Misinformation About Russia In The Mainstream Media by Prosperity Capital Management

Also see Mattias Westman, founding partner at Prosperity Capital Management on the Sino – Russian Axis

A hack job

Having invested into Russia and the Former Soviet Union for twenty years, it is fair to say that we have learnt to treat much of what the mainstream media writes and says about the region with considerable and justifiable suspicion. Many, if not most, newspapers publish uninformed articles on Russia and, usually, we take no heed. Sometimes, outright misinformation and/or manipulated data are put forward and, generally, we let it slide. We know well that it is not unusual for Russia to be used to score political points and that is of minor concern to us as, more often than not, we do not have a dog in that particular fight.

Russia
Image source: Wikimedia Commons
Russia

With that said, whilst we do not intend to make an overly regular occurance of it, from time-to-time we come across articles that are so egregious that they warrant being made an example of to highlight the stark gap between reality and perception with respect to Russia and the Former Soviet Union.

Three-times Pulitzer Prize awarded, foreign affairs writer, Mr Thomas L. Friedman’s recent Op-Ed piece in The New York Times epitomises hack writing in our humble opinon and we would like to take the time to correct the misinformation put forward on Russia – deliberately ignoring the article’s focus on the US Presdential Election and its aimed discrediting of Mr Donald Trump.

Mattias Westman

Founder

Donald Trump’s Putin Crush

Thomas L. Friedman

The New York Times, 14 September 2016

Thomas L. Friedman, The New York Times

When it comes to rebutting Donald Trump’s idiotic observation that Vladimir Putin is a strong leader — “far more than our president has been a leader” — it is hard to top the assessment of Russian-born Garry Kasparov, the former world chess champion, which The Times’s Andrew Higgins quoted in his story from Moscow: “Vladimir Putin is a strong leader in the same way that arsenic is a strong drink. Praising a brutal K.G.B. dictator, especially as preferable to a democratically elected U.S. president, whether you like Obama or hate him, is despicable and dangerous.”

Mattias Westman, Prosperity

Whilst much of this is hyperbole and largely the author sharing his political views, it is at least reasonable to comment on the description of Putin as a “brutal K.G.B. dictator”. Last Sunday, Russia held her parliamentary elections, in which all parties were allowed to participate. The various parties debated one another on television for hours and there are no indications of serious voter fraud. Russia has many oppositionally-minded newspapers, radio stations and even one television channel. The internet is entirely unencumbered. One could go on and on. Whilst Russia is certainly not a perfect democracy, to refer to it as a dictatorship – brutal or otherwise – is simply ludicrious and highlights that, Friedman, does not have any idea of what he is speaking about.

Thomas L. Friedman, The New York Times

Indeed, Kasparov’s point cuts to the core of what is so scary about a Trump presidency: Trump is what The Economist has called “the leading exponent of ‘post-truth’ politics — a reliance on assertions that ‘feel true’ but have no basis in fact,” and, sadly, “his brazenness is not punished, but taken as evidence of his willingness to stand up to elite power.” When politics becomes “like pro-wrestling,” society pays a huge cost, The Economist added, because any complex explanation of any problem is dismissed as experts just trying “to bamboozle everyone else.”

Mattias Westman, Prosperity

Here, the glasshouse, so to speak, is being placed into serious danger…as we will see later.

Thomas L. Friedman, The New York Times

So Trump just skips from blaming Mexican immigrants for high murder rates, to President Obama for inventing ISIS, to China for creating the concept of global warming, to thousands of Muslims in New Jersey for celebrating 9/11, to Obama for really having been born in Kenya, to an I.R.S. audit for preventing him from showing us his tax returns — which would probably show that he paid no taxes.

Every word of it is a lie that most in his own party won’t call out. Can you imagine the damage Trump could do to the fabric of our democracy if he had the White House pulpit from which to preach his post-truth politics — how it would filter down into public discourse at large and infect every policy debate?

“Donald Trump has not only brought haters into the mainstream, he has normalized hate for a much broader swathe of the population who were perhaps already disaffected but had their grievances and latent prejudices held in check by social norms,” observed Josh Marshall, publisher of TalkingPointsMemo.com, in his blog on Saturday. “This isn’t some minor point or critique. It’s a fundamental part of what is at stake in this election, what makes it different from Obama v. Romney. … This election has become a battle to combat the moral and civic cancer Trump has [been] injecting into the body politic.”

Mattias Westman, Prosperity

These three paragraphs relate to US politics which, for the purpose of this commentary, does not concern us.

Thomas L. Friedman, The New York Times

Think about the ridiculous trope Trump has been peddling, that if only Obama were as “strong” as Putin. Well, if he were, here are some of the benefits America would enjoy:

Mattias Westman, Prosperity

Ok, let’s get started…

Thomas L. Friedman, The New York Times

A 2015 report in The Moscow Times noted that “life expectancy in Russia has been growing several times slower than in the rest of the world for the past 20 years, according to a research by the U.S.-based Institute for Health Metrics and Evaluation.” That coincides almost exactly with Putin’s leadership of the country. The article explained, “During the period of 1930-2013 [life expectancy] only grew by 1.8 years in Russia, while the global average number increased by 6.2 years, pushing Russia out of the top 100 countries with the highest life expectancy and placing it in 108th position — between Iraq and North Korea.”

Mattias Westman, Prosperity

This is very interesting. Firstly, I hold some doubt that a country’s leader has such a direct influence over the life expectancy of that country’s population, but if one accepts this as a given, then perhaps one can at least try to determine when such influence would start to be felt. Here, Friedman is suggesting that a decade before coming to power would be reasonable. I would argue that it is more realistic that the earliest juncture would be around two years after coming to power. These sorts of things generally carry considerable inertia and, as such, it is unlikely that the effect of a leader’s hand would be felt immediately and I would be happy to take any bet that it is not felt ten years prior to the leader taking office. One may wonders why Friedman chose to use the ‘ten years before number’. If one measures the change in life expectancy in Russia after Putin came to power, say from 2002 until 2015, it turns out that it has risen by more than six years – one of the highest rates of improvement recorded anywhere in the world.

Thomas L. Friedman, The New York Times

Why don’t we have a leader strong enough to slow gains in the life expectancy of an entire nation?

Mattias Westman, Prosperity

Not to be a pedant, but with the opposite of Friedman’s supposition having been proven, does this statement mean that, knowing the facts, perhaps he would think that Putin is a strong leader after all?

Thomas L. Friedman, The New York Times

An investigation by the World Anti-Doping Agency released last summer found that Putin’s Russia was operating a state-sponsored doping scheme for four years across the “vast majority” of Summer and Winter Olympic sports. According to a July 18, 2016, BBC report on the investigation, “Russia’s sports ministry ‘directed, controlled and oversaw’ manipulation of urine samples provided by its athletes.” Scores of Russian athletes were barred from the Rio Olympics as a result.

Mattias Westman, Prosperity

‘Doping’ in sport could be a long discussion. Far from defending ‘doping’, one can point to the fact that there have been more documented cases of ‘doping’ in the US than there have been in Russia. Naturally, this is not an excuse and two wrongs do not make a right, but singling out Russia in this instance has a political tinge to it that cannot be ignored. The banning of all Russia’s Paralympic athletes from Rio – the overwhelming majority of whom have never been implicated in any ‘doping’ – is in my view, a cruel collective punishment that cannot be justified. Many of these athletes have overcome great hardship and robbing them of their opportunity to participate in the Olympics is unconciable.

Thomas L. Friedman, The New York Times

I get it: A weak president doesn’t dare tamper with his Olympic athletes. A strong president dopes up his Summer and Winter Olympic teams for multiple Games.

Since Putin invaded Ukraine to shore up his faltering domestic popularity, and then got hit with Western economic sanctions, the dollar-ruble exchange rate has gone from around 36 rubles to the dollar to 65 rubles to the dollar. Russia’s economic growth fell 3.7 percent in 2015, and the I.M.F. predicts it will fall 1 percent in 2016. Inflation in Russia doubled to 15.4 percent in 2015, compared with 7.8 percent in 2014. A World Bank report quoted by the BBC in April said “the number of Russians living below the poverty line will grow at its fastest pace in more than 17 years in 2016.”

Mattias Westman, Prosperity

There is no indication that Russian action in Crimea was, in any way, done to shore up faltering domestic popularity. In fact, Putin’s domestic popularity has always been at levels that most other politicians could only dream of. It is, perhaps, not worthwhile revisitng the full explanation on the Crimean matter again here, as we have covered it extensively in previous Prosperity Newsletter and Prosperity Analysis pieces, which are available on request.

It is true that the ruble has declined from 36 to 65 against the US dollar over this time period, but that is clearly linked to a dramatic change in the terms of trade, where oil prices fell by some 60%. In our view, allowing exchange rates to fluctuate with the terms of trade is a correct policy and I believe that Friedman is normally a supporter of this approach. Sanctions have had very limited impact on the currency.

It is also correct that the decline in oil prices and the economic sanctions on Russia have led to a fall in GDP. This is unsurprising. Similar effects have been seen in other commodity exporting countries. Most economists estimate that growth has resumed in Russia in the second half of this year and that it will strengthen further next year. This type of ‘J-curve’ effect is not uncommon when a currency depreciates.

On the matter of inflation, there is a more egregious use of data. Inflation rose significantly in 2015 on account of the effect of a depreciating currency, but this year Russia is seeing strong disinflation. In fact, it is likely that by the end of the year, Russia will record its lowest ever inflation rate. Looking forward, we expect that Russia will be close to hitting her target of 4% inflation in 2017.

2015 and 2016 (to date) have the fastest rise in poverty in Russia this century, but this is mainly due to the fact that poverty levels have fallen almost every year during this period. In fact, despite the recent uptick, national poverty levels in Russia are 54% lower than when Putin became President at the end of 1999.

Thomas L. Friedman, The New York Times

It takes a strong leader to shrink his currency by 50 percent, double inflation and vastly accelerate poverty in just two years. A weak leader could never do that.

Mattias Westman, Prosperity

What can we say? Friedman’s article is certainly ‘post truth’! I do not know if Friedman used his manipulated numbers because they ‘feel true’ or if he was aware that they were not true and manipulated them for political purposes. I suppose only he (and his editor) knows. In any case, to us at least, Friedman’s reasoning makes a very good case for the opposite of the point he is trying to make.

Thomas L. Friedman, The New York Times

Putin is a leader who is always looking for dignity in all the wrong places — by investing in bullying wars, not in his own people; by jailing and likely poisoning his opponents; and by being so insecure that he just shut Russia’s last independent polling firm after it indicated that many Russians may not vote in the coming parliamentary elections because, among other things, they think they’re “rigged.”

Mattias Westman, Prosperity

It is tempting to discuss which country has engaged in the most futile and disastrous wars since 2000, but I think most of our readers already know this. Not even what Friedman writes about the polling firm is true! Putin has not shut Levada down and they did not show weak results for United Russia. Levada’s results were quite similar to those of other polling organisations. It is true that participation in Russian elections has declined, but notably not yet to the level of the US.

Thomas L. Friedman, The New York Times

This is the man Donald Trump admires more than our own president.

Mattias Westman, Prosperity

I suppose this statement carries Friedman’s principal point. Perhaps in his eyes, misusing and manipulating data on Russia to support his argument is a small price to pay – even if it means moving to the dark side of ‘post truth’ journalism. Friedman is one of the best regarded and famed journalists in the world at present. This ‘hack job’ is sad to see.