Putin to Blame for Ruble’s Collapse

Like many failed Russian leaders before him, Vladimir "Adolph Want to Be" Putin is destroying Russia's economy as he pursues his own megalomaniac agenda.  Right now, Russia's currency, the ruble, is in free fall because of Putin's failed policies and a big drop in oil and gas prices, the country's main source of hard currency.  Much of the suffering will impact the Russian people as has been their plight throughout history.  Meanwhile, Putin may become even more dangerous.  An editorial in the Washington Post lays fault directly at Putin's feet.  Here are highlights:

THE DRAMA playing out in Russia on Tuesday was not pretty. The ruble’s exchange rate has collapsed by some 50 percent against the dollar since mid-June, with an accelerating fall in recent days. A panicked attempt by the central bank at 1 a.m. Tuesday to stop the slide was a failure. Russia now faces a full-blown currency crisis.

For President Vladimir Putin, the crisis is his own doing, a direct outgrowth of a meddlesome adventure into Ukraine, in which he seized Crimea and subverted the Donbas region with pro-Moscow separatists. Mr. Putin’s incursion led to Western sanctions on Russian industry that are blocking badly needed refinancing on global financial markets; huge debts are coming due. The oil giant Rosneft is particularly hard-hit and has implored Mr. Putin to deliver a bailout. Russia has billions of dollars in foreign currency reserves but can’t easily bail out everyone who needs to repay loans. These squeezed companies are in many cases led by Mr. Putin’s cronies, and they have little room to maneuver. 

The currency slide is also a consequence of the fall in global oil prices. There are a number of reasons for that decline, but the inescapable fact for Russia is that it remains heavily dependent on oil exports and Mr. Putin did little in recent years to diversify the economy. Lower oil prices will crimp Russia’s budget revenues, and the higher interest rates ordered by the central bank will cut into economic growth. Prosperity and stability in recent years have been essential elements in Mr. Putin’s formula of repressing critics while remaining popular. 

It’s important to keep Mr. Putin and his capricious behavior the target of Western policy — and remember that he is the chief cause of Russia’s troubles. The ruble’s plunge may portend a dangerous moment. Until now, Mr. Putin has steadfastly refused to back down in Ukraine and has escalated violence when his allies were cornered. He may respond to the latest uncertainty by striking out again in Ukraine or elsewhere, and he will most certainly ramp up the anti-American rhetoric.