#25 | December 30, 1997 - January 13, 1998 
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"Now is the time to decide," he answered, "whether you want to be a hot dog or a little weenie."
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1997 was the year of the Hot Dog. It was the year the big got bigger and the small got smaller. In Moscow, it was the year small-time shysters went down in flames, while the crooks who thought big and pampered the pack created vast criminal empires. This was the year of the felony rather than the misdemeanor, the year of the naked power play. In 1997, if you didn't have the juice, you went down- and an increasingly smaller group of "them" pushed you into an increasingly larger group of "us."
1997, however, was a great year for the truly dishonest among us. Those of us who were worried before about getting caught for insider trading, embezzlement, influence-peddling or even murder could finally relax after watching the events of this year unfold. It was a coming-out year for that portion of us- we could finally show our true faces to the world without embarrassment or fear of rebuke.
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| No need to hide money in boxes anymore: in 1997, you could steal out in the open! |
After President Yeltsin was reelected in 1996, there was much talk of democracy surviving and thriving, of the economy recovering, and of making conditions more favorable for ordinary people to take advantage of market reforms. In 1997, however, evidence tended to suggest just the opposite- that the new political order ushered in by Yeltsin's reelection actually deliberalized the economy and closed many of the valves that had already been opened.
The Boston Globe on December 22 reported that the number of small businesses in Russia in 1997 dropped to 831,000, or down to less than half the number that exist in Poland (1.8 million). Meanwhile, corporate and financial power in Russia became increasingly concentrated among a few players.
According to Russky Telegraf, the system of authorized banks- widely criticized in 1996 as a method of increasing the financial power of cronies of government officials- was actually rearranged in March 1997 to weight the process even more in favor of a few of the richest banks. As of this year, the criteria for tenders for control of government funds relied primarily on two factors: experience in handling government funds, and the size of the bank's holdings. In other words, the richer and more entrenched the organization, the more likely they were to get more money.
In 1996 a few prescient Russia observers warned that an oligarchy of seven bankers was taking over the country: by 1997 that oligarchy had actually shrunk to two distinct teams, with Vladimir Potanin on one side and everyone else on the other. Potanin's Oneximbank won two huge tenders, one for a 25% chunk of the telecommunications company Svyazinvest and one for Norilsk Nickel, arousing a violent reaction among tender losers who felt they'd been cheated. This incident was one of many which precipitated the storied "Bankers' War," in which two teams of Hot Dogs attacked each other viciously in public while the rest of us weenies stood around and watched.
Meanwhile, political and economic power in Russia consolidated not only on the federal level, but on the provincial level. In a report issued by the Moscow Interbank Currency exchange (MICEX), Russia's leading market analysts concluded that the "rich regions were rapidly becoming richer, while the poorer regions were rapidly becoming poorer." The split was largely between agricultural regions, which often fell into an economic freefall in the absence of subsidies, and industrial regions like Perm and Moscow, where wealth rapidly accumulated.
You had to be big in 1997 to get by. In the Moscow expatriate community, small-timers like Paul Glotster, Michael Bass and Andrew Paulson were either physically eliminated or effectively excluded from the game, while Sammy Hagar stadium-crowd types like Boris Jordan stayed alive by sticking with the band despite reported improprieties and bureaucratic problems that would have sunk smaller solo artists. Even big aid-community figures like Jonathan Hay and Andrei Schleifer kept key jobs (Schleifer even kept a seat on the Gore-Chernomyrdin committee) despite being dismissed from the Harvard Institute for International Development for administrative violations. The enduring lesson: don't go solo, and you'll be taken care of.
1997 was the year in which Russia- and the rest of the world- were introduced to a new phenomenon, one in which ordinary standards of quality or conduct were openly violated by people who felt they could get away with it. Bill Gates, whose Microsoft corporation has been in open violation of anti-trust statutes for years now, visited Russia and was received as a God, while back at home his plans to force Internet Explorer on the world are continuing despite fines of $1 million a day.
In Russia it was even worse: after the "Writer's Union" scandal forced Anatoly Chubais associates Pyotr Mostovoi and Maxim Boiko out of office, the two reformers immediately assumed posts as heads of giant Russian monopolies- Mostovoi as chief VP of the diamond monopoly Almaz Rossiya-Sakha, and Boiko as the head of the TV advertising monopoly Video International. The lesson: no one minds if you pretend to be a fair-play capitalist for purely political reasons. By 1997, the hypocrisy was assumed in advance.
Other Russian officials were even less subtle in their Machiavellian leanings. Dmitri Vasiliyev, the head of the Federal Securities Commission,
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| SURPRISE! These suspects in the August broad-daylight assassination of Mikhail Manevich were not apprehended in this breakthrough year. |
"The creation of the Fund...did significantly reduce the socio-political outcry in society and ruined the plans of the leftist opposition to use the issue of 'defrauded investors' for the achievement of their political goals."
In a year where the appearance of having done something was now openly accepted to be as valuable as having actually done something, it suddenly became easier for Western observers to apologize for corrupt politicians. In a glowing Business Week profile of Potanin written by Patricia Kranz, Potanin explains his role in the notorious loans-for-shares auctions:
"'It is a part of our history,' he said, smiling."
In 1997, being big was an excuse for anything. George Soros, who invested $980 million in the successful Svyazinvest bid, explained in a recent visit to Russia that his own participation in Russian business was proof that the Russian economy was becoming fairer. Gates offered the same argument after announcing a deal between Microsoft and Sberbank. What a Hot Dog did and how he did it no longer mattered. All that mattered was that it was a Hot Dog involved.
On the cultural scene, 1997 was the year that saw Techno-Weenie replaced as the cool musical style by Techno-Hot Dog. The once-underground movement was usurped by a massive commercial repackaging of exactly the same monotonous music it had always been, a phenomenon witnessed by Muscovites most recently during a visit by Prodigy. As a symptom of cultural gangrene the rise of techno took second place only to the continued preeminence of retro 1970s clothing as the preferred costume of "everyone who was cool." Little did Moscow know ten years ago that glasnost would lead to a wave of platform shoes, tight plaid pants, huge sideburns and ecstasy, bathed in the audio-glow of virtually indistinguishable musical styles like trance, trip-hop and "progressive house." With the whole of Moscow youth ensconced in faux arguments over these faux-underground styles, it was no wonder adult Hot Dogs felt so free to run rampant all over the place.
Popular moronification was not limited to youth culture, however. Russians in 1997 were introduced to the worst trends of American Hot Dog culture, as mass-budget/no script productions like "Lost World" and "Air Force One" descended upon Russia for play in a series of glittering new movie houses. Encouragingly, Russian adults on the whole overwhelmingly refused to pay for the most vacuous American movies. The Americom reported that "Evita," "Fifth Element," Men in Black," and "Striptease" were their four top-selling movies of 1997, with the gratuitously stupid "Striptease" present due to heavy viewing by expatriates.
10 years ago, in 1987, the Russian/Abkhazian writer Fazil Iskander was asked what was the main occupation of Russians. He answered that the only thing that Russians did was think about Russia: the rest who weren't thinking were busy stealing. By 1997, virtually the same was true of expatriates living in Russia. A flood of books about Russia written by Westerners hit the bookshelves, many of which betrayed a rising sense of panic within the writing community over which cliches to use to replace the old communist ones. Even David Remnick's book "Resurrection" was really just a series of interviews with people left over from the dissident movement, like Aleksandr Solzhenitsin. At one point, Remnick even recounted a scene in which he watched a young Russian child watch a history program on television, and remarked, "I thought to myself that ten years ago, the program would have been entirely different." The book proved that even Pulitzer prizewinners in the middle of this decade were groping for a new angle on the "Russia Story."
In this vacuum of perspective, it was almost inevitable that the "Russia Story" would be transformed into a platform for tabloid aspirants like former Moscow Times reporter Jennifer Gould, whose book, "Tears, Vodka, and Lenin's Angel," was released in the United States to great fanfare. Excepting maybe the book on Chechnya by Carlotta Gall and Thomas De Waal (reviewed in this issue), Gould's book was the most talked-about Russia book this year in the West. Written in confused, pseudo-Maileresque language (forks and knives are described as the "tools of food"), Gould recounted her harrowing experiences as a brainless Canadian in modern-day Russia, at one point drowning her reader in sixteen consecutive pages of accounts of taxi rides. Gould, who now writes for the Village Voice, was eventually forced to publicly rescind earlier statements that "Lenin's Angel" was actually her nickname; not long after her book was released, Moscow Times staffers told New York magazine that the nickname was given to her because it was used to describe the mentally retarded.
While Gould raced to the top, the intellectual/literary crowd in Moscow rolled over and died. Self-professed member of the intelligentsia Masha Gessen admitted as much in her affected, pseudo-tragic book "Dead Again," about the travails of her fellow-travellers in the once-oppressed upper-class Muscovite crowd. As Gessen herself described it, the bulk of the Russian ex-dissident crowd went into high-paying jobs, the fire of their old anti-totalitarianism spirit gone from their restless souls. However, when poetess and nouvelle dissident Alina Vitukhnovskaya was rearrested and thrown back in jail for drug violations, the old dissident crowd, with the exception of a few human rights activists, turned a blind eye. This was not a year for rocking the boat, after all. The vibe was all wrong.
At the head of it all was Boris Yeltsin, who in 1997 came out of the closet, shedding his ineffectual mafia-leader image to present to the world his true loony self. During a recent trip to China, less than a week before his much-publicized gaffes in Sweden, Yeltsin told a pack of reporters to leave him alone after a press conference. "Why are you bothering me?" Itar-Tass reported him saying. "Why don't you look at the moon instead?" The president was pointing at the sun. Later, Prime Minister Jing Zai-men asked Yeltsin to extend his trip. "I can't," Yeltsin said. "I only have enough food to last for two days!"
In short, it was a great year. We were more inane, more rudderless, more unscrupulous, and better-humored than we were in 1996. We can only hope the trend continues in 1998. As for 1997, we were glad to be part of it. After all, it was all a part of our history.
