4 ms·

Same reason why the USSR collapsed, BTW. Oil prices collapsed by mid 80s, and the USSR couldn't survive for very long without those export revenues. Gorbachev t

by m0zg 7y ago

Same reason why the USSR collapsed, BTW. Oil prices collapsed by mid 80s, and the USSR couldn't survive for very long without those export revenues. Gorbachev took over just as oil prices have hit the bottom. And if you look at the same graphs, you will see that Putin's economic recovery was largely sustained by the upward trend in hydrocarbon prices. To this day Russia has not even begun to diversify its economy.

rm_-rf_slash 7y ago
A cynical counterargument would be to point to the taxpaying cybercriminals to show evidence towards Russia’s burgeoning tech sector. https://slate.com/technology/2018/02/why-the-russian-government-turns-a-blind-eye-to-cybercriminals.html https://slate.com/technology/2018/02/why-the-russian-governm...
- m0zg 7y ago
  I'm pretty sure criminals pay no taxes on their ill gotten gains in Russia. Heck, most "legal" businessmen there are forced by the extreme oil-oriented taxation regime to maintain "gray" books and only pay taxes on revenues that aren't under the table. Normal businesses can't really survive the kinds of taxes levied on oil/gas monopolies. It is far easier to pay off your local friendly government tax agent who would then miraculously buy a Maybach and a villa in Switzerland on $20K/yr government salary.
mattrp 7y ago
Technically the ussr collapsed because externally it had to settle accounts in the US dollar and low oil prices - it’s only export - couldn’t provide sufficient hard currency to do this but your point is still correct. Reagan knew this and leveraged it to the maximum even to the point of ruining our own oil economy and increasing our reliance on and strengthening our “allies” in the Middle East some of whom we later had to topple and some of whom we still struggle with today. It’s notable that this lesson wasn’t lost on China who long resolved that it would never run out of hard currency the way the USSR did. Russia on the other hand... as you point out they can’t seem to realize a diversified economy is one that collaborates and is open.
- m0zg 7y ago
  It's even worse than that. The ruling elite knows that on the one hand it's non-removable, but on the other its days are numbered (Putin is quite old and he won't live forever; what happens after he dies is anybody's guess), so they pillage and burn whatever they can while they can, with impunity. Diversifying the economy would require a long term view. The folks currently in power don't even realize anything is wrong per se - oil and gas money works pretty well for them.

by m0zg 7y ago

rm_-rf_slash 7y ago

A cynical counterargument would be to point to the taxpaying cybercriminals to show evidence towards Russia’s burgeoning tech sector. https://slate.com/technology/2018/02/why-the-russian-government-turns-a-blind-eye-to-cybercriminals.html https://slate.com/technology/2018/02/why-the-russian-governm...

m0zg 7y ago
I'm pretty sure criminals pay no taxes on their ill gotten gains in Russia. Heck, most "legal" businessmen there are forced by the extreme oil-oriented taxation regime to maintain "gray" books and only pay taxes on revenues that aren't under the table. Normal businesses can't really survive the kinds of taxes levied on oil/gas monopolies. It is far easier to pay off your local friendly government tax agent who would then miraculously buy a Maybach and a villa in Switzerland on $20K/yr government salary.

mattrp 7y ago

Technically the ussr collapsed because externally it had to settle accounts in the US dollar and low oil prices - it’s only export - couldn’t provide sufficient hard currency to do this but your point is still correct. Reagan knew this and leveraged it to the maximum even to the point of ruining our own oil economy and increasing our reliance on and strengthening our “allies” in the Middle East some of whom we later had to topple and some of whom we still struggle with today. It’s notable that this lesson wasn’t lost on China who long resolved that it would never run out of hard currency the way the USSR did. Russia on the other hand... as you point out they can’t seem to realize a diversified economy is one that collaborates and is open.

m0zg 7y ago
It's even worse than that. The ruling elite knows that on the one hand it's non-removable, but on the other its days are numbered (Putin is quite old and he won't live forever; what happens after he dies is anybody's guess), so they pillage and burn whatever they can while they can, with impunity. Diversifying the economy would require a long term view. The folks currently in power don't even realize anything is wrong per se - oil and gas money works pretty well for them.