The Kremlin Backs Down
The Russian stock market is in freefall, having lost nearly one-fifth of its total value over the past few weeks.
Things were already bad enough with the economy overheating under massive inflationary pressures, and then “Prime Minister” Vladimir Putin went after yet another major Russian company, this time steelmaker Mechel. Putin stated
: “I already mentioned at the meeting [on Thursday] that one company was exporting its product at a fraction of the domestic market price. The domestic price was 4,100 rubles ($176), and they were selling it to themselves, across the border, for 1,100 rubles, and then sells the product for $323.
Stocks plummeted further, with Mechel losing half its value and the MICEX stock index dropping to its lowest level in more than two years. The Moscow Times quoted an anonymous trader:
“Our clients were going crazy today, shouting over the phone — they were absolutely outraged. A couple more such statements, and Russia can forget about its aim of becoming a world financial center. Officials have called the country a save haven from the world crisis, but [we’ve] got a different problem affecting the stock markets — Vladimir Vladimirovich Putin.”
Yulia Latynina mocked Putin’s “$60 billion house call” saying: “the subsequent overall decline in Russia’s stock market, which fell by $60 billion the day after Putin’s statement, has already cost the country’s steel industry far more than the losses it would have ever incurred from Zyuzin selling coal through the spot market.”
And the Kremlin’s response? Press spokesman Dmitri Peskov spoke as if from another planet, with the absolutely unmistakable echo of the USSR. He claimed that investors were to blame, having “reacted too emotionally.” Then he went utterly mad:
The real meaning of [Putin’s] statement was actually positive, not negative. Putin mentioned Mechel just as a flagrant example of violating the law. [His] real message for business was: We will create the most favorable environment for all of you, which you will be able to use provided that you don’t break the law. When investors understand the real meaning of Putin’s words, stock markets will cheer up.
The same sort of gibberish, verbatim, that we heard in Soviet times from Russia. How neo-Soviet can you get?
Last week the Kremlin aggressively denied any intention to house nuclear bombers in Cuba after the U.S. military reacted with outrage to leaks that it had such a plan in mind, and scurried to assure Georgia that it would soon pull back the “railway repair” soldiers it inserted into Abhkhazia a few weeks ago after Georgia generated massive international news coverage and threatened military retaliation. Then it hurried to make sure it hadn’t offended the mighty NATO alliance after “President” Medvedev’s crazy rhetoric, echoing Khruschev with his shoe, which seemed to imply Russia would dismantle it. And finally even the most ardent Russophile sociopaths, like Vladimir Frolov, scampered like frightened mice to minimize the devasating international black eye that resulted when Russia vetoed UN sanctions against Zimbabwe.
These four events, to say nothing of the stock market’s total implosion, clearly expose the Kremlin’s fundamental weakness. Russia stands totally alone in the world, utterly without allies, and its creaking military systems are no match for the cutting-edge technology of the West. Russia’s economy is puny, and when judged in terms of per-capita wealth it is at third-world levels. Quite simply, Russia is in no position to stand up against a concerted effort of the Western powers, and will not attempt to do so. Russia is only capable of pscyhotic rhetorical bluster, energy intimidation and assassination. No nation can be a significant player in world affairs relying on such crude devices.
Indeed, the only reason that Vladimir Putin remains in power now is that the Western governments have not made a point of confronting him — just as they didn’t timely confront Stalin or Hitler. In a childish and cowardly manner, they hope that the people of Russia will come to their senses and oust Putin themselves, perhaps after a massive downturn in the Russian business cycle forces their hand. But this is nonsense. Such hopes were vain in the time of the USSR and they are equally vain now. The USSR collapsed because of the concerted pressure brought to bear by the Reagan presidency, combined with Russia’s profound level of corruption and incompetence. The Russian people themselves did nothing to bring down the USSR, they watched it collapse just as they had previously watched Stalin rise to power and send millions off to perish in his concentration camps.
It’s impossible to identify anyone in Russia who could possibly be the leader of a mass movement designed to bring civilized government to the country. Who would that person be? Garry Kasparov? Mikhail Kasyanov? Grigory Yavlinsky? Mikhail Khodorkovsky? Nonsense. None of them has shown the slightest inclination, much less ability, to be the leader of a mass movement. The Kremlin has responded with barbaric, draconian cruelty to the largely insignificant murmors put forth by each, and liquidated any possiblity that they could do so. Others, from Galina Starovoitova to Anna Politkovskaya, have been killed outright.
So it’s time for the Western democracies to act on Russia. The world is beginning to catch on. Last week we published a fantastic essay from Newsweek magazine which called for European unity in oppositon to neo-Soviet Russia. Hopefully, this will be followed by similar calls on this side of the Atlantic led by whichever president gets elected in November.
It’s something all freedom-loving Amerians can agree on, regardless of their party affiliation.