It would seem that we're now at the stage of global economic lunacy where the worldwide socialist slide is so far gone that the president of Russia is lecturing the world, and particularly Europe, about the risks of socialism.
Speaking at the Asia-Pacific Economic Cooperation conference in Vladivostok, Russia, Vladimir Putin promoted the merits of free-market economics. He said that by pulling the former Soviet satellite states into its sphere after the fall of the Iron Curtain, Europe chose to take responsibility for subsidizing their economic well-being. And now the eurozone model is on the verge of collapse itself, seemingly destined to follow in the footsteps of the old Soviet Union.
Putin's solution is to create and build influence -- and restore the lost power of the Soviet era -- through trade, without taking on the responsibility for other countries' debts or internal problems. Russia's Gazprom, for example, supplies an estimated 36 percent of Europe's gas, with that figure skyrocketing to over 80 percent in former Soviet states like Poland. The European Commission launched an investigation into Gazprom last week, threatening up to $1.4 billion in fines for unfair competition practices. Putin responded by lecturing Europe on what he portrayed as a desperate cash grab by changing the rules midgame, long after the contracts were signed and prices set.
"It seems now that someone in the European Commission has decided that we are going to share this subsidizing burden," Putin said at the conference. "That means the united Europe wants to keep political influence while we would be paying for this a little bit. This is a non-constructive approach. ... In our times we have shifted to market relations with these countries and market formation of prices. Let's stay on the ground of today realities."
Yes, let's keep this free-market show moving along unimpeded, says the president of the part of the world previously synonymous with communism.
Putin didn't stop there, either. Continuing his transformation into some kind of Russian Ronald Reagan, he lectured the world on the perils of protectionism. Admitting he wasn't blameless in sometimes taking measures to protect the sectors most vulnerable to global economic turbulence, he confessed that "addiction to the medicine of protectionism may temporarily relieve the pain, the acute symptoms, but it slows down the recovery of the global economy, hampers trade and investments."
Only time will tell to what degree Putin's actions come to match his words, but those words already stand in stark contrast to the rhetoric emanating from much of Europe and the rest of the world.
In France, socialist President Francois Hollande had an opportunity to back down from a campaign promise to slap a 75 percent income tax on any personal income over 1 million euros. Unfortunately, Hollande has reiterated that he's the kind of socialist who keeps his promises. What France desperately needs right now is a socialist who reneges on everything that comes out of his mouth and spends most of his term on vacation, but apparently Hollande is determined not to be that kind of guy.
France's richest man, Bernard Arnault, the multibillionaire CEO of LVMH (the parent company for brands such as Louis Vuitton, Dior, Moet & Chandon, Guerlain and Sephora), who sits in fourth place on the list of the world's richest people, has already applied for Belgian citizenship and has reportedly been spending much of his time in the neighboring country, where, incidentally, his tax rate would be 50 percent. Despite Arnault's denials that he'd move either jobs or his own tax burden out of France, the left-leaning Liberation newspaper ran a front-page story featuring Arnault's photo and a headline that translates to: "Screw off, rich idiot!" Arnault promptly sued the newspaper for "public injury," noting that he has created more than 20,000 jobs in the country.
But really, why should Arnault be condemned to give away 75 percent of his personal income to a government that does nothing but fritter it away on free health care and entitlements for illegal immigrants, on various whiners who refuse to leave the block on which they grew up in an effort to procure gainful employment, on unproductive bureaucratic leeches, and on a trough full of political fat cats? Apparently some people feel better about their lot in life when socialist policies are perceived as forcing people such as Arnault to share in their misery.
That's not a country -- it's an economic gulag. I have a feeling that Putin would be only too happy these days to lecture you on the difference. Incidentally, how much would Arnault, or anyone else, pay in income tax in Putin's Russia?
Answer: Russia has a 13 percent flat tax for all personal income, and a 20 percent rate for corporate taxes. It used to be much higher, but apparently Putin was pretty sure that cutting taxes would stimulate economic growth. Go figure.