My point of view the story or headline is over due. I am not a subscriber to the WSJ.
I have dismissed other hit pieces in the journal but the headline rings true to me. Dont know exactly why. I have a subscription to the NYT. I have dismissed their propaganda at times as well.
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I suspect this is true, but I also question whether it really matters that much. The Journal piece this morning said the growth of the Russian economy has slowed from 3.5% to 1% (or something, too lazy to look it up). Well that’s bad, but hardly enough to start a revolution or have members of the Duma start to question Putin.
Heck, we have recessions that actually send the economy backwards, they sometimes last for two years, and then things return to normal. If these sanctions were going to have any impact they would have to have some impact . What with the rise in oil prices (temporary but substantial) and the aid of China and India not supporting the sanctions, I don’t think these tea leaves are going to produce dissent, much less regime change.
I’d like to be wrong about this.
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The issue is how much can the Kremlin spend on the war effort. The Russian civil economy is getting less because of that. Unlike our economy where there is greater wealth and we can afford military spending (although for the poor here that is highly questionable).
We are squeezing fuel prices successfully with the Indians and Chinese. While some quarters in India and China will spend more on oil from Russia most of their intake is closer to prices the western cartel sets. Those prices can be set even lower as the price of oil falls. We just are not seeing behind the scenes. The pressure by the western cartel is brutal. Chinese independent refiners do take Russian crude for more money. I have read that months ago. That is the exception to the rule.
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The Journal piece this morning said the growth of the Russian economy has slowed from 3.5% to 1% (or something, too lazy to look it up). Well that’s bad, but hardly enough to start a revolution or have members of the Duma start to question Putin.
An economy’s GDP growth dropping from 3.5% growth to a mere 1% growth doesn’t sound bad when thinking about a static social context. But during a war, the GDPs of many economies grow at a faster than normal rate (typically via borrowed funds) with all of the growth tied to weapons, ammo and military labor. For Russian GDP to drop near zero while fighting an offensive war means a hefty contraction is being experienced in every sector of their economy not tied to dusting off 50 year old tanks and swapping spare parts among a dwindling fleet of vehicles.
I suspect sanctions are doing quite a bit of good to cripple the Russian economy. I certainly wouldn’t want to be flying any domestic Russian airliner now or in the foreseeable future.
WTH
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Author of WSJ article, Evan Gershkovich, was arrested in Russia.
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That will be a direct ransom attack by the Russian government.