What’s Shakin’?

Fracking has made the United States one of the leading producers of oil and natural gas on earth. We don’t need access to Middle Eastern product. We have enough here (with our neighbors in Canada and Mexico). “Fracking is the process of drilling down into the earth before a high-pressure water mixture is directed at the rock to release the gas [and oil] inside.

“Water, sand and chemicals are injected into the rock at high pressure which allows the gas [and oil] to flow out to the head of the well… The process can be carried out vertically or, more commonly, by drilling horizontally to the rock layer and can create new pathways to release gas [or oil] or can be used to extend existing channels.” BBC, December 16, 2015.

But there are side effects… really nasty side effects, as heavy fracking states like Oklahoma and Kansas have discovered. Seismic activity in Oklahoma has increased one hundred-fold in recent years, with up to 12% of the fracking-induced shakers capable of inflicting significant damage. Put another way, Oklahoma now rivals California as a state where earthquakes can cause measurable damage. The pressure from injected water lubricates and pushes open underground fissures accordingly. Not to mention the devastation that comes with having to deal with the waste-water from the process.

“In an assessment released by the United States Geological Survey [on March 28^th], experts said the chance of a destructive temblor in the next year is as great in parts of north-central Oklahoma and southern Kansas — where oil-and-gas operations have set off man-made quakes for about five years — as it is in the shakiest parts of quake-prone California.

“The warning came in the agency’s map of earthquake risks, a document that for the first time included the prospects for human-caused quakes… ‘By including human-induced events, our assessment of earthquake hazards has significantly increased in parts of the U.S.,’ Mark Petersen, the chief of the agency’s Natural Seismic Hazard Mapping Project, said in a news release.

“Four other states where waste disposal has led to human-induced quakes — Texas, Colorado, New Mexico and Arkansas — face considerably smaller risks of damaging tremors, the agency said. About seven million people live in the areas at risk of a human-induced earthquake, most of them in Oklahoma and Texas.

“Over the last 15 years, those states have experienced an explosion in oil and gas production, which releases huge amounts of toxic wastewater. That wastewater is disposed of by re-injecting it into the ground, into rock formations thousands of feet below the surface, increasing the pressure on existing subterranean faults, and causing them to slip and produce tremors.

“Along with the economic boom from oil and gas exploration, Oklahoma has experienced a rising number of earthquakes. In an average year, Oklahoma has historically had fewer than two quakes of magnitude 3 or greater — roughly the level at which a tremor can be felt. Kansas has had even fewer such shocks. But last year, Oklahoma recorded 907 quakes at magnitude 3 and above, and Kansas registered 54.

“Oklahoma now ranks behind only Alaska in earthquake frequency, followed by California… Three of the quakes this year, measured at magnitudes of 4.7, 4.8 and 5.1, were among the largest in Oklahoma’s history.

“Including Oklahoma and southern Kansas on the map reinforces what the Geological Survey’s scientists have said for some time: The huge number of small, human-caused quakes in the two states may have set the stage for a larger, more destructive one.” New York Times, March 28^th.

Right now the price of oil is low enough for a number of high-cost fracking sites to shut down and even declare bankruptcy… but others are rolling merrily along. When the price of oil returns to its high cost trajectory in a few years, we can expect the fracking to escalate. But exactly who pays for the damage from the temblors that result? And which fracker is responsible for which quake? Can we really accept the growth from such oil extraction techniques without assigning a very specific number to the damage they cause? How about the inevitable injuries and perhaps fatalities.

I’m Peter Dekom, and we really do not measure economic growth in this country remotely accurately… we just ignore the hard dollar costs that are not clearly directly linked to each event.

Love My Pretty Little Weapons

Lots of European countries, the United States, Russia, China, India, Pakistan, Israel and North Korea and perhaps even Iran have nuclear weapons capacity. Nasty stuff foments worry in the Middle East and in the Korean Peninsula with fear of “technology seepage” from Pakistan, home of the “Islamic bomb.” Iran and North Korea have benefitted from Pakistan’s largesse to date, but terrorists are salivating at the potential of getting a nuke or more. We tend to lose focus on the nuclear race at the top for fear of proliferation among what we feel are less responsible parties.

But as the old Cold War, what we thought was dead and buried after the fall of the Soviet empire, awakens and moves from a chilly breeze to the makings of a Polar Vortex, perhaps it is time to refocus on the big three nuclear powers: China, Russia and the United States. Russia was the major prime mover in updating and replacing its nuclear arsenal and led the race to modernization in that sector. China joined the nuclear club later than the Soviets and Americans. She generated massive economic power only relatively recently, so her efforts to implement her nuclear capacity have occurred primarily in more recent years, resulting in a very modern (and growing) overall weapons capacity.

With China’s movements in the South China Sea and Russia’s proclivity to prod and test U.S. resolve globally, opposing American policies almost as a knee-jerk response, it merits looking at the state of new weapon systems in each of these global powers… and to ask the bigger question that permeates an increasing number of global multinational summits: why aren’t we negotiating a nuclear (and more) disarmament pact to replace the expired treaties of old. One-upmanship is not a viable policy for any nuclear power.

“American officials largely blame the Russian president, Vladimir V. Putin, saying his intransigence has stymied efforts to build on a 2010 arms control treaty and further shrink the arsenals of the two largest nuclear powers. Some blame the Chinese, who are looking for a technological edge to keep the United States at bay. And some blame the United States itself for speeding ahead with a nuclear “modernization” that, in the name of improving safety and reliability, risks throwing fuel on the fire.

“President Obama acknowledged that danger at the end of the Nuclear Security Summit meeting in Washington early this month. He warned of the potential for ‘ramping up new and more deadly and more effective systems that end up leading to a whole new escalation of the arms race.’

“For a president who came to office more than seven years ago talking about eventually ridding the world of nuclear weapons, it was an admission that an American policy intended to reduce the centrality of atomic arms might contribute to a second nuclear age.” New York Times, April 16^th. Even if you believe that these three superpowers are unlikely to use a nuke or spread nukes to other countries, the sheer cost to taxpayers in each nation is a very significant burden.

The updating of our systems carries with it an emphasis on tactical weapons, more targeted and less massively impactful. The bad news is that a narrowly cast weapon is more likely to be deployed than a nuke that would take out an entire city. The deterrent factor is significantly less. Given the various enhanced delivery systems, the nature of some of these new weapons is more about getting the destructive force delivered to its target without the risk of being destroyed before impact. And that does not always require that the payload carry a nuclear explosive.

Both China and the United States are developing a rocket-delivered, hypersonic glide vehicle, an ultrahigh-speed warhead that can travel up to 17,000 miles per hour. The payload (pictured above) would be moving so quickly towards its intended target as to defy current defensive technologies. Even without any explosive material in the warhead, the mere speed of the payload would create a massive amount of damage anyway. China’s military has already tested prototypes of this weaponry.

“The Obama administration is hardly in a position to complain. It is flight-testing its own hypersonic weapon, but an experiment in 2014 ended in a spectacular fireball. Flight tests are set to resume next year. As part of the modernization process, it is also planning five classes of improved nuclear arms and associated delivery vehicles that, as a family, are shifting the American arsenal in the direction of small, stealthy and precise.

“‘We are witnessing the opening salvos of an arms race,’ James M. Acton, a senior analyst at the Carnegie Endowment for International Peace, last year told a congressional commission that assesses China’s power.

“One fear about the new weapons is that they could undercut the grim logic of ‘mutual assured destruction,’ the Cold War doctrine that any attack would result in massive retaliation and ultimately the annihilation of all combatants. While much debated and often mocked — in classics like the movie ‘Dr. Strangelove’ — MAD, as it was known, worked. Now, the concern is that the precision and less-destructive nature of these new weapons raises the temptation to use them.

“A key question that Mr. Obama addressed is whether America’s planned upgrades are helping drive this competition. Or are Russia and China simply using the American push as an excuse to perfect weapons they would build anyway?

“Moscow and Beijing, analysts say, are testing space weapons that could knock out American military satellites at the beginning of a nuclear war. In response, Washington is launching space observation satellites meant to deter and help defeat such attacks.” NY Times. Where does this lead? How expensive will playing in this yard cost each and every one of us, in hard taxpayer dollars and risk of life? Can any nation afford to continue at this road, but if no one is willing to negotiate a reduction in weapons capacity, who cannot afford to play? And is this about nukes or weapon systems in general?

I’m Peter Dekom, and there’s much to be gained to the extent we all start talking and negotiating.

The Bars Sinister

Americans are spending ourselves into oblivion. We have obviously ignored former Republican President Dwight David Eisenhower’s 1961 speech as he departed the presidency. “The only general to be elected president in the 20th century, he famously warned the nation about the potentially corrupting influence of the ‘military-industrial complex.’” Wikipedia. Yet today, we get dragged into most major conflicts, one way or another, spend about 41% of the global military budget, and have not won a major conflict since World War II. A vast number of Congressional districts house component manufacturers of military arms and equipment or military bases, making voting for big military costs a local economic issue that gives the big arms-makers a huge advantage to have their way with taxpayer dollars.

We are equally callous in our wanton commitment to allowing pretty free access to guns while dealing with the results by having the highest incarceration rates, some of the longest sentences, on earth. We have only 5% of the earth’s population, but we imprison 25% of the world’s criminal inmates. 2.2 million souls, most of whom are permanently cut out of mainstream earning power regardless of their having “paid their debt” to society. 200,000 of those prisoners are in the federal system, representing a doubling from their numbers two decades ago. “In 2012, about 1 in every 35 adults in the United States, or 2.9 percent of adult residents, was on probation or parole or incarcerated in prison or jail…” HealthAffairs.org, April 1, 2014.

Even as most states were able to lower their violent crime rates in recent years, we still house an increasing number of criminals. Although the Obama administration has set about commuting sentences for a large number of non-violent drug offenders held in federal prisons, this pattern of release is a fraction of an eye-drop of the total prison population. Half of those serving federal sentences are incarcerated for non-violent crimes. Without a parole system, the federal system tends to keep inmates in prison much longer than state systems. But too many criminal justice practices still retain the clearly outmoded “three strikes” and “truth in sentencing” statutes, which are slowly being repealed (just not fast enough).

The costs of creating a permanent class of those excluded from participating in the mainstream economy by virtue of a criminal record, forcing many to resort to criminal earnings to survive, cutting out delinquent fathers from their families and leaving families to rot as breadwinners are sent away are massive. These practices foment recidivism and create “schools for crime” by mixing non-violent inmates with violent criminal experts.

“Time in prison not only means a loss of freedom, but it also means a loss of earnings, risks to the health and safety of the incarcerated, and prolonged absences from family that can strain marriages and increase behavioral problems in children. The probability that a family is in poverty increases by nearly 40 percent while a father is incarcerated.

“Economic hardship often continues after release: A criminal record creates substantial obstacles to employment that could increase with the amount of time served, and incarceration decreases earnings by 10 to 40 percent, compared with similar workers. The fact that so many states have rules (including unnecessary and unnecessarily inflexible occupational licensing restrictions), and companies have practices that make it harder to hire former prisoners compound the economic and human damage.” Jason Furman, chairman of the White House Council of Economic Advisers, and Douglas Holtz-Eakin,president of the American Action Forum and a former director of the Congressional Budget Office, writing an Op-Ed for the April 21^st New York Times.

But the hard costs of our criminal justice system, the sums funded directly by taxpayers, are equally staggering. “[More] more than $80 billion is spent annually on corrections, or over $600 per household. The annual cost of imprisoning one person averages approximately $30,000 for adults and $110,000 for juveniles, higher than the cost of a year of college. At the federal level, the Bureau of Prisons budget grew 1,700 percent from 1980 to 2010 and now devours more than 25 percent of the entire Department of Justice budget.” Furman and Holz-Eakin. What’s worse, the system does not work; it does not deter (juveniles and younger offenders in particular), it does not correct and it most certainly does not provide the kind of protection of the general public that most people assume.

While we do need in incarcerate some, we simply have gone way beyond any justifiable limits to our sentencing practices. “Incarceration plays an important role in promoting public safety, and imposing prison sentences for criminal conduct has moral and practical dimensions. But the criminal justice system should be designed to ensure that the benefits of incarceration exceed the costs. Individuals incarcerated for nonviolent drug crimes — 50 percent of the federal prison population — pose a low risk, and the costs of incarcerating these people outweigh the benefits. Similarly, since criminal behavior declines and costs increase with age, releasing older individuals who have already served lengthy sentences is also likely to yield net benefits.” Furman and Holtz-Eakin. We need to get these folks out of prison and find a way to avoid tainting their futures with alternative correctional paths, particularly for simple drug-crimes.

Following Reagan-era policies, mental hospitals were seriously reduced, leaving people with severe mental issues to make their way in the world, out on the streets and often finding their way into prisons that were and remain woefully under-prepared to tackle these mental health issues. We need to separate out those with serious mental illness and place them into more appropriate facilities. “[About] 20 percent of prison inmates have a serious mental illness, 30 to 60 percent have substance abuse problems and, when including broad-based mental illnesses, the percentages increase significantly. For example, 50 percent of males and 75 percent of female inmates in state prisons, and 75 percent of females and 63 percent of male inmates in jails, will experience a mental health problem requiring mental health services in any given year.” HealthAffairs.org.

We also love to incarcerate children. According to statisticbrain.com, we have 1.9 million kids incarcerated in any given year, the most of any developed country, 74.1% for non-violent offenses, 65% of these incarcerated minors never finish high school, the average cost of incarcerating a child is $88,000 (vs the cost of educating a child, $12,500 on average), the recidivism rate within 3 years is 59.6% with about 24% of Americans have at least one arrest by age 23. 33 states have no lower age limits for criminal convictions, and the ranks are overwhelming filled with black and brown kids. The mental illness statistics mirror those of adults. We love to destroy lives with one of the least effective criminal justice systems in the world.

Bottom line: we’ve been talking about this issue for way too long. It’s time to do a ground-up rebuild of our entire state and federal criminal justice system, focusing on reducing our total level of incarcerating criminals by 25% within five years and 50% within ten. We need to stop courts from automatically resorting to prison sentences as a matter of routine and examine a healthy set of alternative corrective measures. This is not a Republican or Democratic issue; it is a matter of our aggregate national priorities.

I’m Peter Dekom, and we need to apply an accountable cost-benefit program to a failed criminal justice system that we can no long afford.

Robust Urban Clusters

The bigger question to a polarized Americas has to be, “if not the United States, what?” Whether rural traditionalists, with heavily Evangelical values, like it or not, in the current configuration of the “United” States, they are destined to lose power, influence and perhaps the ability to continue their lives in accordance with their passionately-held values. This, notwithstanding the First Amendment and the fact that 53 states have governors and legislatures controlled by white conservative traditionalists. The nature of our population is changing. Demographics and raw economics will slowly pull the plug on a lifestyle from times past, a culture that time is leaving behind. Homophobia, climate change denial, preachers overriding scientific research, racial discrimination and a gun culture represent values of a bygone era, unsustainable in a modern, futuristic world.

Today’s “relevant” earth is not built around the vast tracts of land that form the bulk of almost every political jurisdiction. The bulk of high-value commerce, jobs and invention are almost strictly urban, relegating that more open land to blue collar resource extraction and cultivation. In the developed world, large metropolitan areas have rather dramatically supplanted states/provinces as the true political and economic power bases. That’s where the wealth is concentrated, even where the owners of those vast natural resources mostly choose to live. The United States is no exception. Political scientists and economists know: Nations governed by agricultural or mineral resource-driven rural regions lag behind countries that have prioritized their urban centers.

Writing for the April 15^th New York Times Op-Ed, Paraq Khanna, a senior fellow at the Lee Kuan Yew School of Public Policy in Singapore, explains the macro-economic reality that may someday reshape the United States into smaller, regional countries more aligned with their constituents. The power will continue to shift to the major cities, and the polarization that seems to grow with every election will probably define those territorial boundaries.

Khanna writes: “Advanced economies in Western Europe and Asia are reorienting themselves around robust urban clusters of advanced industry. Unfortunately, American policy making remains wedded to an antiquated political structure of 50 distinct states.

“To an extent, America is already headed toward a metropolis-first arrangement. The states aren’t about to go away, but economically and socially, the country is drifting toward looser metropolitan and regional formations, anchored by the great cities and urban archipelagos that already lead global economic circuits.

“The Northeastern megalopolis, stretching from Boston to Washington, contains more than 50 million people and represents 20 percent of America’s gross domestic product. Greater Los Angeles accounts for more than 10 percent of G.D.P. These city-states matter far more than most American states — and connectivity to these urban clusters determines Americans’ long-term economic viability far more than which state they reside in.”

The rest of the developed world is already metro-focused. As our Congress caters to states (where federal voting districts are controlled) – a rather clear misuse of funds if true overall growth is the focus – central authorities in Europe and Asia are investing heavily in infrastructure favoring cities where jobs and people are the most plentiful. We’re diverting precious resources to benefit a dwindling segment our population, and under-investing where infrastructure would create the greatest benefits. Our political system doesn’t permit any other result.

But urban power brokers have other ideas. “These are the groups that are pushing America deeper into the global economy by rethinking how the national economy functions. But they have to go it alone, because Congress still thinks in terms of states. America needs a new map.

“We don’t have to create these regions; they already exist, on two levels. First, there are now seven distinct super-regions, defined by common economics and demographics, like the Pacific Coast and the Great Lakes. Within these, in addition to America’s main metro hubs, we find new urban archipelagos, including the Arizona Sun Corridor, from Phoenix to Tucson; the Front Range, from Salt Lake City to Denver to Albuquerque; the Cascadia belt, from Vancouver to Seattle; and the Piedmont Atlantic cluster, from Atlanta to Charlotte, N.C.

“Federal policy should refocus on helping these nascent archipelagos prosper, and helping others emerge, in places like Minneapolis and Memphis, collectively forming a lattice of productive metro-regions efficiently connected through better highways, railways and fiber-optic cables: a United City-States of America.” Khanna. But we live in a country where too many of us really have stopped caring about those with contrary beliefs.

The degree of polarization hit me hardest in 2013, when 36 Republican U.S. Senators voted against FEMA aid to east coast Hurricane Sandy victims because they lived in liberal states, signaling a level of divisiveness the United States had not witnessed since the Civil War. That suggests that the United States may well devolve into these regional nations to the extent that this level of animosity and divisiveness continues unabated. Khanna even suggests that the contiguous 48 states might well break apart into seven massive territories that could look like the map above. Who gets the nukes, the military and what happens to our national debt? What happens to international treaties, our currency, power grid and our power-generating capacity?

If we cannot care about each other, if we have raw callousness about and hatred for those with differing values to the extent that we cannot help them in their time of dire need, then exactly how will the United States cope with the horrific costs we are already experiencing (like the flooding in Houston) and will continue to experience with climate change? We face trillions of dollars of damage and destruction in the next few decades. How and when will this extreme vision of the United States be possible? I hope not too soon, but I fear our polarization will only accelerate the process… unless someone figures out to make Americans out of us again.

I’m Peter Dekom, and if we don’t like this vision of the future, perhaps it’s time we invested a little more reality into our present.

If Not GDP, What?

In my April 16^th blog, Is GDP Measurement Just Too Gross?, I pointed out that not only was the use of Gross Domestic Product a severely distorted “averaging” statistic but that using this number as a governmental success metric has produced all kinds of policies that have accelerated income inequality/polarization that is literally tearing apart the fabric of our American body politic. For example, if I had a passel of trillionaires in a country where 98% of that nation earned nothing, the GDP number might look terrific amidst a sea of economic misery and poverty.

Economists generally agree that while there is value to knowing what the GDP number is, the fact that this statistic ignores debt, does not factor the costs of resource depletion or the hard dollar losses that occur as a result of pollution and industrial as well as natural disasters, makes GDP at best a secondary success metric. If the well-being of most of those living in a particular country is the desired goal, GDP does little to reflect that reality.

Economists have been grappling with alternatives for decades. The notions of measuring the relevant wealth of the economic mean or median or reporting a modified statistic that reflects GDP “with an explanation” or perhaps a metric that is not a hard dollar measurement but a scale of lifestyle measurements have all been proposed and discussed by leaders and global economic think tanks. Yet economists, and the policy-makers who rely on their projections, resist anything that does not allow clear mathematical comparison, so they tend to prefer analyses measured in hard dollars.

One group favors a dollar-driven metric known as the Genuine Progress Indicator (GPI), which “starts with the same personal consumption data that the GDP is based on, but then makes some crucial distinctions. It adjusts for factors such as income distribution, adds factors such as the value of household and volunteer work, and subtracts factors such as the costs of crime and pollution.” Progress.org.

Fundamentally, GPI looks at hard dollar calculations that take the following into consideration: income distribution (noting that the poor benefit more than the rich from increases in earning power), housework-higher-education-volunteering, crime, resource depletion, pollution, long-term environmental damage, changes in leisure time, defensive expenditures (relating to things like insurance, medical costs, cost of commuting, repair costs, etc. and not military expenditures), lifespan of consumer durables & public infrastructure and dependence on foreign assets (effectively, global borrowings and national deficits).

England has developed a lifestyle scale as an alternative to a hard dollar measurement. “The measurement is composed of 40 indicator variables which are composed of both subjective and objective data. The subjective data includes surveys of British people’s life satisfaction in a variety of areas and how often they use green space. The objective data includes measurements on the economy, health, education, the environment, crime, and more.” Pachamama.org.

The U.K.’s Office for National Statistics (ONS) developed the standards based on this initial survey of the British public of what people considered to be priorities in their lives. Economists were less-than-thrilled with what is basically a “happiness index,” but the metric was released. “When the ONS embarked on its mission to ‘measure what matters,’ it carried out a national debate to find out what people consider important to their wellbeing. When asked ‘What things in life matter to you? What is wellbeing?’, among the top five responses was ‘present and future conditions of the environment’; the others were health, good connections with friends and family, job satisfaction and economic security.” The Guardian (UK, August 2^, 2012).

The challenge here is how to compare national success, a variable that impacts national credit ratings (hence borrowing rates), trade treaty negotiations, currency fluctuations, etc., among countries around the world. Various NGOs as well as governmental agencies have created their own lifestyle comparison statistics – such as the Happy Planet Index or the U.N.’s Human Development Index (HDI) – but no major commercial or economic agencies are willing to treat these measurements seriously or as reflective of any applicable economic value. This “lifestyle” approach simply does not create metrics that can easily be translated into hard dollar comparisons that provide the kind of tracking economists require.

“The HDI, now twenty years old, adds educational and health measures to the GDP. Educational measures include literacy and educational attainment, and health measures are based on life expectancy. However, the HDI leaves out key information related to debt, sustainability, climate change, carbon footprint, ‘happiness’ measures, and so on… The recognition of the limitations of GDP and even the HDI has led groups in some countries to try and develop a broad set of new measurements. 

“The U.S. administration under President Obama recognized this need and embedded in its recent healthcare legislation the creation of a new agency under the National Academy of Sciences (NAS) to develop a system of key national indicators. It appears that the State of the USA will become that agency. It aims to be officially launched sometime this summer and is developing about three-hundred different metrics.

“In Europe, the European Commission has also been creating an array of indices that will reflect societal well-being. Their plan is to first issue a ‘pilot version of a comprehensive environmental index.’ Unlike the U.S., the Europeans expect to integrate it into their present macro-economic statistical systems.

“Other potential GDP replacements are: the Calvert-Henderson Quality of Life Indicators; Canadian Index of Wellbeing; Genuine Progress Indicator (GPI) [discussed above], Index of Sustainable Economic Welfare (ISEW); and the National Accounts of Well-being.” Investingfor theSoul.com. July 28, 2010. But until a hard dollar measurement generates global acceptance, we will continue to limp along on the highly misleading GDP.

But as Joseph Stiglitz [Nobel Prize-winner in economics] has put it, “What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing.” We’ve been measuring the wrong thing for several generations, and what we’ve got is more poverty than ever before, a contracting middle class, and a massive accumulation of wealth in a very narrow segment at the top of the economic ladder at the expensive of everyone else in this country. It’s time to find a reliable international substitute for that GDP number, and for world leaders this has be a priority before even more people are damaged by policies created on the wrong metric.

I’m Peter Dekom, and to solve a problem, at least you need a reliable way of encouraging policy solutions and accurately measuring the results.

Putin-esque

He’s outfoxed American policy vectors in Syria, reinforcing the brutal and corrupt Bashir Assad regime, keeping that dictator in the driver’s seat in Damascus. He’s stood up to the West and its challenges to his annexation of Crimea and his suborning insurrection (with a little outside help from…) in eastern Ukraine. He’s countered Western sanctions with a cry for local production to fill the void. He’s cozied up to Iran and sent jets to harass an American naval destroyer in international waters and a US Navy jet in international airspace. Local oligarchs who defy his direction have faced loss of their wealth, prison and in some cases, death, with no consequences to Vladimir Putin.

Popularity polls in his native Russia still hold him in high regard. Is this a Russian Czar who can do no wrong in the eyes of the vast majority of his people? Are there any flaws in his seemingly impermeable armor or is this the Russia we are likely to face for a decade or more going forward?

Russians are well-aware of the skimming and glomming of major assets and cash by government officials and those in their privileged quarter. After all, most of these mega-wealthy elite did not pay fair market value for ownership of companies, land and natural resources when the Soviet Union collapsed, and yet, somehow, they wound up owning what used to belong to the government anyway. Connections and access defined the new Russia, feigning free market capitalism when raw corruption just passed the power of the old Soviet elite to the new Russian elite (many of whom are the same people or their children).

Maybe most Russians just shrugged their shoulders, asking “so, what’s new about this,” when the Panama Papers suggested that many of those in Putin’s inner circle availed themselves of the tax-evasion-and-illicit-gain illusive “Russian doll” corporate structures and secret accounts through the Panamanian law firm Mossack Fonseca. But perhaps there are more ordinary Russians taking another look at their leadership than Mr. Putin has faced before. After all, for most Russians, the economy has tanked and daily life is increasingly miserable.

With oil and gas prices still very low, the cash that Russia had counted on to finance a new solid economy vaporized. Oil riches have devolved into a nation that has uncharacteristically run a major deficit since 2012, with its sizeable reserves expected to run out in 2017. The ruble itself has crashed and burned as Russians thus faced higher prices for just about everything, from basic commodities to simple utility bills. With the pressure of sanctions compounding, many Russian companies are unable to generate their expected top-line revenues, resulting in too many workers missing paychecks. To rub salt in already raw wounds, the government has been forced to close basic institutions like public schools and hospitals. Infrastructure is crumbling fast as well.

The little cracks in Putin’s armor were beginning to be visible at Mr. Putin’s annual televised response to selected queries from the Russia people, which took place this year on April 14^th. “A somewhat humbled, or at least not swaggering, President Vladimir V. Putin held his annual, live call-in show on [April 14^th], with his answers to the choreographed calls intended to underscore his concern for the plight of ordinary Russians amid a second, punishing year of recession.

“Largely gone were the diatribes against opponents like the United States and Turkey. In their place was praise for domestic cheesemongers and Russian fishermen, and approval of government efforts to keep prices down for everything.

“Perhaps the entire marathon, three hours and 40 minutes, the 14th ‘Direct Line’ session, could best be summed up by Mr. Putin’s answer to a first grader named Alina. She asked the president whether he thought a woman could become president of Russia. Her dad had told her that only a man like Mr. Putin could handle America, she said.

“‘We should not be thinking about how to cope with America, we should think about how to cope with our internal problems, our internal issues,’ Mr. Putin answered. ‘Roads, problems with the public health service, the education system, the development of our economy, economic recovery, problems of setting the pace of growth.’… If Russia addressed those problems, Mr. Putin said, the country would feel ‘invulnerable.’

“But Russians were clearly feeling vulnerable, as questions poured in …  In all, around three million questions were submitted by telephone and Internet, television executives said, of which Mr. Putin answered about 60… The first questions were posed by two studio anchors who pulled them from social media platforms, one about the steep rise in prices and the second asking when the economy would hit bottom.

“‘The government’s economic officials keep telling us that we have hit the bottom in the crisis and are now on the way up again,’ noted the caller. ‘They’ve already said this seven times. Where is the Russian economy now as you see it?’

“Mr. Putin, who had previously predicted that economic growth would rebound by now, was more cautious this time, calling it a “gray period.” The president admitted that the economy had shrunk by 3.7 percent last year, but said he expected it would only contract by 0.3 percent in 2016 and register modest growth after that.

“He also said there was enough money in the two main sovereign wealth funds and other reserves to tide Russia over for the next four years. [Not exactly say most knowledgeable analysts who embrace the 2017 number noted above].” New York Times, April 14^th. Is a statement that our economy is contracting less reassuring? And so we will wait and see if those cracks become giant fissures, and if they do, exactly how far Mr. Putin might be willing to go to life those crushing sanctions. Don’t expect anything significant to happen anytime soon, but these signs are very important.

I’m Peter Dekom, and the teas leaves can suggest a major global policy shift if read correctly.