With $88 oil, Russia is flying high. Russia will invade and carve off part of Ukraine.
When he took Crimea in early 2014, our stockmarket didn’t blip. I hope this won’t add to the pressures already on our stocks — inflation, falling retail sales, supply blockages, China’s lockdowns and threats against Taiwan, and covid/omicron.
Unhappy collection of unpredictable ills.
Time to resurrect:
In short, cash is king in a time of uncertainty (like now) and a time when great (cheap) investment opportunities are likely to bloom soon.
Putin is fascinating. I found this summary in the Economist:
By the time Mr Putin became president in 2000 Russia was run by an oligarchic elite which saw the state as a source of personal enrichment. But when pollsters asked people what they expected of their incoming president, reducing this corruption was not their highest priority. The standing of the state was. Russians wanted a strong state and one respected abroad. As Mr Putin’s successful manifesto put it, “A strong state is not an anomaly to fight against. Society desires the restoration of the guiding, organising role of the state.” When, shortly after his election, Mr Putin restored the Soviet anthem, it was not as a symbol of reverting to central planning or rebuilding an empire. It was a signal that the strong state was back. State power did not mean the rule of law or a climate of fairness. It did not have, or need, an ideology. But it did have to take on some of the “geopolitical reality” that the meeting in Viskuli had stripped from the Soviet Union.
Putin wants to be president for life. Restoring the strong state will work. Pity he’s not into capitalism. Russia was another country I looked at investing in. But gave up, with places like Turkey.
Thomas Friedman at the New York Times did a super piece a couple of days ago:
Why is Vladimir Putin threatening to take another bite out of Ukraine, after devouring Crimea in 2014? That is not an easy question to answer because Putin is a one-man psychodrama, with a giant inferiority complex toward America that leaves him always stalking the world with a chip on his shoulder so big it’s amazing he can fit through any door.
Let’s see: Putin is a modern-day Peter the Great out to restore the glory of Mother Russia. He’s a retired K.G.B. agent who simply refuses to come in from the cold and still sees the C.I.A. under every rock and behind every opponent. He’s America’s ex-boyfriend-from-hell, who refuses to let us ignore him and date other countries, like China — because he always measures his status in the world in relation to us. And he’s a politician trying to make sure he wins (or rigs) Russia’s 2024 election — and becomes president for life — because when you’ve siphoned off as many rubles as Putin has, you can never be sure that your successor won’t lock you up and take them all. For him, it’s rule or die.
Somewhere in the balance of all of those identities and neuroses is the answer to what Putin intends to do with Ukraine.
If I were a cynic, I’d just tell him to go ahead and take Kyiv because it would become his Kabul, his Afghanistan — but the human costs would be intolerable. Short of that, I’d be very clear: If he wants to come down from the tree in which he’s lodged himself, he’s going to have to jump or build his own ladder. He has completely contrived this crisis, so there should be no give on our part. China is watching — and Taiwan is sweating — everything we do in reaction to Vlad right now.
Which brings us back to the central question: Vlad, why are you in that tree?
For starters, don’t look for the answer in Ukraine. If Putin decides indeed to take another bite out of Ukraine, it will be first and foremost because Putin thinks it will strengthen his chance of staying in power in Russia, which for him is always paramount.
To understand how invading Ukraine again could serve that end, one has to go back to the shift Putin made in the last decade: He went from selling himself to the Russian people as the leader who would enable them to overcome their poverty of wealth in the post-Cold War era to the leader who would enable them to overcome their poverty of dignity in the post-Cold War era.
I learned this from Leon Aron, a Russia expert at the American Enterprise Institute and the author of “Yeltsin: A Revolutionary Life,” who is now writing a book about the future of Putin’s Russia. The way Aron put it, when Putin came to power at the end of 1999, he was able to benefit from the restructuring of the Russian economy by Boris Yeltsin; from significant foreign investment; from rising oil, gas and mineral prices; and from improved political stability.
Russians associated Putin’s first two terms — 2000 to 2008 — “with unprecedented wealth accumulation in modern Russian history,” said Aron.
But beginning in 2011 and stretching all the way to 2019, Russia’s economy stagnated because of lower energy prices and, most of all, institutional impediments to growth: Putin’s preference to tap Russia’s natural resources, not its human resources. No Silicon Valleys for him — except cyberhackers. That would require real rule of law, secure property rights and the unleashing of talented people, who ask too many questions like, “Vlad, where did your money come from?”
“Putin’s response to this economic stagnation and the political peril it represented was to shift the basis of his regime’s legitimacy from economic progress, which made Putin so popular in his first two terms in office, to Putin as the defender of a motherland besieged by the West,” Aron told me. “Putin concluded that if he was going to be a president for life, he had to be a wartime president for life.”
Writing in The Hill, Aron quoted Russian opposition columnist Sergei Medvedev as recently observing: “Putin has forged a nation of war that has battened the hatches and looks at the world through a lookout slit of a tank. … The degree of military-patriotic hysteria [in] Russia today brings to mind the U.S.S.R. of the 1930s, the era of athletes’ parades, tank mock-ups and dirigibles.”
This is classic wag-the-dog politics. Putin is a thug, but he’s a thug with an authentic Russian cultural soul that resonates with his people. His obsession with the Soviet Union and his nostalgia for the power, glory and dignity it gave him and his generation of Russians run deep. He was not exaggerating when he declared in 2005 that the breakup of the Soviet Union was “the greatest geopolitical catastrophe” of the 20th century.
And because Ukraine, and its capital, Kyiv, played a central role long ago in Russian history, and because Ukraine was a bulwark and breadbasket of the Soviet Union in its heyday, and because perhaps eight million ethnic Russians still live in Ukraine (out of 43 million), Putin claims that it is his “duty” to reunite Russia and Ukraine. He blithely ignores the fact that Ukraine has its own language, history and post-Soviet generation that believes its duty is to be independent.
For Putin, losing Ukraine “is like an amputation,” remarked political scientist Ivan Krastev, chairman of the Center for Liberal Strategies in Sofia, Bulgaria. “Putin looks at Ukraine and Belarus as part of Russia’s civilizational and cultural space. He thinks the Ukrainian state is totally artificial and that Ukrainian nationalism is not authentic.”
The reason Putin has accelerated his Ukraine threat — which I would call “marry me or I will kill you” — is that he knows that under Ukraine’s current president, Volodymyr Zelensky, the process of Ukrainization has accelerated and the Russian language is being pushed out of schools and Russian television out of the media space.
Said Krastev: “Putin knows that in 10 years the young generation in Ukraine will not be speaking Russian at all, and it will have no identification with Russian culture.” Maybe best to act now, thinks Putin, before the Ukrainian Army gets bigger, better trained and better armed — and while Europe and America are in disarray over Covid and in no mood for war.
And then there are just the raw geopolitical motives. In creating the crisis around Ukraine, said Krastev, “Putin is inviting the West to a funeral for the post-Cold War order.”
For Putin, the post-Cold War order was something imposed on Russia and Boris Yeltsin when Russia was weak. It involved not only pushing NATO into Eastern European countries that were once part of the Soviet NATO — the Warsaw Pact — but also pushing NATO and European Union influence into the former Soviet empire itself, in places like Ukraine and Georgia.
Putin’s troop buildup says to the West: Either we negotiate a new post-Cold War order or I will start a post-post-Cold War confrontation.
As longtime readers of this column know, I was a vigorous opponent of NATO expansion after the Cold War. It is one of the stupidest things we ever did — focusing on “NATOizing” Poland and Hungary rather than building on an amazing, largely nonviolent, democratic revolution in Russia and locking it into the West. Nurturing that Russian revolution to fruition would not have been simple, but by pressing ahead with NATO expansion we made it easy for an autocratic nationalist like Putin to lock himself in power by telling the Russian people that only he could keep NATO and the West from destroying Russia — militarily, culturally and religiously.
That said, I don’t weep for Putin. He is the human embodiment of one of the oldest Russian fables: A Russian peasant pleads to God for aid after he sees that his better-off neighbor has just obtained a cow. When God asks the peasant how he can help, the peasant says, “Kill my neighbor’s cow.”
The last thing that Putin wants is a thriving Ukraine that joins the European Union and develops its people and economy beyond Putin’s underperforming, autocratic Russia. He wants Ukraine to fail, the E.U. to fracture and America to have Donald Trump as president for life so we’ll be in permanent chaos.
Putin would rather see our cow die than do what it takes to raise a healthy cow of his own. He’s always looking for dignity in all the wrong places. He’s rather pathetic — but also armed and dangerous.
The above is Friedman’s full article. It came from here.
Another really great piece is from the Economist:
A forced brotherhood
Why Russia has never accepted Ukrainian independence
It might have, had it chosen democracy
Read the piece here.
Favorite Herman cartoons
Weather advice
Today’s forecast for us:
* WHAT…Very cold wind chills expected. Wind chills as low as 15 to 30 below zero.
Be wary: Full gas tank. Blankets, water, food, tools. Spare batteries and this device, which will charge your car and your iPhone: Click here.
My schedule, interesting as usual
I have a bit of cash — I sold a handful stocks I lost faith in. Also a bunch of real estate syndications got sold or refinanced at the end of 2021. There’s fear that someone in Washington will get the bright idea of doing away with the 1031 exemption.
I’m icing my shoulder, gobbling Celebrex anti-inflammatories and doing some gentle shoulder strengthening exercises. YouTube has millions of useful videos.
I’m scheduled at 10:30 AM to read a book to granddaughter Sophie, 8, over Zoom. What will really happen is she’ll teach me how to use Zoom and she’ll read to me. I don’t stick to the plot, I make stuff up and — worst of all — read too slowly.
Kids should be in school. Grandfathers make lousy teachers.
This is Sophie:
See you tomorrow. — Harry Newton
