Who Better to Oversee the Full Emergence of a Russian Oligarchy -- Mafia Style -- Than the Former KGB Agent, Vladimir Putin? Trump and Putin: Two Mob Plutocratic Peas in a Pod

The Kremlin ( Larry Koester )

The Kremlin (Larry Koester)

Originally posted in March, 2014


All this talk of a new cold war is just a lot of political blather coming out of DC due to the re-emergence of the neocons.

The reality is that there will be no war with the Russian Federation because Russia is now a raffish capitalist nation. Let us just remember Vladimir Putin was a lieutenant colonel in the KGB (for 16 years) at a time that they might have surpassed the CIA for lacking scruples, although probably not by much.

Since Putin assumed power in Russia in 2000, he has served as either president or prime minister of the Russian Federation, effectively being the most powerful man in the nation for the past 13 years.

There is no ideological conflict with Russia now, no wall to bring to down, no communism to overthrow. Under Putin, the Russian Federation has become a full-fledged member of the global capitalist system, only with the sleight variation that the Russian mafia plays an open role in the free market system. Instead of bankers crushing people with financial maneuverings, the Russian oligarchs allegedly prefer using their friends "Smith and Wesson" to resolve business disputes.

Who better to oversee the full emergence of Russian capitalism -- mafia style -- than the shirtless former KGB agent, Vladimir Putin?

There is much speculation that Putin assumed control of Crimea (where it is speculated that most residents identify with Russia more than the Ukraine) after NATO overreached by offering Ukraine membership in 2008.  Ukraine never became a NATO member due to internal political upheaval.  Yet, with the latest unrest and overthrow of pro-Russian leadership in Ukraine, Putin no doubt assumed that new Ukrainian leadership might turn to NATO as a way to intidimidate Putin.

During the confusion over the power shift in Ukraine this year, Putin sent Russian troops into the Crimea as a likely warning to the US and NATO that he was not going to let US and Europe get any closer to the Russian border.  He was, in essence, protecting his turf, just as a drug dealer might do.

This is not a confrontation over ideology; it is a turf war for hegemony.

Russia isn't reversing its global capitalism course, but there are natural resources, economic markets and the fear of further encroachment by US-Europe into Russia's backyard.  

As an example of how capitalism is entrenched by both sides in this standoff, the website Wall Street on Parade reports an unprecedented warning by White House Press Secretaty Jay Carney to try and discourage investment in Russian equities:

Now, once again, it seems that common sense has escaped the Masters of the Universe on Wall Street. Last Tuesday, Jay Carney, the Press Secretary of the Commander in Chief of the United States, told an assembly of reporters that he would not recommend investing in Russian equities right now, unless they were going to short them....

Carney was responding to a question from a reporter about the fact that the Russian stock market had seen a bounce over the past few days. Carney responded:

“I think it’s down for the year, and I think the ruble has lost its value, and I think that the long-term effect of actions taken by the Russian government in clear violation of the United Nations charter, in clear violation of its treaty commitments, that are destabilizing — and illegal — will have an impact on their economy all by themselves. They will also incur costs because of the sanctions that we and the EU have imposed, and there will be more actions taken under the authorities that exist with the two executive orders that the president has signed. So I wouldn’t — I wouldn’t, if I were you, invest in Russian equities right now, I think the… unless you’re going short.”

It’s pretty much unprecedented for White House Press Secretaries to gratuitously dole out stock advice and likely violates a whole raft of securities laws to recommend the dangerous idea of shorting stock to a room full of strangers, some of whom may be late on their mortgage payment — especially when you don’t even hold a securities license. 

But US capitalist masters of the universe struck back at Carney's attempted intervention in the global equity market, according to Wall Street on Parade:

Exactly one week later, Morgan Stanley, which boasts of  “$1.7 trillion in client assets, nearly 17,000 Financial Advisors and 740 locations,” reinstated its “Buy” rating on Russian equities....

What could possibly account for Morgan Stanley taking such a radical position against the world’s only super power? According to Morgan Stanley’s web site, since 1994 the company has been “building relationships and expanding its product offerings in Russia. Morgan Stanley did not leave Russia after the 1998 financial crisis, and its uninterrupted presence has fostered trust and credibility with key governmental and corporate decision makers.”

In addition, says the company, it has recently established “a local trading platform and opened a Russian subsidiary bank in October 2005 allowing it to provide a full suite of financial services to its clients in Russia” and it has “managed most of the highest profile and most successful transactions in equity, mergers and acquisitions and debt in the Russian market.”

Perhaps unbeknownst to Press Secretary Carney, when one recommends shorting Russian equities, one may be imperiling a chunk of the U.S. stock market as a goodly number of Russian ETFs (Exchange Traded Funds) and outright Russian equities have been afforded entrance to our stock markets by our own Federal regulators.

In short, Russian capitalism is so integrated into world capitalism, including investors in the US, that Carney is suggesting - if you accept the Wall Street outlook - that financiers bite off their nose to spite their face.   

I was visiting the Bill Moyers office and studios last summer and my host took me out for lunch.  He pointed to a very tall skyscraper being erected midtown and told me it is nicknamed the "Russian mafia tower" because it was being built with investment funds from the Putin-affiliated Russian oligarchy.

So with Russia investing in real estate in Manhattan, and Wall Street barons investing in Russia despite clumsy White House warnings, don't expect a military war with Russia anytime soon.  It is one big capitalist family now.

The US and Europe just have to remember that Putin has a thuggish ego and doesn't like the Russian Federation feeling cramped or bulllied.

Once that is settled, capitalism will continue blooming between US-Europe and Russia. It hasn't effectively stopped.  

Russia isn't an adversary; it is a growing partner with the crooks on Wall Street.


Mark KarlinComment