Writing in the Washington Post Anders Aslund (pictured, left), a senior fellow at the Peterson Institute for International Economics (and author of the upcoming book "How Capitalism Was Built" to be published by Cambridge University Press next fall) exposes the neo-Soviet propaganda being spewed out by Vladimir Putin as a clear sign of weakness, another nail in Russia's coffin.

Vladimir Putin spoke his mind when he launched into an anti-American tirade in Munich recently, accusing the United States of having "overstepped its national borders in every way: in the economy, in politics, and in the humanitarian sphere it imposes its policies on other states. Well, who likes this?" Given the United States' Iraq troubles, it is natural that the Russian president would thrive on American weakness. But his speech was as notable for what it said about his domestic politics.

Putin obviously thinks he is riding high. The Russian economy is booming. Incredibly, in the past seven years, Russia's gross domestic product has grown by 500 percent, measured in current dollars (from $200 billion in 1999 to $1 trillion last year). The world is desperate for Russia's oil and gas, and Putin remains astoundingly popular at home. His successor is certain to be handpicked by him. One can only marvel at how adeptly he handles a 3 1/2 -hour televised news conference, with detailed answers, alternating charm and combativeness.

Despite all that, Putin has painted himself into a corner as he faces the end of the two terms in office that the Russian constitution allows him. This is a man who speaks the language of a modern leader trying to rebuild his country, when in fact he and his cronies have really just wanted to enrich themselves. Having spent his time as president undermining democracy, property rights, the free press and the rule of law by taking over Yukos oil (and throwing its owner into a Siberian prison) and then other big companies, now he and his coterie must cling to power somehow -- or risk losing it all if they cannot stage-manage a transition to the proper person.

The tolerance of corruption in the Putin regime is astounding. Recently, for instance, a Swiss court established that Minister of Communications Leonid Reiman, a close personal friend of Putin's, was the owner of telecommunications assets in Russia worth more than a billion dollars. But this has not been reported in major media in Russia, and Reiman remains at his post without having offered any explanation or apology, only an implausible blanket denial.

How can Putin and his cronies give this up?

It seems clear that Putin has these worries in mind when he fulminates on the world stage against the United States. Such words have the effect of increasing his popularity and therefore his grip on the country, which has been suffocated by his near-total control of television stations, newspapers, nominations of candidates, political parties and even public meetings. The evidence of a growing Russian authoritarianism is clear: Russia is one of the few countries that has declined since 2000 from "partly free" to "not free," according to Freedom House's meticulous ratings.

Russia's foreign policy in these seven years has changed accordingly, showing how brazen national political values do affect a country's behavior outside its borders. Recently, for instance, Russian Foreign Minister Sergei Lavrov boasted: "Not one single significant international problem can be resolved without Russia or against Russia." Rather than acting as a problem-solver -- as Putin did in his first term when, for instance, he cooperated with the U.S. effort against the Taliban in Afghanistan -- he is now positioning himself as a spoiler on the world stage when it comes to the United States and its allies.

Nevertheless, Putin has managed to charm some Western leaders -- former German chancellor Gerhard Schroeder, former Italian prime minister Silvio Berlusconi, outgoing French President Jacques Chirac and, most notably, President Bush. Just this month, Bush told the Wall Street Journal: "Vladimir Putin has kept his word on everything he's said to me." Well, then he cannot have said much. Putin reciprocated in his anti-American Munich speech: "I consider the president of the United States my friend. He is a decent person." He could as well have said: "He is a useful fool."

Putin has divided the European Union by pampering its southern members -- France, Greece, Italy and Spain -- while antagonizing Poland and the three Baltic States of Estonia, Latvia and Lithuania, which have tied themselves closely to the United States. In Moscow, the four latter states are called the "aggressive new minority" in the E.U.

Russia has shown itself to be most aggressive in foreign policy in its own neighborhood of former Soviet republics. It has antagonized these countries so badly with its bullying -- oil cutoffs, transportation blockades, trade shutdowns, immigration crackdowns -- that they are all rushing for the exits and seeking closer cooperation with NATO and the E.U. or working to develop new energy pipelines that skirt Russia. Russia's role in the region is dwindling despite its growing oil- and gas-fueled national wealth. As nationalist intellectual Stanislav Belkovsky, director of the National Strategy Institute in Moscow, recently put it: "In 2006, Russia ceased to be a regional power."

Likewise, even as it declares itself an energy superpower, Russia has tripped itself up. In the past year, it has bombarded its neighbors with rude surprises: oil taxes and higher gas prices; spigots closed to force a political point. No amount of reassurance at this point can erase concerns in Europe about Russia as a reliable energy supplier. In the post-Soviet space, both friends and foes of Russia are repelled, finding Putin's regime too unreliable and abrasive. They all now are trying to reduce their dependence on Russia.

The ultimate question is how the Putin regime will end. For the first time in Russian history, the secret police are fully in charge, right to the top. A tightly knit circle of Putin's friends from his St. Petersburg KGB days rules in the Kremlin. Led by Igor Sechin, Putin's closest colleague, they control virtually all security organs. There is much speculation about whether they can even be overruled by Putin himself. The closest parallel to the Sechin group in the past is the group controlled by Joseph Stalin's secret police chief Lavrentii Beria, though there is one great difference: Unlike Putin, Stalin was not a creature of the security apparatus; he manipulated it for his own needs. There is another big difference: This group is interested only in amassing great wealth, not in controlling the lives of its countrymen. Which is why it is alarmed by the prospect of the 2008 presidential election and why Moscow is awash with rumors that Putin will find a way to stay on.

Given what is at stake, the United States can no longer be a mere bystander in this drama. Six years of soft policy on Russia have done nothing but encourage the Kremlin's anti-Western stand. Bush could learn a lesson from Mikheil Saakashvili, president of Georgia, to carry a big stick when dealing with Putin. When Bush compliments Putin, he evokes only contempt in the Kremlin. President Ronald Reagan knew how important it was to speak the truth loudly and clearly. Vice President Cheney's speech in Vilnius, Lithuania, last May was a welcome departure, which enraged the Kremlin. It's the time for the White House to follow through.

The West persuaded Soviet leader Leonid Brezhnev to ratify the Helsinki conventions on human rights and free and fair elections in 1975. The Helsinki conventions played an important role in undermining the Soviet dictatorship. The United States should invoke them again as Russia approaches a new round of parliamentary and presidential elections, in which it now appears that every rule in the book is set to be violated.

Indeed, in Munich Putin saved his rudest abuse for the Organization for Security and Cooperation in Europe, which was founded on the Helsinki conventions and is the international organization for monitoring elections. Like Brezhnev, Putin accused the OSCE of "interfering in the internal affairs of other countries," but the Helsinki conventions made democracy an international concern. Putin and his cronies may not like that, but given the link between Russia's domestic policies and its foreign behavior, it's important for the West to insist.