Kenneth Rogoff is Professor of Economics and Public Policy at Harvard University, and was formerly chief economist at the IMF. He wrote an article for Project Syndicate titled Russia’s Skeptical G8 Partners. Here’s a example of the professor’s economic professionalism:
Why wasn’t Chinese president Hu Jintao, whose country’s economy is the world’s second largest (when measured at world prices), given a seat at the table instead of Putin? After all, even with all its energy resources, and even with today’s sky-high oil and gas prices, Russia’s national income is only about the size of Greater Los Angeles
Prof. Rogoff takes China’s GDP measured in purchasing power parity dollars and compares it to Russia. Well, prices on goods and services in China are definitely many times lower then in Russia or in America (one only needs to visit Walmart). Then he takes Russia’s GDP measured in official exchange rate dollars and compares it to Greater Los Angeles. But even here Prof. Rogoff is twisting facts. Official exchange rate GDP of Russia is $740 billion but GDP of Greater LA is $500 billion. Are 740 and 500 "comparable"?! I envy Prof. Rogoff's students - it must be a cakewalk writing term papers in his class.
http://www.lawa.org/news/newsDisplay.cfm?newsID=91
Citing data provided by the Southern California Association of Governments (SCAG), the study projects a Greater Los Angeles area population of more than 21 million people, a work force of 9.9 million men and women, and a gross domestic product of more than $600 billion by the year 2015. Today’s figures are 15 million people, 6.87 million employed, and $500 billion GDP.
IMHO even by 2015 Greater LA's GDP will be uncomparable with current GDP of Russia.
Now I have a great counter-argument for Prof. Rogoff. After all, even being the greatest power in the world the US GDP per capita is at the level of US$ 41 800 while a god forgotten, permafrost bound region of Ymalo-Nenetsk in Siberia boasts US$ 52 000 GDP per capita.
For your information – some facts from CIA Factbook:
China
GDP (purchasing power parity):
$8.859 trillion (2005 est.)
GDP (official exchange rate):
$2.225 trillion (2005 est.)
GDP - real growth rate:
9.9% (official data) (2005 est.)
GDP - per capita (PPP):
$6,800 (2005 est.)
Russia
GDP (purchasing power parity):
$1.589 trillion (2005 est.)
GDP (official exchange rate):
$740.7 billion (2005 est.)
GDP - real growth rate:
6.4% (2005 est.)
GDP - per capita (PPP):
$11,100 (2005 est.)
Tuesday, June 27, 2006
Monday, June 26, 2006
Oil Addiction
A week ago USA Today published an editorial titled “Oil Addiction”. The author laments that oil addiction makes US government too soft of dictatorial and tyrannical regimes. Of course, Russia is included as an example of an oil rich dictatorship. In truly Puritanical tradition the author appeals to the superiority of moral values over materialistic needs such as consuming energy. I doubt that if America refuses to buy oil from dictators, such as Saudi Arabia, Venezuela, Iran, etc. its citizens rejoice and stop driving SUVs, using air-conditioning and start paying triple utility bills. The author writes:
Much of the problem is driven by the USA, which accounts for a quarter of the world's oil consumption. There are no easy solutions. Increased gas taxes are a tough sell. Domestic drilling is inadequate to the task. And practical alternatives to oil might or might not materialize. But as unappealing as these may be, ignoring troubling world developments is worse.
One place to start is to recognize that the central question is not what we should pay for energy but how we should pay for it. If we can begin to shift the hidden costs away from the taxpayers and onto energy consumers, the true nature of our addiction will be more visible.
Somehow US Today editors and many other dictatorships’ watchers forget about the other side of the problem with high oil prices. Very high oil prices – or better said constantly increasing oil prices – are beneficial for contemporary American economic policies. Oil trade in the world is done in American dollars – green pieces of paper printed in the US. Since March 2006 the world doesn’t even know how much green paper America currently prints. But as long as increased amount of green paper is happily consumed by international oil traders due to increasing oil prices, everything is ok. America can afford its tremendous budget deficit not fearing inflation.
There’s a traditional scary story for Russia – your economy will collapse when oil prices go down. Probably it’s true. But low oil prices will also make a lot of American green paper useless – it will flood back to its native land. Is America ready to live with huge budget proficit? Is it ready to live with double digit inflation? Ironically the financial crisis could also solve the problem of oil addiction – unemployed don’t drive SUVs even if gas is very cheap.
Much of the problem is driven by the USA, which accounts for a quarter of the world's oil consumption. There are no easy solutions. Increased gas taxes are a tough sell. Domestic drilling is inadequate to the task. And practical alternatives to oil might or might not materialize. But as unappealing as these may be, ignoring troubling world developments is worse.
One place to start is to recognize that the central question is not what we should pay for energy but how we should pay for it. If we can begin to shift the hidden costs away from the taxpayers and onto energy consumers, the true nature of our addiction will be more visible.
Somehow US Today editors and many other dictatorships’ watchers forget about the other side of the problem with high oil prices. Very high oil prices – or better said constantly increasing oil prices – are beneficial for contemporary American economic policies. Oil trade in the world is done in American dollars – green pieces of paper printed in the US. Since March 2006 the world doesn’t even know how much green paper America currently prints. But as long as increased amount of green paper is happily consumed by international oil traders due to increasing oil prices, everything is ok. America can afford its tremendous budget deficit not fearing inflation.
There’s a traditional scary story for Russia – your economy will collapse when oil prices go down. Probably it’s true. But low oil prices will also make a lot of American green paper useless – it will flood back to its native land. Is America ready to live with huge budget proficit? Is it ready to live with double digit inflation? Ironically the financial crisis could also solve the problem of oil addiction – unemployed don’t drive SUVs even if gas is very cheap.
Wednesday, June 21, 2006
Circles of Hate
Kirill Pankratov wrote a review of Gary Shteyngart’s book “Absurdistan” in eXile. Here are some of his thoughts about peculiarities of American hate that I fully support:
There is a strict differentiation in the American media and cultural space con-cerningz whom you can hate or despise and how. One must be very careful with anybody non-white, of course. Blacks are strictly off-limits. Asians are too, for the most part. You can't say anything truly bad about Jews (you can criticize Israel's policies as much as you'd like to, but you risk being labeled an anti-Semite). You can make fun of Germans, but they are so neutered and inoffensive these days it's like making fun of pigeons. It is pretty safe to hate and mock French. But then again, how much can you milk tired jokes about "surrender monkeys" and rude garcons in Parisian restaurants?
But it is totally permissible to hate and despise Russians. It is as if a huge sign is flashing over the media landscape: "Here you may shit as much as you want!" There is a very small number of roles that Russians can play in American popular art vicious mafia thugs and their molls, obnoxious fat apparatchiks, half-starving babushkas, raving alcoholics, pitiful girls exploited for sex trade, or the occasional brave pro-Western dissident or a spy. Any kind of "normalcy" is simply forbidden. There are a few objective reasons for that:
1) During many decades of the Cold War the West conditioned its own plebs to hate and dehumanize the "savage Russian enemy," so this line produces automatic brand-recognition and little mental resistance; there is no "Russian lobby" in the US, but many ethnic anti-Russian lobbies (e.g. Ukrainian, East-European, Jewish, Baltic) were nurtured for decades;
2) Russians are essentially white Europeans (even if alluded to as "Asiatic despotism" on a proper occasion), so hating and despising them is safe from the dreaded "racism" label;
3) Russians are not known for mobs rampaging through streets because of some prophet caricatures published in an obscure newspaper, nor they likely to issue fatwas to kill offending authors, or actually cut their throats; so it is safe in a cowardly way.
It was a real shock to meet several people who were extremely tactful and delicate when talking about evident cases of black racism but at the same time feel absolutely free to make spiteful and malicious generalizations about Russian ‘chicks’ or Russian “rudeness”. And they knew that I am Russian and that I am insulted by such remarks. Nobody knows how much hate brawls in souls of always friendly smiling PC talking people. В тихом омуте черти водятся.
There is a strict differentiation in the American media and cultural space con-cerningz whom you can hate or despise and how. One must be very careful with anybody non-white, of course. Blacks are strictly off-limits. Asians are too, for the most part. You can't say anything truly bad about Jews (you can criticize Israel's policies as much as you'd like to, but you risk being labeled an anti-Semite). You can make fun of Germans, but they are so neutered and inoffensive these days it's like making fun of pigeons. It is pretty safe to hate and mock French. But then again, how much can you milk tired jokes about "surrender monkeys" and rude garcons in Parisian restaurants?
But it is totally permissible to hate and despise Russians. It is as if a huge sign is flashing over the media landscape: "Here you may shit as much as you want!" There is a very small number of roles that Russians can play in American popular art vicious mafia thugs and their molls, obnoxious fat apparatchiks, half-starving babushkas, raving alcoholics, pitiful girls exploited for sex trade, or the occasional brave pro-Western dissident or a spy. Any kind of "normalcy" is simply forbidden. There are a few objective reasons for that:
1) During many decades of the Cold War the West conditioned its own plebs to hate and dehumanize the "savage Russian enemy," so this line produces automatic brand-recognition and little mental resistance; there is no "Russian lobby" in the US, but many ethnic anti-Russian lobbies (e.g. Ukrainian, East-European, Jewish, Baltic) were nurtured for decades;
2) Russians are essentially white Europeans (even if alluded to as "Asiatic despotism" on a proper occasion), so hating and despising them is safe from the dreaded "racism" label;
3) Russians are not known for mobs rampaging through streets because of some prophet caricatures published in an obscure newspaper, nor they likely to issue fatwas to kill offending authors, or actually cut their throats; so it is safe in a cowardly way.
It was a real shock to meet several people who were extremely tactful and delicate when talking about evident cases of black racism but at the same time feel absolutely free to make spiteful and malicious generalizations about Russian ‘chicks’ or Russian “rudeness”. And they knew that I am Russian and that I am insulted by such remarks. Nobody knows how much hate brawls in souls of always friendly smiling PC talking people. В тихом омуте черти водятся.
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