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Monday, February 18, 2008

EDITORIAL: Annals of Russian Stupidity


Annals of Russian Stupidity

A recent column in the Moscow Times' "word's worth" column began like this:

When I was following life in Russia by surfing RuNet every day, I came across an article about the French trader who lost Societe Generale $7.2 billion. Since I had read about five articles in English without understanding a word of it (especially why the guy hadn't made a centime off the deals), I hoped that the Russian media would be more illuminating.

Wrong. The article informed me that the wily fellow покупал и продавал контракты на поставку обычной ванили (bought and sold contracts for shipments of ordinary vanilla) and noted that since world vanilla trade is nowhere near $7.2 billion, it was obviously a scam. I read that and moved on to the next story, which just goes to show that in economics, я полный кретин (I'm a total moron.)

The next day the Russian translation and finance blogs went wild. It turns out that the trader had been making "plain vanilla deals" -- "plain vanilla" being English-language slang for anything run-of-the-mill. The Russian translator had turned "ordinary" into "shipments of vanilla" and instantly earned a spot in the translation hall of shame.

It's not clear that the columnist (a classic Westerner eager to accept personal blame so as to improve in the future), gives Russians sufficient credit for being stupid. After all, this mistake couldn't be caused simply by a translator's ignorance of English. To occur, the translator would have to be a total blockhead, someone totally unaware of the massive press coverage of this incident and, beyond that, so clueless that it wouldn't occur to him that his translation sounded idiotic on its face. Can such things really be occurring at high levels of Russian society, so that this kind of gibberish is commonplace? You'd better believe they can. It's no different in any way from what was happening behind the old Iron Curtain in the USSR, and given that the country is run by a proud KGB spy, nobody should be surprised in the least.

This doesn't even consider, of course, the actual lies the Kremlin is telling, only the mistakes and blunders.

Robert Amsterdam, for instance, points to an article in the Energy Tribune which exposes the fact that growth in Russia's energy sector is currently less than one-third what it was five years ago, emphasizing the point with the following devastating graphic:

The reason for this failure is crystal clear: what we are seeing in Russia is the return of communism/dictatorship and its predictable impact on productivity and efficiency. Think the Kremlin is telling the truth about growth data in the oil sector to the people of Russia? Perhaps this explains the reluctance of Vladimir Putin and his cowardly sycophant Dimitry Medvedev to enter into presidential debates, or indeed to admit genuine opposition candidates into the race itself?

The extent of Russia's barbaric return to dictatorship is quite horrifying. As an op-ed in the Moscow Times states: "Nothing seems to dampen the authorities' enthusiasm to wipe out any trace of [the Yukos oil major], which at one point was the country's largest and most transparent oil production company. More than 45 people connected to the company have been the target of legal action and the company's assets were expropriated. These actions against Yukos reveal a justice system that is infected with corruption and political bias. They have also demonstrated the complete breakdown of rule of law in Russia."

It's really breathtaking how we are seeing history repeat itself in Russia. It is as if the population has suddenly suffered a massive stroke of amnesia and no longer can recall what happened to the country over the course of the last three decades. And like the famous Emperor with his "new clothes," Russia now stands naked before the world, preening as if it were swathed in mink -- just as the USSR did not so very long ago.

How can the people of Russia be so stupid? Repeating the mistakes of the past is the single worst mistake a people can make. Russians have the right to experiment with authoritarian rule if they like, though most intelligent people would say it's like playing with matches at a gas station. But how can they possibly think that such experiments should be carried out by a proud KGB spy, a relic of the Soviet past that resulted in such spectacular failure, destroying the once-proud nation at its very foundations?

There is an analogy that seems compelling, a well-known syndrome that drives women who have been beaten by their husbands to remain with them until they are killed.

In another one of his brilliant bits of reporting, ace Russia scholar Paul Goble explained in scientific detail what should be obvious to any thinking person, that data produced by the Russian government, ruled over by a proud KGB spy, is laughably useless. It seems that most of the world understands this now, but clearly some are still in the neo-Soviet darkness. So for instance recent article in the Economic Times of India unquestioningly reported a statement by Tatyana Golikova, Minister for Health and Social Development, which ran on state-controlled propaganda network Interfax. Golikova said: "In 2007, 1,602,387 children were born, which represents a growth of 122,750 children compared to 2006. We have not seen such a growth in birth rate in 25 years. The number of children that were born in 2007 is the highest since 1991. This shows that the measures taken at the governmental level were well-timed and effective."

Who do they think they are fooling? A few third-world nations, perhaps, and most certainly themselves.

If you read the article, and you have an IQ above the first grade, you will instantly realize that even if the birth rate statistic is accurate, the article says nothing about the infant mortality rate or the net gain to the population. In other words, even if the Kremlin isn't lying or mistaken, it could very well be that the infant mortality rate wiped out these gains, or that the overall mortality rate of the population did so. The article states: "
Since 1993, the country has lost some 5.8 million inhabitants and now has a population of 142 million." So even if the 122,750 figure represented pure net gain in population, it's meaningless against the existing losses.

But there is no reason whatsoever to believe that the data is accurate. If the birthrate was down, would Putin really be told the truth? Wouldn't the bureaucrats below him be afraid of doing so, just as they feared reporting bad news to Stalin? At an even more fundamental level, assuming they weren't afraid, are they really capable of generating accurate data amid one of the most corrupt and incompetent political systems on the planet? And assuming they could, how can anyone think the KGB "president" would accurately report such data to the population and the world if it damaged his credibility? Has Putin ever once publicly admitted failure? We report today that, when the Moscow Times tried to ask him in a press conference about his biggest failure, he simply ignored the question.

And assuming Putin's "measures" were the cause of a real spike in the birthrate, are those "measures" really likely to make things better in Russia? The "measure" in question is to pay mothers a lump sum of cash for a baby, in effect bribing them to procreate. But the article gives no data showing that the mothers who allegedly gave birth were the ones that received those payments, and it doesn't pause for even a second to wonder what kind of country will be produced as a result of buying babies.

To be fair to the Russians, there's no direct evidence that they are stupid enough to believe the garbage they are being fed by the Kremlin, only proof that they adore it. But if they aren't fooled, then doesn't that make them even more stupid for willfully returning Putin to power even though they understand he's lying? Is their self-appraisal really so dim that they don't think they can do any better than this thug?

Fool me once, shame on you! Fool me twice, shame on me!

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