Corruption and crime act as confiscatory taxes and make normal, unfettered commerce a virtual impossibility. Few Americans appreciate the extent of the economic collapse in Mother Russia. While in Silicon Valley, I recently spoke with a CEO from a major semiconductor company who had recently visited a leading Russian chip maker. He said the plant was an anachronistic joke. This in an industry in which a technology 18 months behind the curve is obsolete.
Bad policies translate into disastrous economic results.
The accompanying table indicates the extent of the economic contraction. Industrial production and gross domestic product have sunk by almost 10 percent since January. Store shelves are emptying. Social statistics are grim as well. Life expectancy has actually fallen by several years over the past decade, and two leading causes of death are suicide and alcoholism.