Georgia Once Again
Sorry about the light posting, but I have been in DC for 4 days, including 3 days of deposition testimony in a manipulation case before the Federal Energy Regulatory Commission. A good time was had by all. Well, maybe not all. I had some fun, though.
It seems that things have carried on without me, with the comment sections of some earlier posts going nuts. (Choice of words quite intentional;-)
But, it’s time to weigh in with some new material. Several Russian things have caught my eye.
First, in Georgia on My Mind I speculated about the possibility of a renewal of fighting between Russia and Georgia. Tensions have ramped up further in the 11 days since. Russian criticism of NATO maneuvers–staff exercises, really–in Georgia has grown only more shrill as the exercise began:
The expulsions came as Moscow fiercely criticised the start of Nato military exercises in Georgia, another source of tension in relations between Russia and the 28-member alliance.
Dmitry Rogozin, Russia’s envoy to Nato, said that the alliance would be better off holding the manoeuvres “in a madhouse” than in a country where troops were “rioting against their own president”, a reference to this week’s alleged army mutiny in Georgia.
. . . .
“It’s still not clear how Russia is reading both the Obama administration and the security relationship with Nato,” said a senior British official this week.
“The messages coming out of Moscow are still unclear. Russia is still hugely sensitive about anything that affects its near-abroad.”
The development of a functioning Nato-Russia relationship is seen as important by security analysts, who believe that Moscow has a role to play in helping the allied effort in Afghanistan and combating piracy off the coast of Somalia.
But earlier this week, Mr Lavrov cancelled plans to attend a meeting later this month of the Nato-Russia Council, a body that brings together the governments of the western alliance and Moscow.
And what, exactly, is “unclear” about the Russian responses?
The aforementioned mutiny of the Georgian tank battalion, and the ongoing standoff between Saakashvili and the opposition; the Russian assumption of the responsibility of guarding “independent” South Ossetia’s and Abkhazia’s borders with Georgia; related allegations that Russia is positioning troops (including Grad rocket launchers which Russia excoriated the Georgians for using) in these areas, within 40 clicks of Tblisi, in violation of the cease fire; Russian allegations of the massing of Georgian troops; the spy expulsions (choosing the Canadians as the tat in the game of tit for tat is interesting–thoughts, Michel?); the sortieing of the entire Russian Black Sea Fleet. It is plausible, though not proven, that the demonstrations and the mutiny had Russian support, even if they also draw upon domestic dissatisfaction with Saakashvili. If a strategy of subversion doesn’t work. . . what next? Maybe the repositioning, the fleet movements, etc., are just muscle flexing and an effort to voice extreme displeasure with NATO, but maybe there is something more.
Another interesting tidbit: Russia fired the head of its airborne units. Presumably another casualty of the war to reform the Russian military, joining ousted GRU commander General Valentin Korabelnikov.
Here is an interesting article by a Finnish expert on Russia that echoes a favorite SWP theme: the brittleness of the Russian system, especially in hard economic times under an anomalous diarchic leadership:
It would be inadvisable, however, to hold your breath while waiting for Russian reforms: there are serious structural constraints that are preventing Russian from making significant changes. Thus, anyone who is optimistic that Russia will soon change its ways seems bound to get caught up in the cycle of disillusionment.
In the post-Soviet age, Russia has never had anything more than a tepid interest in integrating with Europe. A set of deep-seated historical, cultural, economic and social factors instead have encouraged Vladimir Putin’s Kremlin to pursue its own course. Accordingly, Russia has developed a peculiar socio-economic system that Putin aptly dubbed “managed democracy.” The evolution of this awkward system of government now makes Russia’s integration into the associations of democratic states impossible for the foreseeable future. It also makes the enlargement of Euro-Atlantic institutions seem like a threat to what the Kremlin claims to be Russia’s national interests.
Seemingly unperturbed by the dramatic disconnect between Russia’s and the West’s values and interests, the Kremlin pursued two geopolitical goals in recent years. Buoyed by an unprecedented windfall from energy exports, Russia tried to position itself as an independent great power unconstrained by any alignments. It also sought to fashion itself as an alternative values center – a norm-maker in its own right, on par, say, with the European Union or the United States.
The global economic slump ended up exposing severe flaws in the Russian system, in particular a glaring lack of checks on executive authority. The excessive concentration of power in the hands of a few now seems to be hampering the country’s ability to come to grips with a spreading economic crisis. A more open system, one that encouraged the promotion of the best and the brightest, as opposed to those who best curry favor with Putin, would stand a far better chance of guiding Russia out of its present economic mess.
During the “fat years,” the abundance of energy-export revenue meant that the Kremlin leadership didn’t have to worry about its brittle and arcane management structure. But now, with surpluses giving way to ballooning deficits, Russia’s rulers have ample reason to be worried about their futures.
It seems that at least some of the Kremlin’s leading men are aware of their plight, and are interested in finding a way out. Thus, some appear to be ready to reengage the West following the breakdown in relations last year, stemming from Russia’s blitz into Georgia. [For background see the Eurasia Insight archive]. This forward-thinking faction also seems to be tentatively probing for ways to reinvigorate the Kremlin management team, with the aim of making it more flexible.
But the real question is whether Russia’s paramount leader – Putin – is ready to admit that the system he built has turned out to be dysfunctional. Until an answer manifests itself, Russia will find itself stuck. Putin’s dependence on managed democracy has left the government ill-equipped to handle the economic crisis, as it can neither opt for thorough democratization, nor can it effectively follow the path of authoritarian adaptation.
. . . .
The thing is that the Medvedev-Putin “tandemocracy” is neither a democratic division of power, nor is it an efficiently functioning duumvirate. Under conditions where dwindling resources are fostering competition among various elites, Russia’s peculiar power arrangement stands to become a factor of instability [here, here, sayeth SWP].
When Putin anointed Medvedev as his successor he made sure that Russia’s next president would be politically and institutionally weak and dependent on him. As a result, Medvedev is essentially an impotent leader: he cannot sack Putin, his prime minister, make him responsible for all Russia’s current woes (as many Russian autocratic rulers did to their predecessors in the past) and then attempt to introduce certain changes “from above.” For his part, Putin also appears to be stuck with Medvedev as his presidential pick. What follows is a virtual political stalemate with Moscow being unable to come up with a semblance of a coherent policy.
As Russia’s political system remains largely unreformed (and seemingly unreformable), its foreign policy is likely to be more of the same. For the Russian leadership, the notion of the country’s great power status will stay unchanged. Russia, therefore, is likely to become increasingly prickly in its dealings with the United States and European Union due to its own inherent internal weakness.
The last paragraph suggests the tie between the three stories: increasing Russia bellicosity in Georgia, and versus NATO generally, the sacking of another commander of an elite service branch, and tensions within the regime. A regime under tension, especially one with Great Power pretensions and bathed in paranoia, could find another adventure in Georgia to be very useful. Indeed, note the mention in the above article about some of the “liberal” elements in the government desiring to reach a rapprochement with the West after the Georgian rupture. This would not serve the interests of the hardline siloviki, which would give them further incentive to stoke tensions with the West–and we see tensions in Georgia, the Baltics, and elsewhere. Military men disgruntled over the proposed reforms are a danger to the government, and in the current economic and political situation could represent a very grave danger–so some of the most prominent are being replaced.
In brief, all the aggressive talk and action emanating from Russia make perfect sense when one considers the extremely unsettled economic conditions; the brittle nature of the political system; the cross-currents between Putin and Medvedev, and the various factions that look to each. There is a real possibility–not a probability of one, but an appreciable one–that these forces could erupt into something serious. Although domestic tumult is possible, I think a foreign adventure is more likely. And the most likely place for that to happen is Georgia.
And speaking of Georgia, I will be heading there Friday. No, not that Georgia. Our Georgia, to speak at the Atlanta Fed’s conference on the financial crisis, to be held on Jekyll Island, GA. So the posting may again turn light.
http://www.moonofalabama.org/2009/05/the-georgian-mutiny-that-wasnt-.html
Comment by Sublime Oblivion — May 6, 2009 @ 9:20 pm
Putin would have to get really careless in spilling lots of blood in the streets at home, if it even came to that, or engaging in a stupid foreign adventure costing lots of lives before Russians turned on him. They’ve got the most egregious human rights violation show trial going on in front of their noses with Khordokovsky and only the handful of civil rights advocate care. Ignorance, willful or otherwise, and apathy can’t be a foundation for a civil society. Putin is luckier than Chavez who has to contend with organized college students and the merchant class erupting from time to time.
Even if Putin/Medvedev left the scene tomorrow I’m dubious they would be replaced by anyone that would drive Russia closer to a western democracy.
It seems to me that Russia rots for another generation until the voting block of pensioned sovoks, United Russia’s most ardent supporters besides the obvious feeding-from-the-siloviki-trough public servant class, dies off.
Comment by penny — May 7, 2009 @ 10:41 am
Russian defense expert Pavel Felgenhauer is right with you, SWP:
http://www.jamestown.org/programs/edm/single/?tx_ttnews%5Btt_news%5D=34961&tx_ttnews%5BbackPid%5D=27&cHash=b22c1df13e
Comment by La Russophobe — May 8, 2009 @ 10:10 am
Pavel Felgenhauer is a sham of a “defense expert.”
Comment by Cutie Pie — May 10, 2009 @ 2:04 pm
I was born in Georgia, but now I’m a citizen of the U.S.
I went to a Russian school, so I read Russian web sites in Russian.
On this site, http://inosmi.ru/ I was reading this article,
http://www.inosmi.ru/stories/08/09/30/3534/248748.html and there was this paragraph.
ÐкономиÑта из ХьюÑтонÑкого универÑитета Крейга Пирронга (Craig Pirrong), ведущего блог ‘Бывалый профеÑÑор’ (Streetwise Professor), поведение Путина шокировало. Ðа его взглÑд, так напоÑледок ведут ÑÐµÐ±Ñ Ð¾Ñ‚Ñ‡Ð°ÑвшиеÑÑ Ð»ÑŽÐ´Ð¸.
It says that economist from Houston University, Craig Pirrong, was shocked by behavior of Putin, and he (Craig) believes that only desperate people behave that way.
Well, I do not agree with Craig. It’s not that I like Putin. No.
The simple truth is that inflation is not the most important issue.
The most important issue is to reduce unemployment, to put people to work.
Why? To produce more. The more you produce the more you consume or save.
It’s that simple.
And how you put people to work? There are two ways.
1. Borrow money from abroad and invest it in something useful, – to build housing, for example.
2. Print money and invest it in something useful, – to build housing, for example.
Now let’s discuss the difference, and here is my point.
Russia – or any other country – does not need to borrow from foreign institutions to build housing.
They can print their own money and invest it. And no, borrowing from abroad is not better, in my opinion, regardless of the level of increased inflation.
Actually, this is a very interesting subject, and I’m looking forward to a discussion.
My point is simple. Inflation is bad? OK. But borrowing from abroad is even worse.
That is why a central bank should not be independent. Government should print money and invest that money to increase wealth of the nation. To build housing, for example.
Can anyone prove me wrong?
P.S. I’m an MBA student in California Coast University, but the described opinion is my own.
Unless, of course, someone described it before me. Actually, I don’t even believe that I am the first to describe this idea. Does anyone know who did it first?
Comment by Michael Vilkin — May 10, 2009 @ 6:58 pm
@michael vilkin–
Thanks for your comment, and for letting me know that my views are deemed worthy of noting in Russia. LOL.
I do have to disagree with your analysis, though, Michael. Most importantly, printing money creates no wealth. You can’t really “invest in something useful” merely by printing money. When you print money you create . . . money. And people soon learn that the government is merely printing money, and demand more money to provide useful things n exchange; they do not increase the amount of useful things that they supply.
Monetary creation/inflation serves as a tax on monetary balances. Perhaps you can fool people for a while by getting them to think that an increase in nominal demand is really an increase in real demand, but soon they figure that out, and the inflationary spiral begins. There may be an initial increase in unemployment, but after people figure out that the government is engaging in an inflationary policy that effect dies out.
The central bank should definitely be independent. Lack of independence usually results in a lot of inflation and a decrease in wealth, not an increase. In part because inflation distorts the price system and leads to misallocations of resources.
It is not really a choice between “print” and “borrow abroad.”
La Russophobe offers a special issue today
http://larussophobe.wordpress.com/2009/05/10/may-13-2009-contents/
which contains a wealth of material showing the breakdown and failure of Putin’s policies all across the Caucasus region.
Comment by La Russophobe — May 11, 2009 @ 12:09 pm
I don’t think a reader out to be able to publish a comment like “Pavel Felgenhauer is a sham of a ‘defense expert'” without being required to provide at least one link to published material substantiating the claim. Felgenhauer has
been published by the Moscow Times and the Jamestown Foundation, two of the most well-respected sources of information
about Russia on the planet, and he’s risking his life daily with his writings — as the killing of heroes like
Politkovskaya and Markelov clearly prove.
Readers who conduct themselves in this outrageously childish manner are the bane of the blogosphere, an embarrassment
to us all in the eyes of the mainstream media. I condemn them.
Comment by La Russophobe — May 11, 2009 @ 12:12 pm
La Russophobe, “the breakdown and failure of Putin’s policies all across the Caucasus region” is just one man’s opinion, and I’m not sure that it’s correct. The game is not over until it is over.
I read Russian news web sites and discussion forums in Russian. The level of hatred towards the U.S. is beyond my ability to describe it. If they could exterminate us – all Americans – like cockroaches, they would not hesitate a split second. At the same time liberal – and not only liberal – idiots here believe that Russia was defeated and she is no longer dangerous. In my opinion, there are too many such idiots in this country, – probably, a majority of the population. That is why, in my opinion, the U.S. has a couple more decades to be a superpower. Some 20 or 30 years from now the U.S. will get to the end of the road. In a few words, dumbing down of students in public schools shows up later in dumb population. Just look at this silly debate about torture of the terrorists. Russians are laughing at stupidity of Americans. In my view, Russians are right.
How can one describe stupidity of Pel-assy and her ilk in Congress? To me, it would be laughable if it were not so tragic.
Comment by Michael Vilkin — May 11, 2009 @ 7:07 pm
Dear Professor, thank you very much for explanation. Let’s continue the discussion. First, let’s get rid of the notion of printing the money. Printing money does not create inflation, as you well know. Every Federal Reserve Bank has a right to order currency to be printed and delivered to that Federal Reserve Bank. As long as the currency is sitting deep in the basement of that Bank, it does not have any purchasing power, and for that reason alone printing money does not increase inflation.
As you, Professor, know, new money is created with new debt. I borrowed $100 from my bank. Money supply increased by $100. I returned $110 some time later. Money supply decreased by $110.
But new money can be created for two very different reasons. Let me give you an example.
1. I borrowed $100,000 to build a new house.
2. I borrowed $100,000 to buy an old house, – during housing mania.
In the first case money supply increased by $100,000, but in a few months a new house was built, and wealth of the nation increased by one new house, which has a market price at least $100,000.
We can say that both money supply and wealth of the nation increased by the same amount, – $100,000.
In the second case some fast-talking SOB talked me into buying an overpriced asset. Money supply increased by $100,000, but nothing new was built. Wealth of the country did not increase. Money was not lost, of course. My money just relocated to the seller, and I’m left to hold the overpriced asset. Just some redistribution of wealth.
In short, new money can be created to increase wealth of the nation, or new money can be created for speculation, to buy whatever is in favor, is that dotcoms or real estate.
I’d say that in both cases creation of new money will increase inflation.
But – and that is a big but – in the first case inflation will be lower, because new wealth is created. New wealth is not the same as increase in supply, – unless, of course, the owner of the new home puts it immediately on the market to sell. But, even if he does not put the new house on the market, at least the wealth of the nation increased, if not supply of housing.
In the second case there is almost nothing positive. Just increase in money supply, and no increase in either wealth of the nation or supply of housing.
Now let’s go back to the question of independence of the central bank. In my view, if there are millions of people unemployed, the government should order the central bank to do whatever is needed to increase banking reserves. To keep people unemployed is the worst possible case.
I know all the textbook explanations about inflation and unemployment, and I do not agree with them. Here is why. If we create trillions of new money and build new modern cities with modern public transportation, wealth of this country will increase. I know that there will be some collateral damage. Monetary savings will lose some value. Still, it’s very much debatable. If we build modern new cities with modern public transportation, supply of housing will go up, prices will be pushed lower, and I will pay less for rent. I will save some green. Business owners will pay less for rent, and those savings will be passed on to the consumer. I will save some green as a consumer. Prices of some goods will probably increase, but those increase might be offset by lower prices of other goods and services. And most important point. If people live in better homes, who cares about inflation? I would very much like to live in a mansion that has a market price $10 million ( $1 million in today’s dollars ). The point is that if we create new money to create new wealth, and we succeed in creation of new wealth, that is more important than nominal prices of the wealth.
In conclusion, creation of new money will increase general level of prices, but there are some interesting details to note. To put it bluntly, it’s better to live in a $1 million apartment than in a $1 paper box. If all we need to build housing is money, let’s create new money and create new wealth, and inflation be damned.
Comment by Michael Vilkin — May 11, 2009 @ 8:09 pm
@Michael–
You are way off base. You remind me of the old Steve Martin routine, “How to Make a Million Dollars and Not Pay Taxes”: “First, make a million dollars.”
I don’t have a lot of time to respond–have to leave to see a speech by John Taylor of Stanford, inventor of the “Taylor Rule” and “other textbook explanations of inflation and unemployment.” So, I’ll just try to focus on one sentence of your comment: “If we create trillions of new money and build new modern cities with modern public transportation, wealth of this country will increase.” Yes, and if frogs had wings, they’d fly. The question is, whether the creation of trillions of new money will bring Futurama into being? Short answer: No. Long answer: No. There is no necessary causal connection between the creation of new money and the creation of real wealth.
You are repeating the mercantilist fallacy, revealed as such in theory long ago, and in practice longer ago by the Price Revolution (the great inflation following the massive influx of precious metals from the New World). Money is not wealth. Your theory depends on people systematically suffering from money illusion.
Perhaps here’s a better illustration. There is an acid test of your theory. If you are right, Zimbabwe would be the richest nation in the world, for they’ve followed exactly the policy you suggest. A little research will tell you how well that’s working out for them. Similarly, a little research on early-Weimar Germany, or post-WWI Hungary, etc., would provide some additional empirical evidence on your theory.
Dear Professor, I’m sorry to see that you missed the point.
I’m not advocating just to print money and drop the bags of freshly printed money from helicopters.
I’ve never said that.
I said that new money is created with new loans when the banks make loans.
Every loan made by any bank increases amount of money in circulation.
And increase of money in circulation increases general level of prices, or inflation.
Now please make a short and clear statement.
Are you saying that banks should stop making loans?
My point is that a bank loan to build a new house is better than a bank loan to buy an old house. Looks like you don’t see the difference.
BTW, in Zimbabwe they also don’t see any difference.
They just print money, and don’t build new cities.
If Zimbabwe were using my approach, they would not just print the money.
They would make loans to build new housing.
Now, with all due respect, it looks like Zimbabwe approach and your approach are very similar.
1. Increase in money supply causes inflation.
2. Making loans to build new homes is not any better than making loans to buy old homes.
3. The conclusion: just increase money supply and don’t build anything, because the result will be the same.
Dear Professor, please explain what is wrong with making loans to build new homes, as opposed to making loans to buy existing homes. If there is no difference with respect to inflation, then Zimbabwe government is right: just print the money, because there is no difference. Why bother to build decent housing if there is no difference? That is why they just print the money and don’t build anything.
If they were making loans to build decent housing, not only money supply would increase. New jobs and new wealth would have been created. That is the difference between Zimbabwe approach and my approach.
Comment by Michael Vilkin — May 13, 2009 @ 4:20 am
Another writer offered this:
“Since the same number of people are chasing the same amount of stuff, we cannot on average be wealthier than we were before.”
I agree of course. If you print money like in Zimbabwe, money supply will increase, but wealth of the nation will not increase.
Now look at two events.
1. I borrowed from my bank $100,000 TO BUY AN EXISTING HOUSE.
2. I borrowed from my bank $100,000 TO BUILD A NEW HOUSE.
Here is the question. If a new house has been built, how it affected amount of wealth of this country?
Will it increase, decrease, or stay the same?
If wealth is not affected, then they in Zimbabwe are right, – just print money and don’t build anything.
Comment by Michael Vilkin — May 13, 2009 @ 4:38 am
To Sublime Oblivion:
You said: “For a start there’s a huge surplus of housing in the US. That is certainly one thing it doesn’t need any more of”.
Well, for a start, why don’t you tell me what you smoke usually?
It must be hashish.
Millions of American families live in substandard housing, because they can not afford neither to buy nor to rent decent apartment. Now get this.
Surplus, by definition, means “An excess of quantity supplied compared to quantity demanded at a given price; a surplus puts downward pressure on the price”.
There is a huge surplus of black caviar on the world market. At a price of hundreds of dollars PER OUNCE supply exceeds demand AT THAT PRICE.
By your logic, since there is a surplus, producers of black caviar should produce less of it?
So that ordinary people never taste those black fish eggs?
And construction workers in the U.S. should all go on welfare so that ordinary people never have a chance to live in a decent apartment and continue to live in a 2-bedroom apartment with 3 children?
What the hell are you doing here?
Find another place to educate yourself.
Get lost and don’t come back.
Go to this web site, where everyday Russians talk about America UNCENSORED.
http://forum.msk.ru/
After that tell me what majority of Russians say about America.
And never again talk about surplus, – or about economics.
Sheesh…
Comment by Michael Vilkin — May 13, 2009 @ 5:07 pm
To Sublime Oblivion:
You said: “For a start there’s a huge surplus of housing in the US. That is certainly one thing it doesn’t need any more of”.
Well, for a start, why don’t you tell me what you smoke usually?
It must be hashish.
Millions of American families live in substandard housing, because they can not afford neither to buy nor to rent decent apartment. Now get this.
Surplus, by definition, means “An excess of quantity supplied compared to quantity demanded at a given price; a surplus puts downward pressure on the price”.
There is a huge surplus of black caviar on the world market. At a price of hundreds of dollars PER OUNCE supply exceeds demand AT THAT PRICE.
By your logic, since there is a surplus, producers of black caviar should produce less of it?
So that ordinary people never taste those black fish eggs?
And construction workers in the U.S. should all go on welfare so that ordinary people never have a chance to live in a decent apartment and continue to live in a 2-bedroom apartment with 3 children?
What the hell are you doing here?
Find another place to educate yourself.
Get lost and don’t come back.
Go to this web site, where everyday Russians talk about America UNCENSORED.
http://forum.msk.ru/
After that tell me what majority of Russians say about America.
And never again talk about surplus, – or about economics.
Comment by Michael Vilkin — May 13, 2009 @ 5:08 pm
To Sublime Oblivion:
You said: “For a start there’s a huge surplus of housing in the US. That is certainly one thing it doesn’t need any more of”.
Well, for a start, why don’t you tell me what you smoke usually?
Millions of American families live in substandard housing, because they can not afford neither to buy nor to rent decent apartment. Now get this.
Surplus, by definition, means “An excess of quantity supplied compared to quantity demanded at a given price; a surplus puts downward pressure on the price”.
There is a huge surplus of black caviar on the world market. At a price of hundreds of dollars PER OUNCE supply exceeds demand AT THAT PRICE.
By your logic, since there is a surplus, producers of black caviar should produce less of it?
So that ordinary people never taste those black fish eggs?
And construction workers in the U.S. should all go on welfare so that ordinary people never have a chance to live in a decent apartment and continue to live in a 2-bedroom apartment with 3 children?
What the hell are you doing here?
Find another place to educate yourself.
Get lost and don’t come back.
Go to this web site, where everyday Russians talk about America UNCENSORED.
http://forum.msk.ru/
After that tell me what majority of Russians say about America.
And never again talk about surplus, – or about economics.
Comment by Michael Vilkin — May 13, 2009 @ 5:29 pm
Michael, you are, quite frankly, a complete idiot.
You quote me that “a surplus puts downward pressure on the price”. Exactly. Now what’s been happening to the housing market the past two years?
And why do we have a financial crisis? Partly because of misdirected investments into housing by subsidizing homeownership for political reasons.
Re-black caviar, the reason it’s so expensive now is because Caspian Sea sturgeon were shortsightedly massively over-fished, and stocks will need decades to recover (which I doubt they will, especially if your attitudes prevail).
Re-your site. That does not prove anything about the “majority” of Russians. Unless you’re going to concede that the majority of Americans are neocon freaks judging by the likes of Right Nation and similar sites.
Comment by Sublime Oblivion — May 13, 2009 @ 9:39 pm
Hey, Sublime, I don’t really care about your opinion, am I a complete idiot or not.
I have a very thick skin, so don’t even try.
OK. Let’s continue.
You said:
“You quote me that “a surplus puts downward pressure on the priceâ€. Exactly. Now what’s been happening to the housing market the past two years?”
Well, I did not quote you that “a surplus puts downward pressure on the price†simply because you did not say it. I said it.
You, the smart cookie, said:
“For a start there’s a huge surplus of housing in the US. That is certainly one thing it doesn’t need any more ofâ€.
Now you, the smart cookie, explain why “it doesn’t need any more ofâ€.
If there is a surplus in housing because of high prices, should construction workers go on welfare?
Should millions of families continue to live in crowded apartments?
Or should we build more housing and create jobs and improve economy and standard of living?
It’s not that I expect an intelligent answer, you smart cookie…
And yes, majority of Russians hate America.
A friend of mine who has both Russian and US citizenship returned recently from Moskow where she went for family reasons, because her son, who was born in the US was constantly beaten up. He was beaten up because he was American and did not know Russian very well. His mother says that hatred toward America is beyond description.
The site, http://forum.msk.ru/ , shows what ordinary Russians really think, and how they hate America.
Unless, of course, some bonehead reads it differently. 🙂
Comment by Michael Vilkin — May 13, 2009 @ 11:06 pm
I apologize for a triple posting of the same message.
My message was not appearing after submitting, and I tried to post it a few times.
Sorry.
Comment by Michael Vilkin — May 13, 2009 @ 11:13 pm
1. If you want to start off by insulting me, don’t whine when it ricochets back on to you.
2. “If there is a surplus in housing because of high prices, should construction workers go on welfare?”
They should retrain and get another job.
3. “Should millions of families continue to live in crowded apartments?
Or should we build more housing and create jobs and improve economy and standard of living?”
Crowded apartments aren’t a particularly pressing issue at the moment in the overall scheme of things. There are plenty of foreclosed properties that are decaying / being stripped away because the US built too many houses.
You might also want to get used to crowded apartments, because with oil production probably past peaking gas prices are going to soar and the suburban way of life is going to become increasingly unaffordable.
4. Unlike you, I rely on statistics such as approval ratings of the US in Russia, instead of slim anecdotal evidence. Beating up the black sheep in a community is the norm in schools throughout the world.
Comment by Sublime Oblivion — May 13, 2009 @ 11:27 pm
Sublime, you said:
“Crowded apartments aren’t a particularly pressing issue at the moment in the overall scheme of things. There are plenty of foreclosed properties that are decaying / being stripped away because the US built too many houses.”
If there were too many houses, every family in the U.S. would live in a nice house.
There are plenty of foreclosed properties NOT because the US built too many houses.
There are plenty of foreclosed properties because the banking system made too many loans TO BUY existing houses. Increased demand pushed the prices up. Here in California prices tripled – TRIPLED ! – in just a few years.
Conclusion: foreclosures are caused by high prices, and NOT by too many homes.
Let me ask you something.
What substances have you experimented with back in ’60s ?
Permanent brain damage is obvious in your tortured logic.
Comment by Michael Vilkin — May 14, 2009 @ 8:37 am