EDITORIAL: The Horror of Life under Putinomics


The Horror of Life under Putinomics

The Swiss bank UBS has just released its 2009 Prices and Earnings report reviewing of how much people earn and how much they have to pay to afford life in all the major cities around the world. The results for Putin’sRussia are simply stunning.

They show that, among the member nations of the Group of Eight, residents of Los Angeles need to work by far the shortest time — less than 10 hours — to pay for an eight-gigabyte iPod nano (which UBS calls an “ideal example of a globally uniform product”). Montreal comes next, 10 percent longer than L.A., followed by London (15 percent longer), Tokyo (25 percent longer), Berlin (50 percent longer), Paris (60 percent longer), and Rome (twice as long).

Bringing up the rear in its usual fashion is the G8 interloper, Russia. Muscovites in Russia’s capital city must work more than three times longer than Angelinos (a whopping 36 hours) to afford an iPod — and this grossly understates the Russian burden. Moscow, unlike virtually any other major city on the planet, usurps the national wealth to an obscene extent. For most ordinary Russians in the hinterlands, earning $3 and hour and praying their wages will actually be paid, an I-pod is an unattainable fantasy.

Russia is, in other words, totally without qualifications to sit on the G-8 panel as a simple matter of economics. Consider Russia’s barbaric political and legal systems, to say nothing of its open hosility to the security interest of the other G-8 members, and it’s easy to see why John McCain has called for Russia’s ouster.

The U.S. dollar versus the Russian ruble

The U.S. dollar versus the Russian ruble

Between 2006 and 2008, the Russian currency clawed back 20% of its value against the American dollar.  This meant that foreign products like TVs and blue jeans became 20% more affordable to Russians, though Russian exports became 20% more dear, costing Russian jobs.

And all of that work over the course of two years was wiped out, and then some, in the space of just six months at the end of 2008 when the ruble’s value plunged and the dollar soared, so that now it is worth 10% more than it was when the ruble began its expansion.

The same thing happened to the Russian stock market.  Some Russophile idiots insisted that the stock market had nothing to do with the lives of ordinary Russians, but they now have eggski on their faces as we have seen a horrifying rise in unemployment in Russia accompanied by a dramatic drop in real wages and purchasing power.

All this came as a shock to many who thought there was something real behind the Putin economy, but in fact all there ever was was smoke and mirrors.  Now, the Wizard of the KGB has been exposed, and the Russian economy lies in ruins. The world sees Russians for what they are:  The barbaric denizens of a third-world banana republic run by the secret police, no different than Zimbabwe and headed down the same road of self-destruction.

12 responses to “EDITORIAL: The Horror of Life under Putinomics

  1. This makes me wonder too, I too can’t understand how a dictatorship so bloody(Chechnia, Dagestan,Ingushetia, Georgia, Beslan, Nord-Ost, Kursk), so corrupt and so autocratic be among G8 countries, it simply does not make any sense. YES indeed Russia has more nukes that it sometimes threatens it’s neighbors and the world with, but is this kind of politics ever going to be fruitful? For the Russians or the rest of the world?

    • Don’t you know? Everything for the peace for our time.

      • I wish president Obama read Churchill…

        “The belief that security can be obtained by throwing a small state to the wolves is a fatal delusion.”
        Winston Churchill, The Gathering Storm

        “This is the lesson: never give in, never give in, never, never, never, never—in nothing, great or small, large or petty—never give in except to convictions of honour and good sense! Never yield to force; never yield to the apparently overwhelming might of the enemy!”
        Winston Churchill, October 29, 1941

  2. Being in Los Angeles, it is a relief that the cost of living is so low.

  3. As I recall, it was the first President Bush, or perhaps President Clinton, who first invited the Russians to be a part of this G8 group. I think the goal was to show their support to reform that was ostensibly carried out by Boris Yeltsin, and to demonstrate that Russia was welcome to the civilized world if she tried to become more like one of us.

    Well, obviously, Russia is no longer trying to become more like one of us and is not in the least interested in abandoning her barbarism and in entering the civilized world. The membership in the G8 has, however, been retained by her, probably by the forces of inertia. It would be difficult, politically speaking, to expel Russia now, although there have been calls to do just that. I think Sen. McCain proposed that.

    I guess Russia want to feel proud, whether justifiably so or unjustifiably so. The West can humor her, since she really does not matter, with her puny underdeveloped economy and all that. So, I think showing our total contempt and disgust with her is even better.

  4. There isn’t going to be a G-8 before long anyways. We are moving towards a G-20.

  5. Just for the record. It is September, and our Kavkaz-center fans who were swearing back in May-June in capital letters that Russia will attack Georgia in a matter of days disappeared.

    So, ahmad, sascha, George and whoever else – next time you foam at your mouth with some craziness (like the claim that mojaheds blew up a power station in Siberia) – could you please put some disclaimer. Something like

    I was absolutely confident that Russia will attack Georgia in summer of 2009. Please keep this in mind when you try to assess the credibility of my posts.

    • @Kavkaz-center fans

      You mean, Kadyrov-fan and his other split personalities? :)

      Btw, summer didn’t end yet (and the Second Chechen started in September-October).

      And we still have recent moves like few days ago, when they moved into North Caucasus 3,800 new Army troops from the Moscow Region (complete with a Grad battery in the column).

      They even officially denied it’s for the “Caucasus antiterrorism forces”: http://en.rian.ru/russia/20090827/155943960.html

    • Living in Georgia myself, I am damn glad that they did not invade.

      However as Robert said, there is still at least one more month of good weather left.

  6. Putin isn’t up for any immediate foreign military adventures right now. He’d love to crush Georgia and Ukraine, but, there are limits to what he can get away with right now.

    Things are deteriorating too fast for him economically at home to make any big missteps. He doesn’t have the full fledged support of the Russian masses to invade Georgia and he knows it.

  7. I know one Russian family consisting of the Mother and a son and daughter in their mid 20s. All three have had their salaries slashed 20% and work a four day week.

    Not only are the salaries low, the prices are high as noted in the article. In fact, everytime I go to Russia, I am asked to buy products for friends and they reimburse me. A Nokia phone that cost $300 in NY was going for $560 at Evroset. One of my friends came to visit me and found a MacBook Air on sale for $1200. The price in Russia over $2000.

    As one of my Russian friends states, “Russia is a country with low salaries and high prices”.

  8. Now Russian “Flagship” carrier Aeroflot is turning to Boeing and Airbus because “made in Russia” = crap.

    Aeroflot plots a new path
    Russian airline Aeroflot was once the poster child for the nation’s engineering prowess. But as the BBC’s Richard Galpin reports, the airline is turning away from Russian-made planes at a potentially huge cost to the nation’s manufacturing industry.

    The iconic Soviet-era Tupolevs and Ilyushins, previously the pride of the country’s aircraft manufacturing industry, have become so outdated that Aeroflot is now buying the vast majority of its planes from Boeing and Airbus.

    “We are sad to some extent to say goodbye to the Tupolev 154s,” says Vitaly Savelyev, Aeroflot’s chief executive officer.

    “But its time is now gone. The Tupolevs use so much fuel that they’re not economic to operate.”

    It is estimated they consume almost 50% more fuel than their Airbus equivalent.

    Designed in the 1960s, they are also noisy and uncomfortable with famously floppy seats.

    If you are unlucky enough to be allocated the seats placed in two strange alcoves at the back of the plane, it feels and smells like you are actually sitting in the toilet.

    A tour of the cockpit of a Tupolev 154 reveals a dense cluster of clunky knobs and glass dials surrounding two battered seats and a yoke (or joystick) of which the World War I fighter ace the Red Baron would have been proud.

    Industry on the brink

    Aeroflot is aiming to become one of the world’s leading airlines and can no longer afford to fly such museum pieces.

    The whole company is about to go through a radical restructuring which will see 6,000 jobs axed over the next two or three years.

    It also says it is improving the in-flight catering and entertainment services and planning to introduce new uniforms for its flight attendants this autumn.

    But by turning its back on Russian-built planes in the name of modernisation, Aeroflot may have sounded the death-knell for the country’s aircraft-manufacturing industry – which is already struggling to stay alive.

    The conglomerate of state-owned firms still making civilian planes was bitterly criticised by the Russian Prime Minister Vladimir Putin recently.

    It has debts estimated at 95bn roubles ($3bn; £1.8bn) and is being kept afloat thanks to massive government subsidies.

    “We are of course going to support the aviation industry,” Mr Putin said.

    “But this is not a justification for negligence – quite simply for bad work. Plans for the manufacture of planes are not being implemented.”

    Glimmer of hope

    The factories are trying to produce more modern ranges of planes.

    There are for example new Tupolevs.

    But none of the airlines here really want to buy them as they are not comparable with Western planes.

    Delivery dates are also extremely unreliable. Last year the entire industry delivered seven airliners when the total number ordered was just 13.

    “It is true that the planes we are making here are out of date; and we only sell a handful of them,” says Viktor Kuznetsov, deputy director of Aviastar, which manufactures the Tupolev 204.

    “But we have to keep going. Just think what would happen if Boeing and Airbus stopped selling to Russia. This is why our industry is strategically important for the state and will survive.”

    For all the gloom there is still one glimmer of hope for Russian’s aviation industry.

    It is a new regional airliner called the Superjet which went on public display for the first time at the Moscow air show last month.

    Sleak and modern, it has received quite good reviews from the experts.

    It was built by Sukhoi but with significant assistance from Boeing.

    Perhaps under pressure from the government, Aeroflot has placed an order for 30 of these planes to ensure it does have a Russian element in its fleet.

    But it is not clear when the first planes will be delivered.


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