Thursday, April 24, 2008
Wall Street, Main Street and Pennsylvania Avenue
Ford cut more jobs and operations in the United States--not good news for Main Street. One area of major growth for Ford is its Russia division--where it will be increasing operations in its plant outside of St. Petersburg and hopes to increase sales by 75 percent. Russia and other emerging markets were big winners for Ford. Good for Wall Street.
And Ford is going to have a much different perspective about developments in Russia than most U.S. politicians. A stable regime that promotes and sustains economic growth and leads to a more robust middle class is better for Ford than political and economic instability. They will want Medvedev to be much more "Putin" than "Yeltsin". And any increased political confrontation between Moscow and Washington threatens the position of U.S. companies--so Cold War-esque rhetoric from American politicians is not a good thing. So the divergence opens up between Wall Street and "Pennsylvania Avenue."
Main Street's view of relations with Russia will depend, increasingly, on whether Main Street sees jobs and economic benefits coming as a result of a closer economic relationship with Russia.
Yet another indication that the US needs Russia far more than Russia needs US.