The Russian enigma explained

Winston Churchill once remarked that Russia is "a riddle wrapped in a mystery inside an enigma."

This has never been more true than today, when even the most diligent and studious among us might not understand what's happening in the former Soviet Union.

You, the enlightened and well-informed Daily Cougar reader, probably have a plethora of intelligent and well-thought-out questions about the current situation in Russia.

Q: What's the current situation in Russia?

A: The economy is collapsing. The ruble's value has dropped by half, and most trade is done by barter. Many workers haven't been paid in over a year. Also, there is no functioning government, and there hasn't been since Aug. 23 when President Yeltsin dismissed Prime Minister Kiriyenko.

Q: So a bunch of Communists are discovering that Communism doesn't work.

So what?

A: Actually, they're not Communist any more and they haven't been for almost 10 years. The Soviet economy, unable to keep up with U.S. arms expenditures, imploded, and ever since then the Russians have been trying to make the transition to a capitalist society.

Q: Good for them. Capitalism works great. So what's their problem? Are they just stupid or what?

A: The problem is that they went about the transition from planned economy to free market all wrong. Instead of privatizing industries by selling shares of stock to investors, or even giving them to workers, these industries were sold at bargain-basement prices to well-connected - and already wealthy - shysters.

These (usually) former Communist Party members then stripped these industries down to next to nothing, selling the parts at a huge profit and pocketing the money. They are the kleptocrats (those who steal) who rule this kleptocracy (rule by those who steal).

Q: How could they do that? Wouldn't other companies drive them out of business?

A: In a truly capitalist market, yes. But because the state has had monopolies on all these industries for decades, there aren't any other Russian companies that can compete.

Q: So why not throw those jerks in jail?

A: Because there's no law against what they're doing. The Russian legal system was not designed for a free-market economy.

Q: Well, if they tried doing that to me, I just wouldn't pay my phone or electric bill!

A: Oh, they're not. They're not paying any other bills either, for that matter. The Russian government cannot even collect tax money that is owed to it. As a result, the government has no way to pay its bills, including the salaries of government workers or the interest on the loans that the government has taken out to ease it through this painful transition.

As worthless as the ruble is, nobody - not the government nor the common citizens - has any (with the exception of the kleptocrats).

Q: Uhhh ... What's a ruble?

A: The ruble is the Russian unit of currency. The Russian government tried printing more of them. Under Chernomyrdin's last term as prime minister, he switched from printing more rubles to borrowing money from the International Monetary Fund (IMF) to pay the government's deficit. This stopped hyper-inflation, for the time being, but now Russia has defaulted on its debt to the IMF.

Now, the ruble's value is continuing to plunge to rubble-like levels, and investors are scared.

Q: OK, I get it. Eventually ol' Uncle Sam's gonna have to cough up billions in foreign aid to bail the Russkies out, right?

A: No, not quite. The United States isn't going to be lending Russia billions for much needed reforms, because it already has (through the IMF) lent Russia billions for much needed reforms, and the only things that got reformed at all were the Swiss bank accounts of Russia's well-connected kleptocrats. And nobody else is going to invest in Russia either, because after the Russian government devalued the ruble, everybody

Q: I have no idea what you're talking about.

A: Their economy's totally screwed up, and there's nothing we, or anybody else, can do about it. Russia's on her own.

Q: Oh ... Well, if things are so bad over there, why aren't there riots and stuff like that?

A: Because Russians take a certain kind of perverse pride in needless suffering. They refer to themselves as mnogostradal'nyi, which means "long-suffering people."

Q: Is that why Russian authors like Dostoyevsky and Tolstoy are so hard to read? Are they trying to make me suffer?

A: Probably, yes.

Q: Uhhmm, don't they have nukes over there?

A: Yes. Most estimates put the number of nuclear weapons in Russia at about 22,000.

Q: But we're not, like, in danger or anything, are we?

A: We probably are. Among those in Russia who have not been paid in several months are both government scientists, who have been developing nuclear weapons, and military personnel, who guard and launch them. And they're probably getting hungry.

Q: So what you're implying is that a military or R&D unit could sell nuclear technology and weaponry to governments hostile to the United States, including countries like North Korea, China, Libya, Iraq, or even private groups or citizens in order to buy food for themselves and their families?

A: Sure they could. Who knows? They may already have.

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