Cyrill Vatomsky, Where All Politics Are Global

At last, I got off my behind and actually did what I promised: I am posting this podcast of the latest Embassy of The New World Order radio show on KSCO AM 1080.
To get to the podcast, follow the link with the title of the article and then click on listen.

And as I promised elsewhere I talked a bit about the The New Republic column by Michael Idov. I tried to put some of Idov's  observations  tp make a point that although he is writing about Russia, he in a sense is not. He describes a late feudal society and lots of features of contemporary Russia are universal. Some Russians love to talk about how unique it is and how it always takes its own way. Too bad most of the time it is a detour.

Cusiously this article created quite a flurry of posts in English Language Russia-related blogosphere and opinions are quite different. Some predictably claim Russophobia, some liked it for its lack of corny  Cold War era slogans.

So i used the article as a trampoline to satisfy my own propensity for tangents ranging from Chinese manufacturing to Friedrich Barbarossa to Felipe Calderon and his meek attempts to revitalize Pemex. All of that by the way came from the Idov's article.

Predictably, when issue of globalization is addressed (and I did talk about the Columbian Free  Trade deal in the very end) some jump to talk about immigration. Illegal immigration is a painful subject int eh US especially among the talk radio population. So I got some of that as well.

As always, this is just a quick note, not even a summary of what the show was about. I thought it was a good one, so give a listen if you have time and interest.

Truly.

The August 12 KSCO AM 1080 broadcast of the Embassy of the New World Order, featuring Dr. Laina Farhat-Holzman. As usual, this is only an outline to accompany the podcast of the show. Please go to the blog page at http://cyrillvatomsky.com to download or stream the mp3 file.

The show covered lots of subjects in no particular order:

• My disagreements with Laina on how dangerous the results of Turkish elections last month were. I personally think that the situation in Turkey makes it a great example of how economic liberalization of 1980-s resulted eventually in establishment of a moderate Islamic party. Laina is very concerned and has been vocal about it on her blog as well.
• The issue of Kosovo and how it affects other aspects of foreign relations. I am coming on record as no longer supporting independence for Kosovo. It is a geopolitical issue and I am treating it as such. US insistence on Kosovo independence is ill advised because if pushed through, it will cause problems for one of the staunchest supporters of the US - Georgia that also wants to be a NATO member. Geopolitically Georgia's location on the Caucasus isthmus between Black and Caspian Seas is way more important to the US then Kosovo will ever be. I think that the US should drag its feet and give this issue to the Russians as a victory. Creating the precedent of Kosovo independence will push South Ossetia and Ablhazia away from Georgia.
  
• Religion has been discussed a lot in different parts of the show, including a little exchange with a caller that claimed he had seen Jesus. I actually asked for an opportunity to be introduced, but I don't think it went anywhere. I am an atheist, so it is pretty silly to try to convert me.
• Lots been said about moderate religions, and a potential for moderate Islam. In general the consensus was that Islam is preoccupied with appearances and acts like a testosterone poisoned teenager. Grow up already.
• Just a bit about the death of democracy in Russia. Or was it an abortion or maybe a miscarriage. 40% of Russians are apparently ready to vote for whomever Putin appoints, regardless of the person. There does seem to be any pretense anymore in Russia about democratically electing their presidents. Too bad.
• A caller wanted our opinions of the rise of China and supposed future confrontation between US and China. Maybe, someday, but for now China is hardly a military giant. As for economics, I want prosperous China.
• Some talk about America leaning left and most importantly, my take on the split in the "conservative" movement in the US.
  

Take a listen.

As always wit5h my radio shows, this is just a quick outline of what the subjects were on the Embassy of the New World Order KSCO AM 1080 radio show. To listen to the recording of the show, follow the link to the web site (if you are reading this in an email ) and then click on the LISTEN icon.  Commercials are edited out, so it is about an hour and a half - some 40 MEG.

Here are the main subjects, but others were mentioned as well.

• Sex for the Motherland. Putinjugend AKA Nashists are encouraged to procreate to save Russia.
• US Senate is hell bent on ruining US economy. It once again want to blame China for the trade deficit. Protectionist train has left the station and China bashing is becoming vogue. If trade surpluses are so damn good (naturally, since trade deficits are deemed to be so bad) then why 9 out of 10 years of the Great Depression saw US trade surpluses?! The US Congress is trying to cover its collective ass, pandering to xenophobic conservatives on one hand and baseball bad wielding unionists on the other and scapegoating China.
• Umlazi township is South Africa near Durban bans women from wearing trousers. Well, from burqua to trousers to anti abortionism - all this is about controlling women so that men can rule without competition. Nuff said.

After three days of grandiose forecasts and pompous back slapping at the St. Petersburg Economic Forum, some sober and colder analyses of what had been said and claimed appeared in Kommersant Business Daily. The article by Andrei Illarionov {link in Russian only} former Putin's economic adviser starts off with a satirical title "Bananotechnology" - a reference to recently touted government investment in nano technology in Russia that is gradually acquiring the shape of Nikita Khrushchev's corn cob with a hint at a banana republic status. Some serious real successes (like reviving of the Aeroflot Boeing contract, and the total $14 billion worth of signed contracts) of the forum aside, "pink glasses" metaphor would do no justice to verbal and virtual gongs, incense, crystal balls and other Al Gore-like obscurantism in economic forecasting oozing from VIP participants of the forum like former World Bank head James Wolfenson, Russian President Putin, and his two minions - come democratically appointed heirs -Servey Ivanov and Dmitry Medvedev. As Financial Times noted sourly , the economic forum was reminiscent of old Soviet style gatherings

"where the only speakers were chosen by the ruling bureaucracy."

Here are some excerpts from Illarionov's article, mixed in with my comments. The article strikes hard by its uncompromising pro-capitalist drive. Not surprisingly, the discussion thread at Kommersant web site is full of nasty attacks by rabid nationalists calling the author a deserter, a traitor, a Yankee lap dog, a paid CIA stooge and what not. It was also quite interesting to read what some of them think of the US and how strong the fruits of the USSR propaganda still are.

James Wolfenson, a senile retiree from World Bank claimed Russian GDP increased five fold since 1995. Illarionov sardonically suggested Wolfenson should have consulted any number of acquaintances from his rolodex or maybe just try a simple Internet search to get a 55% figure instead.

In retrospect, both World Bank and Citigroup could probably do better then employ him in any intellectual capacity. I remember commenting about his senility some years back when he could not figure out why anarcho-antiglobalists were opposing his favourite Davos get together.

Mr. Putin's speech has been mentioned before and by this blog among others . Russian President proudly proclaimed that direct foreign investment in Russian economy grew by two and a half times. The following sentence mentioned accumulated foreign investment to have surpassed $150B.

Listeners might have had an impression that the latter number relates to the direct foreign investments mentioned in the first sentence. This however is not true.

As of April 1 2007 $151B is the total for foreign investment, including indirect, i.e. mutual, portfolio, bonds, and other instruments. According to Illarionov the main investment appeal indicator is direct private foreign investments. As of April 1 2007 Russia accumulated $73B. However serious this absolute figure might look, as a percentage of GDP this looks very modest - only about 7% GDP. Deduct direct investment in upstream oil and gas and the number gets even smaller: 4.5% of GDP.  Compare this to direct foreign investment is Ukraine that exceed 19% of GDP, 25% of GDP in Latvia, Lithuania and Poland, 42% in Georgia and 59% in Estonia.

I already mentioned Mr. Putin's macroeconomic claim regarding G-7 countries' share of World economic output drop from 60 to 40 . I have to admit, I took the former number for granted without double checking. I have forgotten the predictable ease former Soviet apparatchiks show while dealing with numbers. Mr. Putin it appears had outright lied.

That in 2007 G-7's share of world economic output was 41% was true. But it is also true that G-7's share was not 60% but 51%.

But even these claims paled in comparison with forecasts. Mr. Wolfenson "promised" that Russian economy and economies of developed nations will grow 20 fold by 2050...But nobody seemed to have time to stop and think in St. Petersbourg, comments Illarionov.

For a country whose population declines so rapidly, a 20 fold GDP grows would translate into a 25 fold GDP per capita growth. History does not know anything even close among economic miracles of the past: in 43 years Japan's GDP per capita grew 10 times, 12 times in Korea, 13 times in Taiwan, and 17 times in China.

Someone is smoking something. This smacks of return to absurd and laughable gigantomania of USSR forecasting. One of Putin's potential democratically appointed heirs Sergei Ivanov advanced even more futurama claiming that by 2020 Russian GDP will be among the top 5 in the world and per capita GDP by purchasing power parity (PPP) would be $30,000 in 2005 prices. Another candidate for democratically appointed heir Mr. Medvedev agreed. That was the same Medvedev that lamented the death of capitalism when UK frowned at his Gasprom buying a UK energy supplier to create a vertical monopoly. No wonder they can spout any nonsense while they think that monopolistic capitalism is the true capitalism.

These two clowns do not understand what smart people elsewhere understand perfectly well: you can not reach 50% of per capita GDP of the most economically advanced nation. To reach such a level means to transcend the developing economy status that can drive economic growth simply by sheer power of expansion. At higher levels of development economic growth requires a completely different environment.

Growth rates depend more on social and state institutions like protections of private property, separation of powers, free mass media, independent judiciary, civil liberties, political rights, and law.

I had to do a double take when I read this next figure Illarionov mentions.

Russian economy could have experienced fast economic growth in the oil industry, but looting of Yukos by the state and other swindles {possible translations also include: fraud, shady deal, racket, and hustle} annual oil production rates have tumbled from 13% to 2%. Russian economy could have experienced fast growth in natural gas industry, but Gasprom is squeezing independent producers, while increasing its own production by 0.6% in 8 years.

These are horrendous numbers for a country so dependent on oil and gas sectors for almost everything, for a country where according to some figures up to 60% of Government Budget is derived from oil and gas revenues. Illarionov was one of the few on record predicting the 1998 default that crippled Russia big time. This time he is calling for a complete reversal of the current direction that Putin and both his heirs apparent represent.

Russian authorities all but admitted that the ban on export of all biological specimens from Russia was a flop. Well, not officially, of course.  Officialdoms do not make mistakes let alone flops. However, as the Kommersant Business Daily reported today,

Two weeks after the ban was initially imposed, leaving a legislative vacuum on the issue, the Ministry of Health and the FTS have issued new regulations governing biological specimens being sent out of the country. In essence, the document repeals the ban on the transport out of the country of three basic categories of biological specimens: those being used in clinical studies of new drugs, as part of an international scientific exchange, and for laboratory analysis as part of the treatment of patients in Russia.

Finally, after promises to resolve the issue within hours, Federal Customs Service and Ministry of Health pulled the ban, you think, right? Well, again, not exactly. Unlike the ban that had been immediately imposed without any explanations and any procedures, the repeal of the ban have not yet taken place. Just like it did on May 28^th the Federal Customs Service sent out directives this past Saturday.

"We found out on Saturday that the customs posts had received letters concerning the new regulations for exporting biological materials," said TNT's coordinator for clinical studies, Maria Astanina. "Now the customs officials should pass these rules along to the couriers. So far we haven't received them." Ms. Astanina also said that, in conjunction with possible changes in the permission-granting process, the company is currently not accepting any new orders for the transport of such materials abroad.

In the caption of the article, Kommersant offers a figure of 40 thousand Russians whose health was threatened by the ban. It would be just great to let these people off the bureaucratic hook, but the natural instinct for self preservation trumps patients once again.

Pharmaceutical companies expect to wait at least another week for the real removal of the ban. A representative of one such company told Kommersant that "some time will elapse while the decree is registered with the Ministry of Justice or until information is received indicating that the decree will go into force without registration."

Even when according to the same Kommersant article,

In essence, the regulations can be considered "new" only with regard to laboratory analyses "for patients' medical conditions."

Well, there is another "new" feature that had many people puzzled.

The only unanimous reaction to the document among experts concerned the rule that the permit must be in the name of the patient. According to Svetlana Zavidova, a former legal advisor for the Association of Pharmaceutical Manufacturers, the rule violates patient confidentiality. Specifically, outside agencies - in this case, the customs offices where permits for the export of biological specimens are sent - will have access to patients' confidential medical histories.  

Once again, bureaucratic thinking meets reality. In search of a mild, saving face retreat without casualties among bureaucrats, at least some regulations needed to be imposed. What could possibly be easier and more benign then simply require a patient's name specified? What possible harm could it do? There is no need for it and there is already an existing system of coding that protects interests of patients, but would a saving face bureaucrat do any kind of research on consequences of his actions?

In no way am I suggesting that Russian bureaucrats are somehow different from bureaucrats elsewhere or here in the US. A planning department in some over bureaucratized county in California, like Santa Cruz can easily drag a business owner through several years of a grinding ordeal for no other reason then to show its power. Bureaucrats just have more power, more control over people's lives in Russia. They are more entrenched and are more likely to operate with impunity no matter the consequences of life and death to tens of thousands of people. Unfortunately, Russia is not moving away from the overreaching power of bureaucracy. The course of building "vertical power structures", the course of de facto nationalizations, the course of "managed democracy" its current president had embarked Russia onto leads to more day to day dependence of its citizens on bureaucracy.

The more people depend on the state the less likely they are to oppose it in any way. Across the globe in Santa Cruz, one of the most lefty cities in the US, people are less likely to vote its incompetent leaders out simply because government in one form or another is the largest city employer. Bureaucracy is the foundation of any lefty rule, its bread and butter, its milk and honey, its line, hook and sinker; it is the cage it forces people into. The only way to break the stranglehold bureaucracy has over lives is to privatise and deregulate as much as possible. In Maxist terms, to move away from state ownership of means of production to private ownership of means of production. And that is a very long road indeed.