With very little fanfare, Russian press a few days ago carried a note that could have a most profound positive significance for the future of the Russian domestic economy. The online Russian blog, Katheon, carried the following short notice: “Russian President Vladimir Putin instructed (the Stolypin economist group–w.e.) to finalize the report of the Stolypin Club and on its basis to prepare a new program of economic development, alternative to Kudrin’s economic plan. The program itself should be given to the Bureau of Economic Council in the IV quarter of 2016.”
In their comment, Katheon notes the major significance of the decision to drop the clearly destructive neo-liberal or free market approach of former Finance Minister Alexei Kudrin: “The Stolypin club report advises to increase the investment, pumping up the economy with money from the state budget and by the issue of the Bank of Russia. In turn, the concept of the Center for Strategic Research (Alexei Kudrin) suggested that investments should be private and the state is to ensure macroeconomic stability, low inflation, reduced budget deficit.”…
Breath a sigh of relief. Putin was not bringing back Kudrin as some thought, but just giving him a say as a matter of "fair and balanced" and good politics.
There are three major economic groups in Russia, the neoliberals led by former finance minister Alexei Kudrin, the monetarists led by central bank chief Elvira Nabiullina, and the Stolypin Club, in which Sergei Glazyev (also transliterated Glaziev) plays a leading role.
After a competition, Putin chose to go with the Stolypin group, which in Western terms is Keynesian but not New Keynesian. These economists would likely be open to Post Keynesianism and MMT if they are not already familiar with it.
This is an extremely positive sign for the Russian economy, although it will be severely criticized in the West. The Kudrin neoliberals and Nabiullina monetarists have been strangling investment and growth Russia, and severely disadvantaging workers-consumers, by relying on the confidence fairy.
This is an extremely positive sign for the Russian economy, although it will be severely criticized in the West. The Kudrin neoliberals and Nabiullina monetarists have been strangling investment and growth Russia, and severely disadvantaging workers-consumers, by relying on the confidence fairy.
Putin needs to get a tight grip on the oligarchs, too, at least to the degree that their interests conflict with Russia's present situation. They are a major source of corruption. Putin has already pruned back the worst, but that is not saying much. Culling is still needed.
Putin should be looking to China rather than the West. Europe is a basket case, the UK is reeling, and the mighty US is plagued with a slow recovery and rising inequality that is translating into social unrest and political divisiveness. On the other hand, China has been managing a difficult transition fairly seamlessly and is on track to eradicate poverty as part of this five-year plan.
Putin: Nyet to Neo-liberals, Da to National Development
F. William Engdahl
In your description and in Engdahl's article there is a reference to Katheon. I believe what is being referred to should be Katehon, not Katheon. Katehon.com is the blog site.
ReplyDelete@ elwoods
ReplyDeleteYou are correct. "Katehon"
Sounds superb. That's good news. Putin is awesome.
ReplyDelete" that the Central Bank be mandated to buy all gold production of Russian mines at a given price"
ReplyDeleteThat doesn't signal that Russia is considering going on the gold standard does it?
That doesn't signal that Russia is considering going on the gold standard does it?
ReplyDeleteNo indication of that.
The way it works is that the banks owned by the state buy the gold from the mines and the Central Bank of Russia buys the gold from the banks, thereby injecting rubles into the economy by capitalizing the banks and putting rubles into the economy through the mining companies. Under current perception in banking and finance, this strengthens the banks (more capital) and also the cb (more gold), which increases confidence and supports the ruble against attack. It's a combo of monetary and fiscal policy.