Dollars and No Sense
Despite the fact that oil prices have spiked to their highest level in recent memory, the Russian stock market is down nearly 20% since New Year’s Day. The Moscow Times quotes Roland Nash, head of research at Renaissance Capital: “The U.S. is looking like it will go through a really torrid time over the next few trading sessions, and, therefore, Russia is going to suffer alongside it.”
Isn’t Russia supposed to be the antithesis of the United States? If the U.S. economy is suffering, shouldn’t that mean Russia is doing well? If the price of oil is hobbling the U.S. economy, shouldn’t that mean Russia, reaping a windfall of oil profit, is roaring ahead? If the U.S. dollar is in freefall, and it is, and the ruble is appreciating, doesn’t that mean rosy days ahead for Russia?
On Monday alone, the MICEX Russian stock index was at one point down nearly 6% of its total value, and closed down over 4%. MT columnist Alexei Bayer explained: “The United States is not only the world’s largest consumer, absorbing one-third of its resources, it is the linchpin of the world economy. The dollar is central to the global financial system. To hope that the rest of the world can survive a U.S. downturn unscathed is like saying that a high-stakes poker game can go on uninterrupted on the top deck of the Titanic while its hull is taking in water.”
In other words, it’s not wrong to say that the United States is the world’s largest consumer of Russian oil, the commodity that Russia’s economy relies upon for subsistence. Even if America doesn’t purchase Russia’s oil directly, the demand it creates establishes the price Russia sells at. If America’s economy tanks, Russia’s oil becomes substantially less valuable. Russia’s income plunges, and Russia’s economy goes right down too.
You’d think Russians would understand this. You’d think, in fact, that nobody in the world would be a bigger cheerleader for the United States than Russia, that the country would want to go out of its way to support the U.S. economy any way possible. But then again, after decades of Soviet oppression, you’d think the last thing any Russia would consider doing would be to vote for a proud KGB spy as national leader.
Russians have a way of surprising you, don’t they?
Now, to be sure, some of this may be dawning on the malignant little troll who “governs” Russia. The MT reports that Vladimir Putin is all a-twitter over a letter he recently received from U.S. President Bush. Putin stated: “It’s a serious document and we analyzed it carefully. If we manage to agree on its main provisions, we will be able to say that our dialogue is progressing successfully.” Deputy Foreign Minister Alexander Grushko was quoted as saying: “We would prefer measures of cooperation, not confrontation.”
Likely, he’d also prefer that his stock market was up 20%, rather than down.
But if that is so, you have to wonder why Russia is buzzing American military targets with nuclear bombers. Why, if Russia wants cooperation, would it be sending dangerous weapons to American foes like Iran and Venezuela? If Russia doesn’t want confrontation, why wouldn’t it respond to U.S. criticism regarding human rights by asking what changes it might make to improve the human rights climate, instead of attacking the U.S. as an equally egregious human rights abuser?
In fact, try to name just one concrete step taken by Russia in the past year to demonstrate cooperation with the United States. Name one time, if you can, when “President” Putin spoke to his nation and told them they shouldn’t hate the United States or wish it ill, because Russia’s economy depends on American spending. Name one time, in his whole presidency, that President Putin has complimented America on something, expressed admiration for America, or sided with America against one of its enemies.
You can’t do it, can you?
And, on the other hand, all you have to do is open the Moscow Times on any given day and you’ll see stories like the one from March 4th, reporting on the activities of the “Nashi” (“us Slavic Russians”) youth cult. 5,500 youths marched unimpeded through the streets of Moscow to the U.S. Embassy, where they screeched boorish slogans like: “Let them teach their wives to make shchi!” That’s what “President” Putin had said a few weeks earlier when asked about foreign criticism of Russian democracy.
Apparently, Russians are not overly familiar — though they are a nation rich in fairy tales — with the story of the goose which laid golden eggs. Then again, if one reflects on the infamous behavior of Nikita Khrushchev at the United Nations — when he removed his shoe, used it for a gavel and shouted “we will bury you!” — perhaps one might conclude that in Russia, it’s not consider logical do do anything but kill such a goose and have a fine meal. After all, given the stark bleakness of Russia’s tomorrows when viewed in hindsight, maybe Russians are right in concluding that they should live only for today and the gratification of the moment.