Russia Cannot Afford Putin's Ambitions

The Jaded Consumer doesn't want to amplify economic nonsense by linking to it, but the international news sources that uncritically publish economic numbers approved by authoritarian regimes aren't doing the public any favors in understanding the impact of nations' military and economic policies and appreciating the prices caused by their conflicts. This note is intended to provide an evidence-based view of the global conflict underway between expansionist tyrannies and the more democratic nations authoritarians have targeted.

Russia claimed to have bulletproofed itself against sanctions in order to enjoy normalcy as it prosecutes ongoing war against Ukraine. Claims that Russia thrives while democratic adversaries suffer economically are undermined greatly by the data. Russia's central bank's announced interest rate is worse than I've paid on credit cards. At the time of this writing the rate has been raised to 21%. Russian propagandists had been trying to convince democratic nations that imposing sanctions on Russia injured free people more than the subjects of what's left of the Russian empire. The claim Russia's economy is strong has two basic problems. First, Russia's auto industry is now wholly dependent on manufactured goods from China, and Russians buy these with funds obtained selling raw materials to China (primarily unrefined energy products). If acting as a source of raw materials while buying finished goods from one's sponsor state sounds to you like the role of a colony, you've figured out that Russia is now a de facto colony of China. The second problem is that even suffering the colonization sucks: unlike the U.S., which has got inflation in the low single digits and is close enough to its ultimate target inflation rate that the federal reserve bank is cutting interest rates to avoid allowing inflation to fall too much, Russia still has an official inflation rate that is in the high single-digits (and a real inflation rate estimated at 27%). It might be worse, but a lot of what Russians want to buy isn't available at any price. Whoops.

Russia isn't alone in living in a fantasy land. China has been making public policy on the basis of fictitious population data, and that's going to cost it. The longer China can get cheap fuel from Russia to prop it up from collapse, the longer the West has to reconfigure supply chains so as to avoid dependence on authoritarian regimes and the legal quicksand the tyranny there imposes on all who do business there.

Russia is dependent on North Korea and Iran for weapons and is burning cash while it goes all-in on Putin's dream of re-establishing the lost empire of the Russia of his imagination, with Soviet-era borders. Unless some outsider throws Putin a lifeline, he's going to drive himself and his government into the same kind of bankruptcy-driven collapse that put an end to the Soviet Union. China will just take the eastern territories Russia continues to occupy but hasn't anyone there to defend it. China has already updated its maps of Russian territory with its preferred Chinese names.

Wagner Felons Turn Out To Commit Felonies

 So, this happened. Was anyone surprised?

Russia Over the Long Term

 Much ink has been spilled arguing about the impact of sanctions on Russia using such evidence as the "price" or the Russian rouble or GDP figures that turn on the sales volume of exported energy products, but these metrics don't offer much insight into the strength of Russia's ability to sustain itself while antagonizing the world's democracies with renewed imperialist ambition. (This article won't describe those ambitions; anyone interested in them is well served to read Putin's speeches going back the last few decades to appreciate his longing for the era of Stalin and his hope to return Russia to a similarly feared global power of similar size and international influence.)

What's wrong with looking at the price of the rouble to understand the nation's economic strength? The question one might ask is, whose price? The price available in a free market can hardly be assessed in Russia, where post-invasion law promptly forbade forbade banks and brokers to sell dollars, euros, and other foreign currencies to rouble-paying buyer. If you can't sell roubles, how do you know its price? Russian gaming of currency didn't end there, either. Despite having long-term contracts that required Russia to supply energy products to foreign buyers in currencies such as the euro, yen, or dollar, Putin declared that all purchases would be made in Russian roubles or not at all. Basically Putin declared the power to unilaterally change contract terms at a whim and held energy products hostage to enforce it. The upshot is that nobody knows what the rouble is worth in a free market because there is no free market in roubles after Russia's invasion of Ukraine. Nobody who wants to bail out of roubles can. Indeed, nobody who wants to bail out of Russian assets can: foreigners can't sell stock on Russia's exchanges, they can't sell their interests in Russian energy programs, and they can't liquidate any proceeds they do have in local currency in order to leave with their own currency.

Russia simply seized Western investment. Since nobody will be selling it for foreign currency, the "market" in Russian assets, firms, and currency will not depict the exodus.

What will?

Production.

A look at Russia's production of domestic cars yields some insight into the effect of Russia's policies on Russia's ability to produce passenger cars. The year ending March 2023 shows Russia's automotive production suffering a short-term near-halt, with eventual recovery to about one third of the nation's pre-invasion:

Automobiles don't really show the whole range of Russian production capability, but consider the non-mobilized population of Russia and its interest in normal life. With foreign auto makers bailing out of Russian production partnerships and halting export to Russia, Russians face the alternatives of domestic production or imports from Chinese firms which Russians historically avoided. Although Russian auto sales plummeted over 60%, Chinese share of those sales more than tripled to nearly a third of Russia's ailing auto market. Soviet-era auto brand revivals feature Chinese designs and key components.

As interesting as the evolution of seized foreign plants into Russian production centers may be, the story of Russia's consumer vehicle market isn't the story of Russian GDP. Consider something closer to the priorities of Putin's war machine: trucks required to support war logistics. Russia actually needs trucks to re-establish the empire Putin imagines in his fantasies. Trucks have a certain priority. Before Russia's invasion, a February 2022 estimate foresaw Russia's commercial vehicle market growing at over 3% per year through 2028 on the strength of joint ventures with foreign firms bringing their expertise to the Russian market. The dislocations described above killed growth in Russian commercial vehicle production just as the war in Ukraine destroyed thousands of trucks driven by Russia to lose in Ukraine:

Outside the realm of trucks, Russians find themselves relying on suddenly slower, costlier, and more tenuous supply lines for foreign goods ranging from perishable food items to teabag paper.

Given that Russia now apparently depends on China for its domestic supply of automobiles and trucks, one must ask where Russia is getting the money to pay China for the exported parts. Here, at least, there is no mystery: exported raw goods, primarily in the form of energy products. With the departure of experienced foreign operators, Russia's gas production has already fallen 10% in the last year. Gas is kind of a problem, because its existing pipelines to China won't take more volume and Russia lacks the ability to create LNG terminals to shift gas production to export by ship. Making big capital investments isn't really the style of the Russian empire: it expects others to make the investments on which it depends. By contrast, Russia's oil exports have declined only slightly since its invasion of Ukraine:

Russia is selling all the oil it can to the closest buyers it can manage, because each round trip with an oil transport ship to Europe took something like one week whereas it can take months one-way to India. There's not enough ships to handle all Russia's export if Russia ships oil to India, and Europe has slammed the door on it. It turns out that China is close. And it doesn't matter so much what currency China pays for oil, as Russia must immediately pay Chinese firms that same currency to buy the auto parts, computer chips, cell phones, automobiles, drones, communications equipment, food, and everything else Russia imports from China. 

By reducing itself to a raw good supplier and a finished goods buyer, Russia has remade itself into, in effect, a colony. China, recognizing this, has approved a new map model that renames Russian border cities with old Chinese names (e.g., Vladivostok swapped for Sea Cucumber Bay ("Khaishenvai")), and is already publishing the new maps. Border territories are also renamed. Xi does to Putin what Putin does to former Soviet republics: he's reneging on border-fixing deals Yeltzin made in the '90s. 

Putin can hardly object: he's rendered Russia so wholly dependent on Chinese matériel and funds that he's got to accept what China offers. A Chinese-speaking informant who saw Putin appearing with Chinese officials noted that the Chinese translation of Putin's remarks appeared to suggest the entire speech had been written by the Chinese, as the Chinese text veritably drips with language of a vassal addressing his emperor. Putin either accepted this, or he's an oblivious fool. And it doesn't matter which: he's helpless. Russia no longer poses a credible threat of projected military power. China will enjoy this for a while, no doubt, observing the developments in Ukraine, before taking action. However, Russia will have no practical ability to oppose China when China starts changing street names and flags in former Soviet lands that interest Xi. 

As Russian population has failed to keep Russian resources productively employed, Chinese have taken over former Soviet farms and now own and live on land in Russia. There aren't a lot of ethnic Russians in the eastern reaches of what is left of Russia's empire, so the takeover is already well underway. Putin's Russia endures like a frog in a heating pot: at the sufferance of a chef who's already got the rest of the dinner cooking.

On the Supreme Court's Ruling in Dobbs

The headline today in legal matters will surely be that Roe v. Wade (1973) has been overruled, but the problem goes further. The reasoning employed by the Supreme Court in Dobbs v. Jackson Women's Health Organization (2022) undermined the reasoning employed in Lawrence v. Texas (2003) under which Bowers v. Hardwick (1986) was overruled to end anti-sodomy statutes, which is the same line of reasoning ultimately used to prevent states from banning same-sex marriage (e.g., that the State had no legitimate interest to protect), and in fact the same line of reasoning used by the Supreme Court to strike down laws criminalizing birth control.

We have not seen the end of this.

Whistleblower Cop Fired, Of Course

Lest anyone mistake police for a body dedicated to upholding the law, or even referring criminal activity to a District Attorney for prosecution, we highlight Kentucky's New Albany Police Department.  An officer identified that its employees – other officers – were lying about their overtime and performing work for third parties while on the department's clock, all resulting in theft of public funds for "work" they were not in fact performing for the community.  Was she given a medal?  Did she get a promotion?

Of course not.  This is an American police department, dedicated above everything else to making sure its own members never faced the consequences of the law they swore to uphold.  Their first move was to fire the woman.

If you're thinking the District Attorney will prosecute the corrupt cops, leading to the vigilant public servant's reinstatement, don't hold your breath.  There's little hope for police who want clean departments in Missouri (demoted for truthfully answering questions about an in-custody death), New York (committed following crime-stat fudging report), Maryland (branded a snitch after "ratting" out police brutality, and harassed), Illinois (harassment and death threats after reporting corruption, and instructions not to provide backup to rat cops in danger), Washington (officer was abandoned and allowed to be shot, despite calling for backup, because he reported excessive force, then was disciplined on pretext; his shooter was allowed to plead to "attempted assault"), or pretty much anyplace else they might report wrongdoing.

It's corrupt, and we don't have enough democracy in this country to get departments that will reflect our hunger for real justice.  We need more democracy.

Hilary's Worst Nightmare? Not Trump: Sanders.

In explaining his decision to run for President, Trump described himself as Hilary's worst nightmare.  Trump hasn't been reading the news.  According to CNN, Bernie Sanders would beat Trump by an even larger margin than Hillary Clinton.

Hillary's worst nightmare is a real liberal, capable of getting liberal votes instead of merely getting "Defeat the Republicans" votes.

To emphasize: Bernie Sanders had better polling against Trump than Hillary Clinton.  Among registered voters surveyed for the CNN poll,  Clinton would beat Trump 56% to 40%, whereas Sanders would defeat Trump 59% to 38%.

As for Trump, his "I'm not Hillary Clinton" candidacy doesn't seem to have done him much good among voters, even if he's got the highest name recognition in the un-thinned Republican field.

FIFA Bans Whistleblower (who's 70 and has cancer)

FIFA previously halted ethics proceedings against one of its officials who'd been caught using his FIFA office to benefit from corruption;  the 70-year-old had been diagnosed with colon cancer and guaranteed FIFA he'd never officiate again.  However, the ex-official turned state's evidence, resulting in prosecutions that included multiple extradition requests from Switzerland, so FIFA retaliated with the gratuitous step of imposing a lifelong ban against his officiating in national or international soccer events.

Priorities.

American General Notices Putin's Thugocracy A Threat

At least someone's noticing Putin's innocent-faced invasion of its neighbor illustrates the harm he's willing to cause when convenient.  In order to conceal the scope of the wars Putin conducts in secret, he's declared "peacetime" troop deaths a state secret.  Well, of course.  People might notice they're actually at war.

Retired Cop's Nonsense Explanation For Police Violence Explains A Lot

This video segment does a great job of showing how one retired cop explains away violence against unarmed peaceful protestors by saying that (a) there was violence someplace else, and (b) someone else shot police someplace else.  Therefore, he argues, we should understand police beatings and tear-gassings at peaceful protests by unarmed people.  You kind of have to see this to believe it.

The African American guest has it right:  the retired white cop can't connect any of his grievances against those involved in violence against police with the violence actually witnessed by the guest.  So he makes up explanations to get the conclusion he wants, which is that all the police violence is justified.

If the retired cop's view reflects that of active members of police forces around the country, it's no wonder there's escalating violence against civilians:  cops feel tit-for-tat violence (and killings) is justified.  No wonder people chant "No Justice, No Peace."  And no wonder it makes thugs like the retired cop nervous.  They intend violence and know they're the problem.

Iraqi City of Tikrit Freed from Tyranny, Looting Follows

When 20 houses were set on fire, 50 shops looted, and trucks loaded with stolen goods escaped unhindered, an Iraqi official explained: "No plans were made for what to do with the city after it was liberated[.]"  Now, where have we seen that before?

"Islamic State" Sex Slavery, Personalized

Putting a human face on the sexual slavery practiced by the "Islamic State" declared in Syria and parts of Iraq, CNN is running a story about a 19-year old aspiring physician abducted at gunpoint.  Apparently, the "Islamic State" offers a compensation package to fighters that goes beyond $2,000 cash and drugs to stave off flight from battle:  they offer the opportunity to rape captive women.

FBI Director Worried 1st, 4th Amendments Might Mean Something

The Director of the FBI expressed concern recently that technological advances might render practically meaningful the First Amendment's right to free assembly and the Fourth Amendment's right to freedom from unreasonable search.  Instead, it might be necessary to get a court order to snoop on U.S. citizens.  Poor G-man.

Incidentally, nothing in the tech interferes with government collection of metadata, only with the encrypted message contents.  Mapping networks of connected individuals is apparently still fair game for government agencies interested in snooping warrentlessly into the relationships of those presumed innocent.

UPDATE: The Director of the Federal Bureau of Investigation is asking Congress to create federal law that would interfere with genuine privacy of the sort already required by federal law in areas like credit card transactions and health care privacy.  Apparently those technologies are too dangerous for Americans, after all.

On Fuel Prices, Taxes, and Profits

ExxonMobil's fuel tax map of the United States shows regional variation in tax policy:

The page's author presents a defense to the charge that oil companies are scamming government out of tax money: the government earns in taxes an order of magnitude more on each gallon refined, shipped, and sold in the United States than ExxonMobil earns in profit on the same gallons.

The defense is interesting, but I think it dodges the charge.  Those who accuse multinational oil companies of running a tax scam aren't focused on sales taxes imposed on locally-sold products, but the international business of companies that historically paid U.S. income taxes on income earned in foreign jurisdictions.  From the point of view of ExxonMobil, of course, the government collects not only 40 to 60 cents per gallon refined, shipped, and sold in the U.S. – but also 35% income tax on ExxonMobil's 5.5¢ profit per gallon.  From the perspective of ExxonMobil's detractors, what has that to do with ExxonMobil's 'right' to use U.S. resources to build and defend a global business empire from which it gathers income free of U.S. taxes?

It's an interesting situation that invites inquiry into local competitive conditions globally and examination of the practical effects of tax policy.  With the elimination of the double-Irish scheme, international tax planning will take another wave of innovation (and consultants in the area will make another fortune).  Is there a tax policy that will result in more tax collected and less resources wasted avoiding taxation?

ISIS Explains Enslavement Policy

The Islamofascist organization sometimes known as ISIS has apparently published a position paper supporting its people-trafficking, which it describes as consistent with shariah.  The self-declared "Islamic state" previously admitted it peddled flesh for cash, but the position paper seems a propaganda step taken to defend its position against genuine Muslims reacting to seeing their religion employed in this manner.  Or maybe it's an advertisement to young males, unable to get dates back home.  The would-be caliphate doesn't strictly require females to serve domestic roles, though; they're also employed to oppress women in public in ways males might find hard to explain.

It'll be interesting to see what response results from these killers' formal announcement of their outrageous position.  Presumably nobody will now mistake their outlook for something less sinister.  Certainly the women who are hunting these misogynists with rifles have already gotten the message.

Statue Raised to Innocent Man Who Died Imprisoned

In Lubbock, Texas, a statue has been raised honoring Timothy Cole, a nonsmoker who was convicted of an aggravated sexual assault committed by a smoker.  Cole died in prison years after the real perpetrator, Jerry Wayne Johnson, wrote prosecutors to confess he'd committed the assault.  Johnson had heard Cole weeping in a nearby holding cell, but didn't risk confessing until the statute of limitations had run.  The Lubbock County prosecutor who procured the erroneous conviction sent no response to Johnson's letters, and Cole died in prison without ever learning the guilty man had confessed.  Cole died in prison of a severe asthma his family believed would have been better treated in the free world, – treatment that would have extended his life.  Cole's asthma was one reason he never smoked.


Cole had been offered parole if he confessed to the assault, but refused to lie to be set free.  He encouraged his sister to stick with her law school plans, saying he believed in the justice system even if it didn't believe in him.

There are no words.

Islamofascists Sell Sex Slaves for Fundraiser?

Not long ago, the so-called Islamic militants Boku Haram kidnapped hundreds of girls then announced they were for sale.

Now the self-styled Islamic State in Iraq and Syria is in the news selling as "spoils of war" captive females they claim converted to Islam in order to marry Islamists.

While it's not clear what established governments are willing to do to protect women from being treated as property (U.S. planes apparently engaged in search activity), it's evident that private individuals are willing to take steps to free captives.

This isn't to say that fascist-government-sponsored sex slavery is new (it isn't), or that established governments do better (if Russia is "established", definitely not), or that it can't thrive where local law is otherwise effective (if we doubt law in the U.S., there's at least a tradition of the rule of law in Canada, no?).  There's room for improvement everywhere, apparently.

Information Protocols and the Surveillance State

Just in case you thought Snowden's exposure of a secret spy program against Americans is okay because it centers on metadata rather than on message content, listen to what General Michael Vincent Hayden – former director of the NSA and the CIA – says eighteen minutes into this Johns Hopkins Foreign Affairs Symposium: "First of all, David's description of what you can do with metadata … is absolutely correct, okay? We kill people based on metadata."

This casts into better light the decision of the Internet Engineering Task Force in RFC7258/BCP188 that pervasive monitoring is an attack and that protocol designers must work to mitigate it.

Russia Booted from G8. Um, G7.

Following Russia's propaganda-laden invasion of the Crimea, Western powers ejected Russia from the G8.  For the foreseeable future, the organization will presumably be called the G7.

This follows a series of tit-for-tat sanctions in which Russia banned various foreign officials' travel to the country after its own officials' visas and foreign accounts had been impounded.

For those just tuning in, Russia is a thugocracy led by the former KGB head Vladimir Putin, who claims not to remember meeting the owner of a diamond-encrusted Superbowl ring, and not to remember taking the ring from him in 2005.  (And whose Ph.D. thesis he directly plagiarized from KGB translations of earlier Western publications.)  When Russia's effort to reincorporate the Ukraine through a puppet government failed in the face of a popular uprising, Russia invaded the Crimea to obtain direct control of the port there.  Russia's story? The did it to protect Russians in the Crimea from dangerous Ukranians.  Putin has officially declared that the collapse of the totalitarian dictatorship once known as the Soviet Union "was the greatest geopolitical catastrophe of the century" and he appears to be well on the way to re-creating it. On concerns that Russia could backslide on democracy and human rights, Putin said "our place in the modern world will be defined only by how successful and strong we are."

Snowden: Because Our National Intelligence Director Lied under Oath About It

For those of you interested in the traitor/hero debate on Snowden, the DC Clothesline has an article and interview that's been curiously absent from mainstream channels.

If the rule of law isn't respected by government even when citizens' lives are involved,
it's no surprise that it's ignored utterly when the issue is personal freedom and autonomy. The right to be informed about government is a fundamental assumption of democratic process: if you don't know what your government is really doing, how will you know whether you must vote differently?  In that regard, Snowden is plainly doing something good for democracy irrespective of whether his conduct would be prosecuted by our current administration. 

And why shouldn't the current administration use judicial process to miscarry justice? It's already lied to its own judicial overseer.  Why would it stop there?

To do what Snowden did for America, knowing what it would cost him, is a sacrifice worthy of respect.

Criminal (in)Justice System At Work

Perhaps you've heard that Michael Morton was freed after almost twenty-five years in prison for a crime he didn't commit. Good news, that.

But the other side of the story is ugly.  After intentionally withholding physical evidence and witness statements that would have shown the prosecutor's alligator tears (yes, he cried while imploring the jury to convict) begged for the conviction of the totally wrong man – one the suppressed eyewitness confirmed wasn't present – it appears the state's attorney was apparently so busy doing similar work with so many other cases in order to keep his prosecution rate up that he was unable to recall any details of the Morton case. Because, you know, they were like every other case in which he needed a conviction.  The state's lawyer, Ken Anderson, went on to become a judge.  Because the purpose of the machine is to get convictions, and success is rewarded with advancement.

Never mind that the Texas Disciplinary Rules of Professional Conduct expressly bar the behavior brought to light by attorneys working for free or with charitable funding to undo the evil committed by the state with the public's tax revenue. Never mind that prosecutorial irregularities are, in fact, regular.  I suppose it's nice that Ken Anderson lost his law license over this, but how many lives did he wreck before he was caught? Certainly the next murdered woman – whose killer wasn't being sought because Ken claimed he had the right man when it was obvious from the witness testimony and concealed physical evidence that he didn't – would claim her life was affected.  But what about all the other bogus convictions, the plea deals forced on people too terrified to risk their fates to a system bent on consuming their freedoms, the fortunes in defense costs required by bogus prosecutions?

And what about real crimes the district attorney's can't be bothered to prosecute – embezzlements by business partners, white-collar crimes that affect whole communities, and other less-than-first-degree crimes – what happens when they go unattended because all available resources are expended shooting fish in a barrel using tainted prosecutions to destroy lives that aren't protected by unlimited defense budgets?

The system needs serious work.