EDITORIAL

Putinomics Crushes Russia’s Economy

“The Russian economy is in recovery!” That’s the Kremlin’s story and it’s sticking to it, whatever the facts may show.

And what the facts in fact show is continuing disaster.

The VTB Capital purchasing manager’s index, for instance, shows that employment has fallen every month since October 2009, reaching 9.2% in January, the highest level since March 2009. The PMI index fell to 51.0, it’s lowest level since last July, and just one point above the level that indicates a double-dip recession. VTB says that the services sector “slowed to nearly a standstill in February, as the number of new orders declined dramatically from the prior month.”

That’s only the tip of the bad-news iceberg where Putinomics is concerned.

Robert Amsterdam points out that the Russian banking system is so mired in failure that the Kremlin is actually praising the role of pawnshops, which are thriving as banks tumble and collapse and lending dries up to a mere trickle.

The initial public offering of Rusal, the world’s largest aluminum producer, was a humiliating disaster, so much so that the offering’s own underwriters lost interest in the shares and repudiated them.

And in another truly breathtaking development, the Kremlin admitted things were getting so desperate it might be prepared t0o abandon the national currency.

There is only one word for a person who can review an avalanche of bad news like this and still contend that the Russian economy is in recovery, and that word is: Idiot.

The world has watched slack-jawed as the once-vaunted Putin economy has imploded. It has seen exposed Putin’s ridiculous lies about Russia becoming an independent “safe harbor” that could challenge the United States as a leader in a multi-polar world. The harm done to the Putin economy as a result of the global crisis was far, far greater than what the USA experienced.

Worse, the world has seen exposed the naked fraud of the Putin economy, which in fact is nothing but a sham, totally dependent on world crude oil prices. Though he has held power for more than a decade now, Putin has done nothing to diversify the Russian economy. To do so would require two things that Putin is incapable of: first, knowledge of economics and business; second, a willingness to allow competing centers of power to arise in Russia, centers that could one day challenge him.

So Putin has fiddled while Russia burned. He has not prepared his country for the vagaries of the business cycle, not prepared it to be competitive in a globalized economy, not prepared it to face the technology of the 21st century. Instead, he has done nothing but provoke foreign countries, so that Russia has far more enemies now than when he took power, and divert huge amounts of resources to a new cold war.

Putin has acted, in other words, exactly like what he is: a narrow-minded, proud KGB spy who wants nothing but to create a new-and-improved USSR.