Possibly the worst form of economics, except for all the rest…
The West-Russia economic & diplomatic decoupling that is underway right now is completely without historical precedent for such a large ($1.5 trillion) and relatively integrated economy as Russia's. And sanctions aren't even the main cause of it ??
— Dmitri Alperovitch (@DAlperovitch) March 5, 2022
The fact is that it is the unilateral decisions of Western companies to pull out of Russia or break their contracts with Russian companies (when the sanctions are not requiring them to do so) that is driving Russian economy into a very deep economic hole pic.twitter.com/US6W21yZk9
— Dmitri Alperovitch (@DAlperovitch) March 5, 2022
Yes, sanctions on some of the biggest Russian banks could make their ability to pay local employees and buy/sell goods complicated but they could have found a way to make it work if they wanted to. The reality is – no one wants to continue doing business with Russia after Feb 24
— Dmitri Alperovitch (@DAlperovitch) March 5, 2022
And selecting a new candidate is a coordination problem of its own. Hence, the probability of a regime change is low. 21/
— Professor Olga Chyzh (@olga_chyzh) March 5, 2022
“sanctions will not topple putin because he’s built a security state also in a few weeks those people will go unpaid” is a real head spinner
— kilgore trout, death to putiner (@KT_So_It_Goes) March 6, 2022
and I don’t care if putin remembered to secure pay for an elite security force of 5,000 people, that’s not gonna cut it in a country of 144 million unpaid unemployed hungry people
— kilgore trout, death to putiner (@KT_So_It_Goes) March 6, 2022
I personally think that there's about 144 million other actors impacted by these sanctions that aren't really considered here. That seems like a flaw.
— Atticus Goldfinch (@AtticusGF) March 6, 2022
we’re already tiers beyond what sanctions have ever accomplished, they’re 10 days in and practically reset to the stone age
— kilgore trout, death to putiner (@KT_So_It_Goes) March 6, 2022
there is going to be a qualitative change in what Putin can offer. one of the major benefits available to both oligarchs and siloviks is an exemption from having to live in russia and deal with the institutions putin has built. but he can't offer that anymore. https://t.co/pyBaeytqUp
— rev. howard arson (@Theophite) March 6, 2022
So, y’all tell me about the flaws in this reasoning?
Medium Cool with BGinCHI – What’s Next?
Kent
Whether or not sanctions have the desired effect of getting Russia to turn tail and leave Ukraine is an open question.
But I do think we have crossed a Rubicon here. Essentially the western world is saying we will no longer do business with and sponsor a state that wages wars of aggression on its neighbors. We simply won’t, regardless of the costs. That has never happened before in history. Aggressors have always gotten away with slaps on the wrists. As has Russia frankly over the past 20 years.
What I can’t see is the end game. Not for the west, not for Ukraine, and not for Russia. I have absolutely zero sense of where this is going to end up. And it doesn’t seem like anyone else does either. That is extremely scary.
japa21
Okay, I admit freely I am not an expert in economics or diplomacy or the military. But I do understand minds and how people think. And I am becoming very concerned about the Russian people. As zheena has remarked many times, the biggest victims of the sanctions and these companies moving out of Russia are the middle class Russians, the ones who could best push for a new “regime”.
Do they blame Putin for these problems? Or are the going to blame the West, EU, NATO, UK and US? And if it is the latter, will they stand more firmly behind the government. Specially if, ultimately, the begin to believe the real villain here is Ukraine.
Remember, Russians, just like Ukrainians, have a long cultural memory, and undergoing extreme hardships and surviving them is part of the memory.
Not going to pretend I have answers. I just think sometimes we (meaning many of us here) seem to really take pleasure in a lot of this and forget the human suffering element.
Yutsano
I noticed she put the only agents of change as the oligarchs. It’s as if any level down from the billionaires doesn’t exist. News flash: hungry humans get unhappy really fast. I’m reminded of an old slogan from the Revolution: “нет хлеба!!!” that brought down the Tsar. History might be rhyming again.
dmsilev
I don’t think anyone really knows. Which doesn’t help our anxiety levels, that’s for sure.
Chief Oshkosh
I see the Coke logo in the graphic, suggesting Coca-Cola has pulled out. Is that so?
As to the analysis of Prof Chyzh’s analysis – I think it’s correct. 144M people going without pay will be pissed off. Chyzh’s analysis is what I’ve seen a lot of recently from some experts: they’re blind men describing the elephant.
Suzanne
I don’t know if sanctions will change Putin’s mind, because I don’t think anything will change his mind at this point. I wonder if they will incentivize anyone to assassinate him. I can’t see him ever leaving office while alive.
Omnes Omnibus
@Chief Oshkosh: At whom will they be pissed off?
Suzanne
Unrelated question: Suzanne is leaving town for four days. How many pairs of underwear will she take?
Omnes Omnibus
@Suzanne: One for each day and a spare?
White & Gold Purgatorian
@Suzanne: At least 5.
CROAKER
@Suzanne:Boogity, boogity
Sebastian
And Russia is going full Nazi.
Calouste
I don’t think Russia has been reset to the Stone Age in these 10 days, but they are getting pretty close to the Brezhnev era.
Suzanne
Quoting Zack Bornstein on Twitter:
Me every day: *never shits myself*
Me packing underwear for a vacation: I’m going to shit myself 2-3 times a day
trollhattan
@Suzanne:
Underwear? Highly overrated.
Kristine
@Suzanne: Eight, because they don’t take up much room and showering before going out means changing.
White & Gold Purgatorian
@Suzanne: It seems to me that effective opposition to Putin (as in removal) will almost have to come from the Russian military, if it can happen at all. Yes, the oligarchs have money, but do they have the resources and decision making ability to undertake such action? I’m doubtful. Under Putin, have even the oligarchs have grown soft and lazy, going along to get along with the guy who has enabled their wealth?
Sebastian
@Kent:
It might be the ultimate win of the Free World. Russia and China wanted to have it both ways, all the trappings of free trade and free markets but none of the obligations. It appears this was the perfect Trojan Horse after all because once your people get used to the luxury, you can’t go back.
There are echoes of Asimov’s Foundation here for those who are familiar.
China could be next once the West realizes that the economic pain is only temporary for us but fatal for the other side. Amazing lessons to be learned here.
Omnes Omnibus
@Suzanne: Well, if you get a bad sandwich, you will be okay.
JMS
@Suzanne: on vacation 2 weeks ago we thought we’d be gone 4 days but there was a problem with the flight and we had to stay another night. Never so happy to have brought 2 extra pairs of underwear, one extra pair of socks and a spare outfit (shirt and pants). Usually overpacking is overkill but for once it paid off.
Peale
I think the gas companies bailing aromatic immediately indicates how fed up those companies were dealing with Russian corruption. My own company was early in to Russia but exited about 12 years ago. The consumer goods companies are probably having similar problems.
Suzanne
@White & Gold Purgatorian:
I don’t think any of them have the huevos.
I mean, I get it, I don’t have the huevos, either.
Ruckus
@Suzanne:
Personally I don’t think there is much of a mind left to change. I think he’s running on pure greed and need for attention and will never have enough. He’s built a system based upon massive greed and control by him and his helpers/henchmen and that’s falling apart. He’s striking out at his supposed attackers but the only one doing any attacking is him, and that list of companies and countries that are leaving him holding the bag is an attention getter. He can mentally blame the entire world for his failure to be the “man” he thinks he is and deserves to be but somewhere in that head full of ego he knows better. A whole lot of people are going to be hurt in the end for one man’s size of the moon ego. As history has always been made, so shall it be made again. I’m betting that we won’t see much of a change in human concepts of power in the lifetime of anyone alive today. I wish I was wrong.
Roger Moore
@Kent:
I think there’s more going on here than just the invasion of Ukraine. Russia has been engaged in a covert war against NATO at least since 2014, and quite possibly longer than that. NATO hasn’t responded in kind, both because we haven’t been sure what the best way to respond is and because Russia has been buying off right-wing groups in the West, and they have been fighting to keep us from acting. The invasion of Ukraine gives NATO an obvious excuse to act and is so blatant the right wing parties that Putin has been buying off are afraid to support him openly. It’s not obvious the response would be so strong if Russia hadn’t done so much leading up to the war.
planetjanet
I understand Kilgore Trout’s point that if you don’t pay the military and cops, then you won’t have a military or cops. But we did that experiment in the US with several furloughs of federal employees, some lasting many weeks. Yes, there was an expectation that they would eventually get back pay, but the country kept moving. We closed a few parks and museums. That is about it. It would take a really long time with no pay and no hope for pay before people really walked off.
dm
So, I’m reading the replies to the experts and thinking: why does this sound like March 2020 twitter-responses to epidemiologists?
Lately I’ve been reading some threads (e.g., this from Slava Malamud: https://twitter.com/SlavaMalamud/status/1500499723295277059
and I find myself thinking of Weimar Germany, and Keynes’ The economic consequences of the peace.
Was Yeltsin Weimar, and Putin the fascist consequence of the economics imposed on Russia? Or is Putin the Kaiser, and can we avoid the real monster that is yet to come this time?
Scout211
@Sebastian:
Thank you for that link. That Twitter thread was very informative.
Suzanne
@JMS: I like to be prepared for contingencies. I almost always overpack, but I would rather err on the side of caution, as I too have had travel mishaps.
I do hate packing the toiletries, though. I do not decant into smaller containers, so it is a pain.
Roger Moore
@trollhattan:
I thought that was Baud’s line. And Cole’s.
Jeffro
I wonder if someone or some campaign could help Fox News hosts draw parallels to their own (financial) peril here.
More importantly, I’d REALLY like to be a part of a campaign to help Fox News hosts draw parallels…or not, and pay the price.
Ruckus
@Suzanne:
You wear underwear in pairs?
Is that comfortable?
Le Comte de Monte Cristo, fka Edmund Dantes
So here’s my thought – what does Vova think happens when his military campaign is over and he succeeds in crushing Ukraine’s independence? He’ll have about 37M desperately impoverished people with a grudge in his south and no economic ability to provide relief. His military will be badly decimated, his people impoverished and locked inside due to sanctions and one trading partner worth a shit (PRC) but one that also drives hard bargains.
Do we just tell Xi he can have Siberia east of the Urals if he grants Vladivostok special administrative status? And let Putin know we told Xi that?
frosty
@Suzanne: I have a shower kit packed with all the toiletries I need, in small containers. Good for a couple of weeks at least. Granted, I’m a guy and I use a lot fewer than Ms. F, so it’s easier to keep a kit packed for travel and just grab it and go.
dm
@Kent:
I’m sure the Yemenis will be happy to hear this.
?BillinGlendaleCA
@Omnes Omnibus: Baud.
?BillinGlendaleCA
@Suzanne: I was told there would be no math.
Kent
I think China is WAY too smart to follow the path of Russia. The Russians have been engaged in endless military conflict and border disputes along endless stretches of their border since basically forever, and have engaged in all manner of military adventurism abroad including most recently in Syria.
The Chinese? Not so much. Other than the Korean war and their ill-advised invasion of Vietnam in the early 1970s their military adventurism has been exceedingly minimal. The Chinese build bullet trains and highways and factories and dams around the planet rather than waging wars or building military bases.
Look at Africa. European countries have been waging war there for 200 years. The Chinese moved in and are doing things like building light rail transit systems in Ethiopia rather than military bases. They will probably end up dominating the world but it will be through economics not military conquest.
Kalakal
You could cite the 1956 Suez Crisis.
The UK, France, and Israel ( with a lot of diplomatic subterfuge) invaded Egypt to regain control of the canal after Nasser nationalised it. Massive US economic sanctions on the UK led to a humiliating climb down on the part of the British and the resignation of the PM. Its often cited as the end of the UKs pretence to be a Great Power. The whole affair was a humiliating shambles for the British and French, a justified cause of fury to the Egyptians and a major territorial gain for Israel.
As it lead to the canal being blocked for decades disaster is too kind a word.
While there are similarities with now the differences are great. Eden was not Putin and could resign and live. But Britain and France did back down and retreat before sanctions trashed their economies. And blamed their own idiot leaders ,and Eisenhower for pulling the rug out from under them, but mostly their own leaders
As Omnes put it, the big question is who are 144 million Russians going to hold responsible?
Le Comte de Monte Cristo, fka Edmund Dantes
@Suzanne:
3. They can be flipped.
Gin & Tonic
@Suzanne: Why are they “pairs”? You only wear one at a time, I suspect.
Villago Delenda Est
Classic FAFO, Vlad.
Poe Larity
The oligarchs have their money and feifdoms, but they have zero power over the security state. Someone very close has to be bought and someone that close is already probably very well taken care of.
Putin’s 10 or 15% cut of the oligarch’s trillions can afford loyalties that are unimagineable. The presidential guard, FSO and Kremlin Regiment alone are like 20 or 30K.
The rioting will have to be very big to kick over that pot.
Villago Delenda Est
@dm: Alas, they don’t count. Melanin content too high to care.
Enhanced Voting Techniques
It’s not impossible that has been going on for a while now and the cops and military get paid by bribes or selling government property on the black market.
dm
I doubt we need to even tell Xi this. He and his generals have probably been looking very closely at the Russian Army’s performance in Ukraine, and calculating just what price they’re going to demand from Putin for bailing him out as his economy collapses (Russians think the West humiliated them after the fall of the Soviet Union. Just wait until they learn the Russian for “Belt and Road Initiative”).
On the other hand, Siberia’s resources may be much more attractive than the headaches invading Taiwan would bring (another lesson Xi and his generals may be contemplating).
Another Scott
@dm: Thanks for the pointer.
I have to think that those angry white guys are a minority – just like over here – but they have too much power – just like over here…
Grr…,
Scott.
Calouste
@Ruckus: Yes, Putin is a lost cause. At the moment IMO it is about keeping the folks who actually control the launching of nukes convinced that it is better for them to ignore orders from Putin and not invite a counter strike. Putin and his family might all have nuke proof bunkers, but even his general staff will have cousins and nieces and nephews who don’t and will die in a nuclear war. And that will be on their minds.
Villago Delenda Est
@Kent: A state that wages aggressive war against a neighbor in Europe. This is a key distinction.
Gin & Tonic
@?BillinGlendaleCA: There is always math, Bill.
JoyceH
@Le Comte de Monte Cristo, fka Edmund Dantes:
I honestly don’t think that’s going to happen. Russia’s military isn’t nearly the threat that both we and Putin thought it was – it’s falling apart as we speak. Sure, they can do a lot of damage, but the damage isn’t strategic. Bombing an apartment building is about as useful a step toward overthrowing the Ukraine government as bombing the OKC federal building advanced the cause of overthrowing the US government.
CROAKER
10,000 days …. Right in Two
https://www.youtube.com/watch?v=6E1DkgUNfBc
Ken
For some reason, I feel this should also mention a train travelling west at constant speed, or perhaps a goat and a cabbage. I was reading Dudeney’s 536 Puzzles and Curious Problems yesterday, and am clearly still under the influence.
Kent
@dm: Near as I can tell, the Yemen war is a proxy war between two bad actors, Iran and Saudi Arabia, in which both sides have few redeeming qualities. Not the Yemenese government supported by Saudi Arabia. And not the Houthi rebels supported by Iran.
But yes, we (the west) should be doing more to bring that conflict to an end as well.
counterfactual
Not digging through a massive twitter thread crawl right now but: “The current sanctions decrease the size of the pie, but the pie is still very large and Putin’s ability to distribute it is intact. ”
I’m quite sure that all the oligarchs are rational consumers, who will accept only slightly diminished circumstances with aplomb and general cooperation.
Nah, it’ll be Mad Max over the last can of fois gras
And I’m reminded of all the expert opinion on the effectiveness of the Russian Army from four weeks ago.
Kent
Well yes. The west is composed largely of Europe and North America. So this is our backyard. And especially the backyard of Poland, Germany, France, Hungary, etc. War on the European continent threatens to drag in all of Europe in a way that a war in say Myanmar or Yemen doesn’t.
West of the Rockies
As has been suggested here, “the West” has been silently enraged by the Russian State rat-fucking elections, social media, etc. Their hacking and propaganda have not gone unnoticed. Payback is a serious bitch.
I go have sympathy for the people of Russia. Their elections are repeatedly stolen by the little goblin Putin, may he rest in pieces.
delk
@Suzanne: you can always fly home in the pair you flew in with. Gives you something interesting to say when they ask you if you have anything to declare ?
debbie
@Suzanne:
I heard Putin thought he’d insulated Russia against sanctions, but these are far more onerous than he expected and he is very, very angry. Makes it worth it in my book.
Also, someone over on FB posted a tweet from Kyiv Independent saying Anonymous hacked into Russian state t.v. and played war footage. Even better!
Mike in NC
@Suzanne: Putin is in office until 2036.
Suzanne
@Gin & Tonic: I don’t know why they’re pairs. In Spanglish, they’re chonies. Plural, but not talked about as a pair.
I suppose this is related to how we talk about “a pair of pants” or “pants” but not “a pair of shirts” even though we have two arms.
Honus
@Suzanne: minimum is three pairs, one to wear, one to wash out in the sink and hang up to dry, and another that you washed the day before and is now dry to change into. Did that for a month in France; of course that was forty years ago when I was 25, and I could go commando for a day or two or week.
Realistically, pack at least five and as many more as you can stuff in when everything else is packed. Use the same procedure for socks.
Poe Larity
@Suzanne: idk, but I do know the train you are on and the one going 60 mph from the other direction will cross in 4 hours.
Le Comte de Monte Cristo, fka Edmund Dantes
Watched a BBC reporter do some “man in the street” interviews in Russia Wednesday or Thursday. The 50 and up crowd was in as much denial as a Fox News junkie in The Villages. The younger ones either said “I’m not comfortable saying anything” or were openly against the war.
Calouste
@Poe Larity: Heads of state get rarely assassinated by someone in their entourage for money, mostly because the assassins know their chance of survival is pretty low. The motivation tends to be political.
Honus
@Gin & Tonic: I only wear one pair of trousers, pants or jeans at a time too.
CROAKER
Hej Sokoly!
https://www.youtube.com/watch?v=e1AmVd8OLd0
Calouste
@Villago Delenda Est: Note in this context that Ukraine in 2022 is Europe in a way that Yugoslavia in 1991 wasn’t. “Europe” has expanded over the years.
And of course this involves Russia, which triggers a lot of different reactions in a way that other countries, with the exception of Germany, don’t.
Goku (aka Amerikan Baka)
@Kent:
I read recently that China’s population will begin to age and shrink over the next 40-50 years, putting stress on social programs and economy. That might put a crimp in those plans?
Cameron
@delk: “fly home in the pair you flew in with” = “the hose you rode in on?”
Villago Delenda Est
@Calouste: Very true. Recall that in 1900, the Tsar and his underlings were trying to convince the other great powers that they (the Russians) were wypipo just like the English, the French, or the Germans. The standard retort was “scratch a Russian, find a Tatar.” They were not considered to be “in the club”.
Goku (aka Amerikan Baka)
@Le Comte de Monte Cristo, fka Edmund Dantes:
Did you read the Twitter thread that Sebastian posted above? It seems there’s popular support for the war in Russia according to that thread
NotMax
@Suzanne
Travel tip:
Underwear is available for purchase out of town, too.
;)
Cameron
@Villago Delenda Est: Even though the royal families of Germany/Russia/UK were related. Early 20th century just seems like such a weird world to me.
Suzanne
@NotMax: I packed probably 15 pairs. What can I say? I was a Girl Scout. BE PREPARED.
santa?
As history has always been made, so shall it be made again.
@Ruckus:
Godzilla!
randy khan
@counterfactual:
Also, when the pie shrinks a few percent a year, it’s not so bad. When it shrinks 30% in a month, different story.
I’m not going to make any predictions here, but I get the sense that the sanctions are going to continue for a good long time and that quite a few countries are working out their permanent alternatives to Russian gas and oil.
Chacal Charles Caltrop
@Villago Delenda Est: well they weren’t around to be in it for long, that’s for sure.
@Honus: unless you’re traveling in the Middle East. The air there was so dry I could wash my cotton clothing in the sink in the evening, hang everything to dry in the closet, and all my clothing would be bone dry by morning, even the jeans.
@Kent: I agree. Whatever the Chinese knew about Putin’s plans, I’m pretty sure they didn’t sign up for World War III.
Ancient Atheist
The vastness and resources of Russia are immense, yet the GDP of Russian has remained stagnate for the past 20 years. It varies from $1.5 trillion to $1.8 trillion under Putin and his oligarch leadership. Year over year that’s about equal to the GDP of Texas or Italy. Can Putin’s dictatorship be stopped by sanctions? History says no; but these are different times. However, we can now see the insanity of, “mutually assured destruction” as a geo-political policy. For that to work both sides have to play. Putin’s not playing and that’s a problem.
Uncle Cosmo
(JFC, I just typed out a long post & my PC ate it….)
In the past I’ve remarked here on the seeming incongruity of captialist bazillionaires and their pet political party being in bed with Ptui!n’s Russia. It strikes me there are two main reasons:
I wondered how long it would take our bazillionaires to tumble to the key difference – Ptui!n is a bazillionaire with thermonuclear weapons and death squads and a willingness to use them (or at least, credibly threaten to use them). And whether they’d understand that they are not safe in the same world with a Ptui!n before it was too late – for them and for human society.
The invasion of Ukraine might just have tumbled our “malefactors of great wealth” out of their comfy beds. They might ruefully be waking up to the notion that it’s waaaay safer (and probably just as profitable) to make common cause with whatever remains of democratic forces, and back off the headlong rush to world oligarchy for long enough to restore some sanity.
The great robber barons have made tactical shifts like this before. Consider the Gilded Age when slight easing of the assault on the working classes probably staved off proletarian revolutions. Consider the end of WW2, when US corpitalists acquisced in Fordian bargains** and power-sharing with labor, along with high marginal tax rates, in order to stave off what many feared would be a precipitate return of the Great Depression.
Maybe PUJOTUS*** can see an opportunity to negotiate a more humane deal with the apprehensive capitalists of the world to get us through the next few decades of extreme peril. Y’think mebbe?
(As Beau of the 5th Column says, It’s just a thought – y’all have a good day…)
** During the first third of the 1900s, Henry Ford notoriously paid his auto workers much better than his competitors, who scoffed that it was an unsustainable policy. HF explained that he wanted his employees to be able to buy the cars they produced. And they did, in droves. Ford ended up with the $$$ anyway, but his employees ended up with stuff they wanted. That sort of deal across American industries worked well for the 25 years after VJ Day – so long as wages were essentially recirculated within the US economy, until Europe and Japan recovered sufficiently to compete for American workers’ cash and the system was no longer “closed”.
*** President Uncle Joe Of The United States. :^D