I’ve seen this story before.
It begins by making sure that, until we get used to President Trump, the bark is worse than the bite. The ether around him will thrum with the vibrations of hellfire and brimstone. We will be rid of all doubt that he has meant everything he said during the campaign – about walls, about deportations, about taking names and keeping lists. We will begin to believe that, in fact, he means much worse than he said, that there will be internment camps, attacks on the media, the wholesale evisceration of all of our greatest accomplishments.
Imagine, if you can, that there’s a presidential election going on in your country. And not just any election, but a highly emotionally charged one, with passions running high on both sides, to the point that even friendships and family ties are strained. And then imagine that someone asks you whom you support. Would you tell the truth? Are you sure?
Now, imagine you’re Russian. (Bear with me. It’s not as much of a stretch as you might think.)
Pity the central bankers.
In a recent policy briefing, the Central Bank of Russia fretted openly that monetary policy – specifically, the Bank’s ability to stimulate or dampen economic growth by manipulating lending rates and the money supply – was losing touch with Russian households. At fault, according to a report by Bloomberg (which, credit where it’s due, broke the story), is inequality, which has grown to such a high level that those who can afford to borrow don’t need to, and those who might need to can’t afford it. Thus, whatever the CBR might decide to do with interest rates wouldn’t matter much.
That, though, is only the tip of the iceberg. Elsewhere in their report, the CBR writes (in typical central-bankese):
The headline is stunning: Berlin. Grozny. Aleppo.
Alongside pictures of the destruction of Aleppo, the New York Times draws a straight line through three points in history. The text of the argument is clear: The devastation meted out on Aleppo, the Times is saying, is of a scale not only with the total war wrought on Chechnya, but with the effort to defeat Nazi Germany, as well. The subtext, however, is even clearer: This is how Russia fights.
The Times could have selected any number of other German cities – Dresden, perhaps, flattened by the Western allies – or it could have chosen Hiroshima. But it settled not by accident on the prize that fell to the Red Army. Taken generously, it is an attempt to help us remember wars we should not yet be forgetting. Less generously, it might seem another brick in the wall of “russophobia” that has, by some accounts, become prominent in Western political discourse.
Why haven’t Western companies lined up to demand that their governments repeal sanctions on Russia? After all, hadn’t they been used to making oodles of rubles? Wouldn’t they like to make some more?
I’ve never had much patience for the peculiarly Russian question of “кому это выгодно” – literally, “who benefits” – when it comes to policy analysis. It implies a logic that is simpler and more transparent than reality actually is and allows for a bit more solipsism than is generally healthy. But that doesn’t mean that it’s not worth following the money (to use the American idiom) – not because it always gets you where you need to go, but because it generally at least points in an interesting direction. And in the case of Russia and sanctions, it is particularly interesting to look at exactly who is making money in Russia.