Putin v. Obama: It’s the Economy, Stupid

A couple of days ago, Daniel Drezner wrote an op-ed for the Washington Post commenting on a statement made by one of the candidates in the recent televised forum on national security.

Last week at a televised presidential forum on national security, Donald Trump continued his pattern of praising Russian President Vladimir Putin. In particular, Trump said the following:

I mean, the man has very strong control over a country. And that’s a very different system and I don’t happen to like the system. But certainly in that system he’s been a leader, far more than our president has been a leader. We have a divided country.

As my Post colleague David Weigel notes, this is simply Trump’s latest slathering of praise onto the Russian strongman:

Trump goes further than many Republicans. In his telling, Putin — a “strong leader” — epitomizes how any serious president should position his country in the world. Knowingly or not, Trump builds on years of wistful, sometimes ironic praise of Putin as a swaggering, bare-chested autocrat.

After the forum, his running mate, Mike Pence, who used to be more critical of Putin, doubled down on Trump’s claim:

Pence walked that line back a little Sunday, suggesting that he was trying to indict the “weak and feckless leadership” of President Obama — but you get the point.

Well, if we are going to compare the leadership of Putin and Obama, why not compare them by measuring what people really care about? After all, don’t we all know that “it’s the economy, stupid.”

So let’s see how what Putin’s leadership has done for Russia compares with what Obama’s leadership has done for the US? We all know that the last eight years under Obama have not been the greatest, but if it’s Putin that Obama is being compared to, we ought to check out how Putin’s “very strong” leadership has worked out for the Russian economy as opposed to Obama’s “weak and feckless leadership” has worked out for the US economy.

Here’s a little graph comparing US and Russian GDP between 2008 and 2015. To make the comparison on an even playing field, I have normalized GDP for both countries at 1.0 in 2008.

putin_v_obamaLooks to me like Obama wins that leadership contest pretty handily. And it’s not getting any better for Putin in 2016, as the Russian economy continues to contract, while the US economy continues to expand, albeit slowly, in 2016.

So chalk one up for the home team.



10 Responses to “Putin v. Obama: It’s the Economy, Stupid”

  1. 1 Jacques René Giguère September 14, 2016 at 2:18 pm

    As it had any bearing on a Trump voter.I feel like a Roman in 30 AD. Be afraid, be very afraid.


  2. 2 Hugo André September 14, 2016 at 4:33 pm

    I feel a bit bad to be writing this since I agree with your sentiments regarding both politicians but I do not believe that a comparison of GDP growth rates is a good way of showing their relative merits.

    The Russian economy is very dependent on oil. If the oil price had remained high their growth rate would’ve been as high as that of the US, perhaps even higher. The downturn that you see at the end of the graph is mostly a result of the oil price collapse (although western sanctions did cause some of it).

    Even if that wasn’t the case, another problem with this sort of comparison is that different countries have different underlying growth rates. Sri Lanka recently ended a decades long civil war. Because of this it will see strong GDP growth for years to come almost regardless of who is in charge.

    Mind you, more careful analysis has repeatedly shown just how harmful Putin’s rule has been for the Russian economy and it’s long term outlook. So I still agree with your conclusion…


  3. 3 Richard A. September 14, 2016 at 4:34 pm

    Where did you get the real GDP series for Russia at?


  4. 4 David Glasner September 14, 2016 at 5:33 pm

    Jacques Rene, I know exactly how you feel.

    Hugo, I appreciate your comment, which is well taken, but you are not reading this post with the attitude appropriate to the topic under discussion.

    Richard, I took the yearly RGDP figures from the St. Louis Fed from 2008 to 2014, and then estimated Russian RGDP in 2015 by taking 96.25% of RGDP in 2014, based on published estimates that the Russian economy contracted by 3.75% in 2015 compared to 2014.


  5. 5 Miguel Navascués September 15, 2016 at 12:15 pm

    I’m sure that the economic and welfare differences are bigger than the simple comparison of real GDP. I’m sure that the qualities in public & private services are incommensurables.


  6. 6 Hugo André September 15, 2016 at 12:32 pm

    I’m sorry about that, David. Even very good economists sometimes say/write shockingly nonsensical things when talking about subjects outside of their area of expertise. This makes it hard (for me at least) to tell the difference between silly posts and serious posts that use silly arguments.


  7. 7 peterschaeffer September 19, 2016 at 9:29 am

    This is yet another example of the sort of superficial analysis that passes for “serious thought” in some (IYI) circles. Even a cursory examination of Wikipedia shows that Putin wasn’t even Russia’s President from 2008 to 2012. He first took office as President in May of 2000 and left in May of 2008. Putin resumed the Presidency in May of 2012 and remains Russia’s President today.

    So how does Putin’s record compare with Bush/Obama? Let’s just say that the facts are a lot kinder to Putin and Trump than Bush/Hillary/Obama. The IMF WEO database has detailed information for both the USA and Russia.

    Here is the actual data.

    Constant currency GDP growth 2000-2015 – Russia 69.3%, USA 30.35%
    Constant currency GDP Per-Capita growth 2000-2016 – Russia 69.3%, USA 14.5% (ouch)
    Current currency PPP GDP growth 2000-2015 – Russia 127%, USA 74.7%
    Current currency PPP Per-Capita growth 2000-2015 – 127%, USA 53.4%
    Share of global GDP 2000-2015 – Russia -1.4%, USA -24.1%

    Cherry-picking a period when Russia has been hit by declining oil prices (and Putin wasn’t even President for much of the time) versus a cyclical recovery in the USA is disingenuous at best, and deception at worst. Over the longer period that Putin has been a major influence in Russia, Russia’s economic performance has been much better than the USA. Of course, given that Russia started out at a lower level, convergence would be a reasonable expectation. The fiction is claiming otherwise.

    These cherry-picked statistics are typical of the trite “analysis” that is used to attack Putin and Trump. No one who looks at the real numbers should be surprised by Putin’s popularity and Trump’s recent gains.

    Of course, much of Putin’s popularity is not related to economics and Trump was clearly referring to other elements of Putin’s rule. Putin is an avowed Russian nationalist. Given that anti-nationalism is the dominant ideology in the West, deceptive criticism of Putin is inevitable.


  8. 8 David Glasner September 19, 2016 at 11:12 am

    Peter, Thanks so much for these kind words.

    “This is yet another example of the sort of superficial analysis that passes for “serious thought” in some (IYI) circles.”

    Just wondering, in which (IYI) circles has my “superficial analysis” passed for “serious thought?” And what does IYI stand for anyway?

    You said:

    “Even a cursory examination of Wikipedia shows that Putin wasn’t even Russia’s President from 2008 to 2012.”

    You are such a stickler for detail. Or is that you suffer from OCD? Can you perhaps tell me what difference it made to Putin or anyone else (aside from Putin’s having taken a cut in salary, as if more than a small fraction of Putin’s income actually comes from official rather than “unofficial” sources) that he was Prime Minister instead of President of Russia between 2008 and 2012?

    You said:

    “Here is the actual data.”

    Actually “data” is the plural of “datum.” So the linguistically correct verb form to use with “data” would have been “are” not “is.” Or does your objection to political correctness encompass linguistic correctness as well?

    You said:

    “Cherry-picking a period when Russia has been hit by declining oil prices (and Putin wasn’t even President for much of the time) versus a cyclical recovery in the USA is disingenuous at best, and deception at worst.”

    The Russian economy is hugely dependent on oil exports. In 2000 the price of oil was about $25 a barrel, and rose steadily to $90 a barrel in 2007. The price of oil continued rising in 2008, peaking at $130 a barrel in the summer of 2008. How much of the credit for that 5-fold increase in the price of oil, do you think Putin deserves? The price of oil crashed after the financial crisis of 2008, dropping to $40 a barrel in December 2008, and started to rebound with the economic recovery in 2009, reaching $100 a barrel early in 2011, and remaining consistently above $100 a barrel, climbing as high as $130 a barrel, through August 2014. So, once placed in the full context of the behavior of oil prices since 2000, your own argument suggests that the performance of the Russian economy has had more to do with ups and downs in the price of oil than anything Putin has done, though if you want to argue that Putin was responsible for high oil prices since 2000, I strongly encourage you to do so.


  9. 9 peterschaeffer September 19, 2016 at 3:03 pm

    Your original article was (explicity) drawn from the work of Daniel Drezner. Drezner doubtlessly fancies himself as an intellectual (although that’s not much in evidence in his post). IYI is an acronym drawn from recent comments by Nassim Taleb. See “The Intellectual Yet Idiot” (https://medium.com/@nntaleb/the-intellectual-yet-idiot-13211e2d0577#.kazqlowo1).

    My use of data as a singular form is considered to be standard. See “Data vs. Datum-Usage Notes” (http://www.acs.utah.edu/idmc/use-note.htm). Quote

    “Throughout the Institutional Data Management Policy, the word “data” has been used in singular form (that is, with a singular verb form). For example, we say “Institutional Data is a valuable University asset” rather than “Institutional Data are valuable University assets.” When referring to a specific item, the term “data element” is used.

    The decision to treat “data” as singular was made after (1) considering the impact of such usage on the overall tone of the policy. In many places, using a plural verb was awkward and seemed less reader-friendly; and (2) gathering input from writing professionals both in general fields and in information processing fields. All of the writers leaned toward usage of “data” as singular, and many gave examples of similar words that have, or are in the process of making the shift from plural to singular usage (e.g., agenda, media, criteria, phenomena…).”

    My choice of 2000 and 2015 as the starting and ending points was partially driven by Putin’s tenure in office (2015 is the last year for which full data is available obviously). However, 2000 and 2015 are also the quite comparable in terms of energy prices. The average prices of OPEC oil in 2000 was $27.6 dollars. The average price of OPEC oil in 2015 was $49.49 dollars. See https://www.statista.com/statistics/262858/change-in-opec-crude-oil-prices-since-1960/ for the source.

    Of course, the CPI rose from 172.2 in 2000 to 237.017 (see BLS series CUUR0000SA0), an increase of 37.64%. In other words, adjusted for inflation from 2000 to 2015, the average OPEC oil price in 2015 was $35.96 (in 2000 dollars) which is higher than 2000, but not drastically so. Note that the average OPEC oil price in 2016 (so far) is actually lower than 2000 (in constant dollars).

    Using partial data for 2016, somewhat diminishes Russian economic performance and improves U.S. economic performance. However, all the conclusions stay the same. The Russian economy under Putin has done much better than the U.S. economy under Bush/Obama.

    Constant currency GDP growth 2000-2016 – Russia 68.27%, USA 34.05%
    Constant currency GDP Per-Capita growth 2000-2016 – Russia 68.27%, USA 16.91% (ouch)
    Current currency PPP GDP growth 2000-2016 – Russia 128.2%, USA 81.8%
    Current currency PPP Per-Capita growth 2000-2016 – 128.2%, USA 58.55%
    Share of global GDP 2000-2016 – Russia -5.4%, USA -24.6%


  10. 10 David Glasner September 20, 2016 at 8:01 am

    I don’t know Daniel Drezner and have no opinion about whether he is an intellectual or an idiot, though I certainly consider his low opinion of Vladimir Putin to be a point in his favor. I cited his article merely because it was a convenient way to frame my little graph comparing Putin and Obama. Both the graph and the post in which it was embedded were pieces of fluff intended as mockery. That you feel the need to defend the dear leaders from my mockery suggests that you take either me or the dear leaders way too seriously.

    Thanks for the link to Taleb’s piece. The piece is interesting, but he seems to have become quite unhinged, unless he is himself just engaging in some not-so-innocent mockery. However, I don’t take any of it personally knowing that since I do not own nor have I read The Black Swan, he could not have been talking about me.

    I accept your citation from the University of Utah validating the use of “data” as a singular noun. I apologize for accusing you of linguistic incorrectness, however, as a linguistic conservative, I found the justification for treating “data” as a singular noun pretty unimpressive. Of the similar examples provided of once plural nouns that have become singular — “agenda,” “media,” “criteria,” and “phenomena” — only “agenda” seems persuasive. I would never use any of the others as a singular noun.

    Finally, you compare the price of oil in 2000 and in 2015. But even with the adjustment for inflation, the real price of oil was 40% higher in 2015 than in 2000, so your comparisons of GDP growth in Russia and the US are distorted by a substantial terms-of-trade effect which, unless you are prepared to accept my invitation to give Putin credit for turning the terms of trade in Russia’s favor, is no reflection on Putin’s leadership skills. Moreover, simply to compare the price of oil in 2000 and 2015, while ignoring the huge wealth windfall accruing to Russia when the price of oil skyrocketed far above the price in 2015, also distorts the comparison, because the windfall enriched the Russia immensely — though Putin and his KGB cronies seem to have misappropriated much of it into their own deep pockets — and that enrichment must have had some residual positive effect on Russian GDP even after the price of oil fell in 2014 and 2015.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

About Me

David Glasner
Washington, DC

I am an economist in the Washington DC area. My research and writing has been mostly on monetary economics and policy and the history of economics. In my book Free Banking and Monetary Reform, I argued for a non-Monetarist non-Keynesian approach to monetary policy, based on a theory of a competitive supply of money. Over the years, I have become increasingly impressed by the similarities between my approach and that of R. G. Hawtrey and hope to bring Hawtrey’s unduly neglected contributions to the attention of a wider audience.

My new book Studies in the History of Monetary Theory: Controversies and Clarifications has been published by Palgrave Macmillan

Follow me on Twitter @david_glasner


Enter your email address to follow this blog and receive notifications of new posts by email.

Join 3,244 other subscribers
Follow Uneasy Money on WordPress.com

%d bloggers like this: