April 10, 2014
Back during the 2012 election, Paul Ryan famously criticized the “sugar high” economics of quantitative easing. Hailing from a vaguely Austrian hard money position (“Deficits are always bad! A strong dollar is always good! In order to succeed reform must be painful!”) he argued that the Federal Reserve’s massive injection of liquidity into the markets was not only unwise and unsustainable but, by stimulating activity in value-subtracting sectors like financial speculation, would end up making the country’s economic problems worse than they were to begin with. Quantitative easing (QE), in Ryan’s view, wasn’t just a stopgap, short-term solution to a long-term problem, it wasn’t even a solution at all. It was part of the problem.
Events have shown that Paul Ryan was wrong to think that monetary easing was a bad idea or that it would somehow exacerbate America’s (very real) economic problems. The inflation that Ryan and other antagonists of QE loudly and repeatedly predicted hasn’t materialized, the economy has plugged along at a steady rate, and the unemployment rate has been ticking downward. But while QE wasn’t actually a “sugar high,” the concept is a very useful one.
What on earth does any of this have to do with Vladimir Putin? Well Putin’s approval rating (at least if the latest Levada Center poll is correct) has skyrocketed to 80%, his strongest level of support since 2010. Other surveys conducted in the past few weeks have shown that Putin is now attracting even higher approval numbers, and that the ranks of people who are willing to say they oppose him have rapidly withered away. Regardless of what Western observers say about the annexation of Crimea (and I personally have repeatedly condemned it) it appears to have gone over very well in Russian society.
Popular enthusiasm for the annexation does not, of course, come out of a vacuum: Russian state media coverage of the “coup” in Kiev has been relentlessly one-sided and propagandistic, and over the past two months Russians have been exposed to a wave of “patriotic” media fervor arguably more intense than any in the country’s post-Soviet history. Just as clearly, though, the positive reaction to seizing Crimea isn’t purely the result of media artifice. Even someone as erudite and worldly as Mikhail Gorbachev has spoken out in favor of the Kremlin’s policy in Crimea, and it is fair to say that a strong majority of Russians genuinely support the “return” of the peninsula to the motherland.
Putin appears to be in a stronger position than ever before: he achieved victory in Crimea with barely a shot being fired, his poll numbers are higher than they’ve been in years, and he has gone after the now-marginalized opposition with unrestrained contempt and fury. The opposition hasn’t been this dispirited and confused in a long time, and the authorities are basking in a warm patriotic glow even more intense than the one after the 2008 war with Georgia. Looking at how things have played out politically, the Kremlin could look at the experience of Crimea and very well determine that the secret to Putin’s continued popularity is “more annexations.”
I would argue, though, that the sudden upswing in Putin’s poll numbers is a sugar high, an artificial and unsustainable jolt that will ultimately create more problems than it fixed. Why? Well, by their nature military triumphs are fleeting. After the fighting starts, victory can only be achieved once (unless, of course, another enemy is quickly found and another war started). People will “rally round the flag” when the troops return home victorious, but this is always a transitory phenomenon because most people don’t really care much about national honor. George H.W. Bush’s experience after the First Gulf War is a particularly stark example of this: he went from a 90% approval rating (higher even than Putin’s!) in early 1991 to losing the 1992 presidential election. Putin won’t face a similar electoral challenge anytime soon, but I would be very shocked indeed if Russians’ enthusiasm for the return of Crimea proved any more enduring. Recall that in September 2008, after the victorious war against Georgia, Putin’s approval rating was 88%. A year later it was 80% and a year after that it was 68%. Even in Russia, military glory can’t prove a lasting basis for popularity.
Not to sound too reductivist, but you can’t eat nationalism, and “national greatness” doesn’t help to pay the bills. Putin’s early popularity was largely due to the unprecedented boom in Russia’s economy. There are any number of stats one can throw around, but the most important was that real wages more than tripled. The economic resurgence of Russia was the real source of Putin’s political power, and Russians continued their support provided that the economy continued to grow. Even in the aftermath of the 2009 recession, the Russian economy performed respectably; there was full employment, stable inflation, and reduced, but still significant, growth in wages. While the headline GDP growth numbers were down from the seven and eight-percent level reached earlier in the 2000’s, growth was still healthy at three to four percent, particularly when compared with the miserable performance of virtually everywhere else in Europe. “Politician becomes popular while economy booms” isn’t a complicated narrative, but it largely explains Russia for much of the past decade.
The Russian economy, though, has been decelerating for over a year now, limping along to 1.3 percent growth in 2013. Largely due to the negative consequences of annexing Crimea, it will likely fall into a recession sometime during the course of 2014, though the severity of the coming recession is very much up for debate. When that recession happens, when inflation starts to increase because of the exceedingly weak ruble and when unemployment starts to climb, I fully expect that Putin’s poll numbers will come down just as quickly as they went up.
That is to say that to the extent that Putin’s popularity was based on the very real improvement in Russia’s economy, it was robust, stable, and enduring. To the extent that Putin bases his appeal on feats of military glory, it will be both fragile and ephemeral.