Thursday, August 25, 2016

The Power Vertical

The Daily Vertical: Putin Was Born In The Wrong Century

The Daily Vertical: Putin Was Born In The Wrong Centuryi
|| 0:00:00
January 12, 2016
The Daily Vertical is a video primer for Russia-watchers that appears Monday through Friday. Viewers can suggest topics via Twitter @PowerVertical or on the Power Vertical Facebook page.

The Daily Vertical is a video primer for Russia-watchers that appears Monday through Friday. Viewers can suggest topics via Twitter @PowerVertical or on the Power Vertical Facebook page.

This forum has been closed.
Comment Sorting
by: Dre Ian
January 12, 2016 12:18
Maybe needed an antidepressant or maybe just more excercize or going out. Your face does look sad. Do not let Putin and his actions against American empire make you frustrated. This is only a friendly health advice. Your column is great. I would say best, but just maybe, maybe. Your dear friend, Ian.
In Response

by: Rocky
January 13, 2016 00:20
NATO and the CIA is so 2015. Since you're so concerned about Brian's face, perhaps you can ask Putin to donate some of his Botox stash. The man's starting to look like the male version of Joan Rivers (may she rest in peace). He's looking really waxy.
In Response

by: Rocky
January 13, 2016 00:31
Edit: NATO and the CIA is so 2015. At least Brian isn't sticking needles in his face like some girly man. Putin's starting to look like the male version of Joan Rivers.(may she rest in peace). It's getting really waxy.

by: George from: Belarus
January 12, 2016 15:00
Yesterday I posted some interesting ideas expressed by Bill Browder, perhaps a significant figure in recent Russian history who may have some idea of what he's talking about, in one of the leading liberal magazines of the world. No comment from The Daily Vertical?
In Response

by: Neil Nelon from: UT, USA
January 14, 2016 05:05
On the position that one of Putin's motives in Syria is to worsen the immigrant crisis in Europe. It may be a Putin motive, but the flow of immigrants and refugees from the Middle East and Africa has been going on for years and the reasons for that migration are said to be from a variety of conflicts and a perception by migrants that a better life can be had in Europe. As an aside, migration is not necessarily bad and noting the low birth rate of the EU with Germany in particular. The critical problem is migrant integration into the work force that causes dislocations for prior labor. That takes some time, tolerance for cultural differences, and management of labor unrest.

Business debt is an investment expecting a return to the business out of which debt interest and principal is paid. The key factor is not how much debt or whether more can be borrowed, but whether or not the business is able to service the existing debt. Economic conditions are sliding badly in Russia and so we can reasonably expect some inability to make debt payments. In some cases a business may incur further, high-interest debt to make ends meet, but the usual strategy is to get leaner, down-size, and sell assets and business components to get the company back where it can service the debt, or in the last case the company goes bankrupt and the creditors/debtors take over. The point of this paragraph is that existing businesses do not require new, additional debt.

Growing and new businesses generally require more debt. And so the lack of money for loans (business investment) impacts economic growth and stability, with stability being that the lack of sufficient investment creates an economic downturn. Given that Russia's economy is contracting, additional money for loans will not be required until the contraction bottoms out. When the contraction does bottom out, interest rates will fall and the Russian government can run a deficit (print money), if necessary, that will go into new business loans. The critical factor here is sufficient confidence by Russians that the Russian government will maintain a healthy enough economy over the long run to maintain faith in the Ruble. And there is a reasonable risk that faith in the government will not be maintained.

Businesses do sell bonds (incur debt) of fixed periods and may sell bonds again when the prior bonds mature and this fits in with Bill Browder's meaning. Bonds are usually sold for several years at different maturities and for investment (business expansion) purposes (see the prior paragraph) and this argues against any immediate or long term requirement for that debt to be thoroughly cycled. Bill Browder will have a more in-depth understanding and his reasoning may be forthcoming.

by: GS from: United States
January 12, 2016 16:34
What else to expect from a kegeblo?

by: John Kanuck
January 12, 2016 18:27
Have power outages made it cold in your studio, or did your mother give you a new shirt for Christmas?

by: O.O. Howard from: eastern USA
January 12, 2016 21:46
I think it's useful to think of Russia as living in two places in time, as is the case in various other countries. In 1991 it fell back to of necessity addressing and rehashing issues unresolved or misresolved since 1917, creating a gap between the present and the issues filling its domestic political imagination of about 73 to 74 years. During the 1990s the matters of the 1920s were revisited throughout Russia, e.g the decay of institutions such as the military, ethnic strife, lots of wrong nation-state boundaries with imposed 'solution', and dissolution of the feudal, agrarian, economic and political system. During the 2000s the matters of the 1930s were revisited throughout Russia- political consolidation increasingly to one man and a clique, show trials, a new industrialization, the generating of competitive military, the forming of a relatively functional if second tier economy. Then as last act of the 1930s reordering of Russia's political scene, the assassination of Trotsky. Who by then posed no actual risk to Stalin but was an undesirable relic of an age the new rulers deemed past. In a very deficient way the murder of Nemtsov was the parallel to this.

At present the chronological rehashing and revisiting of the Russian past has reached 1942/1943ish. We have the Eastern Front being recapitulated at fortunately just a 1% scale of the human disaster then in eastern Ukraine, the ideological war footing, the food shortages and impoverishment, refugees. Though just exactly which current side corresponds to which one in 1942/43 isn't easy to say or clearcut on the ground around Donetsk based on the actions and circumstances. And the Russian involvement in Syria does best parallel Rommel's campaign in North Africa in somewhat pointlessly expanding the conflict with the Western powers, in military scale, in daring, and in its semi-conservative original intentions to bail out an incompetent and problematic ally best abandoned. But absent that ally the opponents would be able to concentrate their might quickly to overwhelming strength and win.

So I suspect this dispute between Russia and The West and other Eastern Europeans will continue for at least two more years if not three in the current vein of war not quite war. And in the process every major problem created or left unresolved by WW2 and the USSR between these parties and in the present situation will get put on the table. Belarus, which some say will run out of collateral against which to borrow in 2017 or so and might perhaps be fairly partitioned along the Dnjepr and Dvina should it undergo a regime collapse and the semi-ethnic dispute resembling that of Ukraine's in 2014. Kharkov, which has stayed persistently skeptical of unity with Kiev and Ukraine might have to let go along with Donetsk (in return for Kiev retaining Dnjepropetrovsk, perhaps). And so far not on the table, but will rapidly appear on it between Russia and the EU if/when most of Belarus turns westward: the eventual dissolving of the Tiraspol enclave, the eventual dissolving of the Russian colony in East Prussia, and future status of East Karelia and Kola peninsula. Possibly, an EU funded voluntary relocation of ethnic Russians from these areas to socially and economically functional homeland regions of Russia where ethnic Russians might be desired.

This might be where we will be collectively in 2020 to 2025- looking at a kinder and more decent and smaller scale migration of ethnic Russians to Russia paralleling the decolonization and forced migration of ethnic Germans from eastern Europe in the mid/late 1940s.
In Response

by: Neil Nelson from: UT, USA
January 14, 2016 18:43
O.O. Howard, you make an excellent and knowledgeable post. We say that we learn history to, in part, avoid repeating its mistakes. A premise of your last two paragraphs is that being Russian, and we should consider what that means, implies forces that will cause Russians to move to a location securely controlled by Russia. And that there are natural, perhaps irresistible forces that cause nations to endure conflict to adjust borders and populations in line with some national or ethnic identity.

Let's take Los Angeles, one of the most cosmopolitan places on Earth. Ethnic and cultural groups do congregate together into enclaves but for the many years I was there I did not see any pressure or desire for any of these groups to leave Los Angeles. I did see the race riots but these were not based on a desire or pressure to leave Los Angeles. They were in large part based on a desire for better economic equality.

The EU is a composite of many ethnic and cultural groups and the idea that ethnic and cultural groups are destined to divide into singular regional groups, all Frenchmen here, all Germans there, and that these regional groups may have conflict to make these adjustments implies that the EU will dissolve, that men are forever destined to be in conflict on cultural and ethnic lines. Certainly we see that in the Middle East, but are we destined or can we overcome this frailty? Obviously we can and have in the U.S. and the EU.

A man's ethnic and cultural heritage is not in his genes, though we can superficially classify a person by their physical appearance, it is in their learning. That we may be Russian or German or French is merely that we think we are. Well yes, we have passports and citizenship but these are means of organizing the State. In a sense the State is an organism imposing a method on its subjects for its own growth and survival. And we have to keep the distinction between the individual and the State in mind.

Now is the idea of being Russian and living within the Russian State coming from the State or the individual? Well we have Russians in Los Angeles. We have Russians leaving Russia for better lives. I suggest that on balance that this idea of Russians living in Russia is primarily a State concept. It is a concept to maintain and justify the Russian State organism. And similarly it is also a concept used by politicians in a State to create nationalism by having an enemy State or cultural group.

This is the philosophy of Hitler, Putin, and Trump. We are rapidly becoming citizens of the World and we have States to make that happen.

by: Greg from: Canada
January 13, 2016 13:40
Brian you have it wrong, Putin should never have been born!!! Just as the world would have been better off without the birth of Hitler and Stalin! Putin's goal of being worshiped by his people and the world at large is very dangerous. He truly is no different than Hitler. He believes Russians are special above all others peoples, he refuses to allow people within areas he controls to speak their own language and Russifies at very turn.

Putin is seeking submission by the world to his view of what the world should be. Nothing else will be accepted. He is evil and dangerous and I doubt a major war can be stopped. Merkel is trying very hard to satisfy Putin's ego by forcing Ukraine to submit... But this will never satisfy his desire for complete control

by: james E Macdonald from: USA
January 23, 2016 06:50
Is it just me or has Putin not been looking well recently? Maybe were all just getting older.

Latest Podcasts

About This Blog

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or