THE omens were bad. A few hours before Vladimir Putin, Russia’s president, was to start his state-of-the-nation address on Thursday, Chechen insurgents launched an attack on Grozny, the Chechen capital. The presidential motorcade was spotted rushing to the Kremlin in the middle of the night. But when Mr Putin finished speaking, there was a light sigh of relief. He did not declare war on the West, or order every human-right organisation in the country to be shut down; he even promised not to suffocate private business. By current Russian standards, this was the height of liberalism.

Mr Putin started with Crimea, which Russia annexed in March. He claimed the peninsula was as sacred to Russians as Jerusalem's Temple Mount is for Jews and Muslims: his namesake, Grand Prince Vladimir (or "Vladimir the Great"), was baptised there in 988 before bringing Christianity to Kievan Rus, the nascent state which later evolved into Russia. This appeal to religious history dodges the fact that Crimea was only conquered by Russia in the late 18th century, and spent far longer as a part of the Ottoman Empire. It will be of little help in dodging Western sanctions.

But Russia's annexation of Crimea, Mr Putin argued, was no more than an excuse for Western sanctions against Russia; had it not been for Crimea, the West would have thought of something else. In the 1990s, he claimed, American special services financed and supported Chechen terrorists in an effort to split Russia. “They would gladly let Russia follow the Yugoslav scenario of disintegration and dismemberment….It did not work, just as it did not work for Hitler…who set out to destroy Russia and pushed us back beyond the Urals. Everyone should remember how it ended,” Mr Putin said. The overthrow of the government in Kiev in February was allegedly organised by America to encroach on Russia's interests. Russia, in Mr Putin's version, had not initiated the confrontation with the West, but was pushed into it by an America bent on dominating the world.

The most worrying thing about Mr Putin’s address is that he may actually believe it. Just as the Russian media invented Ukrainian fascists to justify its hybrid war in Ukraine, it is now inventing American aggression to justify its isolation and confrontation with the West. As Ekaterina Schulmann, a columnist and political analyst, put it, “Aggression is born out of feeling insulted—in the eyes of the perpetrator it gives justification for every horrible action.”

Mr Putin did talk about the economy, promising not to raise taxes for four years, and to provide legal amnesty for repatriation of money coming into the country from offshore. In contrast to Mikhail Gorbachev who, in the face of the oil price collapse in the mid-1980s, opened the Soviet political system to competition and improved relations with the West, Mr Putin did not utter a word about the Russian political system or about corruption. Mr Putin clearly hopes that the devaluation of the currency, combined with a less draconian attitude to private property, will spur economic growth.

The trouble is that it is not just the rouble that has been devalued, but Mr Putin’s words as well. As Boris Nemtsov, Russia’s veteran opposition politician, says, the trust between business and the Kremlin has been destroyed. What Mr Putin says no longer has any bearing on the economy. While Mr Putin was talking, the rouble kept falling. The Russian public may have been euphoric about the annexation of Crimea when their incomes kept growing. But it now seems more concerned about the erosion of living standards and high inflation than it is about the place where Prince Vladimir was baptised.