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Culture War Roundup for the week of November 4, 2024

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despite signs that the Russian economy could well collapse within a year.

What signs?

According to the World Bank, Russia is now a high-income country. Real GDP per capita growth was at 3.6%! If an Australian politician could deliver that kind of growth, they'd be heralded as a living god and probably get Putin-level approval ratings (as opposed to negative approval ratings).

https://www.worldbank.org/en/about/leadership/directors/eds23/brief/russia-was-classified-as-high-income-country

https://carnegieendowment.org/russia-eurasia/politika/2024/05/russia-war-income?lang=en

Even the Carnegie Endowment is struggling to find much bad to say about Russian wages growth. If Biden had delivered positive real wages growth over his term, I think he would still be in office today. Just look at the chart on page 25. Apparently the crushing impact of Western sanctions in 2022 was less harmful to the Russian worker than whatever was going on in America (or the UK, Germany, Australia...) with inflation. And in 2023 Russia left the US in the dust in real wages.

https://www.ilo.org/sites/default/files/wcmsp5/groups/public/%40dgreports/%40inst/documents/publication/wcms_908142.pdf

China's struggling, failing economy was massively outperforming the vibrant, dynamic US economy in 2022 and 2023, presumably it's still doing so. Real wages, real GDP per capita are rising much faster in China and Russia. They're rising from a lower basis level but are rising fast nonetheless. Yet all we see in newspapers and television is stories of disaster, stagnation and decline over there.

This data on US wages doesnt really match what the US numbers show. Real wage growth was slower under Biden than Trump, but definitely was positive in 2023 (perhaps not on 2022 but only as an artifact of stimulus). https://fred.stlouisfed.org/series/LES1252881600Q#0

Good question. Basically Russia has a war economy right now, and all the military production counts as GDP, which gives the impression of growth. This hides the issues in the economy.

Russia is facing down stagflation. Wages have been artificially inflated because military industries are being propped up, with the consequence that other industries have to match those salaries in order to find workers. This has led to acute labor shortages in many industries. Meanwhile the Ruble is facing serious inflation. The central bank has raised the key rate to 21%, the highest in modern history, but nominal inflation remains at 8-9%. Russia's trading partners are no longer as willing to accept payments in Rubles, for a while now the majority of trade with China has been in the Yuan and it's getting worse. Nobody wants to hold Rubles.

Though, I'm not an expert on the economic side of this problem. One of the sources I trust most on Russia-Ukraine is Anders Puck Nielsen, and he has a good breakdown here: https://www.logicofwar.com/russias-war-economy-is-unsustainable/

According to the World Bank, Russia is now a high-income country. Real GDP per capita growth was at 3.6%!

The World Bank also says that the year before, 2022, saw real GDP per capita decline of -2.2 %. And that for 2023 total GDP and GDP per capita were both lower than in 2022.

https://data.worldbank.org/country/russian-federation?view=chart

If an Australian politician could deliver that kind of growth, they'd be heralded as a living god and probably get Putin-level approval ratings

According to the World Bank Australia saw real GDP per capita growth in 2023 at 3%, and in 2022 it was at 4.3%.

If you're measuring the Russian economy in current USD, then sure there was a GDP per capita decline in 2023. But the Russian economy also apparently shrank about 40% from 2013 to 2016, an economic apocalypse comparable only to the 1990s. Exchange-rate games don't really matter for this.

https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=AU

I see 0.6% for 2023 and that's not even real growth, that's just nominal growth. We've been in per-capita recession for some time now.

https://www.macrobusiness.com.au/2024/05/australias-per-capita-recession-worsens/