Blog Archives - Classical Economic Principles

Bloomberg columnist Leonid Bershidsky has important insights into Russian propaganda and how to deal with it.

2/20/2018

President Trump, I'm Russian and I'm Not Laughing

I fear the indictment of Russian internet trolls may lead to less freedom for both Americans and Russians.
By Leonid Bershidsky
February 19, 2018, 10:47 AM EST

"They are laughing their asses off in Moscow," President Donald Trump tweeted on Sunday as part of his damage control after 13 Russian Facebook trolls were indicted for meddling in the 2016 presidential election. Really?
Some Russians -- including the man who runs the indicted troll factory -- are indeed laughing, but I'm one Russian who isn't. The fallout from the indictment comes too close to a couple of lines, both in U.S.-Russian relations and in attitudes toward free speech, that it would be best not to cross.
The Internet Research Agency, a notorious St. Petersburg outfit specializing in propaganda, disinformation and cyberbullying, has been known to Russians -- especially those critical of President Vladimir Putin -- since 2013, when the investigative newspaper Novaya Gazeta published the first report about it. The organization had a strict security policy but also high staff turnover, so its vacancy ads and reports from people who have worked there or applied for jobs have been easy to find on the internet. Links to its many websites and the staunchly pro-Putin comments of its employees are a common sight on the social networks (I've had my share too from them).
Now there's a 37-page indictment detailing how the Internet Research Agency applied the same methods in the U.S., with its employees posing as Americans. Part of it concerns identity theft to open bank and PayPal accounts to enable payments in the U.S. -- illegal activities worthy of prosecution. Another part deals with posting stuff on social networks, organizing small rallies and building a cage in which a Hillary Clinton impersonator would sit in a prison uniform -- all pretty much their normal modus operandi in Russia and Ukraine (where their real identities are also hidden).
The U.S. has laws that require foreign agents to register and which ban foreigners from buying campaign ads. These laws, however, have never been stringently applied -- not even during the Cold War, when the Soviet Union did its best to promote the peace movement in the U.S. and beyond. That treatment made sense then. Writing in the Christian Science Monitor in 1982, Daniel Southerland -- who would go on to become executive editor of U.S. government-funded Radio Free Asia -- called President Ronald Reagan's claim that Soviet secret agents were sent to the U.S. to foster the American nuclear freeze movement "an embarrassment for his administration." He also noted that U.S. officials felt that with or without the Soviets, the freeze movement "would probably be about where it is today."
The same can be said of its effect on the 2016 election and U.S. politics in general. That's obvious to Russians like myself who do not support the Putin regime and at the same time aren't paranoid about its capacity to wreak havoc outside Russia. As economist Konstantin Sonin, a University of Chicago professor, posted on Facebook, "I still don't see a mechanism through which an operation on a $5 million scale can seriously affect the outcome of a campaign in which one side spent $600 million and the other more than $1 billion."
But when it comes to Americans, it's somehow left only to Trumpsters to argue that the U.S. is not a gigantic snowball that can melt from a little Russian trolling. That's the bit that's making pro-Putin Russians laugh. Yevgeny Prigozhin, the Kremlin-connected St. Petersburg caterer who is named in the indictment as the operation's funder, mocked:
Americans are very impressionable people, they see what they want to see. I have a lot of respect for them. I'm not at all upset that I'm on this list. If they want to see the devil, let them.
My respect for U.S. traditions and values, unlike Prigozhin's, is real, and it's rooted in admiration for America's ability to tolerate the nastiest kinds of public speech. A healthy society should be able to take this sort of thing in stride, as anti-Putin Russian commentators have long done with Prigozhin's troll factory.
Even if its impact was limited, the trolling campaign documented in the indictment is egregious for many Americans because it was conducted by foreigners and because the capacity for damage may be greater in the present internet-amplified era. But having lived through the Soviet system, I see a bigger threat than that: Limiting foreigners' ability to troll U.S. politicians, or even the political process as a whole, could be the first step toward doing the same for Americans. The next time someone rolls out a cage containing an actor impersonating a presidential candidate, it could be seen as a legitimate reason to investigate: What if the Russians (the Chinese, the North Koreans, the Iranians) are behind this? Even such an investigation would have the effect of censoring speech.
The other reason I'm not laughing is that the U.S. is on the verge of a misunderstanding that can be dangerous to me as a Russian citizen and to millions of other Russians living, working or just traveling in the West. Prigozhin is known as the funder of arm's length pro-Kremlin operations, such as the Wagner private military company and the Internet Research Agency. Their links to Putin are intentionally tenuous; that's why the indictment doesn't accuse the Russian government of any involvement. Americans are left to draw their own conclusions. The temptation is to believe these freelancers are "Russia," just as much as the Kremlin itself is.
The Internet Research Agency trolls got visas to travel to the U.S. for personal reasons, but instead, according to the indictment, they "gathered intelligence." The obvious next step for the U.S. is to decide that, since so many Russians work for the regime in unofficial capacities, all Russians are automatically suspect. Russians, I fear, may face increasing scrutiny when applying for jobs, bank accounts and other attributes of a normal life in the U.S. -- and the burden of proof that they are not Kremlin agents will be on them.
My American readers may not care much about that: Serves us Russians right for putting up with Putin. It's a legitimate view. And yet, as the supposedly stronger nation, the U.S. can afford not to submit to paranoia.
Perhaps the Trump-Russia story won't lead to any such repercussions for freedom of speech or for Russians in the West. That would be another reason to admire the U.S. I get a sense, though, that the partisan battle around Russian interference in the election will have some nasty, hard-to-reverse consequences.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

A Bad Budget Agreement

2/8/2018

Yesterday’s bi-partisan budget agreement represents a major failure in government policy. It is an irresponsible move that reverses the positive impact of tax cuts with an orgy of spending. Under the agreement, federal spending will increase by 7% this year and another 7% in 2019.
Having provided taxpayers with a major benefit through tax cuts, Congress will now take much of the benefit away. The tax cuts will add about $200 billion to real growth this year. The budget agreement adds about $130 billion to federal spending. Hence, Congress has just agreed to spend two-thirds of the increase in growth. The additional federal spending will raise both prices and interest rates as it bids resources away from the private sector.
The bi-partisan nature of the agreement means both parties will be responsible for blowing holes through their federal budget agreement. However, the main blame will be on Republicans. The inability of the Senate to end the filibuster rule means Republicans need Democrats’ votes to pass most spending bills.
The easiest way for politicians to vote is always to simply give everyone what they want. It is easier to do so since politicians aren’t spending their own money. Rather, they are spending taxpayers’ money. And taxpayers will be the ones who pay the bill for Congress’ latest abrogation of its responsibility.