A Falling Tsar

Fantasies rarely come true. Putin’s is becoming a nightmare for the Russian people.

Perhaps Vladimir would be well-advised to find a copy of Lewis Carroll’s Through the Looking-Glass. The pieces of Humpty Dumpty cannot be put together again. The pieces of the Russian Empire cannot be put together again. The pieces of the Soviet Union cannot be put together again.

The grandiosity of Putin’s ambitions seem laughable in the stark light of reality.

Russia’s economy is smaller than Italy’s. It is about the size of Spain’s. It has been a few decades since either of them dominated the world.

Those numbers, however, are subject to revision. The forecasts for 2015 have dropped from an anemic growth of 1.2% to a negative .8%.

The Ruble has fallen 40% this year. It now stands at about 54 Rubles to the US Dollar. My guess is that the Russian populace already is quite familiar with the word, инфляция, but significantly more is on the way. We, of course, also have incompetent economic managers, so we are quite familiar with the English equivalent: inflation.

While we enjoy lower prices for gas at the pump, the reduced revenue for Russia is sending it into a serious recession.

Inflation and recession are not a popular combo anywhere.

Putin’s popularity is falling fast. He was riding high on the nationalistic enthusiasm engendered by his taking of the Crimea and his attempts to bring the Ukraine back into the Russian sphere.While Putin and a sizable number of disgruntled Russian atavists dream of reassembling the empire, the reaction in the West is, for some strange reason, just a bit less enthusiastic. His machinations brought on the sanctions, which put a squeeze on their economy ahead of the drop in oil prices.

While pretending to be a young, active, modern, shirtless man, old Vlad is thoroughly anchored in the past. As Angela Merkel, the Chancellor of Germany recently stated, empires and spheres of influence are relics of the 19^th and 20^th Centuries. He is still living in a world of fantasy, a world of delusion. Wake up, little Vlad.

Putin is too ignorant of the actual costs of empire to realize his folly. His Russia is a small part of Europe. The European Union is the overwhelmingly dominant economic power in his corner of the world. For Russia to prosper, it must align itself with the European Union. They need not join but they need to admit to reality.

True, many Russian regressives will be upset but the people will eventually enjoy the fruits of an enlightened policy.

The people of Russia need to say to little Vlad, “Wake up . . . and goodbye.”

UPDATE from Sergei Guriev, a former rector of the New Economic School in Moscow:

PARIS — In recent weeks, the fall in the Russian ruble and Russian stock markets closely tracked the declines in global oil prices. But everything changed on Dec. 15. The oil price remained stable, but the ruble and the stock price indexes lost 30 percent from Monday morning to Tuesday afternoon. An unprecedented effort by Russia’s Central Bank in the wee hours of Dec. 16 to stabilize the ruble, by hiking the interest rate from 10.5 percent to 17 percent, proved useless.

The cause of Russia’s “Black Monday” was readily apparent: the government bailout of state-owned Rosneft, the country’s largest oil company. Usually, bailouts calm markets, but this one recalled early post-Soviet experiments, when the Central Bank issued direct loans to enterprises — invariably fueling higher inflation. The Central Bank’s governor at the time, Viktor Gerashchenko, was once dubbed the world’s worst central banker.

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Tagged as: ambition, Crimea, czar, delusion, dollar, economy, empire, europe, fantasy, gas, German, Humpty Dumpty, inflation, merkel, oil, putin, recession, ruble, russia, soviet union, Tsar, ukraine, Vladimir