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How to Write an Op-ed about Russia in the NYT

June 7, 2011

I really shouldn’t waste my time on such matters, but I haven’t written on Russia in a while, so I might as well. As a caveat, yes, I believe Russia is a plutocracy and I don’t “support” (whatever that means) that socio-economic arrangement in any society.

Joe Nocera, a business journalist at the NYT, is upset about the state of capitalism in Russia and he let us know today in his op-ed, “How to Steal a Russian Airport.” Nocera is perturbed that the privately owned Domodedovo Airport, which was to go public (but there were not enough investor interest), is now going to be bought up by an oligarch/former gov. official related to the Putin clan. For some reason, this incensed Mr. Nocera. Why? For starters, Domodedovo’s was an example of model capitalism in Nocera’s eyes (he actually says, ” This is how the textbooks say capitalism is supposed to work”) and this back-door deal is evidence of how Russia’s plutocrats do not respect the “rule of law.” In no particular order, let’s take a quick look at some of the claims and ideas in this op-ed.

1) Rule of law? What law is he referring to? Russian law? Vague, unenforced international law regarding financial institutions that only applies to countries with no political clout? The “law of the market”? No one knows because he doesn’t tell us.

2) How on god’s green earth does a guy who lives and spends his life covering the most criminal financial system in the world get off lecturing the Russians on “crony-capitalism” of all things? This is the same guy who wants to cut slack to Wall Street criminals. Yes, Wall. St. criminals. I bet Norcera knows many of them himself. I’m not arguing he should never comment on Russia, but if you’re going to criticize the Russians for crony-capitalism, you better hope you’ve already aimed that gun at your community and pulled the trigger more than a few times. That’s his job – as a journalist. Though, of course, the modifier “business” tends to have a profound effect on the “journalism” part of the title.

3) If Nocera is bothered by crony-capitalism (and leaders who “thumb their noses at the rule of law”) I suggest he look at list of people who run Wall St.’s most important firms, then look at a list of people in the US Congress, Fed, and White House economic teams over the last, say, 20 years. Just set both pieces of paper next to each other on a table. Look at one and then look at the other. That should keep him occupied long enough to stop writing about Russia.

4) Nocera can’t even stay consistent in his tantrums about Russia, let alone in comparison with the US! He has proven himself as someone who knows little or nothing about Russia over the last twenty years. This is most clearly demonstrated in his support for the criminal-oligarch, Mikhail Khodorkovsky (in Nocera’s defense, maybe he wasn’t outright defending Khodorkovsky since I’m having trouble understanding a lot of the op-ed) . So Khodorkovsky, who stole Russia’s national resources at “bargain prices” in 1990s is worth defending, but when a Putin oligarch would like to do the same, there’s no respect for the “rule of law” (again, what rule of law in Russia?).

5) The reference to off-shore tax havens is too good to pass up. It turns out: “The East Line Group’s ownership is byzantine, involving several companies registered in the Isle of Man.” So the idea the Russian government wants to reign in this company and understand how they work or what’s on their books is preposterous in the mind of Nocera. For he enlightens us, “offshore ownership is almost as common in Russia as the corporate structure is in America; even state-owned companies often use an offshore structure.” Right, textbook capitalism often says: “It is always best to have byzantine ownership of your company and locate it on an island somewhere so you’re not subject to many inconvenient laws and always make sure you don’t pay taxes in the countries in which they operate, despite taking advantage of subsidized products.” That’s my favorite chapter of Capitalism 101.

6) What’s that you say? The privately owned Domodedovo, despite basing it’s headquarters on the Isle of Mann, also gets help and money from the Russian government? Yes, it turns out so. The little nugget took me 15 seconds to find using the “internet.” I wonder how much money this company gets each year from the Russian government – perhaps that’s something you might look up if you say were writing an op-ed about them. Again, textbook capitalism always notes your company should be subsidized whenever possibly by the state and of course, as Nocera knows so, so very well, be bailed out when you take risks and…wait for it…fail.

7) As for more on textbook capitalism, I’m sure most students of economics will read that if you run a business and small number of your customers get blown up because of your lack of “investment” in security — the market will punish you accordingly. Odd, it seems the Russian government paid out the victims of the Domodedovo terrorist attack. Gosh, there’s that state again, helping you with the bottom line. No wonder Domodedovo is such a success story. Also worth noting how he tries to wedge this little inconvenient terrorist attack into op-ed with little comment on responsiblity for the blast.

8 ) The comparison between Domodedovo and Sheremetyevo is equally ridiculous. Nocera writes, “It is no coincidence, of course, that the best airport in Moscow is the only one in private hands.” Gee, I wonder why Moscow wasn’t investing in airports during the collapse of the Soviet Union and the complete destruction of the country’s markets twice in a decade. They must have had all that spare cash lying around. Was infrastructure investment part of Sach’s shock therapy by the way? I can’t remember. Let’s also not forget, Domodedovo has had plenty of problems over the years, so we can rest assure his rosy assessment is rooted in ideology, not reality.

9) I wonder why Russia would worry about private companies or individuals they don’t trust stealing their resources? That’s right – there was a guy named, Boris Berezovsky who stole from the state airline and then hid in England (hat-tip to Sean for this point).

I could go on, but I’ll just stop here. The point is Nocera is not making things up about the economic situation Russia, he simply doesn’t understand how to interpret the situation or contextualize it. Moreover, he lacks the ability to place them in a comparative light that brings anything to the discussion. This is typically how the NYT writes about Russia — in fact, it’s their calling card. Yes, Russia is corrupt; yes, Russia is plutocracy. I, and most people, would never argue the contrary. Those facts are obvious. But is Russia really that fundamentally different from other advanced capitalist economies or are they simply not playing by the rules we’d like them to play? If we took the ideological coordinates of Nocera’s criticism, extrapolated and applied them to the US situation, would he and his business journalist buddies be ok with that?  I doubt it. In the end, it’s always good to remember that ideological consistency, research, and a sense of how other parts of the world work, are not things you’ll find in most NYT op-eds.

One Comment leave one →
  1. June 7, 2011 10:58 pm

    A few things worth noting. First, Chaika’s statement, which Nocera quotes, that Domodedovo’s offshore ownership is unacceptable because it hides “the real owners and those making the management decisions at the airport” is totally valid. Thirty-one people were killed, and I would think that any government that cared about its citizens and foreign travelers would want to know who to identify for lax security.

    Second, apparently Nocera hasn’t visited Sheremetyevo. He would have noticed the new remodeled wing complete with all the cafes travelers like the frequent.

    Lastly, until Nocera denounces the revolving door between Washington and corporate America (as the Bush-Cheney energy policy and Obama’s Goldman Sachs Treasury Department merger are just two examples) with similar ire, then I don’t think he is in any position to scorn the Russians for their byzantine economic practices.

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