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Friday, May 16, 2008

EDITORIAL: Putin's Neo-Soviet Wet Dreams

EDITORIAL

Putin's Neo-Soviet Wet Dreams


In the lead-up to Russia's obscene parade of obsolete, creaking Soviet-made military hardware through Red Square last week, the dictator Vladimir Putin declared that his nation would soon surpass the United Kingdom in terms of GDP. Putin stated: "Russia is currently standing in seventh place in the world. According to international experts, it can climb another step as early as this year and overtake Britain."

It's possible this is the most obscene and ridiculous falsehood Putin has ever told, and that's really saying something. A statement misleading on so many levels could only come from a proudly ignorant and fundamentally dishonest KGB spy like Mr. Putin.

First, Putin "accidentally" failed to include the term "purchasing power parity" in his claim. It's a necessary term, because the UK has the fifth largest economy in the world, while Russia is in 10th place, when judged in terms of the pure monetary value of their respective GDP. And that's based on nothing more than an educated guess about the levels of Russian production, because Russian data is notoriously unreliable.

Second, the use of "purchasing power parity" to artificially inflate the value of Russian GDP is fundamentally fraudulent. It assumes, for instance, that if you visit a doctor in the UK or Russia you will get the same quality treatment. Since a Russian doctor is paid only a few hundred dollars per month as a salary, it's assumed that a Russian doesn't have to be as rich as a Briton to get the same quality of life. That's pure nonsense, and anyone who's ever seen a Russian doctor or simply knows something about the law of supply and demand as influenced by wages knows that.

Third, and by far worst of all, Putin chooses to focus on nominal GDP, the total value for Russia as a country, while completely ignoring the per capita data. Even if we assume that Russia's annual national income is roughly the same as Britain's, Russia has three times more people dividing that income than Britain has. This means that Russians are three times poorer.

Even including purchasing power parity numbers, Russia only ranks #52 in the world when judged for per capita GDP. The UK ranks #22. To put it mildly, the people of Russia won't be catching up to the people of the UK any time soon.

All through the Soviet era, ignorant nasty little men in the Kremlin repeatedly humiliated the people of Russia by broadcasting exactly this kind of ridiculous nonsense before the world, making Russia look every bit as ludicrous as the infamous Emperor with his New Clothes. Totally isolated from criticism and real-world information, the Soviet leaders lived in world of their own illusions where lies became true. Then, one day, their world imploded.

Russia is barreling once again down exactly the same course. All through the Soviet era, the regime was prepared to deny the people of the country the basic standard of living to which they were entitled. Things that were routine in other countries, like blue jeans and chewing gum, became fantastic, unimaginable luxuries in Soviet Russia as the regime spent the nation's paltry income on outrageous levels of military confrontation with the West. Now, with the disgusting parade of military hardware through Red Square just as in Soviet times, Russia's government is going to do it all over again.

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