My Putin Paranoia (FYI – some sources cited are in Russian)

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This is my blog, and I’m allowed to don the tinfoil hat every once in a while. Now… if you’re looking for inane conspiritardery about U.S. involvement in Ukraine, us funding protests, chemtrails, using supersonic, nuclear generated EMP weapons to foment unrest in Ukraine in order to capture the considerable assets of Oleksandr Yanukovych, you’ve come to the wrong place. I’m paranoid, not insane.

Besides, just because you’re paranoid, doesn’t mean they’re not out to get you. Right? RIGHT???

In all seriousness, I’ve been quite a bit perplexed by the actions of Vladimir Putin these past few weeks.

I explained the background on the Ukraine situation already, so I’m not going to get into it here. You can certainly read what I’ve written on the topic here and here. But what I haven’t done is write down my theories on the Russian reaction to the unrest in Ukraine and the ultimate fall of Ukraine’s ever-so-corrupt government.

I will admit I was a bit surprised.

President Vladimir Putin spent a lot of time and resources integrating Russia into the global economy, positioning Russia as a legitimate member of the international community, entering the World Trade Organization, developing economic ties with the European Union, freeing political opponents, including Mikhail Khodorkovsky, had been imprisoned for more than a decade, and brokering a deal with Syria. Putin has endorsed some free market principles, such as privatization and improving Russia’s business climate.

But on the other hand, I also understood that Putin wanted to return Russia to its former world power status, and that was the ultimate goal all along.

But on the third hand, I figured economic development and GDP growth were critical to Putin’s ultimate goal. After all, returning  the country to its superpower status also involves not only the modernization of the Russian economy, but also the Russian military – a goal toward which Russia claimed it would commit between $650-$700 billion in procurement dollars.  That’s a lofty goal for a nation whose armaments programs had a tendency to fail due to inefficiencies, corruption and inflation. Russia needed the money after its little incursion into Georgia in 2008 showed just how ill-equipped its military was. Russia expert Dmitry Gorenburg says the military received no funding for new equipment between 1993-2008, and post-2008 programs were a big fail in executing the Russians’ lofty rearmament goals.

As a result, the vast majority of its armaments are both physically old and based on outdated designs. To deal with this problem, the Russian government has begun to implement a 10-year and $650 billion State Armament Program. The program’s goal is to ensure that 70 percent of the Russian military’s equipment is modern by 2020. The program’s top priorities are to re-equip the Strategic Rocket Forces, the air force, the air defense and space forces, and to provide more advanced command and control equipment for the military.

The problem is there’s just not enough money. Russia’s crumbling economic infrastructure needs urgent updates, and Russia’s economic growth is unable to support the planned levels of military spending. Hell, former Minister of Finance Alexey Kudrin resigned over the issue! And Putin himself admitted that GDP needs to grow before Russia can afford to fund all its ambitious military plans.

“We are setting the goal of accelerating economic growth to 6 percent, better to 6-7 percent, and join the list of the world’s top five economies in five years but not only because advanced economies will be falling but also because we’ll be growing,” Putin said at a congress of Business Russia public association, which unites the country’s medium-sized businesses.

Russia has set the ambitious task of expanding its per capita gross domestic product by 50 percent in the next decade “to achieve the level of more than $35,000 per person from the current $20,700,” Putin said.

In 2011, Russia’s GDP will grow by 4.2-4.5 percent, the premier said.

It did. According to the Economist, Russia’s GDP grew by 4.4 percent in 2011. You know how much it grew in 2012? 3.5 percent. You know how much it grew in 2013? 1.4 percent. Hardly close to Putin’s economic goals. And between the rising inflation and the possibility of sanctions that could impact the Russian economy, and the continuing capital flight, Russia’s economic modernization and its military rearmament goals aren’t likely to happen.

But on the fourth hand, if Putin did, indeed, want to return Russia to some semblance of a “держава” or world power status, he wanted a customs union to counteract the EU, and he needed Ukraine to join, since the latter is a significant Eurasian economy. This is why Russia put so much political and economic pressure on Ukraine to not sign the Association Agreement with the EU, which ultimately caused Yanukovych to turn away from the West and pursue closer ties to Russia, and precipitated the demonstrations which later turned violent.

And that’s why I was a bit perplexed. Turning around into an aggressive invader shortly after hosting a Winter Olympics and after joining the WTO, and claiming to embrace economic development is incongruous. But it happened, didn’t it?

But what if…?

What if Putin’s plan all along has been to contribute to the destabilization of Ukraine and ultimately annex the Crimea?

What if Putin very carefully worked on crafting Russia’s image for the past decade, integrating his country into the international community and global economy, and lulling the west into a false sense of security?

What if Putin was playing the long game, working to ensure that the economy of Russia was so connected to the economies of the West and the United States that any significant economic decline in Russia would mean severe economic consequences for the United States and the European Union?

Because the result seems to be the following:

Any sanctions imposed on Russia or its assets will affect the EU and the United States. Andrey Klishas, chairman of the Federation Council committee for constitutional legislation has introduced a bill in the Duma that would seize the assets and accounts of American and European companies should sanctions be imposed on Russia.  Europe’s sanctions on Russia could cut the oligarchs and members of the Russian government off from the European cities where many have properties and European banks, where many have cash. Meanwhile, Russia is threatening retaliation if sanctions are imposed. A Kremlin aide publicly warned a few days ago of the repercussions. Sergey Glazyev said if America were to impose sanctions on Russia over Ukraine, Moscow might drop the dollar as a reserve currency and refuse to pay off any loans to U.S. banks.

Frankly, Russians are used to economic hardship. Us spoiled first-worlders in the West are not so much.

Could Putin’s calculus include the fact that the West would be just as impacted by Russia’s economic downturn as Russia itself?

Could he understand that despite the current economic slowdown and Russia’s obvious intent to annex the Crimea after the latter holds a vote on independence this weekend, his approval ratings are still fairly high?

Could Putin’s intent all along have been to play long-term chess? To integrate Russia into the global economy and make it a vital source of energy for the West, and then to foment instability in Ukraine and move in with practical impunity, because he knows that the West would be loath to tank Russia’s economy for fear of taking themselves down as well?

It’s a pretty convoluted case, but it’s not unlikely.

Consider the fact that the European Union gets 37 percent of its oil and 39 percent of its natural gas from Russia.

Consider also that Russia is one of the largest economies in the world.

Consider also that economic growth in the EU and in Russia generally mirror one another, although Russia’s swings are a bit more extreme.

EURussianGDP1.

What if Putin has decided that the West won’t do much if he decides to annex Crimea after Sunday’s vote, and has ensured this by working to ensure that any sanctions would bite all parties involved?

After all, Russia has already been conducting “exercises” on the Ukrainian border.

After all, the Duma has already passed legislation outlining how Russia will annex new members of the Federation.

And according to at least one report, pre-marked ballots have already been delivered to Crimea in time for Sunday’s referendum. Yes, I said “pre-marked.”

So what if this was Putin’s plan all along?

Here’s how NOT to do business

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Remember when Maryland decided to implement gun control laws that were even tougher than the draconian regs already on the books in that pit of petty tyranny? Remember when I said that Beretta USA should leave and go elsewhere?

Well, Beretta has decided to open a manufacturing plant in Tennessee. They apparently had enough of Maryland.

Beretta USA officials along with Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Bill Hagerty  announced today the company will expand its U.S. operations by building a new firearms manufacturing plant in the Gallatin Industrial Park. Beretta, a global manufacturer of high-quality sporting and military firearms, will invest $45 million in a state-of-the-art manufacturing and R&D facility. Beretta will create 300 new Tennessee jobs. The company is expected to complete construction on the facility this year.

And yes, respect for Second Amendment rights was definitely part of the decision about the location of the new plant, according to Beretta.

You know where Beretta did not choose to locate?

Georgia, Kentucky, North Carolina, South Carolina, Texas and Virginia. And why not Virginia, you ask? Terry McAuliffe. Emily Miller reports:

“The anti-gun ads that McAuliffe ran in northern Virginia were particularly offensive,” Jeff Reh, general counsel of Beretta USA, told me in an interview. “And the fact that he could gain a voting advantage by doing so caused us additional concern.”

What happened to that “jobs first” for Virginia think Terry was touting during the campaign? Guess Terry forgot that you actually have to have a business-friendly environment to attract… you know… business.

Income inequality

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With the budget debacle seemingly behind us, spending still outrageously high and ObamaCare still a shit show, albeit one that will no longer be challenged by the Pusillanimous GOP, which should really be called the Gimpy Old Party, because it’s filled with intellectually challenged halfwits, the progtards have turned their attention to “income inequality.”

See, the progtards have chafed vaginas because the rich people are apparently getting richer, while the poor are apparently getting poorer, and everyone from Pope Francis to Barack Obama is losing bowel control because of this. So the progtards are planning to do something about it. They are planning to make “income inequality” the cornerstone of their collective campaigns this year, promising to take away money from those money hoarding rich people and give it to the poor.

It’s their usual mantra. It doesn’t matter whether those “greedy rich” got their money through hard work or political connections. They have, and others have not, and therefore what they have must be taken away by government force.

The great Walter Williams penned an essay about income today. Income, he says is the result of productivity and the value placed on it.

Except in many instances when government rigs the game with crony capitalism, income is mostly a result of one’s productivity and the value that people place on that productivity. Far more important than income inequality is productivity inequality. That suggests that if there’s anything to be done about income inequality, we should focus on how to give people greater capacity to serve their fellow man, namely raise their productivity.

What does this mean? There’s been  a story circulating on the web about a college professor who showed his class exactly what this means in practice. Unfortunately, the story is false, according to Snopes, but the idea of the story is solid.

An economics professor at a local college made a statement that he had never failed a single student before but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama’s plan”. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an “A”…. (substituting grades for dollars – something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a “B”. The students who studied hard were upset and the students who studied little were happy.

As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little. The second test average was a “D”! No one was happy.

When the 3rd test rolled around, the new average was an “F”.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

Human nature will always cause socialism’s style of government to fail because the world has producers and non-producers (makers and takers).

It could not be any simpler than that.

So what happens when money is substituted for grades and the professor becomes the boss?
The owner of an engineering firm that designed and manufactured widgets told his workers who had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer, “OK, we will have an experiment at this firm on Obama’s plan.” All pay will be averaged and everyone will receive the same pay, divided equally after all profits were calculated.
After the first payday, the pay was averaged, and everyone – from the lowliest, illiterate janitor to the most brilliant engineer got exactly the same salary. The engineers did what they did best, and the company made a profit, which was divided equally among all employees.. The engineers didn’t get as much as they usually got, so they were not happy, and the janitors and secretaries got way more than they normally did. They were happy. As the second pay period rolled around, the lower paid, less educated workers did even less, because they knew they were guaranteed the same salary as the engineers and managers, who got their education and produced the widgets for the company’s profit. But the engineers and managers didn’t want to put forth the effort they normally had for less money, so fewer widgets were produced that pay period, and the company didn’t make as much of a profit as usual. Everyone got less money but it was still divided equally. No one was happy, but no one got more than anyone else, no matter their work ethic, education or knowledge.

When the 3rd pay period rolled around, the new average was barely enough to feed everyone’s family.  The producers in the company knew they weren’t going to make as much as they did before, so they stopped producing. Why should they put for the effort when their pay was being cut? The company’s profit margin decreased further, and the paychecks shrank. As time went on, the pay never increased as bickering, blame and name-calling all resulted in hard feelings and no one would work for the benefit of anyone else.

To their great surprise, the company closed down and their former boss told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

Look, I know the above example is a bit cheesy and out there, but it does serve to illustrate a point. Income (when unfettered by crony capitalism), is a measure of one’s effort and productivity. The harder the work, the greater the reward. You take away the reward, and you take away the incentive to achieve and produce. You take away from the productive and you give that money to the indolent, and you take away the incentive to work.
You know why a doctor makes more money than a McDonald’s fry cook? Because the doctor went to school, worked his ass off and developed an in-demand skill. Not everyone can be a doctor, but fry cooks are a dime a dozen.
Supply and demand, boys and girls. Those whose skills are in demand will cost more to hire. That’s just basic economics.
But the moment a government tells a doctor that his labor is worth no more than a fry cook’s and prevents the doctor and his customers from setting their own values on the exchange, that doctor will likely put forth the effort that’s only worth $8 per hour. Why bother? His labor isn’t worth any more than a fry cooks, despite the schooling and hard work.
What will happen to the producers once the government starts taking away their profits and redistributing them to “the poor” who haven’t produced anything? Think back to the examples above.
Equality sounds like this awesome idea, but not at the point of a gun.
And equality of outcome (that’s what income is – the outcome of your work) is not the same as equality of opportunity. One allows everyone an equal chance to earn as long as they work hard, and the other simply appropriates and redistributes the work of those who worked hard to those who do not. Is that what we call justice?
There should be no such thing as “income equality,” because there’s no such thing as labor equality. There will always be people who are smarter, more innovative, harder working or more determined. Give those people the incentive to put their considerable skills to work, and you will see the economy thrive. Take away those incentives and tell them their hard work is worth no more than the work of a janitor, and you’ll be living in the dark ages before long.

How’s that working out for ya?

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A Chicago sandwich shop closed its doors and fired all its staff right before Christmas. The employees received their notices on 23 December, informing them the shop was closing down indefinitely, while the company remodels and rebrands the store into a burger joint.

Now before you start whining about evil business owners and how they’re all heartless for firing everyone right before Christmas, I would urge you to think about the following:

The River North Snarf’s shop was closed for four days, from December 5 until December 8, as employees went on striking for higher wages and better benefits.

They joined workers of fast-food chains like McDonald’s, Subway, Potbelly and others in a broader strike orchestrated by the Worker’s Organizing Committee of Chicago.

So here’s how it worked out.

  1. The employees of this store, whose primary function is putting slices of meat and cheese on bread and being nice to customers went on strike, demanding they be paid more than what their labor is worth to their employer – and hell, really more than a lot of skilled laborers out there.
  2. They forced the store to close for four days (and thereby lose profits), but they were all apparently allowed to return to work after their little temper tantrum, which was more generous than I would have been.
  3. Their strike included calls for their place of employment to close its doors, ostensibly because the mean, mean employer wouldn’t pay people $15/hour to put a sandwich together.

strikers

4. And now that the store has actually shut down, they all of a sudden realized that being unemployed gives them considerably less than the minimum wage they were getting.

How’s that working out for you, assholes?

So now, the creepasauri have come out with more demands, whining how unfair it is for the store to do this right before the holiday.

Furious members of the Worker’s Organizing Committee of Chicago gathered outside the store Monday morning demanding severance pay and re-employment for the fired staff.

crybaby

My reply would have been a lot less polite than the Director of Marketing, who said the staff was welcome to reapply for their positions.

Apparently, these whining, entitled assweasels are learning the hard way that a company does not exist for its employees. Its purpose is not to give its employees jobs. The purpose for its existence is to make money, which, by the way, allows the company to actually hire and pay its staff!

So their demands that their employer, who took all the risks to make the venture profitable, stop being profitable and pay workers a higher wage than their labor is worth, will result in no employer.

No money? No staff.

Happy now? You got what you wanted. The store closed.

Awwwww. What’s the matter?

Traveling

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So I just arrived in Germany. I’m staying outside Munich for a night, and then hopping a train to Garmisch for a month’s worth of school. I know… rough life I got here.

I’ll be posting pretty pictures when the mood strikes me, but mostly I intend on being a nerd and studying.

But school doesn’t start until Monday, so I have a few days to screw around and do nothing.

First order of business is sleep. I will do that as soon as I post this entry.

United Airlines sucks. I’ve said this numerous times, because of numerous screw ups, but I’ll say it again. United Airlines sucks. This time they experienced a nearly 5 hour delay! So I was stuck at the airport for four hours, and on the runway for another 45 minutes or so until we took off. The good news was that the flight wasn’t even remotely full, and I had an entire row to myself to stretch out, which I did. I slept, albeit uncomfortably, almost the entire flight, and caused myself to miss the culinary adventure that is airplane dinner. Luckily, I overdosed on crabcakes and bloody marys before the flight, so the last taste in my mouth wasn’t what passes for food on airlines nowadays!

Now there will be a shower. And sleep. And maybe lunch.

Or sleep.

Interesting note – I took an Uber on my way to the airport yesterday. If you don’t know what an Uber is, it would behoove you to find out and immediately demand that this amazing company expand to your city! Uber is a tech company that affiliates itself with private drivers, who will pick you up anywhere you happen to be and take you to your destination of choice. You have a credit card on file with Uber. They charge the card directly after you are done with your trip. There’s no tip, and no cash changes hands. The drivers are polite and clean, and so are the vehicles, which range from black sedans (mine was a Mercedes yesterday) to SUVs. Depending on time of day, it’s a bit more expensive than a taxi, but not overwhelmingly so. Well worth the extra few bucks. The company also asks you to give feedback on your ride and your driver, and if you give anything less than four stars, they will get in touch with you and ensure they put things right, including giving you credits on your next ride. This is a phenomenal service, which forced taxi companies to actually improve their service to compete, prompting them to try and destroy Uber via their influence in the corrupt DC City Council. They failed. Fuckers.

But enough of the Uber commercial. The driver and I chatted the entire way. The driver came to this country 13 years ago from Cairo, Egypt, where he was born. He did his degree in engineering at a university in Rome, Italy. He spoke flawless English, taught at James Madison University, and also speaks Arabic, Italian an Spanish. After leaving his teaching job, he came back to DC and started his affiliation with Uber. He did not demand special services or telephone recordings in Arabic. He didn’t demand benefits or amnesty. He came here with marketable skills, worked, learned English from scratch (I was absolutely stunned at how perfect his English was, and he told me he didn’t know a word of it when he first came to this country in 2000), and got his citizenship. Gee… an immigrant coming here legally and attaining his dreams the old fashioned way, without demanding special dispensations. What a novel concept!

He also told me he was appalled at the administration’s policies after the coup in Egypt. He admitted he voted for Barack Obama, but that he is absolutely disgusted with his foreign policy, and with McCain and other RINO scum who are insisting on continued financial aid and support to Egypt after the coup. He was happy the Muslim Brotherhood was kicked in the nuts. He told me he’s absolutely positive they’re terrorists and couldn’t believe that having attained 51 percent of the vote entitled them to destroy secularism, dissent and religions other than Islam in Egypt.  Kind of like the 52 percent… uh… nevermind. We discussed economics for a while too, and he asked me whose economic policies were worse, Bush’s or Obama’s. I explained they were equally bad. Bush started this stimulus, bailout spending crap. Obama took it to a new level. Both were bad. I explained why. He was very thoughtful and thanked me for the explanation.

I like immigrants.

Smart ones. Ones who have something to offer this country. Not ones who come here expecting this country to offer them something for their mere smelly presence.

OK. Off to take a shower. I smell like plane.

 

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