Putin Blames Outside Forces for Economic Woes
nytimes.com
nytimes.com
It is sort of nice to see economic sanctions being effective (even if that is only part of the story.) They also seemed to have a real effect on Iran in getting them to change their behavior. I think that Israel may be next on the list (although primarily from Europe, US is likely to sit out that fight), the wind is sure blowing in that direction.
Let's turn this around ~ what if the world put similar sanctions on the US after the Iraq/Afghanistan blunders?
Actually it probably would have been a good idea to use the threat of economic sanctions to stop the US invasion of Iraq based on false pretenses (remember it was about WMD) -- it was a mess all around, hugely costly in terms of Iraqi life (aren't the estimates in the +100,000 range these days?) and US money (2 trillion if I remember correctly) and US credibility.
I doubt you could have gotten wide support for sanctions regarding stopping the larger multinational force in Afghanistan.
Ironically, it is likely because of the Iraq debacle that the US is in favor of economic sanctions.
http://www.nytimes.com/roomfordebate/2013/11/19/sanctions-su...
The deep economic problems Russia now faces could have happened to any Russian leader who pursued a similarly kleptocratic, state-enterprise oriented economic policy. If Russia had a more free and more diverse economy, with a genuinely free press and rule of law, the daily life of the common people would be more resistant to economic shocks caused by the drop in the world price of petroleum, which is the major source of revenue for the Russian government.
If goods don't cross borders, soldiers will.
However, the real politik of it is simply: "The rest of the world needs the US more than the US needs them." Now,that's not totally true and hyperbole, but the point is, the US economy is such a large factor in the overall world economy, the costs from sanctioning the US would hurt many other countries much more so than sanctioning a country like Iran, Iraq, Cuba, or Russia, which are usually very small (economically speaking), somewhat isolated (economically and politically speaking) countries. For better or worse, that's one of the things that makes the US a superpower.
Of course I'm not pointing fingers or blaming any side, it's just strange to see history is repeating itself all over again. The news about the NASA budget increase was no surprise for me anyway...
[1] http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MC... [2] http://en.wikipedia.org/wiki/Russia–United_States_relations#...
US energy independence is unrelated to Russia. The entire Russian economy could go down the toilet and the world would hardly notice. Short of starting a nuclear war Russia is irrelevant at this point. They will have to get along with Europe at some point but a whole generation is now lost.
It's just that the best way to put pressure on a country like Russia, is by affecting the GDP. Unfortunately for Russia this has proven pretty easy since a big chunk of the GDP comes from oil and gas.
... but the numbers suggest otherwise. The last few years there is no increase in production by OPEC countries: http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pi...
The Saudis used to keep to their role as swing producer but this time they're letting the rest of OPEC sweat. They've got currency reserves to weather this storm but most of the other OPEC members do not (save for the rich Gulf emirates). The Saudis are trying to teach the rest of OPEC a lesson and bring them back in line.
Couple that with the phenomenal increase in American oil and gas output due to fracking and horizontal drilling and you've got a situation in which two major producers, the US and Saudi Arabia, are flooding the market. Since there's no central authority over American producers, they'll drill whenever the market price will sustain their project. America is unique in that mineral resources are privately held rather than owned by the state, giving private enterprise the incentive to drill as much as possible until the price renders a given well uneconomical.
The end result is that the Saudis have abdicated their role (not for the first time, but this may be the last) and the Americans have picked up.
America is now the world's swing producer. No one saw that coming.
http://arabianindustry.com/petrochemicals/news/2014/dec/14/s...
Most wells don't run at full capacity, and absolutely alter draw speeds to maximize the life and economics of a well. With the drop in prices many large energy companies with the ability to weather these drops in price will of course turn down the taps, reserving the limited holds of their wells for when the price returns. If you have n barrels of oil in your well, and you're certain the price will return to North of $100, might as well save them for then.
new discoveries and technology breakthroughs related to shale and fracking
Fracking is natural gas. On the shale side, it's worth noting that we've known about shale and how to extract it for many, many decades. The only reason it came into the forefront is that the price of oil on the global market finally made it economical -- shale oil is estimated to cost from $25 - $95 per barrel to extract and process. So the paradox is that the collapse of the world price puts a serious wrench in the shale oil production, which purportedly is the reason for the price of oil.
http://www.nytimes.com/2006/12/21/business/21shale.html?page...
The shale oil industry has had booms and busts before as the price of oil fluctuates.
This is correct, but only to a point. Many producers still lease land for limited timeframes (some of them do have "until we are done" clauses, but this is not the norm in Eagle Ford). If your lease has two years left and you don't expect the price to rebound for 18 months, it's still in your interest to produce NOW, since horizontal drilling (far more expensive than the fracking) is a capital cost you've already paid that you need return on.
I don't think that follows. For one, Keystone isn't necessary, the industry will just continue doing what it's been doing: trucking the oil from wells to existing pipelines. Keystone is less expensive and more environmentally friendly but not necessary.
While NY banned fracking, other states have seen their opposition movements collapse, like Colorado, where Rep. Polis' petition was withdrawn and a key senator was defeated (Udall), ostensibly due to his opposition to increased production.
Sure, but the proximate cause of the ruble collapse is the state-backed Rosneft bond offering expanding the money supply to avoid a bankruptcy. (It's a bailout tactic for one of Putin's top cronies).
In a game between politicians, average people are the real losers.
Has ever been any country where this has worked?
Their posters and literature were obviously propaganda. The US had Hollywood. Slick veneered movies where the Reds attack and plucky bunch of kids help slow and dismantle their war machine. So many 70s and 80sfilms revolve around that core concept. That has to stick.
Fortunately we've moved on. Sure there are throwbacks. Excluding those, we've focused our hatred on the Muslims alla 24.
Here is some polling numbers that show that Russia has gained a lot of negative perception:
http://downloads.bbc.co.uk/mediacentre/country-rating-poll.p...
EDIT: I do think that Russia is viewed as having a corruption/mobster issue in the West, even before the Ukraine issue.
Because of our propaganda. We heard all kinds of things about Russian military mobilization, conspiracy theories about who shot down the airliner, how much Putin hates gays, how horrible living conditions were at the Sochi olympic village, how "rigged" the Crimean referendum was, etc.
But we have heard nothing about NATO breaking its post-wall promise, of the enormous rise of nazism on Russia's borders( actual nazism, not the soft nationalism you see in France ), the outrageous corruption and duplicity of the players responsible for the ouster of Yanukovych, the ethnic and political divisions between the Crimea and Ukraine proper, etc.
I continue to be astounded that HN is so virulently anti-russia, mainly because I thought this group would be the most immune to propaganda and most likely to question the official narrative.
The military mobilization on Ukraine's borders did happen.
> conspiracy theories about who shot down the airliner
It was likely the rebels with Russian technology.
> how much Putin hates gays
He did that to himself.
> how horrible living conditions were at the Sochi olympic village
I don't think that is a major factor.
> nazism on Russia's borders
Please explain.
> outrageous corruption and duplicity of the players responsible for the ouster of Yanukovych
Please explain.
> the ethnic and political divisions between the Crimea and Ukraine proper
I am aware of that. But doing an invasion first and then asking for permission or doing a referendum is not usually how these things are done in the modern era. That was an aggressive move. Usually there is an independence movement and votes are held and permission is sought, it is a long process but a doable one if it is peaceful.
Russia is by no means unique in this respect. This applies to most global and regional hegemons. There are many that do not like the U.S. or China. Britain and Germany in recent memory, or France earlier in early modern Europe, inspired similar fear. But what is particularly worrying about Russia now is that the narrative being privileged within the country only portrays Russia as the victim of recent history. This makes it difficult for Russians and their neighbours to come to a common historical understanding.
Everybody older than 25 watched a good number of movies where Russians were the threat. Mostly James Bond style movies, but you've got a few others in there as well.
http://www.pewglobal.org/2013/09/03/global-opinion-of-russia...
We don't like imperialistic ambitions.
We don't like bullies that believe they have the right suppress weaker nations, simply because they are stronger.
We don't like liars and deceivers.
We don't like people that willingly welcome nationalistic propaganda.
Right now Russia is all of the above.
For a while we believed that Russia would honor agreements and treaties, such as the one where Russia guaranteed the sovereignty of Ukraine in exchange for Ukrainian nuclear disarmament.
For a while we believed that Russia had given up the old dream of dominating its neighboring countries.
For a while we believed that Russia was growing more democratic and respectful of international law, norms and standards.
For a while we (naively) believed what Russian leaders told us.
For a while we believed that the Russian people had learned from the Soviet era and truly wanted a free society with meaningful democratic institutions. For a while we believed that the Russian people could see through nationalistic propaganda and resist being riled up by lies and misrepresentations (such as Ukrainians being "fascists").
We were let down. We are now massively disappointed. By Russia, by Russian leaders and - yes - by the Russian people who are demonstrating a staggering deliberate ignorance.
Personally I am so disappointing that I am willing to endure hardship and lower economic growth just to draw a line now and take a stand.
Turn this around. Throw out Putin. Allow free, critical press. Negotiate a deal with Ukraine on Crimea (I am sure one could be worked out as long as it is not at gunpoint). It will cost you, but it is obvious that a deal with gas in exchange for territory would be possible.
But above all, I need to see realization from the Russian public that they cannot act as bullies, that Russia does not have "more right" than others simply because they are stronger. That's the irony: The doctrine that a stronger state has the right to suppress weaker states is the core principle of fascism. I am sorry to say, but you, the Russian people who believe that "Crimea is ours", it is you who have become the fascists!
It do not dislike Russians. But I have become extremely suspicious as to the intentions of the Russian leaders and how far the Russian people will allow them to go.
> We don't like imperialistic ambitions.
> We don't like bullies that believe they have the right suppress weaker nations, simply because they are stronger.
> We don't like liars and deceivers.
> We don't like people that willingly welcome nationalistic propaganda.
This actually describes the USA really really well.
As you can tell from Putin's elaborate use of propaganda, regular Russians would probably not agree with chauvinist and aggressive policies (otherwise the propaganda wouldn't be necessary). I don't believe many Russians perceive themselves as supporting a government that pursues an aggressive policy. It's easy to see how that propaganda can work - compare the US' post-9/11 invasion of Iraq, backed by a public opinion that was mostly manufactured.
Don't get me wrong - Putin's actions are definitely wrong and unacceptable, and the West has to take proper action to deter him from further escalation. But we have to be cognizant of what will work, and what will only deepen the conflict. This is international politics - don't act on anger, disappointment, or other feelings, it'll most likely make things worse.
[1] http://www.ft.com/intl/cms/s/0/15eb42e6-852e-11e4-ab4e-00144...