Russia can never be a Top-Tier Economy

As long as one has the single-minded mission to intervene and usurp what belongs to others, there can be no long-term economic salvation. Yes, it can work in the short-term via physical threat to the populous ala Stalin et al. However, liberty and economic freedom cannot work when a sovereign nation is in perpetual war and turmoil. Goods of production will not flow as a free market with the burden of defense needs and lack of entrepreneurial incentive.

We see this playing out in third world totalitarian countries, where violence is what controls the masses, and justifies permanent control of the people by the government. Thus, it is no surprise that permanent crisis produces dictatorships which under Communist auspices becomes almost inevitable. While not poverty stricken, this is playing out in the image of Marshall Law in the Ukraine, which brings us back full circle to why the Russian economy will never be a threat to the United States, as we are seeing with China today.

The decline in Russia’s once industrial might is now a rotting manufacturing sector weighing down its $1.7 trillion economy, crippled by chronic under-investment, long delayed reforms, wide scale state ownership and western sanctions that are slowly squeezing its banking sector. As much as Russia would like to place blame for these issues elsewhere, they are basically self-inflicted.

“Bigger problems in Russia’s real economy are the cause of the expected modest GDP growth,” said Apurva Sanghi, an economist at the World Bank. “Russia’s low and declining potential growth is the binding constraint.” If you don’t believe the liberal World Bank, take it from the horse’s mouth. Putin’s friend and colleague, Alexei Kudrin, the head of the Audit Chamber since May, warned in an interview that a looming slowdown could be much worse than anticipated.

Not to be tangential, but the people as history shows, can only be pushed so far. We see this playing out in France, as the means of division through the environment by the left will stop when it starts affecting the pockets of the true believers. That which is populism in Paris has pushed Macron into emergency mode. This is the biblical “pebble in the shoe” that agitates the everyman. Those who work in the factories of Orsk, Russia, know this only too well. “There is a feeling across the whole city of crisis. No money, no jobs, no hope,” said a person whose family has worked at the Orsk factory for generations. “It is a very dangerous situation for the authorities to have 3,000 angry people out on the streets.” Albeit France, Russia or Lilliput, most men can be trusted with the direction of their own destinies. Jefferson, whose Doctrines of Europe have been read by Chairman Mau and other devoted non-rationals, said if associations (groups) cannot be restrained within the limit of order and justice, they can be protected by moderate powers of people of their own will. Those in power today do not share the will of the people.

Further gains in oil prices will mean little to the Russian economy. “An oil gain will just boost capital outflow and won’t go toward internal spending,” Kudrin said. “A shift in investor trust in the economy isn’t happening. So far the climate is pessimistic.” Even with strong diplomatic ties to China, India and Saudi Arabia, domestic anger over the loss of jobs and financial security are becoming harder to dismiss. Few scenarios play out well for the Russian people if there remains a constant state of battle. Suppression by Stalinist extension seems unrealistic, although it remains alive and well in parts of China. Technology has advanced beyond what Orwell had suggested. However, its advance has also opened up another avenue for Big Brother to be omnipresent and strike psychological fear in minds that will be susceptible to it. This type of possible manipulation would make the post-Freudian crowd smile.

About John Thomas

John Patrick Thomas is a four-time cancer survivor who lives with his family in South Florida. John attended Gettysburg College and The American University before embarking on an entrepreneurial career on Wall Street. He turned to the teaching profession after his life-threatening bout with bone cancer. John has recently written a #1 Amazon Cancer Bestselling book entitled, “A Call to Faith, the Journey of a Cancer Survivor.” He has appeared in publications such as The New York Times, The Wall St. Journal, The Washington Post, Memorial Sloan-Kettering Cancer Center publications, and was featured in new DayStar network series, “Impact with Pastor Dave.” He has traveled as a missionary and may be one of the few people that tell you cancer was the best thing to ever happen to him. You’ll have to ask him why.

One comment

  1. Marshall Plan.
    Martial law.

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