But based on his most recent claim over the weekend that he believes a new round of sanctions — which includes shutting off the flow of Russian oil and natural gas to China and India — will collapse the Russian economy. Bessent's statement tells me he understands nothing about the resilience of the Russian economy, nothing about the nature of Russia's bilateral relations with India and China, and not a damn thing about Russia's military industrial complex. In short, he may be really smart about trading bonds and securities on Wall Street, but he's a dummy when it comes to Russia and its economy.

The belief in Washington policy circles that the Russian economy can be collapsed is not a new goal hatched by Bessent. That scenario figured prominently in the Rand Corporation's April 2019 report, which was prepared for the US Department of Defense — Extending Russia: Competing from Advantageous Ground. The authors assessed the Russia economy in 2019 as follows:

The common charge that modern Russia is just a petrostate like Saudi Arabia is grossly overstated, but its economy and state budget are disproportionately dependent on energy exports, the value of which has collapsed.28 Russia possesses sizable manufacturing and service industries, but these are relatively uncompetitive on the world market, and the country exports few manufactured goods other than weapons. Recognizing the folly of Russia's economic dependence on energy exports, the liberalizing technocrat Dmitry Medvedev pursued a policy of economic modernization during his presidency that sought to diversify Russia's economy. . . .

Russia's overall economic outlook is unfavorable for both the short and long terms. Between the collapse in energy prices and the international sanctions imposed after the Crimea and Ukraine invasions, Russian GDP fell and is now stagnant.31 The ruble lost half of its value against the dollar and euro in the aftermath of the crisis, but Russia has nevertheless developed a dependence on imports for both consumer and capital goods. Predictably, these conditions have resulted in a massive tax shortfall and the imposition of austerity measures. For the past two years, the Russian government has been making up the gap by spending down the hard currency reserves built up during the boom years, but these will be exhausted soon, necessitating politically fraught choices to slash social spending. The likelihood that oil prices will remain stagnant for the foreseeable future gives little hope that the Kremlin can make an easy escape from this conundrum. While much of Russian industry was de-privatized (renationalized) under Putin, the government is rumored to be planning a selloff of some of these assets to raise desperately needed cash.