Russian Inflation, on the Warpath
Perhaps the single most inane and comical pronoucement we’ve see come out of the Russophile camp this year was the suggestion that Russia had cured its life-threatening problem of chronic inflation. Russian inflation has remained horrifyingly high by world standards, and any reduction has been owing to the simple fact that Russians have seen their incomes wiped out by the global economic slowdown, which at its peak stripped 80% off the value of the Russian stock market. With no money, impoverished Russians had a hard time bidding up prices for Russia’s anemic manufacturers.
But now, inflation is back with a vengeance, and is expected to be one-third higher this year than Russians had been led to believe by their government, again aproaching double digits. Grain prices are already soaring because of the national epidemic of wildfires: Prices for buckwheat groats surged 7.3 percent, while wheat flour gained 2.8 percent and millet increased 2.1 percent.
Nobody can be surprised, of course, at Russia’s continuing inability to produce enough goods to satisfy demand even when its citizens are impoverished by world standards.
Russia cannot produce goods and services adequately because its government takes no effort to acheive this result. Instead, now as ever, the Kremlin squanders precious national resources on military aggression (invading Georgia, buzzing the shores of the United States with nuclear bombers, sending weapons to Iran and Venezuela and Syria) and a gilded lifestyle for the Kremlin elite (Putin and Medvedev have multiple palaces to live in).
Meanwhile, Russians themselves are shockingly lazy and unproductive, in part of course because they have given up hope that their society will reward their efforts. The goods Russians produce are sparse and poor in quality, and there is no market of any kind for Russian goods abroad. A society characterized by this extensive economic malaise cannot succeed. Jobs are not produced, growth is not achieve, and the society stagnates and ultimately collapses, just as the USSR did not so very long ago.