President Richard Nixon (the real life version, not the Nixon from the graphic novel and movie Watchmen). Could Nixon have dreamed that nearly four decades after he opened up China to world trade and pursued détente with the Soviet Union that the Chinese and Russians would own billions of U.S. debt, and be urging the U.S. government to pursue more prudent fiscal and monetary policies?

Original Post

People simply do not realise that Russia is a deeply conservative country.

Fiscal policy is buttressed on a low, flat rate of income tax (13%), and there is virtually no social safety net, with spending on unemployment security, medical provision, disability aid, infrastructure, the environment, and urban regeneration far lower, in both absolute terms and as a percentage of GDP, than its G8 contemporaries.

Similarly, military spending is high in comparison — and growing — medical care is available free in theory, but requires private insurance or additional cash payment in practice, and businesses are in reality pretty un-regulated.

If that doesn’t sound to you like a set of policies Newt Gingrich or William F Buckley would support, then you don’t know your dyed in the wool conservatives from your woolly jumper wearing liberals.

The Parallax Brief believes, however, that these government policies are generally matched by the views of Ivan Six-Pack. Now, the Parallax Brief had been led to believe by his pinko sociology teachers in college that Communism taught progressive views on gender, race, immigration and class, so it therefore came as a shock to find when he moved here that after 80 years of Marxist indoctrination, young ladies in Russia often reject feminism, men ooze with unrepentant machismo, and the population appears to generally support a penal code that could have been based on Dostoyevsky’s work.

The Parallax Brief passes no judgment on Russia’s conservatism (beyond finding it ironic that those who criticise Russia the most would like similar policies implemented in their countries -- I’m thinking of YOU Charles Krauthammer, Ed Lucas, Anne Applebaum and the Republican Party), but does view it as the foundation from which Russia can be better understood, and its news and policies better analysed.

Russian Leaders Pushing Fiscal Restraint aka Conservatism?

Russia Blog has already documented Russian Prime Minister Vladimir Putin's pointed criticism, at the World Economic Forum in Davos, Switzerland back in January 2009, of Western governments haphazard series of bank bailouts and ambitious plans to spend (read: borrow, or more likely, print) more money for "stimulus". While some Westerners may tell Putin to mind his own business, particularly since Putin definitely dislikes foreigners meddling in Russian politics, the unfortunate reality is that Russia (and China) still have billions of dollars accumulated in sovereign wealth funds. And neither Moscow nor Beijing want to see the value of those dollars inflated away when Washington "monetizes the debt".

Unfortunately, The Wall Street Journal initially described Putin's Davos speech, in kneejerk fashion, as an "attack on capitalism". But what was being criticized was not capitalism but the actions of governments that have precipitated and so far failed to solve the global financial crisis. No less a right-wing American talker than Fox News host Glenn Beck stuttered in amazement last February that an ex-KGB man is now warning U.S. leaders against the dangers of excessive government intervention in the economy and Russia's painful history of failed central planning. "Putin? PUTIN??" was all Glenn Beck could say, after having previously accused the Russian Prime Minister of promoting Russian Orthodoxy as Russia's only permitted religion while (in somewhat contradictory fashion) simultaneously accusing Putin of "building mosques" across Russia.

Back to the Future on Gold?

In addition to the irony of governments hailing from former Communist states urging the U.S. to become more fiscally responsible, there is another ironic shift taking place. Ahead of the G-20 summit that President Obama will join this week in Europe, the Russian and Chinese governments have made various modest pronouncements about creating a new multinational currency as an alternative to the dollar. One of the ways Moscow and Beijing see such a currency avoiding devaluation is by being partially backed by gold, included among a basket of other commodities such as crude oil.

Returning to gold happens to be a policy that many old-line American conservatives have been calling for since President Nixon officially removed the U.S. dollar from any remaining peg to the precious metal in the early 1970s. Ambrose Evans-Pritchard, a veteran British journalist who writes for the conservative-leaning UK Telegraph newspaper in Britain and has previously written for the right-wing American Spectator magazine in the U.S., is intrigued. So was Matt Drudge, who put the article on his Drudge Report website, one of the first places many conservatives in the U.S. go online for news.

Original Article

Russia backs return to Gold Standard to solve financial crisis
Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.
By Ambrose Evans-Pritchard
Last Updated: 8:23AM BST 30 Mar 2009

Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.

Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc...[read the rest at the UK Telegraph website]

So, can Russia be described as a conservative country? Probably not in the Anglo-American sense of the word. The rule of law and private property rights in Russia are still not as established as they ought to be. But certainly, in the limited sense of the word, as a country that promotes the status quo and gradual as opposed to radical changes in domestic and foreign policies, yes. Perhaps Washington's leading conservative Cold Warriors, that still believe a policy of confrontation with Russia is in America's national interest, ought to rethink their position.