Dot.Demarche

Talking to myself about foreign policy, US politics, technology, &c.

Bear-ly tolerable?

Tom Friedman (the Mustache of Understanding) wrote a book aeons ago (ok, last century) called “The Lexus and the Olive Tree”. The book, and most of Friedman’s writing, gets dismissed as layman’s schlock by highbrow IR folks, along with progressives who hate him, mostly for Friedman’s early support for the Iraq war. And his ridiculous metaphors. And perhaps the fact that his writing does really well. Me, I like him ‘cuz he’s a Minnesotan.

Anyhoo. In LntOT (not to be confused with LotR) Mr. F talks about the “golden straitjacket” applied by international financial institutions, banks, and investors. No modern economy can survive without the capital, liquidity, and confidence provided by a decent investment climate. I leave the discussion of the current American disaster to the real eggheads - but  it certainly emphasizes that no modern economy can really function without these fat cats behind them.

Maybe that’s not the right turn of phrase, because it looks like the investors have indeed been leaving Russia behind them. After an already-bad summer, the main Micex index has lost another 30% since the Georgian invasion. Gobs of money have fled Russia. Increasingly, folks are getting the sense that Putin’s Medvedev’s Putin’s Russia is not, well, normal. Not-normal places are bad for investment. Not-normal places with tremendous oil teats to suckle at sound all right, until you realize that you’re either gonna get locked up or nationalized. After that, well, they mostly sound like a bully who happens to control the playground where everyone wants to ride the hydrocarbon swings.

Er, sorry. Channelling Friedman. Anyway, the point is that Russia is paying a price for this incursion, and perhaps the neoliberal market economist dovish peace-love-dope hippies will be right, and Russia will find that crime trans-border conflict does not pay. So you can hold on the panicking for the moment.

If they go for Ukraine, well, then you can panic.

 

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