The First Casualty
Last night I was surprised to see at the top of the front page of the New York Times, Russia Economy Worsens Even Before Sanctions Hit:
While the annexation of Crimea has rocketed President Vladimir V. Putin’s approval rating to more than 80 percent, it has also contributed to a sobering downturn in Russia’s economy, which was in trouble even before the West imposed sanctions. With inflation rising, growth stagnating, the ruble and stock market plunging, and billions in capital fleeing the country for safety, the economy is teetering on the edge of recession, as the country’s minister of economic development acknowledged on Wednesday.
From a textbook perspective, the deep-rooted ills in Russia’s economy have been clear for years: The decade-long skyrocketing in energy prices that buoyed Mr. Putin’s popularity has flatlined, exposing the country’s dangerous over-reliance on revenues from oil and natural gas. Efforts to diversify into manufacturing, high technology and other sectors have failed, and officials have been unable, or unwilling, to stop the rampant, corrosive corruption that scares off foreign investors.
But yesterday I had also seen that The Automatic Earth reposted a graph from Tyler Durden, at ZeroHedge. In truth neither TAE or ZH are known for posting good news, but even recognizing that the two curves have been pushed together, this chart seems to report the opposite of what the Grey Lady is claiming:
I find another chart from ZeroHedge even more telling:
The bottom chart is not about Russia, but apparently we’re supposed to believe that our sanctions are hurting Russia worse than business as usual is hurting us.