Streetwise Professor

March 29, 2010

Thoughts About the Underground

Filed under: Economics,Politics,Russia — The Professor @ 4:44 pm

Today’s terror bombing in Moscow reveals, yet again, that Islamic terrorism remains a world-wide threat.  Yes, the Chechen terror in Russia has its unique history and causes, but it shares ideological and operational similarities to and connections with the broader international Islamic terror movement.  The targeting of innocent civilians is brutal and wrong, and my sympathies are with those killed, those maimed, and those terrorized.

The Economist’s story expresses concerns–and they are not the first to do so–that this episode will be used to justify an expansion of state repression:

Big terrorist attacks have in the past been used by the Kremlin to justify tightening its grip on power and curbing the opposition. The second war in Chechnya, in 2000, which helped to propel Mr Putin into his presidency, was accompanied by a move to bring Russian television under Kremlin control. In 2004, after the school siege in Beslan, in North Ossetia, Mr Putin scrapped regional elections. It would be unfortunate if the Kremlin, rather than overhauling its security agencies and reviewing its north Caucasus policy, opts to act in similar fashion now.

This is no doubt possible.  Indeed, according to Oleg Kozlovsky, two narratives have dominated the immediate aftermath, one of which goes far beyond the Economist’s concerns:

It is too early to say who organized this terrorist attack. Russian bloggers discuss mainly two versions: Chechen rebels and the state security services. However weird it may sound, the latter version is at least as popular as the former one. In any case, the police and FSB were so corrupted and so busy fighting the opposition that they didn’t find time for the terrorists. By the way, chief of Moscow police was going to spend this day in Moscow City Duma promoting a bill introducing imprisonment for participants of banned peaceful rallies. He must have considered them the biggest danger for Moscow citizens. No surprise terrorists feel less restricted in Moscow than human rights activists.

Whoever organized this attack, the government will surely try to use this tragedy to further “tighten the screws” and secure their own power–the way they did after Beslan hostage crisis in 2004. The only question is what exactly they are going to do.
My thoughts run in a slightly different direction: will the inability of the current government ever lead to more widespread discontent with the competence of the government?; a reduction in the willingness to acquiesce to a strangulation of civil liberties in part justified as a necessary component of a war against terror emanating from the Caucasus that appears to be failing on its own term?  This is just the latest in a series of spectacular Chechen attacks on Putin’s watch (Nord Ost, Beslan, the recent bombing of the Moscow-St. Petersburg train, and now the Moscow Metro).  One part of the alleged bargain between Putin and the populace is that the former surrender their political voice and civil rights, and the former protects them.  When does the tipping point come when people decide that Putin has not lived up to his end of the deal?

Another part of the alleged bargain is that Putin provides prosperity.  I noted in my post last week that Putin’s tone in his screed directed against the United States in Hillary!’s presence betrayed a certain degree of panic over the economic situation. This article from Reuters provides further color that reinforces this perception:

Now leading the nation as its prime minister after completing the maximum two terms as president, Putin often plays a far more visible role than President Dmitry Medvedev in telling Russia’s business leaders what they are expected to contribute to the economy.

“I’m asking you for a third time, when are you going to sign this contract, do you not hear me?” Putin lashed out at deputy chief of gas monopoly Gazprom (GAZP.MM) Alexander Ananenkov, an elderly man wearing a hearing aid, at a meeting last December.  [What a guy!  Browbeating old deaf men.  How’s that for alpha male chimp behavior, S/O?]

. . . .

Another of Putin’s projects is the diversification of Russia’s energy export supply routes which, apart from their geopolitical role, will also swell the investment plans of state monopolies such as Gazprom and Transneft.

The multi-billion projects serve as growth drivers as they translate into orders of pipes, turbines and other equipment.

“I was recently at a (Russian) electrical transformers factory. A remarkable enterprise, new, very beautiful, modern. So why are you importing 70 percent of all transformers?” Putin asked the head of the Federal Grid Company, Oleg Budargin.


Most of Putin’s foreign visits are related either to energy diplomacy or the lobbying of deals on behalf of Russian defense or nuclear power firms.

During his March visit to India, Putin signed deals worth $10 billion including to build up to 16 nuclear reactors, saying Russia wants to control a quarter of the global nuclear power market.

Putin is also keen to support construction which achieved double-digit growth during the oil boom years and where asset price bubbles had formed before the crisis hit.

“We need to heat up this sector a little bit, although I am not talking about overheating,” Putin said of the construction industry, where he plans to introduce a government-backed mortgage scheme with subsidised interest rates for home buyers.

So, apparently Goldilocks is going bald: Putin doesn’t want housing too hot or not hot enough; he wants it JUST right.  Good luck with that.

Putin’s frenetic activity, his browbeating of some executives, and his pleading before foreigners on the behalf of others, does not exactly scream confidence in Russia’s economic prospects.  In fact, it suggests quite the opposite, and Putin is responding in the only way that a former Soviet appartchik knows how: to issue a blizzard of commands.  The fact that these commands will almost certainly not lead to a substantial economic improvement, and are likely in fact to prove counterproductive, will eventually reveal that Putin is rather impotent.  That is poison to an authoritarian leader.

The economy and domestic safety are two of the fundamental plinths of the Putinist bargain.  Both look increasingly shaky, although Putin’s popularity has not yet exhibited any dramatic weakening.  My question is: how long can that last when he does not deliver on his side of the bargain?  My conjecture is that fear of the answer to that question will lead to even more rigorous efforts to atomize society and control public expression (including over the internet) to prevent the formation of a critical mass of people saying that the emperor has no clothes.

* I was interested to see that the Obama administration issued a statement on the bombing that used the term “terror” or “terrorism” more than once.  Does that mean that the phrase “man caused disaster” (in Janet Napolitano’s artless prose) is no longer operative?  That there is actually such a thing as terrorism?

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  1. First, I see Kozlovsky apparently places credibility in the FSB-did-it version. Whereas I can imagine (if not place much credibility in) that being the case for the apartment blasts, how on Earth do you persuade or coerce two suicide bombers to give their lives for make benefit of Kremlin totalitarianism??

    Second, exactly how is Putin’s “browbeating of some executives” and especially “pleading before foreigners” (known in other circles as trade missions with state support) a new development? Did he not do these before the crisis? And how exactly is “[signing] deals worth $10 billion including to build up to 16 nuclear reactors”, i.e. winning your domestic industries foreign contracts, “likely in fact to prove counterproductive”?

    Comment by Sublime Oblivion — March 29, 2010 @ 8:47 pm

  2. Imagine? You don’t have to IMAGINE the Kremlin’s complicity in the Moscow apartment bombings of 1999, KGB agents WERE CAUGHT RED HANDED trying to place a bomb in an apartment block in Ryazan. Putin razed the Moscow sites and then murdered several of the members of the special investigation commission that was seeking the true cause.

    Are you really such a moron as to be unable to understand how the Kremlin could use the same tactics as the terrorists to brainwash desperate people into taking desperate acts? The KGB has been using such tactics to sow discord in the Middle East, so as to jack up oil prices, FOR DECADES. Who imagined Litvinenko could be poisoned radioactively before it happened? The point isn’t whether the Kremlin did or didn’t carry out this attack, the point is that Russians must face the reality THAT IT COULD HAVE DONE SO, and even the likes of SUBLIME MORON admits this fact. Lucky for him, he doesn’t have to wake up every morning to that horrifying reality in Russia.

    Once again, like a goat, Putin bleats nonsense about “destroying terrorists” after the fact, having totally failed to protect the country when it was OBVIOUS they would seek revenge after the Buryatsky killing. And yet, treacherous idiots like SUBLIME MORON don’t have a single word of criticism for a regime whose policy has OBVIOUSLY FAILED for all the world to see.

    Any country that sends its athletes into this meat grinder in 2014 will be guilty of murder when they are caught up in it.

    It’s time for Western leaders to face the barbaric human rights atrocities being committed by Russia in the Caucasus. Terrorism by Caucasus extremists is to be condemned, as SO IS TERRORISM BY THE KREMLIN.

    Comment by La Russophobe — March 30, 2010 @ 7:10 am

  3. First, information about suicide bombers came from Russian authorities which doesn’t mean it is a truth. Though the official version is most likely correct this time, the very idea of government being responsible for the attacks directly is alarming by itself.

    Second, it is not a new development though I don’t know where you read such thing in the article. But let’s follow your conclusion which means it is not the Putin who deserves credit for economic growth before crisis – Putin is useless ruler at best and counterproductive at worst – growth could actually be even bigger without him.

    “And how exactly is “[signing] deals worth $10 billion including to build up to 16 nuclear reactors”, i.e. winning your domestic industries foreign contracts, “likely in fact to prove counterproductive”?”

    You quoted one half of two sentences here. Anyway, signing a deal worth 10 billions is success for sure, question is if Putin is able to travel the world so fast and be so persuasive to make enough deals for Russian economy to grow. Such deals are not counterproductive, they are exact opposite, but neither Kozlovsky nor SWP said that.

    Lastly, you completely missed the main point of the article – these attacks will be most likely used by Kremlin to gain even more control over Russian society.

    Comment by Deith — March 30, 2010 @ 8:08 am

  4. Even Russians understand the horror of Putin’s total failure to govern:

    Why didn’t senior officials… talk to people through one of the main federal channels to stop them from going into the Metro and to prevent panic?” asked writer Vadim Rechkalov in the popular daily Moskvosky Komsomolets.

    “Instead, from the moment when the first blast took place and till 0900 [0600 BST], the leading federal channels showed people singing, dancing, making breakfast and relieving pain with their hands.”

    Comment by La Russophobe — March 30, 2010 @ 3:02 pm

  5. LOATHSOME REPTILE – why don’t you take a hike? I just took a look at your hate site to see what you wrote about this. LOATHSOME REPTILE blames “the brilliant Chechnya policy of Vladimir Putin”, with not a word for the terrorists directly responsible. Several commentators on its hate site, in particular “Georg” and “sascha_hero Germany”, have in fact openly praised the bombings, with no word of sanction, censorship, or condemnation from LOATHSOME REPTILE. Of course, that is not because LOATHSOME REPTILE runs a bastion of free speech, because those who actually dare call it out or disagree with it, are viciously attack by LOATHSOME REPTILE and the rest of its brood. This selectivity strongly indicates that LOATHSOME REPTILE is sympathetic to the terrorists, but just doesn’t have the guts to make it explicit. However, it would serve LOATHSOME REPTILE well to know that by publishing the pro-terrorist screeds of the likes of “Georg” and “sascha_hero Germany” on its site, LOATHSOME REPTILE is legally responsible for them and as such might well be in violation of the laws against inciting violence or giving moral support to terrorism. In any case, I do not feel it incumbent upon me to respond to a LOATHSOME REPTILE that is, at best, neutral about anti-Russian terrorism.
    (My apologies for slandering reptiles in this post).

    That assumes that Putin *has* to make foreign deals to make the Russian economy growth. In reality, most commentators (Citibank, World Bank, median survey of investment banks) predicts 2010 GDP growth in the 4-6% range.
    “Such deals are not counterproductive, they are exact opposite, but neither Kozlovsky nor SWP said that.” – correct, my bad. I read it to quickly. That said, I do find SWP’s logic chain that “Putin travels the world seeking foreign investment” = “Putin has no confidence in the economy” to be ridiculous. It is well known that political leaders all over the world frequently accompany their countries’ trade missions to enhance their chances of winning foreign contracts.

    Comment by Sublime Oblivion — March 30, 2010 @ 3:42 pm

  6. “not a word for the terrorists directly responsible”

    LIE #1. We link to Kim’s article on Pajamas and adopt it, the article CLEARLY CONDEMNS the terrorists. You are an illiterate ape. It’s truly breathtaking hypocrisy that you call upon us to condemn terror but you don’t say A SINGLE WORD about Putin’s failed policy.

    “Several commentators on its hate site”

    LIE #2. We are not responsible for what commenters write on our site, idiot, and we cannot conduct a minute-by-minute policing of posts that often generate hundreds of comments. Your “legal” analysis is lacking in ANY grounding in fact. and you are unqualified to give it(of course, you cite to ZERO legal authority). We have not received an e-mail from you complaining about any particular comment, if we had we would have reviewed it. Hence, you are obviously grossly neliglent, or a liar.

    You’re right, though, that we are a hate site. We hate Vladimir Putin and his neo-Soviet state and want to see it destroyed! We’re proud of that hate, and sad to hear you love Putin, a representative of an organizatation that killed more Russians than the Nazis. We think that’s truly sick, and makes you a mortal enemy of the Russian people who should probably be jailed.

    It’s not surprising that the people of the Caucasus, brutalized by Russian crimes that have been formally adjudicated MANY times in the ECHR (state-sponsored murder, torture and kidnapping) would express outrage at Russian people and glee when they are attacked. We do not condone such expressions and work to limit them on our blog, but it is healthy for the world to understand the just outrage of the people who live there at being brutalized by Russian forces. Read more about that here:

    NOT A SINGLE WORD of protest from SUBLIME MANIAC about these Russian crimes!

    Comment by La Russophobe — March 30, 2010 @ 6:08 pm

  7. As usual, LOATHSOME REPTILE is a damned liar. The article in question only ever blames the Kremlin, and goes even further by proposing to punish Russia for being a victim of terrorism by stripping Sochi of the Winter Olympics. Nowhere does LYING REPROBATE “clearly condemn” the terrorist; all it does is quote Obama’s denunciation of it, but far from endorsing it the LYING RAT viciously attacks Obama for sending US troops to celebrate victory over Nazism (not surprising to anyone familiar with LOATHSOME REPTILE’s numerous prior instances of implicit support for Nazi genocide of Russians).

    Second, LOATHSOME RETARD does not realize that it is the web hosts that are responsible for the comments on their blogs, forums, and any other online information content. I don’t really care for LOATHSOME REPTILE’s ignorance, but one day it might well find out that illegal actions – even under an cowardly and anonymous online persona – have real life consequences. Although LOWLIFE REPROBATE might claim “minute-by-minute policing” is impossible, that is obviously disproved by the prodigal attention it devotes to comments that diverge from LOATHSOME REPTILE’s extremist party line.

    Comment by Sublime Oblivion — March 30, 2010 @ 7:07 pm

  8. +++it is the web hosts that are responsible for the comments on their blogs, forums, and any other online information content.+++

    Is that so? I mean, here, in the US.

    Comment by LL — March 30, 2010 @ 7:18 pm


    You failed to notice that the article continues onto a SECOND PAGE, you drunken ape!

    Here is the quote from the final paragraph: “Violent attacks on unarmed civilians are only to be condemned.”

    We demand an apology. If you are right about comments, Streetwise Professor is responsible for your libelous statements and must ban you.

    Comment by La Russophobe — March 30, 2010 @ 7:31 pm

  10. It’s rather sad how totally desperate, indeed rabid, the Russophile dogs have become. As they watch the total collapse of their beloved Putin regime, their ravings become truly deranged and pathetic.

    We’d urge those interested in the Moscow bombing to actually read the comments on our post about it:

    A fascinating and heated debate is going on there between Russophiles and Russophobes, a debate that its not matched on any other English-language Russia blog in the world. Currently there are almost 150 comments and the post is less than two days old.

    Comment by La Russophobe — March 30, 2010 @ 7:37 pm

  11. +++it is the web hosts that are responsible for the comments on their blogs, forums, and any other online information content.+++

    Is that so? I mean, here, in the US.

    That’s certainly the case in the UK and most European countries. Though hate speech is allowed in the US, incitements to violence, I am about 90% sure, are not. For instance, I’ve noted that many extremist sites typically take explicit care to warn their commentators not to do that, or else take care to disavow the web owners from responsibility under a “Terms of Use” document. I do not know if LR does that.

    Violent attacks on unarmed civilians are only to be condemned, but the West does nothing. It is abundantly clear that the Kremlin’s policies in the Caucasus have failed, and that if those polices continue the bloodshed will only escalate until Russia is enmeshed in civil war.

    1) Which comes at the very end of a long-winded piece which no-one in their right minds will bother reading to the end.
    2) Is phrased ambiguously. LA LOSERDOPE does not specify which “unarmed civilians” it’s talking about, and it is made especially suspect by the comment “but the West does nothing” – both Obama and Brown condemned the attacks, hence false if referring to the Moscow bombings. Instead, it probably refers only to attacks on civilians LR doesn’t dislike, i.e. non-Russians.

    A fascinating and heated debate is going on there between Russophiles and Russophobes, a debate that its not matched on any other English-language Russia blog in the world. Currently there are almost 150 comments and the post is less than two days old.

    Indeed, quite a fascinating zoo LOSER REPROBATE has there. Georg is some crazed Ukrainian who hates Russians and wants them killed because… wait for it… his Russian neighbor got wacked by two Jewish-Ukrainian members of the Bratva (i.e. Soviet-area mafia).

    Comment by Sublime Oblivion — March 30, 2010 @ 8:52 pm

  12. More bombings, more total failure by Putin:

    A Russian agree’s with LR’s analysis, Putin is a hopeless disaster for Russia

    Putin must go, or Russia will descend once again into national collapse.

    Comment by La Russophobe — March 31, 2010 @ 6:08 am

  13. “Putin’s frenetic activity, his browbeating of some executives, and his pleading before foreigners on the behalf of others, does not exactly scream confidence in Russia’s economic prospects. In fact, it suggests quite the opposite, and Putin is responding in the only way that a former Soviet appartchik knows how: to issue a blizzard of commands.”

    How ironic! Putin has absolutely no qualifications to GIVE such orders, only the power, yet he feels compelled to give them regardless of the ill effects. Sounds like the same paradox that did in the USSR. Good luck with that, Russia.

    Comment by La Russophobe — March 31, 2010 @ 12:10 pm


    Only a very dirty little rat, certainly not a man, is unable to admit and apologize when he is wrong.

    Your attempt to tar nearly TWO HUNDRED comments, many with wonderful links to source material, because of one or two bad apples is deeply sick. Your suggestion that we must immeidately moderate comments that number in the hundreds (you’d have no idea about that, of course) is totally deranged. Do you accept that if any twisted mind ever comments on your blog, your blog must be closed? Put down that vodka bottle! Is this really the best you can come up with to defend Putin? Ha!

    You’re a jealous, desperate little mental case, truly pathetic.

    Comment by La Russophobe — March 31, 2010 @ 12:13 pm

  15. Peaceful protest on Triumfalnaya Square, Russian Gestapo responds with crude violence:

    Oleg Kozlovsky was there, and arrested.

    Comment by La Russophobe — March 31, 2010 @ 4:45 pm

  16. Hey Russophobe, some of your frequent commenters are suspected of being your own sock puppets designed to create semblance of debate. What’s true about that?


    Comment by Leos Tomicek — March 31, 2010 @ 4:54 pm

  17. LEOS:

    It’s as true as the suspicion that you and SUBLIME OBLIVION are one in the same. Can you confirm?

    Yes, LR and Robert Amsterdam and Streetwise Professor are ALL the same person, and he is responsible for all the anti-Russia comments on all those blogs as well. There is only one person in the entire world who is crazy enough to despise Vladimir Putin! How brilliant of you to figure it out!

    Comment by La Russophobe — March 31, 2010 @ 5:21 pm

  18. @SO:

    Predicts, we will see how accurate they are. Putin does not have many, if any, options to influence whether Russian economy grows or not. Russians depend on revenues from oil export and demand for oil in the world is connected with growth in big economies like U.S. and China. You have to hope these two grows in order for Russian economy to grow. And are reliable commentators that optimistic about U.S and China? I cannot personally imagine U.S. economy to grow that much with the health care reform passed and implementation of new taxes to pay for it. And China grows but that is just a bubble. And bubbles have tendency to go *BOOM* when they get too big.

    Comment by Deith — March 31, 2010 @ 6:08 pm

  19. Anyhow, fun as it was, I’ve had enough of trolling against LA LOSERDOPE.

    Yes, most “reliable commentators” are in fact relatively positive about China, and somewhat positive about the US (at least in the short-term). Your own scenario relies on a lot of assumptions – that 1) China’s growth is a bubble [export dependency is overstated; pundits have been ranting about it for years but it was the Western economies that actually collapsed in 2008-09], 2) that Russia’s GDP growth mostly depends on oil prices [marginal effect, cheap credit from Western intermediaries was far more important; has bad effects in that it hurts domestic manufacturers by strengthening the currency], and 3) the US is going to grow much slower because of the healthcare bill [will *cut* long-term health costs; overall effect on the budget is marginal]. So personally, I don’t much buy into any of them, though I don’t have the time to argue why in detail (especially since I’ve covered some of these topics on my own blog). But let the predictions and real life tell who’s right.

    Comment by Sublime Oblivion — April 1, 2010 @ 12:07 am

  20. @SO:

    1) China is not a bubble? So it grew during crisis, as the only nation in the world, because of blessed leadership?

    2) Yeah, I made a mistake here, it is not the GDP growth that depends on revenues from oil export, it is the Russian budget. That doesn’t make it more probable Russian economy will grow, though.

    3) Healthcare reform will cost a huge amount of money. There will be new taxes to pay for it and SWP stated and proved numerous times that, simply put: more taxes = less growth. And the healthcare reform plans to spend more and more money over time, so I don’t know how you came to idea it will bring *cut* in longterm horizon and its overall effect on budget is “marginal”. So personally, I side with professor’s of economics opinion.

    Comment by Deith — April 1, 2010 @ 7:30 pm

  21. We can’t help but wonder, if we who run a blog with ten times more traffic and comments and which has been cited by the New York Review of Books and written about in the Moscow Times are “losers,” then what does that make SUBLIME JACKASS? Is he an ULTRALOSER? A SUPERDUPER LOSER?

    Just wondering.

    Comment by La Russophobe — April 1, 2010 @ 8:39 pm

  22. I completely agree with LA RUSSOFREAK that I’m a loser, as are most people. At least I realize it, whereas LA RUSSOIDIOT truly, genuinely believes it is the best thing since sliced white bread thanks to its ability to attract the most degenerate freaks like Georg or sascha_hero.

    Comment by Sublime Oblivion — April 2, 2010 @ 3:13 pm

  23. Hey, Russophobe! If you are so popular, why does the founder Kim Zigfeld need to use a pen name? Why not come out of the shadows?

    Comment by Leos Tomicek — April 2, 2010 @ 10:17 pm

  24. Thank you Anatoly Karlin and Leos Tomicek , your agenda is clear .-

    Given that Vladimir Putin kept his playdate with Hugo Chavez in Caracas instead of rallying support in the Caucasus, I think Greene is right that the Kremlin will do their best to ignore rather than deal with the terror problem.

    The Kremlin has evidently decided that since it cannot benefit from a conversation about what to do next, it’s best to avoid a conversation altogether. That is probably correct, in the short term. But in the longer run, if the terrorists strike again, if the danger remains real, a public debate will begin anyway. When that happens, the Kremlin will no longer be a participant in the conversation: rather, it will become the object of debate, and no amount of rhetoric will help. That is what happens when leaders fail to lead.

    At such moments of decline in Russia, the clans always come to the fore in a mad scramble of self-preservation and self-enrichment. Even Putin’s truest followers are now beginning to speak of their leader and the results of his governance in impertinent and disrespectful ways.

    Of course, no one should think that Putinism will disappear tomorrow, even though its jackals are already circling. Let us remember that Soviet communism took four decades to rot away — decades during which the inner circle knew that the regime was disintegrating from within but lacked any real idea of how to save it.
    So now we hear pathetic echoes of all the communist reform efforts of the long years of Soviet decline: Putinism without Putin, Putinism with a human face, etc. There is much talk of great leaps forward, of modernization, innovations and nanotechnologies — the sort of myths with which fading rulers console themselves as they look for magical solutions to cure the dysfunctions of their regimes.

    On the street, other echoes are heard. Our “father” did not turn out to be a father at all. Even among Putin’s kleptocracy of ex-KGB men — as among the communist apparatchiks in the dying days of Gorbachev’s rule — there is a growing realization that the jig is nearly up and that it is time to look after oneself.

    So, as Putinism atrophies, the great hope among his immediate circle is that they will be able to do what the communist elite did in the early 1990s — hijack whatever new system emerges and put it to work in the service of their own interests.

    Comment by Pjotr Orlov — April 3, 2010 @ 7:36 am

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