Tuesday, November 29, 2016

The Russian Bear isn't so tough

In the past few weeks, a great many writers have said that the Russian star is on the rise. An American election crowned the openly pro-Russian Donald Trump, who has said he would like to collaborate with Russian interests in the Middle East and elsewhere. Other Eastern European nations have elected pro-Russian leaders, and the fate of the two rival organizations, the European Union and even NATO, may have their futures jeopardized.

But one key thing about Russia is often overlooked. It has weaknesses, ones that are not only structural and nearly crippling to the nation, but ones that Russians continue to ignore.

To understand the Russian Federation one needs to know how it became the way it is. Russia was once the core of the Soviet Union, the nation binding that empire together. Once the Soviets tried instituting reforms to match the economic successes of its ideological rivals, unintentionally dissolving the Union in the process, the Russian Federation was formed.

The Russian ruling class then had a choice when facing its new, post-communism fate. Should it try and join the capitalist community gradually, like China had? Or should it dismantle the government control of industry entirely, and jump headlong into this future, much like the Japanese in post-WWII?

The Russians chose the latter to great detriment. When most government organizations were dismantled, much of their workforce was left out of a job and income. The newly privatized corporations did not make up this loss in employment, and most economic gains were made by the very wealthiest of Russian society, now commonly referred to as the "oligarchs."

This led to the rise of Vladimir Putin. The past reforms had been made by President Boris Yeltsin (of both the Soviet Union and Russian Federation), who had become increasingly unpopular. When he decided to resign, his Prime Minister and ex-KGB Lieutenant Colonel Putin was made acting President.

Putin took advantage of his new power to make a deal with the oligarchs. The ones who supported his government were given special privileges with the state in exchange for their cooperation. The ones who resisted Putin were arrested or forced into exile. In the process, since Putin's inauguration corruption in the country has skyrocketed. On the corruption perceptions index Russia is ranked 120 out of 168 nations, more corrupt than China, Mexico, Colombia, and Vietnam.

But Putin did improve the economy. By taking advantage of Russia's newly discovered natural gas reservoirs and by rebuilding the government's state bureaucracy, the economy improved. And Russia remained powerful militarily, having inherited most of the Soviet Union's armed forces. By building a mostly state-run news medium, Russian support for Putin and the Kremlin remains incredibly high.

Now, here is where Russian weaknesses kick in. The past few years have been especially hard on Russian interests, both politically and economically.]

First was Ukraine. A nation that was also integral to the Soviet Union and has many historical ties to Russia diverted from its cousin. In 2014, Ukrainian President Viktor Yanukovich diverted from his promise to pursue ties with the EU to instead work with Russia. The people revolted in the western and central areas of the country, booting Yanukovich from the presidency.

Putin soon responded. It is important to remember why the following happened; Ukraine was (and in Russian minds still is) part of Russia's sphere of influence, and any move away from Russia would inherently weaken it. Not only that, Ukraine was one of the few post-Soviet nations to remain close to Russia, as Poland, the Baltics, Hungary and Romania all turned away from the Federation.

Russian special troops soon entered and seized control of the Crimean peninsula, and rebels began popping up in Eastern Ukraine with Russian support. There is now an uncertain peace, but compared to the firmly pro-Russian Ukraine of the past, Russia now only has pockets of support in the country.

Next is Syria. Since 1956, Syria had received military support from the Soviet Union. It still remains one of the few allies Russia has in the Middle East, an area that is mostly affiliated with the United States, Europe, or has its own agendas.

When Syria began to be embroiled in its own civil war (mostly due to the mismanagement of its dictator), Russia again responded. Any attempt by the US or Europe to intervene through the United Nations was blocked by Russian veto power, and the Kremlin continued to support the Syrian government militarily despite its many humanitarian crimes.

Again, this has not proven very beneficial to Russia. Compared to the stable, reliable military ally of the past, Syria has become a mess. Only some government holdouts remain, while most of the country is controlled by rebels of various kinds, some US supported and others affiliated with ISIS.

Both of these foreign entanglements have been detrimental to Russia's perception abroad. Entanglements in Ukraine have made much of Eastern Europe much more keen on allowing NATO to build up forces to protect them, and has made the military alliance mostly a check against Russian power. NATO, which had been thought irrelevant after the Soviet Union's demise, once again has a purpose. Middle Eastern nations like Turkey and Saudi Arabia have also moved farther from Russian advances, and stepped up their own military spending. And Europe has moved to sanction Russia as punishment for its meddling.

And lastly comes the final Russian weakness; the economy. Although Putin managed to patch up the worst effects of the Soviet Union's dissolution, thing have again worsened. The sanctions hurt the Russian economy, but far worse was the drop in oil prices (due to Saudi Arabian tinkering) which plunged Russia into a recession in 2014 (and is only now tapering off).

This is what reveals the biggest problem Russia has. Its economy is over-reliant on one industry, energy. This is economically very risky. The more diversified a nation is economically, the more likely it can ride out market shocks and jolts. Russia is only successful when energy prices are high. But its long-term future is even worse. Compared to European and North American nations, Russians are not as well-educated and prepared for emerging industries in computing and information. Russia also has a very low-rate for immigration. Immigration is necessary considering the country has a low-birthrate, meaning its workforce will continue to fall and the country will become more unproductive in the future.

And (as mentioned before) much of the economic success of Russia is siphoned off due to corruption. It is estimated that in the 2014 Olympics, a road built to connect Sochi to other Russian cities cost $6.8 billion (for comparison, the entirety of the Canadian Olympics in 2010 cost $1.5 billion). Analysts pointed out that normally road construction is not so astronomical in cost, and that for $6.8 billion another country could have paved such a road with caviar or Louis Vuitton bags. The only rational answer is that the companies hired by the Kremlin to build the road were given some hefty bribes.

Normally these problems alone do not spell disaster. Countries all over the world have these same issues. What is really relevant is that the Kremlin doesn't seem to notice the country's trajectory. Instead, Putin feels more and more pressured to continue to interfere in foreign entanglements that are getting diminishing returns, when the situation at home is spiraling into worsening straits.

The reason it hasn't gotten personally bad for Putin and his oligarchs is that the propaganda machine that is Russian news has been able to spin the economy problems as a Western plot to destroy Russia. Although this is partly true (the sanctions are designed to hurt Russia) most of the problems Russia faces are natural movements of nations turning away from it on their own volition, or are the unstable economic climate collapsing on itself.

Russia continues to see itself as a global power on the rise, when instead it is descending into deeper stagnation. To save it, there needs to be a radical shifting of resources away from military spending to leverage energy revenues into building better education and infrastructure, to spur investment and build a diversified economy that can succeed in the future. Sadly, under current leadership, this will certainly not happen, and it is only a question of when, not if, the Russian people turn on those who have wronged them.

http://www.esquire.com/news-politics/news/a27243/russia-olympics-caviar-road/

Tuesday, November 22, 2016

Globalism is Down in the 8th Inning

In political science, the past year has been nothing short of revolutionary. The conventional wisdom of political scientists everywhere was that globalism is not only pushing the world into further integration, but that the effects are accelerating.

What no one seemed to notice is that there are some people who aren't happy about globalism. And these people not only vote, they can win.

It started off in a few smaller countries where no one really noticed. In 2015, Poland voted for the "Law and Justice Party," giving the country a majority government for the first time since 1989. As you can guess by the name, the Party is tough on crime and wants to boost the power of the state by increasing the executive's power. They are also skeptical of the EU, want to limit immigration, openly disdain gay rights, and want to boost military spending.

Austria had the next election in April 2016. For the presidency, four parties ran for election, two of whom we established in politics, the other two being far-right and far-left. The two anti-establishment parties won the most votes, and qualified for the run off. This was the first time since WWII that a candidate from the established parties had not qualified for the run-off. The two remaining, was the nationalist Freedom Party of Austria, and the leftist Green Alternative. The run-off awarded the Green Alternative the narrowest of victories, which the Freedom Party succeeded in contesting. Austria will need to vote again for either of these two candidates in December.

The news did acknowledge how odd that election was, as the Freedom Party has openly mentioned the possibility of pulling out of the European Union. At the same time, the far-right part didn't really win, and it is Austria, a country that exists mostly on the periphery of importance.

The Philippines then elected Rodrigo Duterte in May, an increasingly erratic president who has threatened to pull out of the United Nations and abandon an alliance with the United States. It is believed that 3,000 people have been killed in his way on drugs since the election, all of which were without trial. Duterte has even called President Obama a "son of a whore," and has pledged to realign his country's interest with repressive China.

Then came the next bombshell; Brexit. The United Kingdom voted 52% to leave the European Union, an outcome not predicted by the polls and only supported by the most obscure of British politicians. The PM David Cameron resigned, and was a clear blow to the European project.

In November, Bulgaria elected openly pro-Russian candidate Rumen Radev, supported by the Socialist Party. And then Estonia elected Juri Ratas, another pro-Russian candidate as Prime Minister.

And the final nail in the coffin, is the election of Donald Trump as President of the most powerful nation on Earth. He is perhaps the most anti-establishment, anti-trade, anti-globalist person elected to that office since Andrew Jackson.

So... what does this all mean?

It is a pattern, showing a consistent rejection of traditional politics and politicians. It isn't defined by a particular ideology or policy, with Trump technically being conservative while others are more socialist. What is common is a clear rejection of the traditional party elites, a rejection of free trade and of immigration. There is increased tribalism and nationalism emerging, with parties like "Golden Dawn" in Greece and "the National Front" in France gaining popularity.

These result may have been inevitable. The events in the Middle East have led to a mass exodus of refugees and migrants, the most seen since WWII. There would of course be a negative reaction from Europeans nations that have mostly white populations. The UK is 87% white, France is 85%, and Germany 80%. Having to adjust to new, different people very quickly will always create negative reactions.

Add to the economic stagnation in most countries, and that there is a perception that crime and terrorism is on the rise (it actually isn't) and you have a common mindset globally. People different from us are moving in to take our jobs, and my culture is disappearing, and our jobs are disappearing to other countries, and our jobs aren't as good as they used to be, and the world is getting more dangerous and our leaders don't care about us and don't want to fix any of this.

No wonder people are choosing the most radical candidates, parties and directions.

This isn't new either. When the going gets tough, people vote tougher. Benito Mussolini, Adolf Hitler, Napoleon Bonaparte, and Vladimir Putin were all chosen by the people (yep, Napoleon won elections) and were all immensely popular. They didn't emerge out of vacuums, but instead out of chaos and economic calamity. Telling people what they want to hear and promising to fix it will sadly succeed more than the gritty compromise building and maneuvering of democracy.

And the newest radical leaders have again another thing in common; stripping out democracy. For in order to pursue the people's will, they need to tear down the institutions that may keep their power in check.

The events haven't stopped either. Next year France has its presidential election, between the incumbent Socialists, the challenging establishment Republicans, and the anti-globalism National Front. With the Socialist favorability dismal, the next president is likely Republican. But Marine le Pen and the National Front is within striking distance, and them winning could spell the doom of the European Union, an institution that has maintained collective unity on the continent. Its end would make the future a lot more uncertain.

I don't think we are heading for a WWII type nightmare, as we leave in a very different world than 1940. But the parallels exist and are striking. Sadly, radical leaders of the past never met their voters promises for long, and often made more problems rather than less. Maybe this will be different, or the pattern will stop. What happens over the next year could indeed bring even more changes.

Wednesday, November 9, 2016

What Does This Mean?

Ok, it is November 9th. And the number one question people have asked me is; "What does this mean?"

Let me be frank here. I was wrong. I didn't think he would win (though I knew he could). In my defense, no one really thought he could win, because all of the data was wrong.

Last night, Donald Trump was elected President of the United States.

Electorally, it was an important win. It showed that with today's demographics, Republicans can win the Presidency. But that has its limits too, as it looks increasingly likely that Trump will lose the popular vote after it is all tallied, meaning they have only won more votes once in the past seven elections. And there was more than one state where the amount of third-party voters could have changed the state's outcome.

But there are very real consequences. The Republican Party controls all our branches of government, with the Presidency, majorities in Congress, and will soon have a majority in the Supreme Court. The last time this happened was FDR in World War II. Essentially, if Republicans agree, they can do whatever they want.

That's the key though. "If Republicans agree." That is the biggest decider of what the future holds, if the party can actually hold together when their are such clear differences of opinion. Let's take a look at some key Trump promises;

1. The Wall
Can this actually happen? Sort of. Logistically building Trump's wall is going to be a challenge (the U.S-Mexican border goes through towns, mountains and rivers) but can technically happen in many areas. And this is something that most Republicans can agree on; tougher border security. So... this could happen.

2. The Muslim Ban
This is less likely. There were some big objections in the Republican party to this proposal, and although it could technically by done by Executive Order, this probably won't happen. What is more likely, is a complete shutdown on any refugees from the Middle East, something Republicans are fairly united on.

3. Taxes
Although Trump occasionally drifted into saying he wanted higher taxes on the rich, the Republican platform he ran on doesn't say that. In fact, these are bigger tax cuts than Reagan's. And these are likely to pass. The Republican party has long ran on saying that the only way to grow the economy is to cut regulations and taxes. This is true, but America also has some of the lowest income taxes in the world, and most experts agree the economy would need to grow by 6% to balance the budget. It is highly unlikely that the economy will triple in production because of tax cuts alone.

4. Climate Change
Republicans have long agreed that even if climate change is real, that it isn't worth the regulations. So we may see Trump himself pull out of the Paris agreement, and if he doesn't lawmakers will simply ignore it.

5. Gay Marriage and Abortion
OK the Republicans aren't going to ban gay marriage and abortions, as they have long said it is a State's issue. At the same time, they get to regain their majority on the Supreme Court. But they had a majority one year ago, and gay marriage and abortion are still legally allowed (there is a swing Republican judge who maintains both are legal). So this is unlikely to change... unless the oldest judge, Ruth Ginsberg, retires, meaning the Republicans could expand their majority further.

6. Trade
Republicans are really torn on trade. It is unlikely that the Party is going to risk starting tariff wars with other countries by ripping up trade deals and taxing imports, even if this is a centerpiece of Trump's campaign. But the Trans-Pacific-Partnership is not happening, at least for America. If Trump wants to nix it he can... although other countries can easily approve it without America's membership.

7. Obamacare
There is actually some disagreement here. Although every Republican agrees Obamacare = Bad, there is disagreement over whether it should be replaced. Some maintain it shouldn't be replaced at all, just kill it. But most Republicans don't want to alienate the voters who benefit from it, and want something to keep key aspects of the law, such as stopping discrimination of pre-existing conditions. What they actually do will be interesting, as it will be difficult to get everyone to agree on a replacement.

8. The Welfare State
It's getting slashed, and Republicans will be happy about it. It is in the platform and is necessary to balance the budget, even though the tax cuts are so extreme I'm guessing the deficit will likely expand.

9. War on Terror
Ironically, little is likely to change here. Although police and the FBI are likely to get more funding and ignore civil liberties, this probably won't change lone wolf attacks very much. And the war against ISIS will probably get more funding, but is unlikely to speed up the victory if there are no American troops. Since Trump doesn't want troops in Iraq, and it would be very unpopular, this is about the same.

10. Syrian Crisis
An odd silver lining here. Although Republicans won't like it, Trump doesn't need to consult them here. He has long said he would like to work with both Putin and Assad to fight ISIS, meaning that there will be more coordination between various factions in the area. It also means Assad (who has killed millions of Syrians) will maintain power.

11. Infrastructure
Another silver lining! Republicans and Democrats have long talked about teaming up to tackle America's crumbling infrastructure. Now, Republicans can fix it however they choose, by either increased funding or even privatization.

12. Jobs
The government can't make jobs unless they actually hire people, and Republicans want to shrink government not grow it. Even if there are tariffs and trade agreements are removed, most manufacturing jobs aren't coming back, and if they do, they will be engineering jobs managing machines. Most of the unhappy, jobless working class are likely to stay that way.

13. Deporting all the Illegals
There are literally millions of illegal immigrants in the U.S. Although Trump is in his legal rights to enforce the law, this is a logistical nightmare. Some families could literally be torn apart, with illegal parents and American-born children. He can try and do it, but it will be very, very messy, and will not look good.

So... if your a Democrat, what do you learn from this? Well there is little for you to be happy about. At the same time, Trump is falling short of most of his promises. Historically, sitting President's lose Congress seats rapidly in midterm elections, though the gerrymandering of Congress may ensure it stays safe for some time. But I might be more worried as a Republican. It is hard to imagine Trump winning reelection if he fails to meet expectations, and that is a steep promise. And what is your party going to become? Can it remain the Party of Reagan, or is it now the Party of Trump?

I don't know. But for once, progressives get to retake the easier job of railing against the government and explaining why it is doing it all wrong. I'm going to love Fox News explain the screw-ups that are incoming.