2/24/2009

Vladimir Putin on government intervention in the economy

From the WSJ:

"Excessive intervention in economic activity and blind faith in the
state's omnipotence is another possible mistake.

True, the state's increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.

In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of business people, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing." . . .

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1 Comments:

Blogger Martin G. Schalz said...

Typical politician? Maybe, maybe not.

For once Dr. Lott, I must say that this, your post, is out of context.

You make a point of Mr. Putin's observation of the failure of the Soviet system, yet do not reference Mr. Putin's condemnation of the Capitalist system of the U.S.

Putin does speak of the current situation that we all face here in the U.S. "The existing financial system has failed. Substandard regulation has contributed to the crisis, failing to duly heed tremendous risks". We know this, and this is no surprise here, seeing as how he is a product of the former Soviet Union.

Here's some more... "Moreover, generated prosperity was distributed extremely unevenly among various population strata. This applies to differences between social strata in certain countries, including highly developed ones. And it equally applies to gaps between countries and regions.

A considerable share of the world's population still cannot afford comfortable housing, education and quality health care. Even a global recovery posted in the last few years has failed to radically change this situation.

And, finally, this crisis was brought about by excessive expectations. Corporate appetites with regard to constantly growing demand swelled unjustifiably. The race between stock market indices and capitalisation began to overshadow rising labour productivity and real-life corporate effectiveness."

Putin does make far more sense than does the current leadership of the U.S. I do admit, and yet our leaders want to try socialism?

Here's a selection of Mr. Putin's capitalist sensibilities. "In the past few years alone, we have implemented such projects as the Yamal-Europe and Blue Stream gas pipelines. Experience has proved their urgency and relevance.

I am convinced that such projects as South Stream and North Stream are equally needed for Europe's energy security. Their total estimated capacity is something like 85 billion cubic meters of gas a year.

Gazprom, together with its partners – Shell, Mitsui and Mitsubishi – will soon launch capacities for liquefying and transporting natural gas produced in the Sakhalin area. And that is also Russia's contribution to global energy security.

We are developing the infrastructure of our oil pipelines. The first section of the Baltic Pipeline System (BPS) has already been completed. BPS-1 supplies up to 75 million tonnes of oil a year. It does this direct to consumers – via our ports on the Baltic Sea. Transit risks are completely eliminated in this way. Work is currently under way to design and build BPS-2 (its throughput capacity is 50 million tonnes of oil a year."

Gotta sell our resources to Europe, at the best price possible, eh?

I accused Dr. Lott, of taking things out of context. I too, did the same thing. Personally, I think that all should just read the links that Dr. Lott provides, and get the entire picture, rather than pick and choose their data, as I just did...

We all have two eyeballs, two ears, and one mouth. If we just listen, and watch twice as much as we speak, perhaps we may learn something...

I do my best to generate thought, rather than rhetoric. In this post, I do so hope I succeed.

2/24/2009 5:31 PM  

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