Gordon Campbell on the Mueller probe, and Russia’s economy

vladimir-putin-imageIn itself, the indictment of 13 Russian nationals and three Russian companies for interfering in the 2016 US wlll do little to change pre-existing views about the Robert Mueller investigation into Russia’s meddling in US presidential politics. Maybe in coming weeks and months, the evidence will shift a few opinions either way – yet for now, as Nate Silver pointed out on the weekend, its difficult for anyone to prove conclusively that such influence was (a) decisive in the final result and (b) more determinative than other factors at play during the campaign.

Certainly, the extent of any Russian influence is not as measurable as say, the Comey letter about the re-opened FBI investigation into Hillary Clinton’s emails. As Silver says, the negative impact of the Comey letter on the Democratic campaign can be measured in polls taken before and after its release, during the week before election day. (Conspiracy theorists who believe the deep state is implacably opposed to Trump and in bed with the Obama/Clinton administration have some trouble explaining the Comey letter, whose sole beneficiary was Donald Trump.)

Tracing the effect of a Russian-led campaign that allegedly began in 2014 is a different matter entirely. Certainly, Russia would have preferred to see Trump elected rather than Clinton, and to that end, it would also have wished to keep stirring the lingering sense of grievance among Bernie Sanders supporters – but that doesn’t prove causality, the extent to which those desires were put into action, or (crucially) the level of impact that – for example – any concerted Russian-led trolling actions in social media may have had. All that will be up to Mueller to prove in the coming months. Presumably if he can establish that a conspiracy to sabotage the US electoral process existed, that alone would be a criminal matter – regardless of its ultimate impact. The full Mueller indictment document can be read here.

Among other things, what Mueller alleges is that a Russian led and financed organisation called the Internet Research Agency ran an interference campaign to oppose the election of Clinton, and boost Donald Trump and – to a lesser degree – Bernie Sanders. Usefully, Silver compares the scale of the Internet Research Agency monthly budget ($1.25 million) with the massive figures spent either directly or via its supportive Super-Pacs by the Clinton campaign over the course of the campaign ($1.2 billion) and the $617 million spent overall by the Trump campaign and its super-PACS over the same period. In terms of headcounts of workers, Silver points out, the relatively paltry budget of the Internet Research Agency would have gone a further in Russian currency (multiply that six times vis a vis the USD) and pay rates. So the Russians could have hired “hundreds of online workers” as alleged, as opposed to the 4.200 paid Clinton staffers and 880 paid Trump campaign employees. Silver’s conclusion:

The Russian efforts were on the small side as compared with the massive magnitudes of the campaigns, but not so small that you’d consider them a rounding error.

Beyond that… as mentioned, cause and impact are virtually impossible to quantify, especially over the course of a two year effort. Moreover, the Russian trolling campaign did not originate the themes that proved so damaging to Clinton’s campaign, in that she would still have had high negative scores on issues of honesty and trust, regardless. Similarly, the allegations that the Russian-financed effort sought to suppress electoral participation by the black community – a crucial base of Democratic support – would be very hard to separate from the almost inevitable decline in such support from the years when Barack Obama was the candidate.

Of course, even a smallish impetus from a Russian online effort that was consistent with the themes of the wider Trump campaign may still have been very important – given the razor-thin margins that finally propelled Trump into the White House. But other, arguably more decisive strategic factors were also in play. It seems incredible for instance, that Clinton never visited Wisconsin (a crucial swing state) even once during the election campaign, after she had lost the state to Sanders during the primaries. And you have to return to the impact of the Comey letter. As Silver says, while many voters had high negative opinions of both candidates, during the final week those disliking both of them eventually broke towards Trump by a margin of 17 points. You’d have to conclude that the Comey letter finally pushed voters in that direction.

The Mueller probe may eventually be able (with the aid of the plea bargain process) to (a) establish the workings of the Russian operation, especially on a state by state basis, and (b) the degree of active co-operation between the Russians and the Trump campaign. But the extent to which any such activity was decisive in the outcome of the 2016 election is, as mentioned, very likely to be an impossible reach.

What the Mueller probe can usefully signal are the vulnerabilities that exist in the US electoral process overall, and in particular states. Yet even on this point…given the way US politicians themselves have been passing laws to suppress voter turnout, and to underfund the provision of adequate numbers of modern voter machines and sufficient election staff in black/Hispanic/low income districts, the Russians really are the lesser concern here, too.

Putin’s puttering economy

On March 18, the first round of Russia’s presidential elections will be held. If a run-off is required, that will take place on April 8. No-one expects anything other than a clear victory for Vladimir Putin, who has just surpassed Leonid Brezhnev as the longest serving Russian leader since Joseph Stalin. To some observers, the more interesting thing is that Putin also appears to be running the Russian economy in ways familiar from the Brezhnev era, too. He’s providing political stability, at the cost of economic stagnation. And as Foreign Policy magazine says, he’s doing so by these means:

First, maintain macroeconomic stability at all costs, pursuing low budget deficits, low debt levels, and low inflation even at the expense of growth. Second, use the social safety net to buy support from politically powerful groups — above all, pensioners — rather than to invest in the future. Third, tolerate private business only in “nonstrategic” sectors, leaving the state in control of spheres, such as energy or media, where business and politics intersect. The Kremlin understands that maintaining its current policies will keep Russia stable but stagnant, underinvesting in human capital and in private businesses while overspending on wasteful and corrupt state-owned firms.

The Brezhnev approach, in a nutshell. Russia’s economy took a hit in the last quarter of 2017.

There is pressure on Putin for reform, once the election process is out of the way. Back in mid 2017, Putin tapped his former Finance Minister Alexei Kudrin to come up with a reform programme, supposedly to be implemented after the 2018 elections. Briefly, the two main reform options now before Putin are those liberal proposals that have long been espoused by Kudrin, and the opposing neo-Stalinist options favoured by the Russian politician Boris Titov.

What Kudrin advocates is a partial asset sales programme, raising the retirement age, extending the tax take into the shadow economy etc etc.

Among the reforms Kudrin is calling for are greater public control over law enforcement officials, raising the retirement age, reducing government stakes in large companies, and improving revenue collection from the shadow economy. He said he thought the state should sell government stakes in Russian oil companies in stages over the next six to 10 years, and that it could sell a portion of its majority holding in the country’s largest bank Sberbank in the same time period. With such reforms, Kudrin said Russia could increase its economic growth rate to 3-4 per cent in five to six years, even with [US-led] sanctions staying in place.
Much of the local Russian media has not been not very impressed. Here’s the Moscow Times verdict on Kudrin:

All of Alexei Kudrin’s liberal plans will once again amount to nothing more than an unattainable utopia. The authors claim it will improve the effectiveness of the state. Perhaps – although not in serving the needs of the people, but in controlling them. They claim it calls for reforms to the judicial system. Of course, but politicians and state-controlled businesses know perfectly well that even if they violate the law, the courts will dutifully hand down whatever decision they request. They claim the plan will spur individual initiatives and reduce government regulation of the economy and society. Sure, but the state will retain the most profitable businesses for itself by occupying the “commanding heights” of the economy — including oil, gas, and defense — while continuing to reduce its commitments in such “unprofitable” sectors as healthcare and education. The authors claim the plan will shift authority from the federal centre to the regions and spur regional development. Yes, but Moscow will retain all financial and political control while the regions will be tasked with maintaining social stability. 

The over-riding problem, the Moscow Times concluded, is Putin and his cronies – who are highly unlikely to endorse Kudrin’s optimistic plan to shift spending out of the military/intelligence areas, and into basing future development on increased spending on health and education. Amusingly, the newspaper likened Kudrin to an elderly schoolmaster who is trying to change the behaviour of an incorrigible student : “The teen has long been hooked on drugs, runs with a local gang, and has a long criminal record for theft. However, the teacher does not see the student as an incorrigible thug, but as a well-meaning child who is simply having a little trouble mastering the lesson. “ Thus:

This is how Kudrin’s liberal strategy for economic development actually looks because it will find implementation not in a vacuum, but in the unyielding power vertical of Putin’s Russia. Putin and his cronies will never give liberals the right to change a country that they feel belongs to them alone. At most, they will hand liberals control over the unprofitable part of business while retaining a “controlling share” of the rest.

BTW and finally, Boris Titov wants to head in the exact opposite direction, by using the state (and the central bank) as the engine of industrial growth. Foreign Policy magazine – in the link above – believes Putin will take neither option, give the different risks that either option would entail. Therefore:

Putin is likely to promise some short-term sweeteners in advance of the election. After the vote, meanwhile, Russia is likely to get painful economic changes, but they will come in the form of tax hikes on individuals and businesses, not via reforms that would boost economic growth. Putin’s political backers will defend their turf, making impossible any changes to Russia’s corrupt state-owned firms or its coddled security apparatus. Russia’s economy will continue to underperform other emerging markets… evidence that an economy that tolerates inefficiency and embraces autarky is doomed, as Putin put it, to lag steadily behind.
Putin, forever, it seems.

Russia, with love

For a decade or so, the St Petersburg shoegaze band Pinkshinyultrablast have been one of Russia’s best musical exports. You should check out for yourself the martial arts related version on Youtube of their earlier track “Holy Forest” but “The Cherry Pit” from 2016 is pretty fine, too. Lead singer Lyubov Soloveva is the charismatic centerpiece of this band, but she and her colleagues have taken their obvious My Bloody Valentine influences and made them into something entirely their own.

This beautiful, floating track was released only a year ago…