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Who Made Krugman the Expert? Cronies Did.

The opinions expressed by columnists are their own and do not necessarily represent the views of

From the mid-1980s until 2003 Mikhail Khodorkovsky used his connections first developed as a rising young communist in the Soviet Komsomol youth movement to amass a private fortune created through banking and oil in Russia. He used his experience and connections in import-export at the top of the communist hierarchy to create one of Russia’s first private banks in the post Soviet era. He then parlayed the bank’s assets into the purchase of the state owned oil producer Yukos for $300 million. Some have said that the low price for the oil producer was arranged by Vladimir Putin, who was then in charge of foreign investments in the St. Petersburg region.

I remember that it was during this period that Russian investment bankers were being killed on the streets in St. Petersburg, ostensibly for not partnering with the right “people.”

The chair of the US House of Representatives committee on Foreign Relations, Benjamin Gillman, said during a hearing in 1997: "Organized crime groups, particularly in Russia, now have an almost chock hold on the country's vast natural resources, as well as their banks and media. Russia has been described recently by the press as a cryptocracy from top to bottom, a semi-criminal state."

And through it all Mikhail Khodorkovsky continued to prosper and grow.

No hair on his head was touched.

By 2003 Khodorkovsky personal fortune was estimated at $15 billion.

And then his luck ran out.

By then Vladimir Putin had taken power.

Putin too had taken a similar path to power. He served as a kind of community organizer inside the KGB, first in the East Germany, and then after the collapse of the Berlin Wall at Leningrad State University and what is now known as St. Petersburg.

Along the way he used his communist connections to amass political power, first under the mayor in St. Petersburg and then subsequently under Boris Yeltsin in the presidential administration.

He eventually succeeded Yeltsin in 1999 as president when Yeltsin resigned as his health and vast quantities of alcohol diminished his intellectual capacities.

By 2003 Putin, as president of Russia, had consolidated power more than any leader since Brezhnev.

Thus he began to resent attempts by oligarchs like Khodorkovsky to promote a more democratic Russia.

The Western press had long denounced insiders like Khodorkovsky for plundering and exploiting the Russian economy. But that was about to change.

From the state-run press organ of Russia, Russia Today:

The attitude suddenly reversed when around the year 2000, Khodorkovsky started working to repair his tainted image abroad. He invited international auditors and began pouring millions of dollars into lobbying in London and Washington.

Khodorkovsky and his staff did an equally large-scale and expensive job in Russia, sponsoring political parties, universities and launching NGOs such as the Open Russia Foundation – a nationwide project aimed at upbringing of loyal leaders perceiving the agenda dictated by the Yukos owners.

Former US Secretary of State Henry Kissinger became Open Russia’s honorable trustee, securing the international influence of the organization.

And from the bad boy of Russia’s ‘bandit capitalism’, in the eyes of the West, Khodorkovsky transformed quickly into a man the world could do business with.

So in 2003, on a remote Siberian airfield, Putin had Khodorkovsky arrested on charges of money laundering, tax evasion and fraud.

“Khodorkovsky’s arrest by special forces who stormed his plane at a Siberian airport and his subsequent trials were widely seen as revenge for defying Putin’s dictate that the country’s narrow circle of billionaire tycoons, dubbed ‘oligarchs,’” writes the Washington Post without irony, “stay out of politics. Behind bars, he became the leading symbol of anxiety about Russia’s questionable rule of law.”

The irony is that today, in the United States, the government takeover of various industries, like healthcare and banking, --and its general activist approach-- uses the same kind of carrot and stick incentives employed in Russia to create the oligarchy that runs the state today…and stays out of politics.

Can anyone really deny that the softened tone at Fox News over the last two years has been due to the international regulatory pressures put on Rupert Murdoch and the Murdoch family? Can anyone really deny that guys like George Soros, Warren Buffett and George Kaiser, and thousands of nameless others, have benefited monetarily and personally from the administration of Barack Obama? Can anyone really deny that the laws were stretched if not broken in the GM bankruptcy in order to pay off the United Auto Workers at the expense of the taxpayers?

How does one spend $1 trillion on the stimulus that doesn’t create jobs?

How does one lose hundreds of billions dollars in the DOE energy program, and thereby drive almost the entire solar industry into bankruptcy?

The irony is that guys like Khodorkovsky were condemned in the US press for how they made their billions until they entered politics and denounced the regime.Our own oligarchy is applauded for how they keep their billions as long as they remain politically useful and prop up Obama’s regime publicly.

The Khodorkovsky case and Russia may seem extreme comparisons to what’s happening in the United States. But they serve as warning signs about the road we are on.

The oligarchy in Russia is the logical extremity of that road.

And the folks in the media and the politicians—you know, the ones driving the bus?—they need to pull over soon, or eventually they’ll lose control.

And then there will be a lot of Putins, Obamas and Khodorkovsky’s in our future.

Here’s a hint for you that we are far down along that road.

The New Yorker, in its coverage of the Khodorkovsky saga, uses without irony testimony from a Stalinist show trial against poet Josef Brodksy:

Judge: And what is your profession?

Brodsky: Poet. Poet and translator.

Judge: And who told you that you were a poet? Who assigned you that rank?

Brodsky: No one. (Non-confrontationally.) Who assigned me to the human race?

Judge: And did you study for this?

Brodsky: For what?

Judge: To become a poet? Did you try to attend a school where they train [poets] . . . where they teach . . .

Brodsky: I don’t think it comes from education.

Judge: From what, then?

Brodsky: I think it’s . . . (at a loss) . . . from God.

Again, I say it is without irony that the New Yorker uses this excerpt.

Because isn’t it this line that the liberal oligarchy uses when conservatives question global warming, Paul Krugman, Obamacare or gay marriage?

“It’s the law, and they should just shut up,” they demand. “What degree do you have that qualifies you to talk about (education, healthcare, taxes, economics, civil rights, etc.)? they taunt triumphantly. “Who made you an expert on our ‘settled science?’” they sneer.

To this last, I like Brodsky’s answer best: “I think it’s . . . (at a loss) . . . from God.

It’s not just a great answer to the question; it’s a great explanation of why progressives will never understand what conservatives are talking about.

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