by Tom Luongo
It came as the biggest shock of the day on Wednesday.
The Russian government
resigned. The day before President
Vladimir Putin gave his
State of the Nation address and outlined a slate of
That speech prompted an overhaul of Russia's government.
Putin's plan is to devolve some of the President's overwhelming
power to the legislature and the State Council, while beefing up the
Constitutional Court's ability to provide checks on legislation.
In Wednesday's State
of the Nation Address, Putin put forward a number of initiatives
changing the framework of power structures at all levels, from
municipal authorities to the president.
particularly stipulate that the powers of the legislative and
judicial branches, including the Constitutional Court, will be
The president also
proposed to expand the role of the Russian State Council.
State Duma (the lower house of
parliament) the right to approve the appointment of the
country's prime minister, deputy prime ministers and ministers.
The bigger shock was that
in response to this Prime Minister Dmitri Medvedev dissolved
the current government willingly and resigned as Prime Minister.
Within hours Putin recommended Federal Tax Service chief,
Mikhail Mishustin as Prime
Minister. The State Duma approved Putin's recommendation and
Mishustin was sworn in by Putin all within a day.
While this came on suddenly it also shouldn't be a surprise.
These changes have been
discussed for months leading up to Putin's speech. And it's been
clear for the past few years that Putin has been engaged in the
second phase of his long-term plan to first rebuild and then remake
Russia during his time in office.
The first phase was rescuing Russia from economic, societal and
demographic collapse. It was in serious danger of this when Putin
took over from Boris Yeltsin.
It meant regaining control over strategic state resources,
rebuilding Russia's economy and defense, stabilizing its population,
getting some semblance of political control within the Kremlin and
bringing hope back to a country in desperate need of it.
Hostile analysts, both domestic and foreign, criticized Putin
constantly for his tactics. Russia's reliance on its base
commodities sectors to revive its economy was seen as a structural
But, an honest assessment
of the situation begs the question,
"How else was Putin
going to back Russia away from the edge of that abyss?"
These same experts
never seem to have an answer.
And when those critics were able to answer, since they were people
connected to monied interests in the West who Putin stymied
from continuing to loot Russia's natural wealth, their answer was
usually to keep doing that.
Don't kid yourself, most of the so-called Russia experts out
there are deeply tied back to Wall St. through one
William Browder and his
Nearly all of them in the U.S. Senate are severely compromised or
just garden variety neocons still hell-bent on subjugating Russia to
their hegemonic plans.
Their voices should be discounted heavily since they are the same
criminals actively destroying U.S. and European politics today.
In the West these events were spun to suggest Putin is consolidating
power. The initial reports were that he would remove the restraint
on Presidential service of two consecutive terms.
And that this would pave
the way to his staying in office after his current term expires in
That, as always when
regarding Russia, is the opposite of the truth...
Putin's recommendation is
to remove the word "consecutive" from the Constitution making it
clear that a President can only ever serve two terms.
Moreover, that president
will have had to have lived in Russia for the previous 25 years.
No one will be allowed to rule Russia like he has after he departs
the office. Because Putin understands that the Russian presidency
under the current constitution is far to powerful and leaves the
country vulnerable to a man who isn't a patriot being corrupted by
There are a number of issues that most commentators and analysts in
the West do not understand about Putin. Their insistence on
presenting Putin only in the worst possible terms is tired and
nonsensical to anyone who spends even a cursory amount of time
These events of the past couple of days in Russia are the end result
of years of work on Putin's part to purge the Russian government and
the Kremlin of what
calls 'The Atlanticist Fifth Column'.
And they have been dug in like ticks in a corrupt bureaucracy that
has taken Putin the better part of twenty years to tame.
It's been a long and difficult road that even I only understand the
surface details of. But it's clear that beginning in 2012 or so,
Putin began making the shift towards the next phase of Russia's
And that second phase is about taking a stable Russia and elevating
its institutions to a more sustainable model.
Once birth rates improved and demographic collapse averted the next
thing to do was to reform an economy rightly criticized for being
too heavily dependent on oil and gas revenues.
And that is a much tougher task.
It meant getting
control over the Russian central bank and the financial sector.
Putin was given that
opportunity during the downturn in oil prices in 2014.
Using the crisis as an opportunity Putin began the decoupling of
Russia's economy from the West. During the early boom years of his
Presidency oil revenue strengthened both the Russian state coffers
and the so-called oligarchs who Putin was actively fighting for
He warned the CEO's of Gazprom, Rosneft and
Sberbank that they were too heavily exposed to the U.S. dollar
this way in the years leading up to the crash in oil prices in
And when the U.S. sanctioned Russia in 2014 over the reunification
with Crimea these firms all had to come to Putin for a bailout.
debt was swapped out for euro and ruble debt through the Bank of
Russia and he instructed the central bank to allow the ruble to
fall, to stop defending it.
Taking the inflationary hit was dangerous but necessary if Russia
was to become a truly independent economic force.
Since then it's been a tug of war with the IMF-trained bureaucracy
within the Bank of Russia to set monetary policy in accordance with
Russia's needs not what the international community demanded.
That strong Presidency was a huge boon. But, now that the job is
mostly done, it can be an albatross.
Putin understands that a Russia flush with too much oil money is a
Russia ruled by that money and becomes lazy because of that money.
Contrary to popular opinion, Putin doesn't want to see oil prices
back near $100 per barrel.
Because Russia's comparative advantage in oil and gas is so high
relative to everyone else on the world stage and to other domestic
industries that money retards innovation and investment in new
technologies and a broadening of the Russian domestic economy.
And this has been Putin's focus for a while now.
Oil and gas are
geostrategic assets used to shore up Russia's position as a
regional power, building connections with its new partners while
opening up new markets for Russian businesses.
But it isn't the end of
the Russian story of the future, rather the beginning.
And the slow privatization of those industries is happening, with
Rosneft selling off excess treasury
shares to raise capital and put a larger share of them into public
Again, this is all part of the next stage of Russia's development
and democratizing some of the President's power has to happen if
Russia is going to survive him leaving the stage.
Because it is one thing to have a man of uncommon ability and
patriotism wielding that power responsibly. It's another to believe
Russia can get another man like Putin to take his place.
So, Putin is again showing his foresight and prudence in pushing for
these changes now. It shows that he feels comfortable that this new
structure will insulate Russia from external threats while
strengthening the domestic political scene.
Gilbert Doctorow has an
excellent early reaction to this
dramatic turn by Putin which I encourage everyone to read in full.
The subtle point he makes
To understand what
comes next, you have to take into account a vitally important
statement which Putin made a few moments before he set out his
proposed constitutional reforms.
He told his audience
that his experience meeting with the leaders of the various Duma
parties at regular intervals every few weeks showed that all
were deeply patriotic and working for the good of the country.
Accordingly, he said
that all Duma parties should participate in the formation of the
And so, we are likely to see in the coming days that candidates
for a number of federal ministries in the new, post-Medvedev
cabinet will be drawn precisely from parties other than United
In effect, without
introducing the word "coalition" into his vocabulary, Vladimir
Putin has set the stage for the creation of a grand coalition to
succeed the rule of one party, United Russia, over which Dimitri
Medvedev was the nominal chairman.
The end result of this
move to devolve the cabinet appointments to the whole of the Duma is
to ensure that a strong President which Putin believes is best for
Russia is tempered by a cabinet drawn from the whole of the
electorate, including the Prime Minister.
That neither opens the door to dysfunctional European
parliamentary systems nor closes it from a strong President
leading Russia during crisis periods.
Once the amendments to the constitution are finalized Putin will put
the whole package to a public vote.
This is the early stage of this much-needed overhaul of
Russia's constitutional order and the neocons in the West
are likely stunned into silence knowing that they can no longer just
wait Putin out and sink their hooks into his most likely successor.
Sometimes the most important changes occur right under our noses,
right out in the open.
Contrast that with
the skullduggery and open hostility of
the political circus in D.C.
and you can which direction the two countries are headed...