Broken Record

“We made too many wrong mistakes.” – Yogi Berra

On July 19, 2022, a group of economics professors from Yale University, the University of Pennsylvania, and the Warsaw School of Economics self-published a 118-page, non-peer-reviewed article titled “Business Retreats and Sanctions Are Crippling the Russian Economy.” Formatted to give the appearance of a rigorous academic study that one might find in a prestigious journal, the authors painted a dim picture of life in Russia in the aftermath of President Putin’s invasion of Ukraine.

According to their analysis, Russia “deals from a position of weakness” in the commodities sector, “Russian imports have largely collapsed,” and “Russia has lost companies representing ~40% of its GDP.” It also claimed that Putin holds “delusions of self-sufficiency and import substitution” and “is resorting to patently unsustainable, dramatic fiscal and monetary intervention to smooth over these structural economic weaknesses.” The final two paragraphs of the abstract hammer home the official adjudication of this pedigreed ensemble, leaving little room for further debate and not so subtly calling into question the patriotism of those who might hold different ideas about how best to execute the economic aspects of the war (emphasis added throughout):

“Looking ahead, there is no path out of economic oblivion for Russia as long as the allied countries remain unified in maintaining and increasing sanctions pressure against Russia, and The Kyiv School of Economics and McFaul-Yermak Working Group have led the way in proposing additional sanctions measures.

Defeatist headlines arguing that Russia’s economy has bounced back are simply not factual – the facts are that, by any metric and on any level, the Russian economy is reeling, and now is not the time to step on the brakes.”

Published at a time when serious flaws in the West’s sanctions strategy were becoming obvious, the article caused quite the stir. In a happy coincidence, the lead author of the study was none other than Yale’s Jeff Sonnenfeld, a media-savvy CNBC regular best known for his work as an executive coach to high-profile CEOs who also enjoy going on CNBC. Sonnenfeld saturated the airways, claiming that early indications of Russia’s resilience were mere proof of the need to double and triple down.