“Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown,” says IMF chief Dominique Strauss-Kahn. The G-7 leaders (minus Russia) are scrambling to find a collective solution.
Above is a Marxist take on the situation from Richard Wolff. Wolff is a professor of economics at the University of Massachusetts, Amherst and the editor of the journal Rethinking Marxism. Wolff presents a passionate analysis delivered with a measure of self-congratulating “We told you so” glee. Wolff’s take can be boiled down to American consumers borrowing and borrowing in order to consume. I think Wolff’s concluding statement is more important. The global economic crisis has opened up a space to criticize the dominance of free market capitalism and offer alternative solutions. It’s a rare moment indeed when you can think outside or beyond capital and people are willing to listen. Perhaps Naomi Klein is right to say that “Wall St. crisis should be for neoliberalism what fall of Berlin Wall was for Communism.”
Interestingly, the opening of the discursive space is appearing in unlikely places. Wolff’s emphasis on debt is more or less being echoed by centrist liberals like Joesph Stigliz (I recommend his recent interview on Democracy Now!) and Fareed Zakaria. Here’s what the latter has written in the latest Newsweek:
Since the 1980s, Americans have consumed more than they produced—and they have made up the difference by borrowing.
Two decades of easy money and innovative financial products meant that virtually anyone could borrow any amount of money for any purpose. If we wanted a bigger house, a better TV or a faster car, and we didn’t actually have the money to pay for it, no problem. We put it on a credit card, took out a massive mortgage and financed our fantasies. As the fantasies grew, so did household debt, from $680 billion in 1974 to $14 trillion today. The total has doubled in just the past seven years. The average household owns 13 credit cards, and 40 percent of them carry a balance, up from 6 percent in 1970.
How then does late capitalism keep itself alive? Debt slavery and robbing Peter to pay Paul. As usual, Washington’s solution is to wage class warfare from above. Bail out the rich investors and pray the stability trickles down to the rest of us below. Same story, new packaging.
And what about Russia? Like their Western counterparts, the Russian government is poised to buy up bad assets, loan its corporations money, and flood the market with liquidity. Putin has already promised $36 billion to Russia’s banks. Last week, the Duma passed a plan to give credits to Gazprom, LUKoil, Rosneft and TNK-BP so they can pay their foreign debts, which total about $80 billion. Medvedev’s five point solution doesn’t seem much different than what most are proposing: Regulation, transparency, and increase free trade. Or basically apply band-aids at a time when invasive surgery is needed.
But Russia’s woes don’t end with its banks and corporations. Analysts are now expecting the bubble in Russia’s real estate market to burst. Developer debt, which is a combined $1.8 billion, is the problem. A few are predicting the collapse in 4-6 months. A halt to building construction will slow down one of Russia’s most vibrant economic sectors and put an extra crunch on an already existing housing shortage.
Luckily for the Russian government, they have a budget surplus of $100 billion to weather the financial tempest. The only question is whether any of these measures will make any short term difference.
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By Sean — 9 years ago
I don’t claim much knowledge on the intricacies of the explosive situation in Moldova. For anyone who has been asleep the last few days, Moldovan students are attempting their own “colored revolution.” On Tuesday, over 10,000 students ransacked the Moldovan Parliament demanding new elections after a Communist Party electoral victory on Sunday. The Communists won around 50 percent of the electoral, beating out their fractious liberal rivals, and claimed a super majority of 60 seats in Moldova’s 101 seat parliament. The students claim mass vote falsification. But unlike the innocuous colors of orange, tulip, and rose, the Moldovan youth appears to favor blood red.
Anyone interested in unfolding events from a variety of sources should check out Scraps of Moscow. Lyndon’s knowledge of Moldova is impeccable.
For an breakdown of why the Communists won, see Vladimir Socor’s “Ten Reasons Why the Communist Party Won Moldova’s Elections Again” from the Eurasian Daily Monitor. Of Socor’s ten reasons, I find these two most compelling:
4) The Communist Party is the only major party with a multi-ethnic electorate. Most opposition parties (including all three that have now entered the parliament) rely entirely on ethnic Moldovan voters (a minority of whom define themselves as Romanians) and have not seriously attempted to reach out to “Russian-speaking” voters. Many “Russian-speakers,” who defected from the Europe-oriented Communist Party in recent years, crossed over to small pro-Moscow groups or declined to vote, rather than joining Moldovan opposition parties. The Communist Party was able to offset that loss by increasing its share of the ethnic Moldovan vote.
5)Exit polls, conducted by Western-funded NGOs, showed that the Communist Party made significant inroads into young age cohorts for the first time in these elections. As the poll coordinator, sociologist Arcadie Barbarosie (head of the Soros Foundation’s local affiliate) observes, the Communist Party can no longer be stereotyped as a “pensioners'” or Soviet-nostalgics’ party (Moldpres, Imedia, April 6).
Two reasons why the Communists won was because they crossed ethnic lines and generational lines.
In this author’s summation, the liberal parties appeal to “pan-Romanian nationalistic ideology,” makes this crisis one between the Communists and the far Right.
Or is generational conflict really at the heart of the protests? The centrality of youth is something that Lyndon emphasizes in this rundown of events. As these two participants/eyewitnesses testify,
The students are discontented with the election result. Most of the people who voted for communism are old people, but old people are dying and there are more young people voting now than before. So the result is definitely not true. It’s not logical.
We don’t want to be governed by the communists anymore. I think the Communist Party should be outlawed, just like the Nazi Party is outlawed in Germany.
. . .
Most of the people in Chisinau voted for the democratic parties. I’ve been asking friends, neighbours, people on the street.
Indeed in the villages, where there are only old people left, most people would vote for the Communist Party. But the young people of our country want a better life, they can’t be satisfied with $150 a month.
Another interesting component to the protests that attest to their youthful flavor, is the use of Twitter as a mobilizing tool. As the NY Times, explains
The sea of young people reflected the deep generation gap that has developed in Moldova, and the protesters used their generation’s tools, gathering the crowd by enlisting text-messaging, Facebook and Twitter, the social messaging network.
The protesters created their own searchable tag on Twitter, rallying Moldovans to join and propelling events in this small former Soviet state onto a Twitter list of newly popular topics, so people around the world could keep track.
Or as Carroll Patterson, a doctoral student on Moldovan economics, told the Times,
“I wouldn’t necessarily call it an anti-Communist movement,” Mr. Patterson said. “This really is a generational squeeze. It’s not really the Communists versus the opposition. It’s the grandmothers versus the grandkids.”
At the center of the protests are two youth organizations, Think Moldova and Hyde Park. Natalia Morar, the Moldovan journalist who was banned from Russia last year, is one of the Think Moldova leaders.Post Views: 322
By Sean — 6 years ago
On Sunday, by all accounts, Vladimir Putin will be elected President of the Russian Federation for a six year term with the option of running again in 2018. The polls don’t lie. The last Levada Center poll, places Putin at 66 percent with Gennady Ziuganov at a distant 15 percent, Vladimir Zhirinovsky, 8 percent, Mikhail Prokhorov, 6 percent, and Sergei Mironov, 5 percent. The second round possibility is now a fantasy. Even without rigging the polls, Putin is slated to win with 50+1 for a first round victory. It’s too soon to speculate if Putin will indeed remain in power until 2024. A lot can happen in six years. If recent events are any indication, a lot can happen in three months. For even though Putin will be victorious, that victory has happened in unfamiliar conditions.
Indeed, the Russian presidential election has been anything but ordinary. Sure, the official cast of characters remains virtually identical to past contests, save a few additions. Communist Party stalwart, Gennady Ziuganov still plays the role of “loyal opposition in-chief,” the aging face of a Communist Party that has the organizational resources to actually present a political alternative to Putin, but lacks the so-called “Leninist will” to adapt to present political conditions. Part of that adaption, however, would require dumping Ziuganov and forsake its aging electorate, something the KPRF mandarins and rank and file are still unwilling to do. Opposite Ziuganov is Vladimir Zhironovsky, another perennial “loyal oppositionist.” Zhirik plays the harlequin in this grand performance, adding outrageous, comic relief to a show already thin on drama. In a way, Zhirinovsky reflects the whole process itself, a clown for a clownish spectacle. Then there is Mikhail Prokhorov, the new addition to the cast. Prokhorov serves as a kind of Khodorkovsky-lite (since the real Khodorkovsky is less pliable and, well, in jail for the foreseeable future). An oligarch who “made” the bulk of his wealth in the “loans for shares” scheme that saved Boris Yeltsin from defeat in the 1996 Presidential election, Prokhorov, unlike Khodorkovsky, not only understood the rules of the game, but also played them correctly. But the biggest question that has dogged Prokhorov is not his past, but whether he’s a Kremlin project or not. I suspect that he’s a mixture. One thing is clear to me after reading Julia Ioffe’s profile of him in the New Yorker is that Prokhorov’s biggest obstacle is that he’s a sleazeball. Bringing up the rear is Just Russia’s candidate, Sergei Mironov. His candidacy only inspires one question: Who’s he?
Then there is Putin. Yes Putin. Not much to say about the man except perhaps, as the star of the show, we’ve seen his ability to play multiple personalities. During this campaign, we’ve seen Putin as the defender of stability, Putin the xenophobe, Putin the strongman, Putin the liberal, and Putin the populist. If there is anything Masha Gessen got right in her new book on the man, it’s the title. Putin is indeed a man without a face, and it’s this facelessness that has made him so effective. Given the choices on the ballot, Putin ironically serves as the political moderate. But Putin’s chameleon-like abilities also make him a perfect totem for his supporters and detractors alike. He serves as both good and evil, corrupt and uncorruptible, hero and villain. Indeed, Putin is a man of contradiction. He rebuilt the Russian state, but in doing so has contributed to its ossification. He has rebuilt the Russian economy, but in doing so made it too inflexible. Putin facilitated the creation of the middle class, but in doing so created his most challenging opposition. Putin vanquished oligarch patronage, and in doing so helped create new patrons. Unfortunately, in resurrecting Russia from the smuta of the 1990s, Putin has had to restore some of the worse historical aspects of Russian statecraft: centralization, personalization, and patrimonialism. In such a system, Putin is the most indispensable and dispensable figure. Indispensable because as the center of the Russian political system, he prevents the whole thing from collapsing. But as that center, Putin also ensures the system a slow and decrepit march to suspension. Given that Putin will be sticking around for at least six more years, it can be assured that so will the contradictions.
The Rise of the Bandar-log
This presidential election also has a new addition to the cast: the Bolotnaya protesters. They weren’t officially hired to play a role, that is unless you believe all the conspiracy theories that they are paid US agents. It’s more like they’ve pushed themselves on to the stage, a motley Greek chorus whose disparate voices have been cauterized into a collective cry for “fair elections.” Liberals, nationalists, communists, anarchists, and their fellow-travelers make up their political palate. The movement, if it can be called that, was conceived on September 24 when Putin announced he was running for election, born during the parliamentary elections on December 4 with outrage against electoral fraud as its first cry, and since has matured into a political force, and if not then at least political irritant to Putin’s re-election bid.
The Bandar-log have captured the political imagination of those at home and abroad, as evidence in the showering of comparisons to the Arab Spring, the colored revolutions in the mid-2000s, the handmaidens of a new Perestroika, and even the American Civil Rights Movement. Comparisons, especially historical ones, are always tricky because they suggest a large measure of similitude. Thus for the protests to be akin to the Arab Spring, Putin must be a Mubarak and Russia, Egypt. Hardly. For the colored revolutions, there must be an opposition candidate strong enough to make the elections contestable. He or she doesn’t exist. For a new Perestroika to be on the horizon, today’s Russia must resemble the Soviet Union. There’s no need to exaggerate. As for the Civil Rights Movement . . . huh?
This not to say that events in Russia are isolated from the global uprisings of 2011. They are not. Revolutionary upheavals are never contained. We’ve seen this too many times–1789, 1848, 1917, 1968, 1989–to discount their contagiousness. While Russia looks nothing like North Africa, it is hardly immune to the infectiousness of its enthusiasm and symbolic power. Indeed, the uprisings in Russia are part of global reconfiguration of mass politics into a more ideologically amorphous, leaderless, network based, social media driven phenomena. In them inhabit revolutionary echoes of the past, which are reconfigured, for better or for worse, toward an undetermined future. What is striking about many of these uprisings, and here Russia is included, is that there is no future program of utopian or technocratic nature. Their platforms are mostly ethically laden calls for dignity and recognition. The rest is made up as they move forward.
This is certainly the case in Russia. The repeated protester mantra that “We want reforms, not revolution” is not just a tactic to keep contradictory forces together, a trauma of past revolutionary experiments, or indicative of its class makeup. Rather the mantra is born out of an ideological moment in Russia where nothing beyond reform is imaginable. In this sense, Russia is already a liberal society.
But what kind of liberalism? That is the question. Will it be the liberalism of Putin that allows for the ravages of economic globalization to eat away at the social and economic fabric of Russian society all the while funneling the benefits into the few oligarchic hands? Or will it be the liberalism of Bandar-log, who if they ever gain a measure of influence will abandon their left and nationalist allies, for a less crooked, but no less neoliberal capitalism? Thus when it comes down to the standoff between Bolotnaya and Putin, the disagreements are about the rules, not the game.
That said, the protests in Russia have unleashed more than a middle class yearning for power. In a fascinating essay, Maria Chekhonadskikh and Alexei Penzin detail the more molecular political explosion that has occurred since December 4. Under the slogan “You can’t even imagine/represent us!” (Vy nas dazhe ne predstavlyaete!), a number of smaller radical initiatives have grown that have mostly flown under the media’s radar:
The protestors’ distrust of liberal oppositional leaders has provoked the mass self-organization of people who wanted speak about their issues and make different suggestions on the tactics of struggle. For example, at the Sakharovsky Prospect rally on December 24th, there were alternative platforms of students, teachers, cultural workers and traditional civil movements. For example, during the meeting there was an open people`s mic and workshop “Making your slogans”, organized by Union for Cultural Workers and Occupy Moscow Movement. Every day, new alternative committees, platforms and activist initiatives have emerged since January 2012. This “constitutive power” of the people is growing and is more aware of the stalemate of representative politics of any sort. The recent rallies and actions on February 4th and 26th demonstrated exactly this – the joyful creativity of a network-organized multitude of protesters and their distrust of any forms of traditional and authoritarian political leadership.
One cannot predict now how and at what moment the growing protest will reach its peak, nor when it will be able to dismantle the regime of so-called “managed democracy” dominating Russia for the last 10 years. Probably, the protests will be so strong that, after March 4th, the situation will drastically change again. At the same time, many activists are thinking about long-term struggle and putting their hopes in the democratic elaboration of a more socially and economically attuned political agenda, dealing with topics of the global crisis of neoliberalism and the question of social justice. But something irreversible has already happened –mass politicization and a rising political consciousness cannot be stopped and trapped in banal mantras of representative democracy. This situation of openness and uncertainty itself is an achievement of the movement, which indeed was unthinkable only three moths ago in the midst of the despair of imagining Putin’s uncanny “stability” for the next 6 to 12 years.
There are many echoes here, mostly of Italian Autonomist Marxism, particularly that of Antonio Negri with the references to joy, creativity, network, and multitude. It is here, hopefully, in the formation of a constitutive power that abandons the yoke of liberal hesitancy that Russia’s brightest political future dwells. There can be no real democracy without social justice, and on this last point the liberals of Bolotnaya are virtually silent.
In the meantime, the liberals of the Bandar-log remain the force in play, and its injection on to the political scene has completely transformed the Russian presidential election. After all, who is Putin running against? It certainly isn’t Ziuganov, Zhirinovsky, Prokhorov, or Mironov. The vast majority of Putin’s memorable comments, warnings, and threats have been directed to the Bolotnaya crowd. The utilization of the counter-protest by Putin’s camp has turned the struggle into an almost schoolyard battle, perhaps not unlike Putin’s childhood fisticuffs. Each side endeavors to tell the other: “I have more friends than you do.” It appears that at least in the short term, post-election Russia will feature more protest tit-for-tats of similar ilk.
The Road Forward
As that great philosopher Donald Rumsfield said, “There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – there are things we do not know we don’t know.” We know Putin, but which Putin Russia will get is unknown. We know the opposition, but whether it can sustain and build is unknown. We know the Russian people, at least some of us like to imagine we do, but they remain the biggest unknown of all. The question, as the former Defense Secretary put it, is about the unknown unknowns. A heavy canopy of unknown unknowns hangs over the Russian political landscape. This, I think, is best encapsulated by the ratcheting up of rhetoric in the last week producing an eerie specter of violence. There is suspicion from both sides that the other will try spark something. The language of provocation is at its height. Blood figures too often in commentary. For example, I was personally struck by the amount of times Viktor Shenderovich mentioned “the spilling of blood” as a possibility in an interview on Ekho Moskvy. Each side may say that violence is a “lose-lose,” but the necessity of making that conscious articulation suggests that the haunting presence of violence is there. And if violence realized, by intent or accident, it would lead Russia into the greatest unknown unknown of all.Post Views: 572
By Sean — 5 years ago
The financial crisis in Cyprus has put Putin in a bind. On the one hand, sitting silent and allowing Russian depositors take up to a 10 percent haircut on its $31 billion in Cypriot banks jeopardizes Putin’s standing with the Russian elite. On the other, if Putin is serious about anti-corruption and de-offshorization, the crisis gives him opportunity to make some modest headway. Either way, the Russian government’s hesitance in striking a deal with Cyprus reflects the schizophrenia between Putin the populist patriot and Putin the guarantor of the class interests of the Russian bourgeoisie.
The European Commission, European Central Bank, and International Monetary Fund have inadvertently accomplished a remarkable feat: prompting the normally disharmonious Russian bourgeoisie to suddenly sing in tune. Note some of the reactions from Russia’s bourgeois quarters. Putin furiously denounced the Troika’s plan as “unfair, unprofessional and dangerous.” Medvedev took the defense of the Russian bourgeoisie even further by red-baiting the EU with comparisons to Bolshevik expropriations. Oligarch and faux-oppositionist Mikhail Prokhorov warned the tax on Cypriot depositors could open “Pandora’s box.” Similar to Medvedev, neoliberal champion and effervescent Putin hater, Yulia Latynina blasted the EU’s “confiscation” as indicative of socialism. The crisis even has the Moscow Times running uncharacteristic op-eds imploring Putin to stand up for Russian capital against EU “bullying.” Even Andreas Aslund, who is ever dour on Putin’s Russia, believes that in this instance Putin “is undoubtedly getting strong advice to act from wealthy, smart, and daring Russian businessmen.”
The great irony in all this is that we find the Russian elite, which normally has no problem cannibalizing each other’s assets at home, defending in Cyprus what they are unwilling or unable to institute in Russia: a working legal system that protects capital from predation. With Cyprus the Russian elite gets its cake and eats it too: capital extraction at home and a safe harbor for its storage in its safe Cypriot colony.
How did Cyprus become so important to Russian capital? As Business Insider explains, all roads lead back to the Cypriot-Russian 1998 Double Tax Treaty:
Additionally, according to Bloomberg Russia billionaire reporter Rich Lesser, there is no penalty for moving money out of Cyprus, so if you want to move your money to another tax shelter, say, The British Virgin Islands, you’re free to do that.
So some oligarchs do.
How does this work? According to the Christian Science Monitor‘s Fred Weir:
“For quite a long time, Cyprus has been the major offshore zone where Russian corporate earnings are banked, and then re-invested in Russia,” says Grigory Birg, co-director of research at the independent Investcafe equity research provider in Moscow.
It works like this: Russian companies and wealthy oligarchs set up shell companies in Cyprus, which then invest in Russian operations and “repatriate” their profits to Cyprus, where they pay a flat corporate tax of 10 percent compared to more than 20 percent in Russia. Since Cyprus adopted EU banking rules in 2004, experts say, the scrutiny has become a little tougher, but not enough to discourage most rich Russians.
According to Russian central bank figures, little Cyprus invested almost $14-billion in Russia in 2011, compared with barely $2.3-billion invested by Russia’s biggest European trading partner, Germany.
“Cyprus is really convenient place for Russians, because it’s in the EU, has a low tax rate, and has adapted itself to Russian customers. It offers infrastructure, proximity, and Russian-speaking staff. It’s about capital protection … but now, no matter what happens with this tax plan, that’s bound to change,” says Mr. Birg.
Basically, Cyprus is for Russians as Caribbean tax shelters are for American oligarchs: a means to squirrel money away from the prying eyes of government auditors and tax collectors.
At the same time, Putin’s allegiance to the Russian elite puts him at odds with his de-offshorization efforts. Again Weir:
“Russian authorities have long pursued a campaign of “de-offshorization,” declaring that this practice of cycling money through other countries is bad for Russia,” says Alexei Makarkin, deputy director of the independent Center for Political Technologies in Moscow.
“In practice, it has usually meant that money just gets shunted from one offshore destination to another…
The crisis certainly presents Putin with an opportunity to fight corruption, as Stefan Wagstyl of the Financial Times notes. Indeed, Russia’s first intervention into the crisis suggests that anti-corruption and de-offshorization is on Putin’s mind. Ten days ago, Kommersant reported that the Ministry of Finance considered giving Cyprus aid in exchange of the names of its Russian depositors. The hope is that even modestly depriving Cyprus as a Russian tax haven will stave off the capital outflow from Russia. Capital flight from Russia is already around $14 to $16 billion so far this year, exceeding Central Bank estimates of $10 billion for the entire year. Medvedev even floated the idea of creating an offshore zone in the Far East. The money would still be under a tax haven but in Russia where the government would know who’s depositing, how much, and ostensibly where the money came from. This would undoubtedly give Putin some leverage in keeping the increasingly fractured elite in line. However, given that a main reason Russians park their money abroad is to avoid government raiderstvo, I seriously doubt a Sakhalin tax haven will be much of a draw.
The Cyprus crisis has pitted Putin against himself. It opposes Putin the patriot against Putin the guarantor of Russian elite; Russian national interests versus Russian class interests. I can only speculate how this internal struggle has played in the recent ebbing of Russian-Cypriot negotiations.Post Views: 713