My how times have changed. In the early 90’s the Russians were begging for American financial aid and investment. Yesterday, Russian President Medvedev talked about the recent visit of Treasury Secretary Paulson to Moscow, in search of Russian investment in a faltering U.S. economy.
Mr. Medvedev made his comments on Tuesday in a meeting with a small group of foreign journalists a day after the American treasury secretary, Henry M. Paulson Jr., appealed in Moscow for Russian investment in the United States. The symbolism of the visit resonated here, in that only a decade had passed since the Russian economy was in shambles and the country was desperate for Western aid.
Whether Paulson can convince the Russians to invest some of their new Sovereign Wealth fund in our failing banking system will be a true test of his negotiating skills. The sight of him sucking up to Putin and Medvedev is a true snapshot of a changed world order. As I pointed out last week, the Russians and the Chinese are already the largest holders of our Treasury Bills. I’m not sure even Karl Marx would have understood the irony that the countries that rose to power in the 20th Century under Communism, would end up bailing out the world’s largest Capitalist power.