MoJo Blogs and Articles | Mother Jones Mother Jones logo en Russia Has Already Blown Up the Global Economy Once. Will It Do It Again? <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>Just in case you're thinking that Russia's economic problems are little more than a fitting karmic payback for Vladimir Putin, you might want to think twice. When the global economy is fragile, sometimes even small events can send the whole system into cardiac arrest, <img align="right" alt="" class="image image-_original" src="/files/blog_committee_save_world.jpg" style="margin: 20px 0px 15px 30px;">and that affects everyone, not just Putin and his cronies. So in case you've forgotten, here's a brief refresher on the events of August 1998:</p> <ol><li>Russia devalues its currency and defaults on its sovereign debt.</li> <li>Markets that are already jittery thanks to the East Asian financial crisis go into full-blown frenzy mode.</li> <li>Money pours out of low-quality emerging market investments and into high-quality US, Japanese, and European bonds.</li> <li>As a result, yield spreads between low-quality and high-quality bonds widen sharply.</li> <li>Long Term Capital Management, which had made large bets on spreads <em>narrowing</em> as the East Asian crisis receded, is blindsided, suffering huge losses.</li> <li>As LTCM gets close to insolvency, Bear Stearns stops clearing their trades. Death is imminent.</li> <li>Because LTCM is so highly leveraged, its debts exceed $100 billion and its collapse thus threatens every bank on Wall Street. Amid growing panic over a systemic meltdown, the Fed finally steps in and arranges a bailout package. Crisis over&mdash;for now.</li> </ol><p>This is not going to happen again. The world is not the same now as it was in 1998. It's just meant as an example of how an otherwise limited financial crisis can have a global impact. The fact that it begins with a Russian currency crisis is merely a felicitous coincidence.</p> <p>But also a bit of an unnerving coincidence. More than likely, Russia's problems will be contained to Russia. But they might not be, so we should all be careful what we wish for.</p></body></html> Kevin Drum Economy International Thu, 18 Dec 2014 05:47:31 +0000 Kevin Drum 266906 at New Documents Show the US Called Waterboarding Torture During World War II <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>Decades before it started waterboarding terrorism suspects, the US government had dramatically different standards for what it considered torture, particularly when it was being done to our soldiers in World War II. <a href="" target="_blank">Recently released</a> documents detail how the the United States charged hundreds of Japanese military officials and prison guards with war crimes for abuses against American prisoners of war, including waterboarding.</p> <p>"What the US was calling torture, what it was prosecuting as war crimes [during World War II] were not even close to what has come out in the torture report," says Shanti Sattler, assistant director at the War Crimes Project at the <a href="" target="_blank">Center for International Studies and Diplomacy</a> at SOAS, University of London, who fought to have the trove of documents made public.</p> <p>The torture indictments are documented in the <a href="" target="_blank">archives of the United Nations War Crimes Commission</a>, which was created in 1943 to classify and identify Axis war crimes and<em> </em>to assist in the prosecution of war criminals. Unlike the Nuremburg and Tokyo Tribunals, which prosecuted major figures from Nazi Germany and Imperial Japan after the war, the UNWCC was set up to help investigate <a href="" target="_blank">"minor criminals,</a>" and did not have prosecutorial powers. In all, the UNWCC investigated more than 30,000 cases that lead to more than 2,000 criminal trials brought by its member states, including the United States<em>.</em> (The tribunals collectively held 49 trials.)</p> <p>Based on UNWCC's work, the United States charged Japanese military officials for numerous war crimes, such as forcing prisoners to stand outside without meals, slapping prisoners, and subjecting prisoners to solitary confinement. While <a href="" target="_blank">several</a> <a href="" target="_blank">articles</a> <a href="" target="_blank">have cited</a> the Tokyo Tribunal's classification of waterboarding as torture, the UNWCC documents shed more light on how the US government defined torture and pursued it as a violation of international law. "These actions were clearly labeled by the Washington War Crimes office as 'ill-treatment' and 'torture,'" Sattler explains in an email.</p> <p>Compiled below are excerpts from the<em> </em>United States' cases against Japanese military officials and prison guards accused of torturing and abusing prisoners.</p> <p>The UNWCC archive has multiple examples of the United States charging Japanese soldiers and prison guards with war crimes for waterboarding prisoners (often referred to as the "water cure" or the "water treatment"):</p> <div class="DC-note-container" id="DC-note-193814">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><div class="DC-note-container" id="DC-note-193485">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><div class="DC-note-container" id="DC-note-193742">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>Some Japanese military officials were convicted of waterboarding:</p> <div class="DC-note-container" id="DC-note-193748">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>In addition to waterboarding, the United States brought war crime charges against defendants for other offenses, including making prisoners stand in the sun without food or water:</p> <div class="DC-note-container" id="DC-note-193749">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>Other charges included clubbing prisoners:</p> <div class="DC-note-container" id="DC-note-193752">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>Kicking prisoners:</p> <div class="DC-note-container" id="DC-note-193753">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>Slapping prisoners:</p> <div class="DC-note-container" id="DC-note-193755">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><div class="DC-note-container" id="DC-note-193759">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>Whipping prisoners:</p> <div class="DC-note-container" id="DC-note-193758">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>And subjecting prisoners to solitary confinement:</p> <div class="DC-note-container" id="DC-note-193761">&nbsp;</div> <script src="//"></script><script> dc.embed.loadNote('//'); </script><p>This is just a sampling of the charges brought against Japanese military officials and prison guards. The documents show that the United States' definition of torture in World War II,&nbsp;when it was used by our enemies,&nbsp; was very different than the one the Central Intelligence Agency has been using since 9/11. "Today, nearly 70 years later, the concept of torture has become a debate in the United States," says Sattler. "The United States must recognize the principles of international humanitarian law that we as a nation helped to develop."</p></body></html> Politics Civil Liberties Human Rights International Military Top Stories historical memory CIA Thu, 18 Dec 2014 00:05:05 +0000 Luke Whelan 266681 at Jeb Bush Wants a Tougher Cuban Embargo <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>Former Florida Gov. Jeb Bush&mdash;the first Republican to declare an official interest in becoming his party's next presidential nominee&mdash;was quick to pounce on President Barack Obama's decision to normalize relations with Cuba. "I don&rsquo;t think we should be negotiating with a repressive regime to make changes in our relations with them until there are substantive changes on the island," he <a href="" target="_blank">told</a> <em>Miami Herald</em> reporter Marc Caputo Wednesday morning. He posted a longer <a href="" target="_blank">comment on his Facebook page</a> later Wednesday afternoon, asserting that "the benefactors of President Obama&rsquo;s ill-advised move will be the heinous Castro brothers who have oppressed the Cuban people for decades."</p> <p>It's no surprise that Bush pounced to attack the shift in policy. A few weeks ago, Bush said that the current prohibitions on travel and trade are too loose and that the US government should clamp down harder on the Castro regime. "I would argue that instead of lifting the embargo we should consider strengthening it again to put pressure on the Cuban regime," he <a href="" target="_blank">told a crowd</a> at an event in early December hosted by US Cuba Democracy PAC, a group that favors maintaining the embargo. Bush claimed that efforts to relax travel restrictions under Obama had aided the repressive government. "Would lifting the embargo change the fact that the government receives almost all of the money that comes from these well-intended people that travel to the island?" he asked.</p> <p>Bush's support for the embargo dates back to the 1980s, when he settled in Miami and formed close ties to the exile community there when embarking on his early business career. A <a href="" target="_blank">2004 article</a> by William Finnegan in <em>The New Yorker</em> noted that "Jeb Bush is largely responsible for the fact that most Miami Cubans are Republicans." As Finnegan wrote:</p> <blockquote> <p>When Jeb became chairman of the Dade County Republican Party, in 1984, he simply looked at South Florida&rsquo;s demographics, saw the opportunity, and went to work making the Republican Party the natural home for Cuban exiles. In 1979, registered Democrats still outnumbered Republicans among Cuban-Americans by forty-nine per cent to thirty-nine per cent. By 1988, only twenty-four per cent were Democrats, and sixty-eight per cent were Republicans.</p> </blockquote> <p>Cuban exiles became an essential part of Bush's base during his gubernatorial campaigns in the Sunshine State. In 2002, Jeb's older brother,&nbsp; then-President George W Bush, went to Florida and threatened to veto any bills from Congress that relaxed the embargo, a bit of chest puffing <a href="" target="_blank">seen at the time</a> as an effort to boost Jeb's reelection campaign that year.</p></body></html> Politics 2016 Elections Bush Elections Foreign Policy Top Stories Wed, 17 Dec 2014 21:14:02 +0000 Patrick Caldwell 266866 at Obama's Had a Helluva Good Month Since the Midterms <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>So how have things been going for our bored, exhausted, and disengaged president? He's been acting pretty enthusiastic, energized, and absorbed with his job, I'd say. Let us <img align="right" alt="" class="image image-_original" src="/files/blog_obama_happy.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">count the things he's done since the November 4th midterm elections:</p> <ul><li><strong>November 10:</strong> Surprised everyone by announcing his support for strong net neutrality.</li> <li><strong>November 11:</strong> Concluded a climate deal with China that was not only important in its own right, but has since been widely credited with jumpstarting&nbsp;progress at the Lima talks last week.</li> <li><strong>November 20:</strong> Issued an executive order protecting millions of undocumented workers from the threat of deportation.</li> <li><strong>November 26:</strong> Signed off on an important new EPA rule significantly limiting ozone emissions.</li> <li><strong>December 15:</strong> Took a quiet victory lap as Western financial sanctions considerably sharpened the pain of Vladimir Putin's imploding economy.</li> <li><strong>December 16:</strong> Got nearly everything he wanted during the lame duck congressional session, and more. Democrats confirmed all important pending nominees, and then got Republican consent to several dozen lesser ones as well.</li> <li><strong>December 17:</strong> Announced a historic renormalization of relations with Cuba.</li> </ul><p>I guess you can add to that a non-event: In its second year, Obamacare signups are going smoothly and ahead of target. Am I missing anything beyond that? Maybe. It's been quite the whirlwind month for our bored, exhausted, disengaged president, hasn't it?</p> <p>All of these things are worthwhile in their own right, of course, but there's a political angle to all of them as well: they seriously mess with Republican heads. GOP leaders had plans for January, but now they may or may not be able to do much about them. Instead, they're going to have to deal with enraged tea partiers insisting that they spend time trying to repeal Obama's actions. They can't, of course, but they have to show that they're trying. So there's a good chance that they'll spend their first few months in semi-chaos, responding to Obama's provocations instead of working on their own agenda.</p> <p>Was that part of the plan? Beats me. But it seems to be working pretty well so far.</p></body></html> Kevin Drum Obama Wed, 17 Dec 2014 20:37:59 +0000 Kevin Drum 266871 at The Person Who Cares Most About Barack Obama's Approval Rating is Hillary Clinton <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>Peter Beinart thinks President Obama is due for a comeback. <a href="" target="_blank">Paul Waldman agrees:</a></p> <blockquote> <p>I think Beinart is probably right, and the economy is the main reason; it swamps every other consideration in evaluating the president. We could have some major shock that upends the momentum it has been gaining, but if things proceed for the next two years on the trajectory they're on, the Obama presidency will be one of the best for job creation in recent history. <strong>But it's also important to understand that an Obama revival, should it happen, is going to look different than that of other presidents.</strong></p> </blockquote> <p>In this case, "look different" means that even in the best case Obama will end his presidency with approval ratings in the mid-50s, but no higher. The country is just too polarized to produce anything better. Conservatives of nearly all stripes are going to disapprove of Obama come hell or high water, and that puts a ceiling on how high his approval rating can go. Ditto for any other president these days.</p> <p>But it's true that the economy seems to be doing pretty well these days, and it's usually the economy that drives approval ratings. That's good news for Obama, but it's far better news for Hillary Clinton. For Obama, leaving office with a strong economy is nice for his legacy, but that's about it. For Hillary, it almost certainly means the difference between winning and losing the presidency. If the economy is sluggish or worse in 2016, there's simply no way she overcomes voter fatigue toward Democratic rule. But if the economy is ticking along strongly, she just might.</p> <p>So that's that. The person who cares most about Obama's approval rating isn't Barack Obama. It's Hillary Clinton. It's the tailwind she needs if she wants to become the first woman to occupy the Oval Office.</p></body></html> Kevin Drum 2016 Elections Hillary Clinton Obama Wed, 17 Dec 2014 18:41:10 +0000 Kevin Drum 266841 at 4 Signs the Arctic Is Getting Baked by Climate Change <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>If you're looking for the ground zero of climate change, head to the Arctic. Nowhere else on Earth is changing as quickly or as dramatically; air temperatures there are rising twice as fast as at lower latitudes. In the summer of 2012, Arctic sea ice reached the <a href="" target="_blank">lowest level ever recorded</a>, shrinking to less than half the area it occupied a few decades ago. Ice has rebounded somewhat in the two years since, but it is still on a downward trajectory of <a href="" target="_blank">about 13 percent</a> per decade and could disappear altogether in summer months by 2030.</p> <p>The distressing Arctic prognosis is made abundantly clear in a new report card issued today by the National Oceanic and Atmospheric Administration. The report card comes out every winter and provides an update of where things currently stand in the Arctic. Here are a few key findings:</p> <p><strong>Sea ice is disappearing:</strong> The 2014 summer sea ice minimum&mdash;a snapshot taken when sea ice is at its lowest&mdash;was 23 percent below the 1981-2010 average, a loss of ice 2.6 times greater than the total area of California. In the map below, the minimum (which happened in September) is on the right; the pink outline shows the average. The winter maximum, on the left, was also below average, by about 5 percent:</p> <div class="inline inline-center" style="display: table; width: 1%"><img alt="" class="image" src="/files/sea-ice-map-630.jpg"><div class="caption"><strong>Arctic sea ice extent in the winter maximum (left) and summer minimum (right) were both below average (pink line) in 2014. </strong>NOAA</div> </div> <p>Here's that same data, expressed a different way. You can see that both the minimum and maximum have fallen over the last several decades:</p> <div class="inline inline-center" style="display: table; width: 1%"><img alt="" class="image" src="/files/graph-630.jpg"><div class="caption">NOAA</div> </div> <p>Melting sea ice doesn't raise sea levels much, because the ice is already floating in the ocean. But because the white ice reflects sunlight back into space whereas dark ocean water absorbs it, losing the ice makes global warming happen even faster. Sea ice is also a key wildlife habitat. Perhaps most importantly, sea ice is a very sensitive guage of overall warming; when ice levels drop like this, it's an indication of change happening throughout the climate system.</p></body></html> <p style="font-size: 1.083em;"><a href="/environment/2014/12/arctic-sea-ice-polar-bears"><strong><em>Continue Reading &raquo;</em></strong></a></p> Environment Charts Climate Change Climate Desk Science Top Stories Wed, 17 Dec 2014 18:37:27 +0000 Tim McDonnell 266736 at New York State Just Banned Fracking <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>After years of wrangling between environmentalists, lawmakers, and fossil fuel companies, New York's top public health administrator said he would ban fracking in the state, citing health risks.</p> <p>From <a href=";_r=0" target="_blank">the </a><em><a href=";_r=0" target="_blank">New York Times</a>:</em></p> <blockquote> <p>The Cuomo administration announced Wednesday that it would ban hydraulic fracturing in New York State, ending years of uncertainty by concluding that the controversial method of extracting gas from deep underground could contaminate the state&rsquo;s air and water and pose inestimable public-health risks.</p> <p>"I cannot support high volume hydraulic fracturing in the great state of New York," said Howard Zucker, the acting commissioner of health.</p> <p>That conclusion was delivered publicly during a year-end cabinet meeting called by Gov. Andrew M. Cuomo in Albany&hellip;The state has had a de facto ban on the procedure for more than five years, predating Mr. Cuomo's first term. The decision also came as oil and gas prices continued to fall in many places around the country, in part because of surging American oil production, as fracking boosted output.</p> </blockquote> <p>New York is the second state to ban fracking, after <a href="" target="_blank">Vermont did so in 2012</a>. That move was largely symbolic, since Vermont has no natural gas to speak of. New York, by contrast, would have been a prize for the fracking industry, thanks to its massive share of the <a href="" target="_blank">Marcellus shale formation</a>.</p> <p>"This is the first state ban with real significance," said Kate Sinding, a senior attorney in New York for the Natural Resources Defense Council. "My head is still spinning, because this is beyond anything we expected."</p> <p>The fracking battle in New York isn't quite over yet, Sinding said. Now the attention of activists will turn toward proposed infrastructure projects in the state&mdash;like a <a href="" target="_blank">gas storage facility</a> by Lake Seneca and an <a href="" target="_blank">export facility on Long Island</a>&mdash;that would handle natural gas from fracking projects in neighboring states like Pennsylvania.</p> <p><em>This post has been updated.</em></p></body></html> Blue Marble Climate Change Climate Desk Infrastructure Wed, 17 Dec 2014 18:01:03 +0000 Tim McDonnell 266836 at Young Fidel Castro Wrote FDR to Ask for 10 Bucks <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>In November 1940, a young Cuban student named Fidel Castro sent <a href="" target="_blank">a handwritten letter</a> to President Franklin D. Roosevelt. Writing in English, Castro congratulated the president on his reelection and requested "a ten dollars bill green american&hellip;because never, I have not seen a ten dollars bill green american and I would like to have one of them." Thinking strategically, the future Cuban dictator also offered access to his country's iron to build American ships.</p> <p>He signed off with a flourish:</p> <div class="inline inline-center" style="display: table; width: 1%"><img alt="" class="image" src="/files/castro-sig630.gif"><div class="caption">National Archives</div> </div> <p>The letter from the now 88-year-old Castro (<a href="" target="_blank">who was 14</a> when he wrote it, not 12 as he said) now resides in the <a href="" target="_blank">National Archives</a>. FDR probably never saw the letter. Castro did receive a response&mdash;<a href="" target="_blank">but no cash</a>&mdash;from the US Embassy in Havana. The polite snub officially marks the first exchange between Castro and the United States&mdash;and the beginning of a long, acrimonious relationship that may be <a href="" target="_blank">about to thaw</a>.&nbsp;</p> <p>Text of the letter (errors and all):</p> <blockquote> <p>Mr Franklin Roosvelt, President of the United States.</p> <p>My good friend Roosvelt I don't know very English, but I know as much as write to you.<br> I like to hear the radio, and I am very happy, because I heard in it, that you will be President for a new (periodo).<br> I am twelve years old.<br> I am a boy but I think very much but I do not think that I am writing to the President of the United States.<br> If you like, give me a ten dollars bill green american, in the letter, because never, I have not seen a ten dollars bill green american and I would like to have one of them.</p> [&hellip;]</blockquote> <blockquote> <p>I don't know very English but I know very much Spanish and I suppose you don't know very Spanish but you know very English because you are American but I am not American.<br> (Thank you very much) Good by. Your friend,</p> <p>Fidel Castro</p> <p>If you want iron to make your ships I will show to you the bigest (minas) of iron of the land. They are in Mayari Oriente Cuba.</p> </blockquote> <p>&nbsp;</p> <div class="inline inline-center" style="display: table; width: 1%"><img alt="" class="image" src="/files/castro-letter630.gif"><div class="caption">National Archives</div> </div></body></html> MoJo Foreign Policy International Wed, 17 Dec 2014 17:04:50 +0000 Dave Gilson 266826 at Russia's Economy Is Collapsing. Here's What You Need to Know. <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><div class="inline inline-left" style="display: table; width: 1%"><img alt="putin downward chart gif" src=""><div class="caption">Photo illustration by Jenna McLaughlin. Putin: Alexei Nikolsky/AP, Chart:<a href=";ws=1">Nikita Rogul</a>/Shutterstock</div> </div> <p>Early Tuesday morning, Russia made what may be a last-ditch effort to save its economy: the country's central bank jacked up interest rates to try to prevent the ruble from plunging in value for the sixth time this year. But the currency <a href=";utm_medium=twitter">hit record lows</a> anyway, sparking worries of economic collapse&mdash;and political instability.</p> <p>Click on a question below to read more about what's going on in Russia.</p> <p><a href="#1"><strong>Have we seen this before? </strong></a></p> <p><a href="#2"><strong>Was raising interest rates the right choice?</strong></a></p> <p><a href="#3"><strong>What's the reaction in Russia?</strong></a></p> <p><a href="#4"><strong>Why is this happening?</strong></a></p> <p><a href="#5"><strong>Is it all about oil?</strong></a></p> <p><a href="#6"><strong>What will Putin do?</strong></a></p> <p><a href="#7"><strong>What will happen next?</strong></a></p> <p>&nbsp;</p> <p id="1"><strong>Have we seen this before? </strong></p> <p>The last time Russia raised its interest rates this high was during the <a href="" target="_blank">1998 financial crisis</a>, sometimes called the "Russian Flu." Declining productivity and a disadvantageous foreign exchange rate helped trigger the crisis. When demand for crude oil went down and Russian President Boris Yeltsin dismissed his prime minister, the fight to save the ruble was on. The central bank raised rates dramatically that May; the government defaulted on its loans a few months later. The Russian economy only bounced back once demand for oil rose.</p> <p>Here's <em>Mother Jones</em>' Kevin Drum <a href="" target="_blank">on an earlier crisis</a>:</p> <blockquote> <p>Why did the Soviet Union lose control of its satellite states behind the Iron Curtain in 1989? Lots of reasons, but the proximate cause was a disastrous war in Afghanistan; plummeting oil prices; and a resulting economic crisis.</p> <p>War, sanctions, an oil crash, and finally bankruptcy. And while history may not repeat itself, it sure does rhyme sometimes: 25 years later Vladimir Putin has managed to back himself into a situation surprisingly similar to the one that led to the end of the Soviet Union and the final victory of the West&mdash;the very event that's motivated almost everything he's done over the past few years. This is either ironic or chilling, depending on your perspective.<br> &nbsp;</p> </blockquote> <p id="2"><strong>Was raising interest rates the right move?</strong></p> <p>Dean Baker, a director at the left-leaning Center for Policy and Economic Research, tells <em>Mother Jones</em> that he would have let the ruble keep falling. Now, the Russian economy is subject to harsh inflation and high borrowing prices just to try to preserve the national currency. "It further exposes the economy," Baker says. "If they let the ruble keep falling, at some point people would want to buy it again. It would be a chance for economic growth."</p> <p>Others, like Ian Hague, a founding partner at a New York-based firm that oversees Russian stocks, believe that raising rates was the right choice to keep the Russian economy afloat. "This move symbolizes the surrender of economic growth for the sake of preserving the financial system," he <a href="" target="_blank">told</a> <em>Bloomberg News.</em><br> &nbsp;</p> <p id="3"><strong>What's the reaction in Russia?</strong></p> <p>Russian television channels are <a href="" target="_blank">reportedly</a> telling citizens that the weak ruble is good&mdash;that it will stimulate domestic production and make exports cheaper. And Russia is expected to keep blaming the West for the collapse; an <a href="">opinion poll</a>, <a href="">translated</a> by <em>Time</em>, confirms that most Russians are still happy to believe that.</p> <p>But Harley Balzer, a professor at Georgetown University and an expert on Russian domestic politics and economy, spoke to a few Russians after the announcement: "People are really scared," he tells <em>Mother Jones</em>. "The few Russians I've spoke to have been in a state of what I'd call shock." And, he says, Moscow isn't explaining what's actually going on very well. "Signals coming out of Moscow have been contradictory&hellip;people don't have enough information."<br> &nbsp;</p> <p id="4"><strong>Why is this happening?</strong></p> <p>Russia is being hit hard "primarily by the oil prices," Baker says. Russia <a href="">gets</a> around half of its budget revenue from taxes on oil and natural gas, and as long as the price of oil is plummeting, its economy is likely to continue sinking.<br> &nbsp;</p> <p id="5"><strong>Is it all about oil?</strong></p> <p>Not necessarily. An unbalanced pension system, inflation, and the harsh US and European sanctions have also damaged Russia's economy in the past year. Sometimes, a less-valuable currency can help a country by making its products cheaper abroad, increasing exports. But Russia doesn't have much <a href="">domestic manufacturing</a>, so it can't take advantage of the ruble's decline that way. "Russia doesn't make anything," President Barack Obama <a href="">told</a> <em>The Economist</em> in August. "They need to start making their own stuff," says Balzer. "Right now they make stuff people don't want to buy, they're using foreign technology instead of their own. That's silly." Baker notes "There's a lot of corruption there, that certainly precedes [Russian leader Vladimir] Putin. It all creates a very bad mix, and there's not a good way out."</p> <p>&nbsp;</p> <p id="6"><strong>What will Putin do?</strong></p> <p>The ruble's collapsing value will definitely put pressure on Putin to explain himself and his plans to fix it. But some experts <a href="">believe</a> Putin might keep getting away with blaming the disaster on the West, at least for a while. "In the short term, he keeps blaming the West," Balzer says. Putin is largely in control of Russian media sources, Balzer explains, and there is not enough outside information pouring in. "But this is not a short game, this is a long game," he adds. Balzer predicts that in a year's time, the sanctions will start hitting Russia much harder, and Russians are going to start asking more questions of their government. "Over time, that's gonna stop working," he says.</p> <p>According to Balzer, Ukraine and the Baltic nations are already pointing out the flaws in Putin's blame-the-West strategy. And, as the Russian people get more information, they're bound to become disillusioned.</p> <p>Michael McFaul, a political science professor at Stanford University and the former US ambassador to Russia, also believes Putin will "hold" the status quo rather than lash out or fold in response to the crisis. "I don't see how more military aggression would help Putin domestically," McFaul tells me in an e-mail. "Nor do I see Putin offering concessions in eastern Ukraine, first because that is not his character, and second because he must understand that it is Saudi actions, not Western sanctions, which are exacerbating his economic woes." (Saudi Arabia's <a href="" target="_blank">refusal to cut oil production</a> is perhaps the biggest factor in the huge decline in oil prices.) McFaul doesn't think that lifting US sanctions would "stop the bleeding."<br> &nbsp;</p> <p id="7"><strong>What will happen next?</strong></p> <p>Balzer predicts that, after Russians get tired of Putin blaming the West for Russia's own economic failures, the Russian leader might go back to the kind of policies he implemented in the first few years of his rule. In 2003, Putin <a href="">shifted his economic policy</a> drastically, towards renationalization and, in turn, corruption. He completely halted previous progressive market reforms. "Since [2003] they&rsquo;ve had a lost decade," Balzer tells me.</p> <p>In the future, Balzer thinks that Russia will be forced to engage in "much more global integration," and to placate foreign powers it has displeased in the past&mdash;such as the US and Europe. "They'll have to get away from oil and gas, get away from things that fluctuate," Balzer says. "They'll have to start making their own stuff."</p> <p>McFaul predicts that there will be a "shakeup of [Putin's] government." He tells me "there is nothing more that investors would like to see than a return for someone like Kudrin to the government." Alexei Kudrin is a former Russian finance minister who <a href="" target="_blank">expressed concern</a> about the Russian economy in an interview with CNBC in October. He resigned in September 2011 after more than ten years working for the Russian government. Many believed he was a stabilizing force, and had influence over Putin. He is <a href="" target="_blank">considering returning</a> to the government, but only if economic reforms are made.</p></body></html> Politics Economy Foreign Policy International Top Stories Wed, 17 Dec 2014 16:56:22 +0000 Jenna McLaughlin 266721 at Battered Ruble Stabilizes -- For Now <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" ""> <html><body><p>I promise not to post this chart every day, but since I've put it up for the past two days when the ruble was crashing, I figure I should let everyone <img align="right" alt="" class="image image-_original" src="/files/blog_ruble_dollar_2014_12_17.jpg" style="border: 1px solid black; margin: 20px 0px 15px 30px;">know when the crash has halted. For a few hours, anyway, <a href="" target="_blank">thanks to some dubious measures from Russian banking authorities:</a></p> <blockquote> <p>The currency was trading 8% stronger against the dollar at 62.1 on the Moscow exchange, while Russia&rsquo;s RTS Index was up 17%, after the central bank eased regulations on the banking system in a bid to provide some relief on capital adequacy for banks and convince Russians to keep their money in rubles.</p> <p>Measures including allowing banks not to take provisions against souring loans and weakening assets they hold, and allowing lenders to use last quarter&rsquo;s exchange rate when settling some foreign-exchange transactions.</p> </blockquote> <p>I'm not sure that loosening banking regulations is a great response to a currency crisis, but I guess you never know. In any case, it seems to have stabilized things for the time being. In the longer term, storm clouds are still brewing. Stay tuned.</p></body></html> Kevin Drum Economy International Wed, 17 Dec 2014 16:49:49 +0000 Kevin Drum 266821 at