Saturday, March 01, 2014
Costs? Nope.
Obama is promising "costs" if Russia invades part of Ukraine. Obviously we're not going to do anything militarily; we haven't been able to do that since 1945.
Well, how about economic costs? I wasn't sure about this. I had the impression that Russia never managed to re-organize after 1990. If that is true, Russia must be depending on Euro money and industry.
Nope. My impression was obsolete. We don't hear anything about modern Russian industry, but in fact it's doing just fine.
From Wiki on the Russian auto industry:
The Soviet Union possessed a large automotive industry. In late 1987, the industry produced 2 million cars, satisfying 45% of the domestic demand.[2] But after the dissolution of the Soviet Union the industry faced a crisis due to competitive foreign imports. ... In the early 2000s, the Russian economy recovered. Macroeconomic trends were strong and growing incomes of the population led to a surging demand, and by 2005 the Russian car market was booming. ... The value of the Russian market grew at a brisk pace: 14% in 2005, 36% in 2006 and 67% in 2007—making it the world's fastest growing automotive market by 2008. Russia's automotive industry was hit hard by the late 2000s recession, which started in the United States. Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in 2009. Lorry production fell from 256,000 to 91,000 in the same period. In late 2008, the Russian government introduced protectionist measures, worth $5 billion, to improve the situation in the industry. This included $2 billion of bailouts for troubled companies and $3 billion of credits for buyers of Russian cars. The tariffs for imported foreign cars and trucks were increased to a minimum of 50% and go up to 100%. ... Sales of Russia's largest carmaker Avtovaz doubled in the second quarter of 2010 as a result, and the company returned to profit. ...By the end of 2010, automotive production had returned to pre-crisis levels.Other industries have a similar story. Quite simply, Russia is self-sufficient. It makes everything it needs. There's no way we can inflict meaningful "costs" on a self-sufficient country. And also quite simply, PROTECTIONISM WORKS. A lesson we desperately need to learn, but we won't learn it. We are positively the stupidest country in the history of the universe. ¶ 4:00 AM
