The morons in Conservativeville have been braying their lust for President Putin, the overweight exhibitionist who shoots sedated tigers and calls himself a hunter (no wonder rightwingers love him: he shoots guns at defenseless animals then calls himself a man). In turn, they call Obama weak, feckless even.
But here’s the thing: Putin has already lost.
The U.S. can’t save Europe when it comes to energy. And it can’t impose truly effective sanctions without Europe’s cooperation. Thing is, it probably won’t have to. Putin’s petrostate will eventually implode all by itself.
Even before the Ukrainian crisis began, Russia was headed toward a major decline. Despite oil prices being more than $100 a barrel, its economy will be lucky to grow at a rate of 1% this year–about one-third of the U.S. rate. The fact that the American economy is growing faster than not only Russia’s but also Brazil’s and those of other emerging-market nations is truly amazing. A decade ago, the BRIC countries were supposed to be the world’s economic salvation. Since then, they’ve become complacent, and their growth has been cut in half. Some, like China, are brewing up epic debt crises. Others, like Russia and Turkey, are ruled by autocratic strongmen trying to grapple with tumbling markets and foreign-capital flight on a massive scale.
The world, in other words, has turned upside down economically. Russia’s pain will continue to be the U.S. markets’ gain, as investors seek safety in U.S. Treasury bills and blue-chip stocks. In economic terms, the war over Ukraine has already been won–and not by Putin.
Here’s a situation that all the sabre-rattling and stare-down contests can’t possibly win, but time can. Let me put Foroohar’s already cogent phrasing into an analogy that even a conservative can understand: Vladimir Putin is George Bush in that he can’t make money on a business literally swimming in it.
A one-percent growth rate is practically an economy in a recession. In a time when Europe has some of the strongest growth (particularly Germany, who is substantially reliant on Russian oil and gas exports) on the planet, Putin is somehow managing to run the nation’s productivity and profitability into the ground. The Moscow stock market lost 200 points in one day (from 1500 to 1300) based on the news about Crimea but also by the fear investors have that Putin can’t manage this slack time in domestic product.
His solution – to annex a province that likely would have remained Russian even after the breakup of the old Soviet Union if Kruschev hadn’t given it to Ukraine – is hardly a long-term strategic asset, at least economically. Its major component is tourism and while Crimea has some untapped oil and gas reserves to draw upon, those can hardly be developed in a short enough time span to be of value to the Russian economy as a whole for a decade or two. By then, the world may have moved onto new energy sources.
President Obama has done the right thing here: He’s let his EU allies bear the brunt of the sabre-rattling while he allows Putin enough rope to hang himself.