Comments by "William Masselink" (@williammasselink) on "Econ Lessons"
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gilman2056 I don't see that. According to Legatum Prosperity Index Russia ranks 77th out of 167 countries, or second lowest among upper middle income countries. That factors in such things as infrastructure, social capital, living conditions and healthcare. Where is all this money coming from for this "frantic pace"? 1/3 of the budget now goes for non-productive military spending from a paltry $2 trillion heavily sanctioned economy smaller than Italy's. (Compare to U.S. with 12% from a $28 trillion economy) This is sucking resources away from the productive economy and social spending. Sanctions fuel declining revenues, depreciating ruble, higher inflation, and 16% interest rates to counteract it. (They've just been extended) Sanctions don't just hurt oligarchs, but also the other 15,000 sanctioned entities and individuals in Russia. Putin promised the Russian people his "geo-political adventure" would not affect their daily lives. How did that work out? Don't see how ever tightening sanctions make the Russian people happy. It's great Russians are buying more Chinese EV's. But put it in perspective. Russia says 1.3 million cars will be sold in 2024. AUTOSTAT says just over one million per year through 2026. That's only around 15th in the world. Far less than comparable countries or even those with smaller populations. For example, Australians buy more cars than Russians. UK, France and Germany buy far more. Thank you for elaborating in English. My Russian is severely limited.
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@Katrina-mx2sf Fair question, and yes, stats can be skewed. Like the IMF and World Bank nonsense PPP rankings (what Mark calls "dark fantasy"). Sources are United Nations Human Development Index, which uses objective data, in tandem with other sources. The rankings remain the same: U.S. at #12 with a 185.1 numerical rating, and Russia at #65 at 111.2, which is just below Morocco. Also keep in mind Russia's economy is being hamstrung by the worst sanctions in history, a collapsing currency nobody wants, 9.1% inflation rate-food higher-, crippling 19% interest rates, a severe labor shortage (4.8 million-their figures) driving up inflation, plus 6-8% of their GDP or 40% of their budget for military spending-at the expense of the regular economy, and running huge deficits to finance Putin's SMO. Plus, as Mark says, economies in free, transparent, democratic states are far stronger than centralized, autocratic states like Russia without personal freedoms. Our current interest rates, being reduced by the Fed, and inflation are far and away lower than Russia's. Not saying everything is perfect here or in your own life, but it's infinitely better than what the Russian people are going through right now.
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@romanzavsegolov4925 I would hardly call Russia's situation in Ukraine a winning one. It's still a relative stalemate, with EU ramping up their support and U.S. aid flowing freely again. Compared to what they started out with, their net gains have been relatively modest: just 9% of the country. Hardly worth the horrendous sacrifice with no end in sight. At the cost of 80% of their starting invasion force and total casualties of well over 1/3m, most of their elite Spetznas, 3000 frontline tanks, 15,000 armored vehicles, hundreds of aircraft, including AWACS and strategic bombers, 1/3 of their Black Sea Fleet. Not to mention the vast amounts of treasure and the ruination of their economy. Again, with no real end in sight. Russia can not keep this up in the long run. EU's economy is 10x bigger than Russia's. U.S. alone is $28t versus $2t for Russia. And it's heavily sanctioned. And the ruble is collapsing, barely a penny to the dollar. Even if they eventually "win", they still lose. They can't afford to rebuild Ukraine, let alone their own country. And the ever-tightening sanctions will remain in force indefinitely.
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gilman2056 Stuff and nonsense. According to Legatum Prosperity Index, Ruasia ranks 77th out of 167 countries for infrastructure, or second lowest among upper middle countries. i.e. social capital 54th, living conditions 68th, healthcare 84th. 23% of Russians, 67% in the countryside, lack indoor plumbing. Where's the money coming from for this "frantic pace"? Russia's sanctioned economy is less than Italy's or around $2 trillion GDP (U.S. is $28 trillion). Of that over 8% or plus 1/3 of the national budget is now going to the "SMO". This is sucking resources out of the productive economy and social programs and is unsustainable. Sanctions fuel falling revenues, depreciating ruble, higher inflation, and 16% interest rates to counteract it. Which have just been extended. Nobody can afford to invest in anything. Except the government top-down military spending. How can ordinary Russians be happy about sanctions? Putin promised the "SMO" would not affect their daily lives. It affects not just oligarchs, but also 15,000 Russian entities and individuals. All well and good Russians are buying more Chinese EV's. Russia says car sales will be 1.3 million in 2024. AUTOSTAT says just over one million per year through 2026. That's only around 15th in the world. Much smaller countries with lesser populations buy more new cars than that, including even Australia. UK, France and Germany buy far more.
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@ptliang011 Okay, I'm back. To begin with, I've tuned in to many of Mark's episodes. He's a lifetime expert monetary economist by education and career. His heritage is Russian, he's been there, speaks the language, and been educated in eastern Europe. He knows of what he speaks first hand. He is anything but an ivory tower professor.
1. Certainly Britain wanted to keep America in their empire just as Putin is trying to force Ukraine back into the Russian empire again. Russia's security has never been threatened. They have 6000 reasons to feel secure. By invading Ukraine, Putin has inadvertently driven powerful Sweden and Finland into NATO, there by doubling Russia's border with NATO. How is having NATO presence in Finland different from say Ukraine? How did that work out for Russia's security? Ukraine was never a threat to the world's purported second military. In fact, just the opposite when Ukraine voluntarily gave up the world's 3rd largest nuclear arsenal in return for security guarantees from US, Britain AND Russia to guarantee Ukraine's independence, sovereignty and territorial integrity, and refraining from force, or threat of force in the 1994 Budapest Memorandum. Russia signed this! It's UKRAINE in a life and death national security situation, not Russia. Was Crimea a threat to Russia's national security when Putin invaded it? Crimea's not even physically attached to Russia! This is simply Putin's obsession to restore his Noveau Rossia Empire. Something akin to "Greater Germany". Putin chose to initiate this because he thought it would be easy like Crimea. It was of choice, not necessity.
2. Actually, Lincoln did have an affinity for the suffering of the slaves and considered it a great evil. However, that was not his top priority which was preservation of the Union: "If I can save the union by freeing the slaves, I would do so. If I can save the union by not freeing the slaves, I would do so". Lincoln even guaranteed to let the South keep their slaves until 1900, and the Federal Government would fully compensate the slave owners if they would return to the union.
3. Britain was the most powerful nation in the world after it's total victory in the Seven Year's War which ended in 1763. Their ability to project power with their Navy was impressive even by today's standards. The Americans were astounded by the forest of masts and hundreds of ships offloading soldiers and supplies in New York harbor. Britain even had the economic resources to hire thousands of German mercenaries (the "Hessians") to supplement their forces. The problem for Britain was not logistics, but mediocre government and military leadership, as their best and brightest sympathized with the colonies, and refused to help subdue them. Russia has nowhere near the industrial power of the "west". Russia produces only 500k cars per year. America, Germany, Japan, China, and South Korea produce cars in the multi millions. Toyota, what, 6 million. Even Tesla produces 2m per annum. Russia's economy is 14x smaller than US, smaller than Italy, or about the size of New York state. Plus it's crippled by sanctions, military spending, a severe labor shortage, high inflation and deficits, 21% interest rates, and a collapsing currency. A totally unsustainable situation. So if Putin wanted to conquer all of Ukraine in 6 months, why hasn't he then?!
Putin's original goal was to conquer ALL of Ukraine. If not, then why didn't he just amass ALL of his forces in the Donbass and be done with it instead of dispersing his military on three different axises, and have a quick fait accompli? Ukraine had every right as a sovereign nation to put down an armed uprising in the Donbass, the so-called DNR and LPR's. Name me one nation in the world that wouldn't. Think Putin would have tolerated it in his own country? Again, short of it's nuclear arsenal which it gave up, Ukraine was never a threat to Russia conventionally. They couldn't even put up any kind of resistance when Putin sent his "little green men" into Crimea. Where do you get this Ukraine's second largest military after Russia? They're military was weak and absolutely no threat to Russia. And why should they demilitarize as a sovereign nation anyway? This slow war of attrition is actually crippling Russia's military, economy and finances. Probably for at least a generation. Putin is literally mortgaging Russia's future. Remember when Putin announced his little SMO to his own people, he promised them it would not affect their daily lives. How has that worked out?
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@huget00n Ee-yup, I'm very familiar with the term. Putin, Lavrov, and Kremlin spokesmen and propagandists use it constantly. As for this lame Russian "illegal coup" nonsense, never ONCE has the Kremlin offered a shred of evidence to that effect. They always cry "coup" when things don't go their way. Standard Russian propaganda gibberish. Accusation without proof is just so much empty words to sway the gullible. In 2014 the LEGALLY sitting Ukrainian Parliament representing the people voted overwhelmingly for closer ties with the EU. Putin didn't like that so he pressured his man Yanukovich to veto it, which he did. Like in Georgia recently, people took to the streets in protest. Yanukovich siced his riot police and snipers on them. The still legally sitting Ukrainian Parliament voted 308-0 to impeach and remove him from office, and issued a warrant for his arrest. He fled ignominiously to Moscow where I presume he still hangs out. A completely and totally lawful process that reflected the will of the people. Of course Moscow started this-and I'm by no means saying they start them all, but this one they are clearly the instigators. What would Putin do if there was an illegal armed insurrection on his Russian territory. Just say that's all right, or would he move to suppress it? Putin did plenty to egg it on even funneling Russian troops into the fray. Civilians were lost on both sides, but far less than military, mostly in the first year, and "just" 316 between 2016-2022. Putin planned his invasion back in 2014 when he gave his "Noveau Rossia" speech outlining the very Ukrainian oblasts he said belonged to Russia. That's when he set up his National Wealth Fund, or "Fortress Russia" as he termed it to weather the sanctions storm he knew was coming when he did carry out his plans. He also boasted in 2014 "If I want, I can be in Kiev in two weeks". Damn straight Russia started this and why the UN votes are 150-5 to condemn Russia's unwarranted aggression. Putin must not be allowed to win. "For as long as it takes". Old-style imperialism should be a thing of the past. Not a single square inch of Ukraine legally belongs to Russia.
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@huget00n OK, I'm back. Russians are masters of double speak. Among my favorites: "liberation"=leveling cities and laying waste to the land and/or occupation and oppression. "withdrawal"=we got our butts kicked. "good will gesture"=we got our butts kicked bad. But the grand doozey is "Special Military Operation". Think future history books will record this as "The Russo-Ukrainian Special Military Operation? Of course Russia started this. No question. Without a doubt. Obvious to the most casual observer. When they illegally took over and annexed Crimea in 2014 to start things off. A clear violation of the Budapest Memorandum of 1994 which Russia signed, not to mention UN charter. I see no evidence of "coup" anywhere. Russia always cries coup when things don't go their way. Without EVER offering a shred of proof. As they never have here. And I see nothing about Victoria Nuland to the contrary. On the other hand, in an interview, Sergei Glazyev, Putin's closest Ukraine advisor said "Russia must interfere in Ukraine" and urged the authorities there to use force against the demonstrators. Which they did, and it didn't end well. The legally sitting Ukrainian Parliament, the Verkovna Rada, voted overwhelming for closer EU ties. Putin didn't like that and threatened economic coercion, itself a violation of the 1994 Budapest Memorandum, to his pro-Russian man in Kiev.Who rejected in favor of closer ties to Russia instead. That's when people took to the streets. Like in Georgia recently. By all accounts, he fled to Moscow voluntarily and on his own, evening of Feb 22, where he still resides to this day. The still legally sitting Parliament then voted 308-0(!) to remove him from office. He said it was illegal. Like he was supposed to rule Ukraine from Moscow? Tourchinov, as chairman of the Verkovna Rada, then automatically became interim president according to the constitutional procedure, something akin to our Speaker of the House taking over. So this was an entirely legal and above board process. Nothing sinister as Moscow continues (falsely) to claim. As for the charge he then sent forces against harmless civilians (he was only acting president from late Feb-early June): These weren't innocent civilians. They were armed, illegal, violent insurrectionists. What if this happened in Russia. Think Putin would just blow it off and let it slide if the shoe were on the other foot? I think not. Let's put this in proper perspective then despite false Russian propaganda claims. Something like 3000 civilians from BOTH sides, mostly in the first year, out of 14,000, the balance being military. And a total of 365 from 2016-2022! Compare that to the 10,064 tabulated by the UN High Commissioner for Human Rights by the Russians in Ukraine since Feb 22. And now including the Children's cancer hospital in Kiev. Or when they caved in the roof of that department store with a glide bomb full of shoppers that Sat morning in Kharkiv. What can justify that? And in the lead-up from 2014 to the Feb 22 event, Putin kept egging things on by funneling in Russia troops to keep the pot stirring. All part of his plan to take over the rest of Ukraine back in 2014: When he outlined specific Ukrainian oblasts he said belonged to Russia in his Noveau Rossia statement. When he boasted "If I want, I can be in Kiev in two weeks". When he set up his National Wealth Fund, or Fortress Russia", as he termed it, to weather the storm of sanctions he knew were coming when he carried out his plan. All this in 2014. Don't say Russia starts all wars, but they dang well started this one. It was premeditated from the get-go. Despite the bogus pretexts they used as excuses for what they were about to do and subsequently did. And if Russia is so right, then why are the UN votes 150-5 to condemn Russia? Even India and "Friendship Without Limits" China abstain. So you're saying Russia is right and the rest of the world is out of step. Old-style imperial delete of conquest are still acceptable. You put your faith in a corrupt Dictator-for-Life. Instead of wanting to make the world a better place, like Mark says.
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@huget00n Never say die. Maybe third time's the charm. This time I'll send it off in three separate segments covering each of your three topics: #3. Russia didn't start the _ (They did). #2. The "coup" (There wasn't any). And #1, the most fun one, doublespeak. It takes a real draconian dictatorship, one-sided government propaganda machine to come up with such hilarity. Unintentionally funny. A little bit like when Lavrov contemptuously dismissed warnings of the imminent invasion as "western histeria". In Russian doublespeak parlance-and nobody does it better-"liberation"=occupation, like in Eastern Europe for 45 years. "Withdrawal"=We got our butts kicked. "Goodwill gesture"=We got our butts kicked bad. But the real doozey is "Special Military Operation" well into year three with no end in sight. Will future history books refer to it as rhe Russo-Ukrainian Special Military Operation? Recall that when Russian troops first entered Kherson City they were greeted by Ukrainians with blue and yellow signs, banners and waving Ukrainian flags, until their "liberators" dispersed them with gunfire. Contrast that 180° when Ukrainian troops reentered the city after the Russians withdrew across the river: Jubilation, hugs, kisses, flowers, tears of joy. It was like the liberation of Paris in 1944 all over again. And when President Zelenksy showed up the next day, he was given a tumultuous hero's welcome. THAT'S the difference between liberation and occupation. That's topic #1.
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@huget00n Topic #2: the "coup" that never was. Only in the minds of Russian propagandists and their minions. Never ONCE has Russia offered any proof or concrete evidence. Whatsoever. Not even a shred. Accusation is not guilt. Russia always cries "coup" when things don't go their way. It's what they do. No such thing to them as a spontaneous, popular protest like recently in Georgia. The legally sitting Ukrainian Parliament, or Verkovna Rada, voted overwhelmingly for closer ties with the EU. Putin didn't like that and threatened economic coercion, a violation of the Budapest Memorandum. pro-Russian President Victor Yanukovich accordingly rejected it for closer economic ties with Moscow. People took to the streets in protest. I saw no smoking gun by anything Victoria Nuland and her colleagues discussed pertaining to the situation. Quite the contrary, Sergei Glazyev, Putin's closest Ukraine advisor, said "Russia must interfere in Ukraine" in an interview and urged the authorities to crack down on the demonstrators. Which Yanukovich did. With riot police and rooftop snipers. It didn't end well, especially for 108 Ukrainians. Yanukovich on the evening of Feb 2 then decided on his own (discretion being the better part of valor) to flee the country and ended up in Moscow where he still resides. Next day the still legally sitting Parliament, by a vote of 308-0(!) then formally removed Yanukovich from office. Oleksandr Turchynov, as chairman of the Verkovna Rada, automatically became interim president according to Ukraine's constitutional process. Like our Speaker of the House would here. A totally legal and above board process. Nothing sinister or underhanded took place. Back in Moscow, Yanukovich described the vote and process as illegal and that he was still president. Then why did he flee? Was he supposed to lead Ukraine from Moscow? Being pro-Russian is one thing, but that would be ridiculous. The mood of the remaining thousands of people afterwards on Ukrainian Independence Square was described as "a hangover after a wild party". Hardly the aftermath of an illegal "coup".
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@huget00n Very good. My third attempt here. Topic 2: the "coup" that never was. Except in the fertile imaginations of Russian propagandists and their minions. No such thing as a spontaneous, popular protest like the one just recently in Georgia. Russia always cries "coup" when things don't go their way. Never once supporting it with even a shred of evidence or proof. Accusation is not guilt. Just empty words without backing. The legally sitting Ukrainian Parliament, Verkovna Rada, representing the will of the people, overwhelmingly voted for closer ties with the EU. Putin didn't like that and threatened economic coercion, a violation of the Budapest Memorandum. Pro-Russian President Victor Yanukovich accordingly rejected it in favor of closer economic ties with Moscow. People took to the streets in protest. I see no smoking gun in the conversations between Victoria Nuland and her colleagues discussing the situation. In sharp contrast, Sergei Glazyev, Putin's closest Ukraine advisor, in an interview stated that "Russia must interfere in Ukraine" and encouraged the authorities there to deal forcefully with the demonstrators. Which Yanukovich did, calling out the riot police, and that didn't end well for 108 Ukrainians. Probably realizing the jig was up and that discretion was the better part of valor, he on his own made the decision to flee the country evening of Feb 02 and ended up in Moscow, where he still resides. Next day the still legally sitting Parliament formally removed him from office by a vote of 308-0, as it had already been vacated voluntarily. Olysandr Turchynov, as chairman of the Verkovna Rada, then automatically became interim president and was sworn in as required by the Constitution. Akin to our Speaker of the House taking power here. Back in Moscow Yanukovich denounced the vote and process as illegal and that he was still the legal president. Illegal how? Why did he flee the country then? Was he supposed to lead from Moscow? It was all done legally and above board and constitutionally correct. Nothing dark or sinister about it at all as the Russians like to falsely claim. The mood of the thousands of celebrating Ukrainians still remaining in Independence Square in the aftermath of all this was described as "a hangover after a wild party".
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@ftboomer1 Sanctions apply to all currencies, not just dollars. What is your source. Are sanctions working? Certainly! I'll just cover oil cap effectiveness as you specifically mentioned that. You're not looking at the complete picture. Price cap sanctions worked well in the first 8 months, decreasing Putin's oil tax revenue by 40% until he found ways to evade the price cap. HOWEVER, The G-7 price cap and sanctions have ALREADY increased Russia's costs to drill and and transport oil: 1. Putin has had to add 600 ocean tankers. 2. 3x distance to ship to China and India (at discounted prices) versus Europe. 3. Extra insurance costs. 4. Costs more to maintain oil fields with loss of western expertise and parts. 5. Price cap forced Putin to expand and modify his port capacity. All this imposes an additional cost of $37 per barrel to ship=loss of profit margin. According to Saudi Aramco, fiscal break-even for drilling Russian oil is $44, twice that of other major producers, again largely due to sanctions. So it costs RF $44 to drill and another $36 to get it to market. And they still trade at a discount. They need $80 plus per barrel. Now there are new U.S. and EU sanctions. Indian oil companies are refusing Russian oil from Russian ships and Indian purchases are down 35% in January. Chinese banks are now delaying payments going through meticulous checks to comply, or refusing to deal with sanctioned Russian entities out of concern for secondary sanctions. Other countries are also starting to cooperate. Even Kazakhstan, Uzbekistan, and Kyrgyzstan, former Soviet republics, have agreed to enforce sanctions on Russia. Deputy Prime Minister (and oil czar) Alexander Novak told reporters in Moscow that Russian prices have seen bigger reductions relative to global prices since the most recent sanctions packages were brought into effect at the end of last year, according to TASS. "The current spike (in the discounts on Russian oil) is associated with the sanctions package that came out at the end of the year" Novak said. The goal of price cap sanctions was to reduce Putin's military chest without affecting global supply. I submit this has been highly successful. Likewise, the "magic" of other sanctions have worked similarly as well on the rest of the Russian economy. And well Putin knows it. He just appointed an economist as his new defense minister.
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@knopkaplay0507 I believe the evidence is unmistakable that sanctions are working effectively against Russia. Their car production is down 50%, and without airbags or antilock brakes. Can't produce new tanks like the t-14 Armata. Inflation high at 8.5% food, or 7.6% overall, interest rates very high at 18% to combat the inflation, and Elvira of the central bank says she may have to raise them even more, 4.8 million labor shortage fueling the inflation, top-down government spending focusing on non-productive military assets, and running huge deficits in the process. Russia is spending over one third of its budget on defense now, or 8% of its GDP. All at the expense of its regular economy. Literally mortgaging Russia's future. Compare this with U.S. defense spending of 4% GDP or 12% of its budget, which is quite high. Or NATO members which we're trying to get them to the required 2% minimum. The strength of a nation's economy is reflected by the health of its currency. And the ruble is sick. Hardly more than a penny to the dollar despite artificial propping up by the central bank. Nobody wants it. Even India and "Friendship Without Limits" China refuse to deal in it. And with the new secondary sanctions, most Chinese banks won't deal with Russian businesses now. Payments to Russia in Yuan are taking months, and with an added 5% premium. The ruble was 26-1 when Putin took power in 1999. Many of these figures are from Russia itself. These are facts, not opinion. And Mark has largely gone into this before if you were paying any attention. The current situation of Russia's economy is simply unsustainable in the long term as Mark states. Incidentally, have you checked out 1968 charge of the light brigade animated sequences yet? Just under 10 minutes long. A real hoot.
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