Putin drives Russia into economic recession
As Russia enters a recession, does the U.S. right still see the Russian president as a strategic super-genius?
Russia's President Vladimir Putin attends in St. Petersburg, on April 24, 2014.
By Steve Benen
One of these days, the right really ought to take a moment to reevaluate their assumptions about Russian President Vladimir Putin being a strategic super-genius.
The International Monetary Fund estimates that Russia's economy has already entered recession. Last year, Russia's economy grew 1.3 percent, its weakest rate in the past 13 years with the exception of 2009, when the country suffered in the global downturn. The growth slowed further this year as investors pulled money out of the county amid concerns over Russia's policy in Ukraine. The head of the IMF mission in Russia, Antonio Spilimbergo, told reporters Wednesday that Russia is already in recession as fears of broad economic sanctions weigh on the economy.
The Wall Street Journal report noted that the head of the IMF's mission to Russia, Antonio Spilimbergo added that sanctions against Moscow have already hurt investment activity, fueled capital flight, and sent the ruble to all-time lows. If Putin's moves lead to economic consequences, it's likely to "reduce investment and growth further."
This certainly doesn't bolster the GOP's complaints that the Obama administration's sanctions are toothless and inconsequential.
But even putting that aside, Putin is quite the grandmaster chess player, isn't he? The Russian leader has pushed his country into a recession and investors are "fleeing the country." Diplomatically, Russia is increasingly isolated. Much of the world thinks the Russian president has gone nuts.
Remind me again why Republicans have spent months celebrating this guy's cunning acumen? It was, after all, just last month when House Intelligence Committee Chairman Mike Rogers (R-Mich.), in an apparent attempt to undermine President Obama during the Ukrainian crisis, told a national television audience, "Putin is playing chess and I think we are playing marbles, and I don't think it's even close.... They've been running circles around us."
This was probably just knee-jerk partisanship from an often-confused lawmaker prone to exaggeration, but I'm curious if the right is still thinking this way.
Indeed, I'm reminded of this recent report.
Russian stocks fell 10% last month, wiping out further billions in capital. The ruble has lost 9% of its value since the start of the year, boosting prices for the imported food and manufactured goods on which the Russian consumer market is heavily dependent. "The acute international situation of the past two months" was the cause, Ulyukayev said, referring to the Ukraine unrest.
Which followed this one.
While the annexation of Crimea has rocketed President Vladimir V. Putin's approval rating to more than 80 percent, it has also contributed to a sobering downturn in Russia's economy, which was in trouble even before the West imposed sanctions. With inflation rising, growth stagnating, the ruble and stock market plunging, and billions in capital fleeing the country for safety, the economy is teetering on the edge of recession, as the country's minister of economic development acknowledged on Wednesday. Mr. Putin, who just lavished $50 billion on the Sochi Olympics, also must now absorb the costs of integrating Crimea, which economists and other experts say has its own sickly economy and expensive infrastructure needs. The economic costs have been masked by recent patriotic fervor but could soon haunt the Kremlin, as prices rise, wages stall and consumer confidence erodes.
As a rule, competent chess players think are able to think ahead more than one move at a time.