As is common with such revolutions, the democratic free-market Orange revolution in Ukraine continues to show signs of having turned sour before it began. Anders Aslund writes, “Last year Ukraine enjoyed economic growth of 12 percent; in the first four months of this year, the growth rate plunged to 5 percent, while inflation has surged to 15 percent….”
Furthermore, “the property rights of thousands of enterprises are in limbo. In Kiev, rumors abound that oligarchs connected to the old regime are trying to sell their enterprises to Russian business executives and are preparing to escape the country. Naturally, executives are cutting off investment, and economic growth is screeching to a halt. To make matters worse, a new socialist minister of privatization has been appointed who opposes privatization in principle. She asked recently: ‘What is so bad about re-nationalization?’ Tymoshenko concurred in a recent newspaper interview: ‘The biggest enterprises, which can easily be efficiently managed, must not be privatized, and they can give the state as an owner wonderful profits.’ This sounds like state capitalism.”
State capitalism. Hmmm. Well what should we have expected? As Justin Raimondo said more than three months ago:
“The Ukrainians believe they can balance their budget by revisiting suspicious privatizations, seizing assets, and re-selling them to the highest bidder. Yushchenko was sold to Western journalists as well as his own electorate as a ‘free-market reformer,’ but this is hardly a ‘free market’ approach. Aside from destroying the sort of stability that business requires, it assumes the good will of government regulators – not a wise course, in any country – and encourages yet more corruption by making political pull, rather than entrepreneurial skill, the coin of the realm. Who will be ‘re-privatized,’ and who will be spared? It’s all up to the gang currently in power.”
More than a decade after the 1994 “small government” revolution of the Republicans, America’s economy appears more regulated and micromanaged by the State than any time since the Great Society or maybe even the New Deal. And yet many of the same people who fell for that phony revolution likewise had high hopes for the Orange Revolution. Those who expected it to be the real deal because it was the popular establishment consensus will probably be disappointed, but will they hesitate next time to take sides so quickly in a foreign election between thugs? (For more on the phony color-coded revolutions, check out Scott Horton’s interview of Raimondo.)
Aslund continues:
“The old regime doubled pensions, saddling Ukraine with the highest pension costs in the world as a share of national income. The new Ukrainian government has added to this excessive burden by raising state wages no less than 57 percent.
“To finance these and other huge social expenditures, the government is scrambling to find more revenue. A lot of discretionary tax exemptions have, sensibly, been abolished, but the overall tax pressure has risen dramatically. Meanwhile, Yushchenko continues to talk about his plans for sharp tax cuts.”
Well, he might be a corporate socialist thug, but he’s [i]our[/i] corporate socialist thug, right? (Hat tip: Jeff Tucker.)