Streetwise Professor

June 24, 2019

Vova Phones It In

Filed under: Economics,Energy,Politics,Russia — cpirrong @ 3:13 pm

Vladimir Putin held his annual marathon phone-in session last week. Although Vova was taking the calls, he was the one who was clearly phoning it in. By all accounts his performance was bored and listless, and largely unresponsive to the economic and environmental (as in garbage disposal) concerns expressed by many callers.

Putin’s answers to questions regarding declining living standards bordered on the pathetic, and definitely revealed he has no answers and can offer no serious succor. The best he could do is to tell Russians that things aren’t as bad today as they were in the 90s.

If the key to success is setting low expectations, Putin certainly succeeded! Perhaps the only current world leader who is doing worse than Russia’s in the 90s is Maduro.

As for explanations, the best Putin could offer was sanctions, and low oil prices. The sanctions excuse is somewhat amusing, given that Putin had previously claimed that sanctions not only wouldn’t hurt/weren’t hurting Russia, they would actually rejuvenate the Russian economy by encouraging the development of import-substituting industries. Insofar as oil prices are concerned, Putin’s answer only underlines the failure of Russia under his watch to develop outside the resource extraction sectors.

None of this should be surprising, and I have predicted such a trajectory. Maximum Leaders get old. They get tired. They get bored. They run out of new ideas and don’t have the energy or inclination to generate them. They begin to prefer a quiet life and to abhor change and innovation. Even they get captured by vested interests who strongly favor maintaining the status quo. Moreover, authoritarian leaders like Putin inevitably become progressively more isolated and out-of-touch because they are surrounded by sycophants, and deprived of feedback from elections, a free press, and open debate.

We are witnessing the senescence of Putin, and Putinism. The most grave concern–for Russians mainly, but for the rest of the world too–is that another inherent feature of authoritarian systems like the one in Russia is that the current leader has no interest in creating a system of succession: indeed, he has an interest in NOT creating one. As he continues to age, or if he dies suddenly, the battle to succeed him will intensify, and inevitably destabilize Russia (with spillover effects around the world).

This brings to mind two closing thoughts.

First, if you think Putin is bad, you should shudder at the type who will prevail in the struggle to succeed him. (Such person will almost certainly emerge from the shadows of the security services or their allies, and you will likely not have heard of him.)

Second, for years Putin’s political hole card has been “I have given you stability.” But ironically, his creation of an increasingly ossified system creates the conditions for a resurgence of instability–perhaps as bad as the 90s–upon his demise, or even his enfeeblement.

So it is more accurate to say that Putin has perhaps delayed instability, and guaranteed that the instability will be all the more intense when it inevitably reappears.

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  1. Kudos for watching the whole way through Prof, although those closest to you may soon start advising that you take up some sort of outdoors hobby.

    ‘(Such person will almost certainly emerge from the shadows of the security services or their allies, and you will likely not have heard of him.)’

    Exactly as Vova himself did.

    It’s true he’s probably bored with the domestic stuff. But it’s not all garbage collection and the price of borscht. I reckon he’s getting a kick out of pulling the tail of the US, cutting deals with President Xi, and prodding the Iranians into shirt-fronting the 5th fleet.

    Comment by Global Super-Regulator on Lunch Break — June 25, 2019 @ 2:35 am

  2. Maybe he’s just got bored now that he can’t read Hellary’s emails every morning.

    Comment by dearieme — June 25, 2019 @ 3:54 am

  3. @dearieme–He can, it’s just that they aren’t interesting to him anymore.

    Comment by cpirrong — June 25, 2019 @ 3:39 pm

  4. @GSRoLB–No worries. I have an outdoors hobby–tennis, including playing when it is 95F/35C (as I did on Sunday). Thanks for your concern! 😉

    Comment by cpirrong — June 25, 2019 @ 6:09 pm

  5. Putin’s term as president of Russia will soon be up (if I recall, in 2024), and according to their present constitution he is not allowed a following term. However, there is talk of him becoming a president of a unified entity that would incorporate Russia and Belarus in a confederation, with a possible Donetsk or South Ossetia thrown in.

    We might then see a glimpse of the future, as there would need to be someone to take over the presidency of Russia, at least nominally.

    Comment by I.M. Pembroke — June 25, 2019 @ 10:02 pm

  6. Since he presumably has access to some highly competent forgers, he should plan on showing his US birth certificate and running for the Dem nomination for the election of 2024. He’s no doubt less of a socialist than Sanders. Of course, he’d be accused of being the Trump continuity candidate.

    Comment by dearieme — June 26, 2019 @ 5:40 am

  7. Question is, what is there left to plunder for any successor? The moment Putin looks like he’s actually on his way out the oligarchs will all bug out.

    Also intriguing to know how China will exploit any perceived weakness during and after the transition. I’ve always said Russia has been overly fixated on the perceived threats from the west, whilst playing down those to their east.

    @Pembroke – any chance of a link re your comment about Russia and Belarus? I recall Craig did mention Putin’s ambitions regarding Belarus some time ago, but that Lukashenko had pushed back.

    Comment by David Mercer — June 27, 2019 @ 2:53 am

  8. Interesting piece.

    1. You wrote this before the Lionel Barber interview was published. I really enjoyed the way Putin bamboozled the boys from the Ft with the real wage/real household disposable income smoke-and-mirrors act. Tho’, to be fair, it seems that Putin was thinking of real household discretionary income. Anyway you look at it, the number sucks.

    2. Regarding Putin creating systemic instability through his ostensible focus on stability, couldn’t help thinking of Hyman Minsky. The financial instability model applied to other areas of human affairs, including politics and international relations … why not!

    Comment by Simple Simon — June 30, 2019 @ 9:14 am

  9. @Mercer – I cannot recall, but it was a Scandinavian publication, I think. It dealt with Lukashenko’s options for the future.

    Comment by I.M. Pembroke — June 30, 2019 @ 10:41 am

  10. @I.M. Pembroke and @Mercer. The incorporation of Belarus into a broader confederation with the RF to provide Putin with a constitutional end-around has been discussed for years. I view it as an option to be exploited if Putin cannot find another loophole in the constitution, e.g., “castling” with Medvedev.

    BTW–has anybody seen Medvedev? Is he awake? Alive?

    Comment by cpirrong — July 7, 2019 @ 5:10 pm

  11. @Simple Simon. Bamboozling the leftists at the FT is hardly an achievement. And yes, the numbers absolutely suck however you slice and dice them.

    The Minsky metaphor is apt.

    Comment by cpirrong — July 7, 2019 @ 5:15 pm

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