The Threadbare Quality of Western-Manufactured Russophobia

For all those who believed that the "New Cold War" with Russia was a passing fiction, Putin's cancellation of the South Stream gas pipeline from Russia to Bulgaria should convince them otherwise.

Each day Russophobic rants appear in the prestige press of the West.  I read the Gray Lady, and I can testify that always within the first few paragraphs of the story, as is the case today in "With Russia on Brink of Recession, Putin Faces ‘New Reality’ " by Neil NacFarquhar and Andrew Kramer, there is a reference to Putin's "nationalistic adventures abroad, akin to the annexation of Crimea."

Today's Russia-bashing article by MacFarquhar and Kramer focuses on a Kremlin report yesterday that predicts recession in 2015. Due to a combination of collapsing oil prices and Western financial sanctions Russian growth is anticipated to be significantly curtailed. The ruble has gone from trading 27-to-the-dollar to 54-to-the-dollar.

Financial experts say Russia’s most pressing problem is not the sinking ruble, despite its potential to prompt a run on the banks, nor the falling price of oil, though the annual budget was based on a price of $96 per barrel, which is now hovering around $70. 

“This is all peanuts compared to the financing crisis,” said Vladimir Milov, a former deputy energy minister turned opposition politician. 

Nearly $700 billion is owed to Western banks, economists said, much of it by the giant state-run companies that constitute the heart of the Russian economy. But sanctions imposed by the United States and Europe over Russia’s annexation of Crimea and adventurism in southeastern Ukraine have blocked access to Western financing. 

Despite Moscow’s plans to turn East as an alternative, China’s banks just do not have the capacity. Instead, the debt threatens to drain the Kremlin of its $400 billion in foreign currency reserves. 

Among the companies with their hands out are Rosneft, Novatek, VTB Bank, Rusnano and Russian Railways, asking for sums well beyond the $90 billion held by the National Welfare Fund, a sovereign wealth fund for rainy days. 

Mr. Putin has yet to express publicly how he expects Russia to emerge from its financial problems. At a news conference last month, he addressed concerns about oil by saying that prices had been high enough in the first part of 2014 to finance much of the Russian budget, and that the country would just have to “wait and see” about next year.

This is the stock-in-trade of Western media: amplify the potency of the economic sanctions Europe and the United States implemented against Russia in order to protect the Banderite coup in Kiev last winter and then gloatingly foretell the collapse of Moscow. It is the puerile fantasy of D.C. and Brussels elites to see Putin return hat in hand to the throne of Western power, scraping and shuffling in front of the NATO generals and London and New York bankers.

These stories are usually pieced together out of quotes from disgruntled Muscovites living abroad or pro-Western think-tank hacks or, as is on display this morning in an OpEd by Russophobic scholar and former Reagan State Dept. employee Karen Dawisha, "Bad-Mannered Russians in the West," USG cutouts.

Dawisha's ludicrous argument is that cancerous Russian corruption and lawlessness is sullying pristine Western institutions and norms. One wonders if Dawisha ever takes the time to read the business page where she could learn about Goldman Sachs corrupting the New York Fed or the LIBOR currency-rigging scheme perpetrated by big Western banks. Dawisha is a joke.

Just to gain a little perspective on future national economic growth, take a look at Jonathan Weisman's "Uncertainty in Washington Poses Long List of Economic Perils":

WASHINGTON — As House Republicans mull another round of fiscal brinkmanship with President Obama, a dark cloud is threatening to return to otherwise clearing economic skies: fiscal and political uncertainty. 

Republican leaders moved Tuesday to finesse their way around another government shutdown next week, but the fiscal gantlet extends well beyond Dec. 11, when the current stopgap spending law that funds much of the federal government expires. 

Absent congressional action, a host of business and personal tax breaks expires on Jan. 1. The government’s borrowing limit is reinstated on March 16, although the government might not actually hit the ceiling until August. 

On March 28, unless lawmakers act, physician reimbursements from Medicare drop off a cliff. On May 31, the highway trust fund runs out of money. In June, the Export-Import Bank, which helps finance overseas purchases of American exports, might shut in the face of conservative opposition to its mission. Then on Sept. 30, the entire Children’s Health Insurance Program faces its expiration. A few days later, across-the-board spending cuts loom once again.

“I see a lot of potential for Republicans to use all these fiscal speed bumps as leverage points,” said Joel Prakken, a co-founder of Macroeconomic Advisers, a forecasting firm that calculated that previous fiscal fights, combined with tighter budgets, shaved as much as 1 percentage point off economic growth, a big sum considering that growth has averaged an annual rate of 2.15 percent since Republicans took control of the House in 2011.

House Speaker John Boehner has shown very little acumen for keeping his caucus in line. More brinkmanship lies ahead:

Congressional leaders moved to clear up some uncertainty Tuesday, but in so doing, they may merely create more. House Republican leaders would like to pass a measure funding the government through Sept. 30, but keeping the Homeland Security office open only for short bursts to pressure the president over his executive action deferring deportation of illegal immigrants. 

Most House Republicans appeared ready to go along with this half measure, but conservative groups opposed the strategy as not confrontational enough on issues like the Environmental Protection Agency’s climate change regulations or the Department of Housing and Urban Development’s antidiscrimination efforts. Anti-immigration conservatives made it clear they would keep opposing the undocumented-worker executive order.

“This is the time to fight, this is the ground to fight on, and I’m a little bit amazed that that isn’t more clear to more people,” declared Representative Steve King, Republican of Iowa.

There is a chance that it is the United States economy that will be in recession next year.