarre” when the hated enemy America is at issue. How can anyone, reading the words of this so-called “diplomat” — an emissary of the Kremlin itself — possibly believe that Russia is interested in partnership with the United States?
He actually gloats about U.S. failure: “With the subprime debacle now destroying venerable American financial institutions, the U.S. government has resorted to socialist policies by nationalizing banks and the country’s largest insurance company.” Can he really be so mind-bogglingly ignorant that he cannot see the consequences for Russia if the American economy were to actually falter? Is he even vaguely aware that the vast majority of the insurance and banking industry remains far outside U.S. government control, while in Russia the reverse is true?
And then his lies get truly fantastical: “All of a sudden Russia was facing a financial meltdown — not of its own making — that was threatening to wipe out the country’s impressive economic gains of the past 10 years.” All of a sudden? The market has been in freefall for nearly half a year! Not of its own making? Russian dependence on crude oil isn’t of its own making? It’s total lack of an industrial and consumer production base isn’t of its own making? The fact that it is ruled by a proud KGB spy with no knowledge or experience in economics at all isn’t of its own making? The war in Georgia? The attack by Putin on the Mechel steel concern?
What planet, we ask you dear reader, is this man from?
But he can top it! Just watch him:
The decision to invest up to 250 billion rubles of government money into Russian stocks is a breakthrough that ends years of financial orthodoxy while making a lot of business sense, with some of the best Russian companies now valued at laughable price-to-earnings ratios. This is not government spending but a very lucrative investment. Some market analysts are projecting the RTS Index to hit from 7,000 to 8,000 points a few years from now, according to UFG Asset Management CEO Andrei Podoinitsyn.
So a Russian stock broker says the RTS will grow by a factor of eight in “a few years” huh? And meanwhile it’s therefore just fine for the Russian government to buy all the stocks and artificially inflate their value, because it’s sure to become real quite soon?
Yikes. See how the USSR went belly up? Folks like this guy here were put in charge, that’s how.
Pay no attention to that man behind the curtain!