Readers will have noticed that, in the La Russophobe articles that form the basis for these posts, the cited references often do not support the viewpoint at all. The hotlinks, like the headlines, are deliberately formulated for tabloid shock value, and the desperate reaches to maximize any negativity toward Russia are frequently comical in their maudlin overreach. Often, yellow-journalism rags like Novaya Gazeta and the more hysterical columnists of the Moscow Times offer plenty of poorly-researched, opinion-heavy rubbish to choose from, but when those sources don’t satisfactorily predict Russia’s imminent collapse, La Russophobe is not above spinning an essentially positive story into a virulently negative one. The key often lies in methodical follow-up of her references.
Take this excellent example. The headline shouts, “Russia For Sale – Cheap!”, and the subhead promises, “Buy One, Get One Free!” Follow the link that supposedly supports this Clearance Sale of the Motherland, and you will discover how much of Russia is actually for sale – not one inch.
The opening paragraphs make clear that nothing at all has been sold yet. If and when it occurs, it will represent an offer of minority shareholder stakes in major Russian nationalized companies, characterized by the markets as a “welcome shift towards privatization”. The article makes clear that the government will retain control of the economy. While it’s true Russia is struggling with a deficit this year, owing to energy prices, the shortfall this year is forecast to be around “$80 Billion”. Always a fan of the”go big, or go home” doctrine, La Russophobe reports the deficit is “speedily approaching $100 Billion”. Well, yes, I guess you could say that – it’s also approaching $500 Billion at exactly the same speed, or a Trillion, or whatever number you care to name. Exaggerating it by 20% certainly makes it sound more serious, doesn’t it? This, we are told, represents a “massive deficit”. Keep that in mind for later, when we look at America’s deficit.
But right now, let’s take a look at what the two nations have in the bank. Cash reserves are an important deficit offset, and let’s recall Russia chose to spend its way out of the recession. Today Russia has around $400 Billion in the bank, the world’s third-richest country after China and Japan. The USA is 18th, with around $80 Billion. That’s misleading – America’s economy is orders of magnitude bigger than Russia’s. However, there’s no getting around the fact that Russia has a great deal more cash on hand than does the United States. Why? The difference between fiscal prudence under Vladimir Putin and fiscal profligacy under George W. Bush. You can babble on all you like about Russia being reliant on energy – so what? The USA is reliant on energy as well; however, one is a net energy vendor, and one is a net energy buyer. Who’s the more vulnerable? You tell me.
Reading a bit further down in the Financial Post story (the Financial Post is an offshoot of the National Post, arguably Canada’s most conservative newspaper) we learn that the likely beneficiaries of this sell-off will be…..other Russian businessmen. What? How, then, does this justify the gleefully gloomy La Russophobe headline? How is this a disaster for Russia? In fact, western private investment would be beneficial, although the western big dogs often are not eager unless they can buy a controlling interest, and then do as they like with the company. As we discussed above, that’s not what is on offer here.
Just before we leave the Financial Post, look in the links sidebar to the right; you’ll find a related story entitled, “Foreigners to Keep Investing in Canada”. This sounds ominous – does this mean Canada is for sale, cheap? Apparently not. Apparently foreign investment is a good thing, that contributes to a stable economy and a solid bottom line. Therefore, attracting foreign investment should be a goal for Russia, and an essentially positive story has been spun into a virulently negative one, using deliberate falsehoods and relying on you not checking the references.
Why, I bet even America allows foreign investment. Sure enough – lookie here. Lenovo, a Chinese company, owns IBM’s PC and laptop unit. Smartmatic, a Dutch company that makes voting machines, owns Sequoia Voting Systems of California. Oooooo….look who’s another big customer: Hugo Chavez. I sure hope he doesn’t own shares in the company! NTT Communications of Japan owns Verio, a major U.S. web hosting service. Hey, I bet I know what would be fun! Investigating which country allows more foreign ownership. But I haven’t got time for that right now.
A good general rule for debunking Russophobic writing – always check the references. If there aren’t any, you know it’s just someone’s opinion; there may be something to it, maybe not. If there are references, read them thoroughly, and pay attention to their own credibility. Oftentimes you’ll find they don’t say anything like the Russophobic author suggests they do.
Oh, yes; I promised we’d take a look at America’s deficit forecast for 2010. I’m not a great fan of Wikipedia as a reference; but this seems to agree with other projections, and includes great graphic support illustrating particular problem areas. The American deficit is forecast to decline to $1.17 Trillion in 2010. That’s Trillion with a “T”.