If you are jumping out of a window, it’s a very fast way down

Reality of life after communism

A pro-democracy demonstrator drags a Soviet soldier out of his tank during the abortive coup

A former Moscow correspondent, returns to Russia 20 years after the Soviet collapse

By Leyla Boulton

A coup against Mikhail Gorbachev, the secretary-general of the Communist party who attempted the gradual perestroika (restructuring) of the Soviet Union, paved the way for the collapse of the Soviet empire and its state-run economy 20 years ago this weekend. In place of the USSR came 15 separate countries.

Chief of these was Russia, whose democratically elected president, Boris Yeltsin, had stood atop a tank to defy the hardline coup leaders who held Mr Gorbachev prisoner in his holiday villa on the Crimea.

By the time the coup fizzled out, the scene was set for the Communist party to give up its 84-year monopoly on power.

A team of young reformers headed by Yegor Gaidar liberalised prices and launched mass privatisation through vouchers given to every Russian.

Ensuing economic hardship, aggravated by the reformers’ compromises and missteps under President Yeltsin’s erratic leadership, triggered a backlash against change any other society would have found bewildering. Yeltsin’s replacement, Vladimir Putin, presided over an increasingly authoritarian system of government, and pandered to nostalgia for the past while allowing the economy to stagnate on the back of high oil prices.

For the 61-year-old former spymaster, the Soviet Union’s collapse was “the greatest geopolitical catastrophe of the century”.

In contrast, Dmitry Medvedev, 45, the current president, says Russians of his age are probably the “happiest generation” for being able to appreciate how far the country has travelled since the empty shop shelves of the dying Soviet era.

I returned to Russia for the verdict of four friends.

The author was an FT correspondent in Moscow from 1990-94

The civil society activist

Lena Nemirovskaya, an art historian who used to gather foreigners and Russians around her kitchen table, set up a school in 1993 to inculcate democratic values in a new generation of politicians. “It’s like a big kitchen table,” Lena, a youthful 71-year-old, explains over dinner. “We had the illusion that with a change of generation, this Sovietness would go away, but it was not so.”

She draws some comfort however from this month’s protests after clearly-documented fraud in this month’s elections. “This is a civic movement, about giving people dignity as citizens,” she explains.

She and her husband Yuri Senokosov, a philosopher who also teaches at the school, were among the signatories of a declaration urging Russians to work together to reverse the country’s slide into authoritarian rule. “We appeal to all social forces to unite to act in order to avoid a national catastrophe,” says the grandly-named memorandum of the founding conference of the December 12 roundtable.

Her Moscow School of Political Studies has given its short lecture courses to 10,000 people since it opened its doors 18 years ago, supported by western grants and, more recently, donations from Russian business. Speakers have included Peter Mandelson, the British ex-minister, European Commissioner, and spin-doctor.

How much difference has the school made? “Our sessions have changed. People now accept criticism and the opinion of others,” she says, speaking before the latest outburst of civic activism. Her graduates include the mayors of sizable cities like Nizhny-Novgorod, the president’s speechwriter, and a deputy finance minister. But it has been a lonely struggle. “We would like this education to be less unique and for it to be available in schools,” she says, referring to a lack of civic education for young Russians.

The businessman

Misha Berger, now 58, started his conversion from journalist to businessman when he developed a “sushi index” for provincial towns to figure out where media advertising would flourish. “I travelled to many regions and since official data were unreliable or often just wrong, I would ask how many Japanese restaurants a town had. If it had five to six, there had to be an upper middle class.” By that indicator, Perm with six sushi bars was a far more attractive commercial proposition than sushi-free Krasnoyarsk.

After a distinguished career at Izvestia covering the economy from the death throes of communism to the birth of market reforms, he put up a sign saying “Berger for sale” when the paper was taken over by Vladimir Potanin, an oligarch who made clear that coverage should not touch any of the sectors covered by his diversified business empire. “I understood that if you considered all the interests of [Potanin’s] Onexim group, you would have to close down the newspaper’s economic coverage.”

He then went to set up a new daily newspaper for Vladimir Gusinsky, a media magnate who ended up fleeing abroad to escape Vladimir Putin’s crackdown on oligarchs.

Misha stayed and thrived to become director-general of United Media, a media group owned by one of the other oligarchs still standing after the crackdown. In business, Misha steers clear of political coverage to focus on business and entertainment. Yet during this month’s protests, he was working round the clock – to oversee the news coverage of the protests. And he is not afraid to voice his views.

“I have a great deal of respect for Gorbachev,” says Misha, who attended the ex-Soviet leader’s 80th birthday celebrations in London - a reminder of how the man who presided over the Soviet system’s demise is reviled, or at best forgotten, at home. “It’s a shame we have to export this feeling of pride. Here we behave as if he does not exist.”

The policewoman

A career policewoman, Galya Lebedeva-Yegorova, 56, was one of Russia’s first entrepreneurs – in the days when private businesses were not allowed.

In 1990 she used her time off duty to paint my flat. Having retired two years ago with a clutch of Veteran of Labour medals, she is contemplating a return to work as an office “menedzher” [manager]. Yet she remains a steadfast supporter of the Communist party, which feeds on resentment of the country’s conspicuous inequalities and the authorities’ failure to provide as they once did in an increasingly idealised Soviet past.

Galya shrugs off charges of widespread corruption in the police force, saying “there is nothing to steal”. She regrets the forced departure earlier this year of old-style operator Yuri Luzhkov as Moscow mayor. In his time, she says, the roads were properly cleared of snow and police enjoyed free travel on all public transport. How Elena Baturina, his property-developer wife, became Russia’s richest woman during his time in office is of little interest to her.

Since the collapse of communism paved the way for Russians to travel abroad freely, Galya has been on police exchange trips to Bulgaria, Cyprus, Turkey, Greece and Israel.

She is unimpressed by the other big change since Soviet times – the abundance of goods in the shops. “There is a lot in the shops but everything is expensive,” she says, speaking in a flat that still has no washing machine.

She reminds me that in the old days, I gave her daughter and son-in-law trainers from abroad as wedding presents. “We traced their feet on pieces of paper for you because they were difficult to find here.”

Galya hints she might have been open to voting differently, had squabbling democrats such as Grigory Yavlinsky got their act together to win popular appeal. “I don’t necessarily agree with you,” she tells her husband as he declares the couple’s allegiance to the Communist party. “I might be a radical.”

The politician

At 59, Grigory Yavlinsky, an economist and founder of the opposition Yabloko (Apple) party, has been confined to the role of a latter-day Cassandra since walking out of the first democratically-elected Russian government of Boris Yeltsin in November 1990.

A charismatic and highly-intelligent figure, he has consistently warned that disaster would follow the policies implemented by others. After years in a marginalised opposition, he gets his latest chance of a “voice” – a chance to put his views to the public on state-controlled broadcast media – with his bid to run for president against Vladimir Putin in elections next March.

“If you are jumping out of a window, it’s a very fast way down,” is how he describes the price liberalisation and privatisation pursued by a team of young reformers led by Yegor Gaidar and Anatoly Chubais after Russia became fully independent in December 1991. “I was proposing we take the stairs. The problem is that Chubais and Gaidar were asking other people to jump out the window, while they stayed in the room.”

As a result, in the Putin era, “we have an economy without property rights, without the rule of law and where there is an enormous gap between rich and poor – three per cent who have a very high standard of living, 20 per cent who have a a western standard of living and 75 per cent of people who have no future, no prospects of a decent job, education or medical care.”

Other economists like Yevgeny Yasin, a former economics minister, argue there was no scope for the gradual approach advocated by Yavlinsky, who retorts:. “The major problem of this period is the disappointment of the people, and that’s why people are leaving.” This includes his two sons, both of whom are living in London but who would like to return to Russia when they see signs of progress.

What keeps him going? “I love my country, I love my people. I love my children. I have pessimistic thinking, but an optimistic will.”

The communion of poverty, tyranny, and death

The Green Death

By Dr Zero

Who is the worst killer in the long, ugly history of war and extermination? Hitler? Stalin? Pol Pot? Not even close. A single book called Silent Spring killed far more people than all those fiends put together.

Published in 1962, Silent Spring used manipulated data and wildly exaggerated claims (sound familiar?) to push for a worldwide ban on the pesticide known as DDT – which is, to this day, the most effective weapon against malarial mosquitoes. The Environmental Protection Agency held extensive hearings after the uproar produced by this book… and these hearings concluded that DDT should not be banned. A few months after the hearings ended, EPA administrator William Ruckleshaus over-ruled his own agency and banned DDT anyway, in what he later admitted was a “political” decision. Threats to withhold American foreign aid swiftly spread the ban across the world.

The resulting explosion of mosquito-borne malaria in Africa has claimed over sixty million lives. This was not a gradual process – a surge of infection and death happened almost immediately. The use of DDT reduces the spread of mosquito-borne malaria by fifty to eighty percent, so its discontinuation quickly produced an explosion of crippling and fatal illness. The same environmental movement which has been falsifying data, suppressing dissent, and reading tea leaves to support the global-warming fraud has studiously ignored this blood-drenched “hockey stick” for decades.

The motivation behind Silent Spring, the suppression of nuclear power, the global-warming scam, and other outbreaks of environmentalist lunacy is the worship of centralized power and authority. The author, Rachel Carson, didn’t set out to kill sixty million people – she was a fanatical believer in the newly formed religion of radical environmentalism, whose body count comes from callousness, rather than blood thirst. The core belief of the environmental religion is the fundamental uncleanliness of human beings. All forms of human activity are bad for the environment… most especially including the activity of large private corporations. Deaths in faraway Africa barely registered on the radar screen of the growing Green movement, especially when measured against the exhilarating triumph of getting a sinful pesticide banned, at substantial cost to an evil corporation.

Those who were initiated into the higher mysteries of environmentalism saw the reduction of the human population as a benefit, although they’re generally more circumspect about saying so in public these days. As quoted by Walter Williams, the founder of the Malthusian Club of Rome, Alexander King, wrote in 1990: “My own doubts came when DDT was introduced. In Guayana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.” Another charming quote comes from Dr. Charles Wurster, a leading opponent of DDT, who said of malaria deaths: “People are the cause of all the problems. We have too many of them. We need to get rid of some of them, and this is as good a way as any.”

Like the high priests of global warming, Rachel Carson knew what she was doing. She claimed DDT would actually destroy all life on Earth if its use continued – the “silent spring” of the title is a literal description of the epocalypse she forecast. She misused a quote from Albert Schweitzer about atomic warfare, implying the late doctor agreed with her crusade against pesticide by dedicating her book to him… when, in fact, Schweitzer viewed DDT as a “ray of hope” against disease-carrying insects. Some of the scientists attempting to debunk her hysteria went so far as to eat chunks of DDT to prove it was harmless, but she and her allies simply ignored them, making these skeptics the forerunners of today’s “global warming deniers” – absolutely correct and utterly vilified. William Ruckleshaus disregarded nine thousand pages of testimony when he imposed the DDT ban. Then as now, the science was settled… beneath a mass of politics and ideology.

Another way Silent Spring forecast the global-warming fraud was its insistence that readers ignore the simple evidence of reality around them. One of the founding myths of modern environmentalism was Carson’s assertion that bird eggs developed abnormally thin shells due to DDT exposure, leading the chicks to be crushed before they could hatch. As detailed in this American Spectator piece from 2005, no honest experimental attempt to produce this phenomenon has ever succeeded – even when using concentrations of DDT a hundred times greater than anything that could be encountered in nature. Carson claimed thin egg shells were bringing the robin and bald eagle to the edge of extinction… even as the bald eagle population doubled, and robins filled the trees. Today, those eagles and robins shiver in a blanket of snow caused by global warming.

The DDT ban isn’t the only example of environmental extremism coming with a stack of body bags. Mandatory gas mileage standards cause about 2,000 deaths per year, by compelling automakers to produce lighter, more fragile cars. The biofuel mania has led resources to be shifted away from growing food crops, resulting in higher food prices and starvation. Worst of all, the economic damage inflicted by the environmentalist religion directly correlates to life-threatening reductions in the human standard of living. The recent earthquake in Haiti is only the latest reminder that poverty kills, and collectivist politics are the most formidable engine of poverty on Earth.

Environmental extremism is a breathless handmaiden for collectivism. It pours a layer of smooth, creamy science over a relentless hunger for power. Since the boogeymen of the Green movement threaten the very Earth itself with imminent destruction, the environmentalist feels morally justified in suspending democracy and seizing the liberty of others. Of course we can’t put these matters to a vote! The dimwitted hicks in flyover country can’t understand advanced biochemistry or climate science. They might vote the wrong way, and we can’t risk the consequences! The phantom menaces of the Green movement can only be battled by a mighty central State. Talk of representation, property rights, and even free speech is madness when such a threat towers above the fragile ecosphere, wheezing pollutants and coughing out a stream of dead birds and drowned polar bears. You can see why the advocates of Big Government would eagerly race across a field of sustainable, organic grass to sweep environmentalists into their arms, and spin them around in the ozone-screened sunlight.

Green philosophy provides vital nourishment for the intellectual vanity of leftists, who get to pat themselves on the back for saving the world through the control-freak statism they longed to impose anyway. One of the reasons for the slow demise of the climate-change nonsense is that it takes a long time to let so much air out of so many egos. Calling “deniers” stupid and unpatriotic was very fulfilling. Likewise, you’ll find modern college campuses teeming with students – and teachers – who will fiercely insist that DDT thins egg shells and causes cancer. Environmentalism is a primitive religion which thrives by telling its faithful they’re too sophisticated for mere common sense.

The legacy of Silent Spring provides an object lesson in the importance of bringing the global-warming con artists to trial. No one was ever forced to answer for the misery inflicted by that book, or the damage it dealt to serious science. Today Rachel Carson is still celebrated as a hero, the secular saint who transformed superstition and hysteria into a Gospel for the modern god-state. The tactics she deployed against DDT resurfaced a decade later, in the Alar scare. It’s a strategy that offers great reward, and very little risk. We need to increase the risk factor, and frighten the next generation of junk scientists into being more careful with their research. If we don’t, the Church of Global Warming will just reappear in a few years, wearing new vestments and singing new hymms… but still offering the same communion of poverty, tyranny, and death.

The failure of paper money systems

Paper money collapse

Detlev Schlichter addresses the Adam Smith Institute Tuesday 22nd November, 2011. He argues that the present financial crisis is far from over; generally misunderstood and misrepresented, it is far from being a ‘crisis of capitalism’. Detlev traces the history of failure of paper money systems and lays out why present policies pursued by various governments and institutions are misdirected and counterproductive. He describes the various endgames facing us.

Another Piig joins the club

It's Official: US Debt-To-GDP Passes 100%

by Tyler Durden 

With precisely one year left for the world and all of its inhabitants, at least according to the Mayans, not to mention on the day of the Winter Solstice, it is only fitting that US debt, net of all settlements for all already completed bond auctions, is now at precisely $15,182,756,264,288.80. Why is this relevant? Because the latest annualized US GDP, according to the BEA, was $15,180,900,000.00. Which means that, as of today, total US debt to GDP is 100.012%. 

Congratulations America: you are now in the triple digit "debt to GDP" club!

(naturally, this is using purely "on the books" data. If one adds the NPV of all US liabilities, and adjusts GDP for such things as today's housing contraction, then the magical triple digit threshold was breached long, long ago).

And here is the breakdown for the forensically inclined ones:

I. Total debt as of December 20: $15,131,979,264,288,80 (source):

 

II. Net cash settlement of all completed auctions: $50,777,000,000.00 (source):

III. Total GDP: $15,180,900,000,000.00 (source):

=> Total Debt/GDP= $15,182,756,264,288.80/$15,180,900,000,000.00 = 100.012%

Once Upon a Time in Afghanistan

Civilization. Handle with care

Record stores, Mad Men furniture, and pencil skirts -- when Kabul had rock 'n' roll, not rockets.

BY MOHAMMAD QAYOUMI

On a recent trip to Afghanistan, British Defense Secretary Liam Fox drew fire for calling it "a broken 13th-century country." The most common objection was not that he was wrong, but that he was overly blunt. He's hardly the first Westerner to label Afghanistan as medieval. Former Blackwater CEO Erik Prince recently described the country as inhabited by "barbarians" with "a 1200 A.D. mentality." Many assume that's all Afghanistan has ever been -- an ungovernable land where chaos is carved into the hills. Given the images people see on TV and the headlines written about Afghanistan over the past three decades of war, many conclude the country never made it out of the Middle Ages.

A half-century ago, Afghan women pursued careers in medicine; men and women mingled casually at movie theaters and university campuses in Kabul; factories in the suburbs churned out textiles and other goods. There was a tradition of law and order, and a government capable of undertaking large national infrastructure projects, like building hydropower stations and roads, albeit with outside help. Ordinary people had a sense of hope, a belief that education could open opportunities for all, a conviction that a bright future lay ahead. All that has been destroyed by three decades of war, but it was real.But that is not the Afghanistan I remember. I grew p in Kabul in the 1950s and '60s. When I was in middle school, I remember that on one visit to a city market, I bought a photobook about the country published by Afghanistan's planning ministry. Most of the images dated from the 1950s. I had largely forgotten about that book until recently; I left Afghanistan in 1968 on a U.S.-funded scholarship to study at the American University of Beirut, and subsequently worked in the Middle East and now the United States. But recently, I decided to seek out another copy. Stirred by the fact that news portrayals of the country's history didn't mesh with my own memories, I wanted to discover the truth. Through a colleague, I received a copy of the book and recognized it as a time capsule of the Afghanistan I had once known -- perhaps a little airbrushed by government officials, but a far more realistic picture of my homeland than one often sees today.

I have since had the images in that book digitized. Remembering Afghanistan's hopeful past only makes its present misery seem more tragic. Some captions in the book are difficult to read today: "Afghanistan's racial diversity has little meaning except to an ethnologist. Ask any Afghan to identify a neighbor and he calls him only a brother." "Skilled workers like these press operators are building new standards for themselves and their country." "Hundreds of Afghan youngsters take active part in Scout programs." But it is important to know that disorder, terrorism, and violence against schools that educate girls are not inevitable. I want to show Afghanistan's youth of today how their parents and grandparents really lived.

Original caption: "Kabul University students changing classes. Enrollment has doubled in last four years."

The physical campus of Kabul University, pictured here, does not look very different today. But the people do. In the 1950s and '60s, students wore Western-style clothing; young men and women interacted relatively freely. Today, women cover their heads and much of their bodies, even in Kabul. A half-century later, men and women inhabit much more separate worlds.

"Biology class, Kabul University."

In the 1950s and '60s, women were able to pursue professional careers in fields such as medicine. Today, schools that educate women are a target for violence, even more so than five or six years ago.

"Student nurses at Maternity Hospital, Kabul."

When I was growing up, education was valued and viewed as the great equalizer. If you went to school and achieved good grades, you'd have the chance to enter college, maybe study abroad, be part of the middle class, and enjoy a comfortable lifestyle. Education was a hallowed value. Today, I think people have become far more cynical. They do not see the link between education and a better life; they see instead that those who have accumulated wealth and power have not done so through legitimate means.

"Most hospitals give extensive post-natal care to young mothers."

This infant ward in a Kabul hospital in the 1960s contrasts sharply with one I visited in 2004 in Mazar-e-Sharif. There I found two babies born prematurely sharing the same incubator. That hospital, like many in Afghanistan today, did not have enough equipment.

"Infant ward at feeding time."

In the 1960s, about half of Afghanistan's people had access to some level of medical care; now a much smaller percentage do. Today's hospitals are crowded, the facilities limited; nearly one in four babies born in Afghanistan today does not reach its fifth birthday.

"A laboratory at the Vaccine Research Center."

Above is a vaccine research center attached to a Kabul hospital in the 1960s. Today, medical care across the country is limited by several factors, including lack of electricity. Less than 20 percent of Afghans have access to electricity; many homes are lit by kerosene

Eurocrats working overtime

Evil and Stupid

Stratfor discusses the latest eurozone liquidity measure:

The ECB has drastically lowered its standards for the collateral it accepts for these loans, so banks get to offload some very risky assets. The cash they’ll receive will generate a superficial improvement for banks — cash is considered the least risky asset to hold. But to move beyond a temporary solution banks have to lend the cash out in order to generate earnings. The cash itself would not earn enough interest to repay the 1 percent rate on the loans.

One of the most talked-about options for generating profits would be buying more European government bonds. European politicians and other advocates of this plan paint it as a win-win scenario. Banks generate earnings by purchasing higher yielding sovereign debt, such as Spain’s or Italy’s

So the ECB is accepting compromised collateral, possibly at par, and may encourage the banks to buy even more compromised debt. That’ll work! We flash back three years to the dark days of late 2008. The de-leveraging process still has a long way to go, and the can is still being kicked down the road.

see also

AP:

banks snapped up €489 billion ($639 billion) in cheap loans from the European Central Bank on Wednesday, a sign of just how hard or expensive it has become to borrow from each other. The huge demand for newly available three-year loans comes as fears rise that heavily indebted European governments could default and force banks and other bond holders to take big losses…

The loans to 523 banks surpassed the €442 billion ($578 billion) in one-year loans extended in June 2009, when the global financial system was reeling from the collapse of the U.S. investment bank Lehman Brothers. It was the biggest ECB infusion of credit into the banking system in the 13-year history of the euro. The ECB wants banks to use the money to help pay off or refinance some €230 billion ($300 billion) in existing loans early in 2012…

it was far higher than the €300 billion ($392 billion) expected…”The good news is, the ECB’s efforts to increase liquidity are working,” said Jennifer Lee, an analyst at BMO Capital Markets. “The bad news is, high demand for the loans creates worries that banks are urgently in need of funds to boost liquidity.”

Let’s do some arithmetic. Much of the €489 billion goes to refinance some €230 billion coming due next month. So there’s €259 billion of net additional liquidity spread among 523 banks. Not that much on a per bank basis, but the largest amounts are no doubt concentrated in the largest institutions.

Still, this is a drop in the bucket, compared to some estimates of the needs of the banking system, and it does nothing at all to deal with the€2.6 trillion sovereign debt problem. Question: what happens when the debts begin to mature and liquidity starts coming out of the system?