RatcliffeBlog - Mitch Thinking Out Loud

How Do You Spell "Capital Flight"

I guess I am beginning to understand George Bush's statement that he looked into Vladimir Putin and believed he saw a man with whom he can do business. Mr. Bush clearly has a skewed view of reality, because Putin is a guy who only does business on his terms.

President Putin, who runs his country as a quasi-dictatorship at this point, has jailed one of "the oligarchs," the cadre of super-rich quasi-mobster businessmen who dictate most of the economic activity in Russia because he threatened to contest Putin's political power. In one of those trumped-up sounding charges of corruption, Putin has had Mikhail Khodorovsky imprisoned on corruption charges as Khodorovsky's company, Yukos, the world's fourth largest oil company, was in the midst of negotiations with foreign investors to sell part of the firm. The sale would have freed Yukos from the strict control exerted by Putin.

Russians, who have had to endure the concentration of wealth and power in the hands of a very few people in the wake of the collapse of the Soviet Union, another centralized regime, are going to pay for this kind of conceit on Putin's part with an even longer economic winter. It also suggests that, should the U.S. and Russia come to some geopolitical loggerhead, the only option will be a catastrophic showdown between Bush and Putin, neither of whom seem to understand anything other than blunt force.