WingRight

The #1 point in my post about what happens if Obama becomes President was that the Republic of Georgia and Ukraine better watch out.

Hold your nose and read this in the New York Times.

Foreign Minister Bernard Kouchner of France said Tuesday that Moscow had been issuing Russian passports in Crimea, a region in southern Ukraine where Russia’s Black Sea fleet is based. “We all know that they are handing out Russian passports over there,” Mr. Kouchner said in an interview with Kommersant, a Russian online newspaper. The government of Ukraine has said it wants the fleet to leave the Crimean base in Sevastopol when its lease runs out in 2017. But the Russian naval authorities have indicated that they want to retain the base. Mr. Kouchner said Russia might try to make advances in Crimea after the success of its military operations in Georgia in August.

You’ll recall that Russia handed out a lot of passports in South Ossetia prior to its invasion of Georgia.

Tags: Obama Problems, Russia by Publius
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1. If you’re living in the Republic of Georgia or Ukraine, you better brush up on your Russian. Within 6 months of Obama taking office, Putin will send troops in to Georgia and Ukraine. He will make certain to grab the Baku-Supsa and the South Caucasus pipelines so he can put Europe into a hammerlock, particularly with natural gas. Obama will protest and so will the EU, but nobody will be ready to push Russian troops out. Estimated probability – 80%. Once he’s in Ukraine, Vladimir will start throwing his weight around with Belarus, Poland, Hungary, Romania, etc. Estimated probability – 70%.
2. Given the timing of the Israeli election, Israel is unlikely to be in a position to take any military action against Iran’s nuclear facilities until after Obama is inaugurated. Obama will absolutely refuse to allow Israel to attack Iran, prohibit overflights of Iraq and threaten to warn Iran if U.S. surveillance facilities observe any Israeli air force planes heading in the direction of Tehran. Estimated probability – 90%. Within the first two years of the Obama administration, Iran will explode a nuclear device and will announce that it has nuclear warheads mounted on missiles capable of hitting Israel and any other country in the Middle East or Central Europe. Estimated probability – 90%. If Israelis don’t start a major program to expedite the emigration of its citizens, Iran will fire one or more nuclear missiles at Tel Aviv. Estimated probability – 60%. If the Israelis strike first, Iran will launch nuclear missiles at Tel Aviv. Estimated probability – 90%
3. Hugo Chavez will decide that he needs some additional land to govern and will start taking it from Colombia. Obama will remember how much Bill Ayers likes Hugo and protest, but do nothing more. A significant border war will break out which will give Chavez a chance to use his new Russian military equipment. Estimated probability – 75%
4. The United States will join with the European Union in a treaty that imposes significant limits on carbon emissions. Most of the countries in the EU will cheat and exceed the limits. The United States will not. This action will reduce US corporate profits by at least 500 billion dollars in the first five years and increase US unemployment to over 10%. Residential electricity and heating bills will triple in that same period and Obama will create major energy subsidies for the middle class. China will not join the treaty and its annual GDP will grow to exceed the GDP of the US during this period.

Tags: Climate Change, Economy, Energy, Liberal "Solutions", Obama, Russia by Publius
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In an editorial, Investors Business Daily reports that Russia’s Georgian adventure looks like the last straw for a lot of foreign investors. A giant capital outflow is beginning as foreign investors pull their money out of Putin Village, “fed up with the rampant militaristic nationalism, red tape, corruption and anti-investor sentiment in Vladimir Putin’s Russia.”

As I’ve blogged before, the Russian economy is balanced on a single unstable point - world oil prices. If those go down below $100 and stay there for awhile, Russia is in big trouble. The flashy oligarchs mask the fact that, even with the oil boom, Russia’s per capita GDP is just 2% above where it was when the Berlin Wall fell.

Inflation is currently running at 14%, so monetary policy is also undercutting the economy and acting as a confiscatory tax for the vast majority of Russians who aren’t oligarchs. As Robert Mugabe could tell Vladimir, once you start down the inflation path to solve your problems, you are going into a steep decline. Could Putin put giant clamps on prices and begin to control inflation? I don’t think so. The corruption is so endemic in Russia and black market profits would be so high, that massive amounts of goods would be moving through an underground economy and continuing to increase in price.

If the clamps don’t work, the Russians drink more to forget their miserable existence and the population drops even faster. If the clamps do work, wide-spread shortages of goods cause the Russians to drink more to forget their miserable existence, etc., etc., etc.

The big influx of foreign capital into oil deals has allowed Russia to paper over an inherently declining economy. Now that the foreign capital is headed back home, the truth will come out in a way that the whole world will see. I would be happy to have someone point out a society in steep demographic decline that was ever able to expand its economy in a meaningful way. I don’t think there has ever been one.

Oh, and by the way, about your Russian army, Vlad? Demographic decline means that every year, there will be fewer and fewer 18 year olds to conscript into the military. Your army is going to get much smaller in the next ten years.

Tags: Oil, Russia by Publius
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