Publius is blown away by Vladimir Putin’s ineptitude and the speed with which Russia is going from Superpower to Super Rubble.
Russia has simple needs that any fool can figure out. Even Publius! First, its leadership must derisk Russia’s dependence on oil, gas and other commodities by:
Taking advantage of the easy-to-reach EU market next door and sell tons of Russian goods and services there.
Taking similar advantage of the U.S. market.
Taking advantage of freefalling information costs to transform the old Soviet software expertise into world-leading information technology.
To do this as fast and and as effectively as possible, Russia’s leadership must put in place the Canadian large-country political model to:
Get a stable democracy fast.
Get good regional economic and political balance over its huge geography.
Minimize the load of state-owned enterprises on the economy.
Get vigorous capital markets.
Minimize military expenditures.
The logic of this means quickly unloading volatile and costly areas on Russia’s periphery like the South Caucuses and doing a deal with Japan over the Kuriles to cut costs on Russia’s hard to protect Pacific coast. Russia can then treat China both carefully (because it is so unstable) and strategically (because it is so big) to maximum advantage.
Whatever rids Russia of its excessive reliance on the volatile pricing of hydrocarbons—oil and gas exports fund 50% of its federal budget—is good. So, faster is better.
Anyone looking at Canada’s position on a map, something Putin must have done at least once in his life, would get this right away. A large country like Russia with a small population and small GDP parked right next to a mega market with a wide-open border spells sales opportunity.
To Publius, a map of Russia screams three words, “Go for it!!!”
When he came to power 15 years ago, Putin had all the freedom in the world to see this and act decisively to put Russia on a fast track to growth.
Instead, Putin chose the Mussolini system, no part of which addresses any of Russia’s clearly understood needs:
State control of the military, information and “strategic” industries.
The rest fends for itself so long as it does nothing to disrupt the state’s power or image of itself.
Hitler called Mussolini a “political genius” for this. His had all the advantages of Communist control for only a fraction of the cost. Hitler’s view, what’s not to like?
We know, of course, that the Mussolini system collapsed three-quarters of a century ago. And we know today that the Canadian model is incomparably superior for large, complex geographies seeking stability and growth over a long period of time. Oblivious, Putin is reviving Mussolini. To do this he must either be very, very stupid or an utter fool. And it probably doesn’t matter which.
So we should not be entirely surprised at how this is working out.
Russia today is imploding. It is a shadow of its former self and that shadow is fading faster every day. Its economy is the size of Spain and getting smaller. Russia has no throw weight at all. Its once powerhouse companies like Gazprom are withering under the relentless assault of falling prices for hydrocarbons.
Putin’s spectacular, serial miscalculations in Georgia and the Ukraine have unnecessarily killed Russian markets and created permanent hatreds where none existed before and on its most vulnerable borders to boot.
The shooting down by his forces in the Ukraine of MH17 with the loss of 298 innocents shows a deliberate act on Putin’s part, or his complete loss of control or parts of both. Either he is broken, or his chain of command is broken or both are broken. Why he would want anyone to know this is unfathomable.
Putin’s serial errors in judgment have turned Russia’s primary target markets in the EU and U.S. strongly against it and forced Putin to go cap in hand to The Center of Everything (what the characters for China actually say) as a miserable supplicant. Worse, Putin’s errors have revived a moribund NATO, created even more unnecessary hostilities on Russia's unstable borders and added to Russia’s need to divert scarce funds to its military. Added to this, Chechnya has spun out of Russia’s orbit entirely after Russia spend a fortune in blood and money there.
If you can imagine Canada doing this, you get just how inept Putin is.
We are now in the unenviable position of having to manage carefully Russia’s collapse so that it doesn’t blow up in our faces in some unpredictable way.
Putin put all this together just in time for the collapse in world oil prices to eviscerate Russia’s economy and destabilize the regime at its core. Now he is being forced to sell off large state-owned companies—the strategic core of Mussolini’s formulation—at a deep discount so Russia can cover a fast growing budget deficit driven by shrinking oil revenues. Once these are gone, then what?
Can you get any dumber?
Yes you can!
Perhaps Putin’s most bizarre misfire was in Syria. Since the time of Peter the Great, Russia has dreamt of control of the Bosphorus and the Eastern Mediterranean. It was a sacred mission for all the Tsars. Forty years ago, the Soviet Union was still a power to be reckoned with in the Middle East. While that power eroded steadily and almost vanished when the Soviets did, until the Arab Spring Russia still had a lot of influence in Syria and a small, face-saving dock in Tartus.
If Putin had so much as a single functioning synapse in his head, he would have used the Arab Spring while it was still a set of peaceful street demonstrations to finesse Assad. At absolutely no cost to himself, Russia would once again have become a necessary player in the Eastern Mediterranean, the grateful Syrians would have given him a virtual Kaliningrad on the Med and the whole area would have opened to Russian business. A stunning power play that would have had Bismarck giving a standing ovation in his grave.
Publius remembers expecting Putin to make this smart, obvious move to restore Russian primacy. But no.
Instead, Putin waited until several years after Syria collapsed into unrecoverable incoherence to step into its multi-sided mess of blood and gore to shore up rather than get rid of Assad. Say again?
No matter how the Syria war turns out, Russia comes away a loser, lots of dead, huge costs, no friends and a key ally melted into a seventh century map of the Middle East. And, as always with Putin, no business on which to grow Russia’s economy.
The Ruble is worth a fraction of what it was worth eight years ago. The Russian economy is in deep recession. At current rates of spending, its reserves will run out in 18 months.
With Putin becoming the next Peter III, Obama looks like a genius. Concert after concert, he plays Putin like a Stradivarius. At no cost to us, not a cent, Putin took Russia off the world stage. Obama skillfully let Putin strengthen our position in Europe, something we were having a hard time doing on our own.
Horrible to say this but all Publius sees is Putin with his feet in two cauldrons of boiling water, the Ukraine and Syria, and us with every reason to keep them there. As Sherman said of Hood after Atlanta, if Hood will go to Nashville, I will send him the rations to get him there. Sherman was going to the sea.
Fifteen years ago it was almost impossible to imagine that the once great Russian superpower would wind up so small and ineffective. Just as he did with the Ukraine, Obama carefully let a fast-weakening Putin jump into a frightful Syrian pit designed with no way out.
The Iranians were the first to get this. They’ve been around a long, long time and were occupied by the Soviets in living memory. So, they know who to fear and why. When Putin’s increasing feebleness began to show, Iran knew things had changed big time. It quickly cut its nuclear deal with the United States and is in the process of doing what Russia cannot: gain large-scale access to the world’s top markets to re-fire its economy.
Now Putin stands accused of murdering a Russian expat in London. Let’s think about this. Given your need for access to the big EU market, you must have a strong ally there. To ensure the good relationship you seek, you pop someone in your putative ally’s capital city, one of the world’s biggest tourist and business centers. Naturally, this not being Dushanbe, you get maximum publicity for the murder you’ve committed. Only an utter idiot could reason this way.
The problem with low-grade fools like Putin being in charge of anything more than a toilet bowl is that they are stupid enough to do things that no half-witted person would think about. And to do them for reasons that no intelligent person would countenance. That makes this fool very dangerous. To himself, to his country and to us.
America’s Russia problem today is managing its implosion. As Putin’s power diminishes, he will lash out at all the wrong things, like Syria. When he finds that there are no gains there he will blame others for his mistakes. Then he will do something really stupid. Like in the Baltic. The next President better be very good. Very, very good.
April 18, 2016 Follow Up
Publius said it would be the Baltic and the Baltic it is. Putin's rapidly failing management has cracked exactly where Publius said it would and right on schedule.
Also, Nagorno-Karabakh in Russia's sensitive buffer zone has once again exploded and this appears to have shaken the Kremlin as deeply as Publius' analysis Putin's collapsed border management suggests that it would.
Even the mighty Economist has jumped on Publius' bandwagon with a cover story on Russia as A Hollow Superpower.
And, with a great story in the New York Times, Neil MacFarquhar put his attention right where Publius says it should be, Kaliningrad.
May 3, 2016 Follow Up
Putin's position continues to slip. Thomas Grove penned a great piece in The Wall Street Journal about how Putin is adding to his troop strength to counter the NATO he has necessarily reinvigorated. Doing this increases Russia's costs and forecloses markets it desperately needs. Putin is following Publius' script for him to the letter. Amazing.
May 18, 2016 Follow Up
It is hard to imagine why anyone would cook the Olympics in such a way as to destroy his country's image utterly at a time of such great weakness. But Putin has done it. In top form investigative reporting, Rebecca Ruiz and Michael Schwirtz penned a story for the New York Times which shows the tightly managed, systematic doping of Russian Olympians, the only possible outcome of which is to ruin Russia's image in international sports. The attempt has been so successful that it may fatally soil the Olympics, making the Games unusable for the advertisers on which they depend.
October 27, 2016
The Economist just published an excellent 16-page Special Report, Inside the Bear, that details Putin's failings and the outlook for Russia. Great to see it on Publius' bandwagon.
August 1, 2017 Follow Up
How bad can it get for the 'Lil Guy? In retaliation for further Congressional sanctions against Russia, he has just ordered 755 Russians--that's right, Russians--to leave their jobs at the U.S. Mission in Russia. Russia is so weak and has so little leverage that the ONLY thing Putin can do in retaliation for anything anyone does to Russia is to kick his own people in the head. Weird.
March 19, 2018
It took just over two years. Today, Bloomberg finally caught up to Publius, publishing a piece by Michael Dempsey that supports everything written here. The pity is that Dumb Don let the FSB do what it always does well: put together its own Stormy Daniels Dossier on him and bank it years ago. So there is nothing the Dumb Guy can do to take advantage of the Putin Gift Horse.
April 16, 2018
The Financial Times today, Karen Hille joined Publius, backing his 18-month old assessment of Putin the Small's in Syrian quagmire. While it is amazing how long it takes for the media to catch up to Publius, who does no more than point out the obvious, it is nice to see them catch up.
April 28, 2020
It's taken over four years for the media to catch up with Publius. But today, Bloomberg finally did. In a piece entitled Putin Has a Syria 'Headache' and The Kremlin's Blaming Assad, Henry Meyer and Ilya Arkhipov describe Vladimir The Small's frustrations. What they don't point out, however, is the immense cost to Russia of rebuilding Syria so that it is a sparkling showcase of Russian power and influence. Leaving Syria as a pile of rubble with half a million dead, 5.2 million refugees, 6.2 million displaced internally and calling this some kind of victory will be seen worldwide for what it is. And Assad's end will be assured. Something that Assad will resist to the death, literally.
January 8, 2021
In a massive setback for Putin the Small, Russian security operations launched the Solar Winds hack, the damage from which is growing bigger every day. This hack has, for decades to come, eliminated any trust that anyone could have in Russian goods and services. "Made in Russia" is no longer an option. That Putin allowed this to happen when he so desperately needs market share Europe and the U.S., the combined economies of which are 10X Russia's, is a staggering failure of management.