Thursday, September 24, 2026

A Message For Afscme Local 444 members. Organized Labor and Politics


Richard Mellor
Afscme Local 444, retired

9-24-26

My former union local, Afscme 444 representing blue collar workers at *EBMUD, a water utility I also worked at, is endorsing Gary Wolff, a local businessman, academic and "progressive" for one of the seven wards that govern the water utility. The local's PAC interviewed the candidate and he promised them "he will be there for us" says the union president Eric Larsen. Larsen also writes that, Wolff, also "demonstrated that he "understood labor values" and is "...aligned with those values." I don't know how many times I've heard that one. 

 

Of course he did, he wants help and money getting elected. 

 

The Afscme Local 444 president has enthusiastically backed Wolff and encouraged the members to "knock on doors and hand out door signs." 

 

In this quick video I made I give a little history about electoral politics at the publicly elected boards and the history of these progressives on them. Unlike Local 444's president I believe it is not electoral politics or relying on so-called friends of labor that is a source of "some of our best support" but the power of workers on the job, the unification of the two Afscme Locals that represent workers in the workplace, one white collar the other blue and a clear idea of what we are fighting for and how we can win. 

 

I neglected to mention in the video that the liberal that was on the EBMUD board for 12 years or more who wouldn't join our picket lines could be found at a rally for Humphrey the Whale that made headlines when he got trapped in the San Francisco Bay. 

 

I am not saying we shouldn't vote and believe defending the right to vote is important as we won it through bitter struggle and sacrifice. But US workers in general never won what we have today through the ballot box, it was won through battles in the streets communities and workplaces of America. 

 

The main point is workers have to rely on our own strength and not appeal to mythical friends of labor in either of the two big business parties. One of the reasons there has been a turn to the right by many workers is the failure and treachery of the Democratic Party to address the needs of workers, relying instead on the poison that is identity politics. 

 

We need an independent political voice for working people/labor rather than rely on the nebulous "friends" who are never were and never will be our friends. 

 

If there are any 444 members or EBMUD workers who wish to get together to discuss the history I am referring to here or would like to know more feel free to contact me. If you don't necessarily agree with my views here but think they are worth hearing please share. 

 

I could say a lot about DC 57 but perhaps another time. 

 

*EBMUD is the East Bay Municipal Utility District

Wednesday, September 23, 2026

Ken Klippenstein: Feds Think AI Critics Are Foreign Agents

 Feds Think AI Critics Are Foreign Agents

Trump admin thinks China is bankrolling opposition to AI data centers

Ken Klippenstein 

Sept 23, 2026

CCP recruits young, apparently

Fundraising fell off a cliff this summer. Not accepting a dime in corporate ad money allows me to be genuinely independent; but it also means I’m ENTIRELY dependent on readers like you to survive. Please become a paid subscriber (or chip in via my GoFundMe here) to keep this newsletter going — Ken

Anxiety over AI and data centers is widely held, but somehow the Trump administration has convinced itself the public concern was manufactured in China.

This week, in little-noticed remarks by President Trump as well as a Justice Department warning, the administration declared war on protestors and opponents of AI, threatening“criminal liability” if they “further the propaganda or other goals of a foreign power.”

While that sounds like some modern day Tokyo Rose shilling for Beijing, with orders coming in over shortwave radio, the actual targets are just normal people who have no idea they are part of the government’s latest national security mirage.

Last week, the Justice Department instructed “citizens and noncitizens” that anyone furthering the “goals” of a foreign power in “any public activity” — including even “public demonstrations” — must formally notify the government to avoid arrest and prosecution.

DOJ warning
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Though they don’t identify any specific protests, it’s not hard to surmise who they’re talking about. Two days prior, President Trump began a spate of social posts declaring that opposition to AI is a traitorous, treasonous conspiracy theory tracing back to China.

“There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China,” Trump posted on September 14. “Conspiracy Theorists, Treasonists, Traitors, and Leakers, BEWARE!”

“The people that say AI is going to destroy the World, and that Data Centers are bad for your neighborhood,” Trump also posted, “are Revolutionaries, but Revolutionaries for a Bad and Evil Cause.”

In a third post, he blamed the skepticism of AI on an unnamed foreign country. “The only reason the AI/Data Center outburst is happening is because the United States is leading, by a lot, every other country,” he said

Most recently, on September 10, Trump alluded to using the criminal justice system to go after “BAD” actors in the AI space. “[W]e will also be looking for BAD, and we can do that, very easily, with our already existing Criminal and Civil Justice System,” Trump warned on September 19.

In other words, the president is playing the national security card. And it’s not just Trump. Congress, too, is getting in on the act.

In June, Senate Intelligence Committee chairman Tom Cotton (R-AR) asked then-acting Attorney General Todd Blanche to investigate “foreign influence efforts targeting the buildout of American AI infrastructure.” The letter continues: “Alarming reports indicate that a network of foreign actors, led by the Chinese Communist Party (CCP), is attempting to manipulate U.S. policy and public opinion on data centers.”

Cotton’s chief exhibit was Neville Roy Singham, a Shanghai-based American tech mogul whose network of left-wing U.S. nonprofits, Cotton claimed, has spent years producing content opposing American AI infrastructure, with the Chinese government as its “ultimate paymaster.” 

“I write requesting the Department of Justice (DOJ) investigate foreign influence efforts targeting the buildout of American AI infrastructure,” Senate Intelligence Committee chairman Tom Cotton (R-AK) wrote to then-acting attorney general Todd Blanche in June. “Alarming reports indicate that a network of foreign actors, led by the Chinese Communist Party (CCP), is attempting to manipulate U.S. policy and public opinion on data centers.” 

(Readers of this newsletter will recall my report last year in which a homeland security official told me that Singham was being scrutinized under the president’s national security order NSPM-7, explained here.)

Cotton’s letter went on to complain that “no entity in the [anti-AI] network has been charged under the Foreign Agents Registration Act (FARA). I therefore request that the DOJ launch a full investigation into these matters.”

“We can’t allow any effort by foreign adversaries to extort these fears and undermine our technological development,” Senate Intelligence Committee chairman Tom Cotton (R-AK) wrote to then-acting attorney general Todd Blanche in June. Cotton’s letter went on to complain that “no entity in the [anti-AI] network has been charged under the Foreign Agents Registration Act (FARA). I therefore request that the DOJ launch a full investigation into these matters.”

Cotton letter
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Days before Cotton's letter, top Republicans on the House Energy and Commerce Committee, led by Chairman Brett Guthrie (R-KY), raised nearly identical concerns. They asked FBI Director Kash Patel and the White House for a briefing on what they called foreign influence campaigns aimed at blocking American data centers.

“It is critical that this Administration takes any effort to undermine [winning the AI race] — particularly from foreign adversaries — with a great deal of seriousness,” they wrote.

Guthrie said in his own statement: “The fact that Chinese Communist Party-backed entities and other foreign adversaries may be attempting to influence decisions related to American data center infrastructure puts into perspective how serious of a fight we are in.” 

House letter
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And well before Trump weighed in, a chorus of private figures in his orbit were pushing the same line. 

Start with David Sacks, the venture capitalist who served as Trump’s AI czar before stepping down to become co-chair of the President's Council of Advisors on Science and Technology. Sacks has been casting domestic resistance to AI as a gift to Beijing. After a Chinese model topped a coding leaderboard in July, he complained that “America is tying itself in knots: politicians and bureaucrats are banning new data centers … This is how you lose the AI race.” More recently, Sacks warned on Fox News against moves that would “just hand the whole ball game to China.”

Then there’s Kevin O’Leary, the “Shark Tank” investor behind a planned $100 billion data center in Utah. O’Leary, a vocal Trump supporter, has spent the past two years cozying up to the administration. That includes a January 2025 Mar-a-Lago sit-down with the president-elect, and a stretch lobbying Trump officials there in a bid to buy TikTok.

This Spring, O’Leary claimed that hundreds of millions of dollars from China were paying protesters to oppose data centers like his. One group he targeted, the Alliance for a Better Utah, shot back: “The only foreign interest in this data center is Kevin from Canada.”

It gets funnier.

In a June 25 post on X, O’Leary conceded he had “no evidence” that the groups and people he’d named were funded by China, and Fox News aired apologies. Two of the groups have since sued O’Leary and Fox for defamation.

O’Leary’s apology

Whoops!

Then there are the industry groups, too numerous to list. A representative example: a spokesperson for the pro-AI Innovation Council told the Daily Caller that the anti-data center campaign was "a manufactured op by dark anti-American forces and foreign governments."

All of this rests on the premise that ordinary Americans wouldn’t oppose data centers unless someone in Beijing was pulling the strings. The polling says otherwise.

A Gallup poll conducted in March found that 71 percent of Americans oppose building an AI data center in their area. That’s more than the 53 percent who oppose a local nuclear plant. Nearly half, 48 percent, are strongly opposed, and the opposition crosses party lines, including 63 percent of Republicans. That’s not a fringe. It’s close to a consensus.

Nor is it technophobia. Nearly half of Americans now use AI chatbots, according to a February Pew surveyof more than 5,000 adults. Yet 40 percent said AI will hurt society over the next 20 years, compared with 16 percent who said it will help. What people distrust is how it’s being rolled out: 63 percent said AI is advancing too quickly, 71 percent said it will make their personal information less secure, and 67 percent had little or no confidence in the federal government to regulate it. Pew research last year found that 61 percent want more control over how AI is used in their lives, and about six in ten worry government regulation will be too lax.

In other words, the public wants a say, and it wants at least some controls in place.

The Trump administration’s response: treat opposition to AI and data centers as a counterintelligence matter. It’s not the first time the administration has played the national security card to clear the way for AI.

In June, the Justice Department intervened in an NAACP lawsuit against Elon Musk’s xAI over dozens of gas turbines the company was running without air permits to power a data center it maintained in Tennessee. The department asked a federal judge to throw the case out, arguing that the NAACP “threatens American national, economic, and energy security.”

To make the point, the government filed a sworn declaration from Cameron Stanley, the Pentagon’s chief digital and artificial intelligence officer. Stanley swore to the court that Grok was “a matter of paramount national security.” 

The irony of the China puppetry gambit is that the approach is likely to backfire. Well, one of the ironies. Another is Trump warning about “Conspiracy Theorists” while alleging a vast Chinese plot for which his allies have produced virtually no evidence. (Though Kevin O'Leary will have plenty of time to find some during the discovery portion of his defamation suit.)

When people who distrust the government’s handling of AI are told their distrust is traitorous foreign propaganda punishable by jail time, it’s hard to imagine them trusting the government more. It’s easy to imagine them trusting it less, and wondering what the government is so eager to keep them from asking. That’s the downside of playing national security card, and it’s one that Washington never seems to think about.

Subscribe to make sure you see my next article, revealing how all of this will be formalized under a new government entity modeled off the military.

Fundraising fell off a cliff this summer. Not accepting a dime in corporate ad money allows me to be genuinely independent; but it also means I’m ENTIRELY dependent on readers like you to survive. Please become a paid subscriber (or chip in via my GoFundMe here) to keep this newsletter going — Ken

US/Israeli War on Iran is State Terrorism




Iran International

 

Sharing this commentary is not an endorsement of the Iranian government but in solidarity with the Iranian people in the face of an unprovoked war and violent aggression on the part of the US and Israeli governments. FFWP

Iranian President Pezeshkian, in his speech at the United Nations just a short while ago, said:

 

“Iran: A Victim of Terrorism”

 

In other words, in polite language, he called America a terrorist state. And do you know what he said next? Just read CNN's breaking news right now and you'll understand. He said: “We will never bow our head”

 

Let me give you just one calculation. Do you know what Saudi Arabia's military spending was in 2025?

 

Saudi Arabia's military spending was 82 billion. And Iran's? 7.4 billion. The difference is as wide as heaven and earth. Saudi Arabia spends six and a half percent of its total GDP on the military. And Iran? Only two percent.

 

Even Kuwait's military spending in 2025 was 8 billion. That is, far more than Iran's. Why do they have to spend so much?

 

Because all of them buy weapons from imperialist America. Which means all that money goes straight to America. Fine, I get it — their military spending is so high because they buy weapons from America. But have those weapons been able to protect them?

 

Forget Iran. Saudi Arabia can't even hold its own against the Houthis in Yemen. Their ports have been shut down. Their pipelines are lying damaged. Now Saudi Arabia is begging America for help. It's begging other countries too. So what was the point of buying all these weapons?

 

And Iran? Despite spending so little on its military, it has now emerged as a powerful state in the world. How? Because they put their own technology to work. They don't have to buy weapons from any imperialist state.

 

Today, President Pezeshkian can stand at the United Nations with his head held high and say:

“We will never bow our head”

 

Why is he able to? Why isn't America killing them? Why isn't it detaining them, or why did it even let them go there? Because Iran has built that Deterrence. 

 

American professor John Mearsheimer has said:

“Iran certainly has some kind of Leverage, which has forced Trump's hand.”

 

Just think about it — a country you are at war with, and its president can go into that very country, stand at the United Nations with his head held high, and say:


America is a terrorist state.


Iran is showing the whole world how to live with your head held high. 

Monday, September 21, 2026

The media can make us believe anything they want – even that Charles loved Diana

The media can make us believe anything they want – even that Charles loved Diana

Why do billionaires buy up newspapers? Because by owning everything – and most especially the media – they can mould our minds into believing it would be a catastrophe if they did not own everything.


Johnathan Cook Sept. 21st 2026

The current narrative of “beloved king shocked by claims he said something nasty 30 years ago” is a perfect example of how, given a bit of time, the media can reinvent the very reality the media itself once created, readily flipping on its head a now inconvenient, earlier narrative.

Anyone who lived through the Princess Diana years should be able to recall that, according to the media of that time, Charles was the undoubted villain – a cold-hearted man who cheated from the start of his marriage on a young, beautiful, doting wife he never loved.

Charles wanted his old flame Camilla as his bride and future queen – and, with Diana’s untimely death in 1997 at the hands of the press pack as her car was chased through a Paris underpass late at night, he soon got his way.

Earl Spencer’s new claim in a book published this week that Charles told him, shortly after Diana’s death, that she would “soon be forgotten” fits all too snugly with that earlier narrative.

But not with the new narrative. 

Now, with Charles a “kindly old king and family man battling to recover from cancer”, the kind of behaviour that made perfect sense in the earlier narrative is a nuisance. Which is why Earl Spencer is receiving a lot more pushback than he would have expected had he made such a claim in the late 1990s.

Three decades ago, Charles was portrayed as an unpopular Prince of Wales, a man lacking the common touch of Diana, and a crank obsessed with irrelevant things like the environment and architecture. The Queen, so the story of that time went, was so unsure of his ability to rule effectively that she dared not abdicate.

Fast forward to the present day, with Queen Elizabeth II dead and Charles III head of state. 

The King is now a wise elder statesman bearing lightly the heavy burden of high office, managing Britain’s tricky relations with a deranged Trump administration better than any politician, and doing it all through serious illness. Ever the good father, he is fulfilling his duties as king to provide his son, William, with the chance to raise and enjoy his young family before he himself is crowned.

We’re in permanent telenovela land. Who knows which bits of this, if any, are true. But the plot twists serve a purpose, like soap opera, to keep us entertained and distracted from the real problems we desperately need to be focusing on. 

And most importantly, whichever way the plot switches, the media cash in on the drama of it all. 

But there is a deeper point. The media, through sustained plot engineering, can have us believe anything – that black is white, and up is down. They can, through sheer force of a new narrative consensus, make us believe the very opposite of what we were encouraged to believe a few moments earlier.

That is why billionaires buy up newspapers. Because they can, through their ownership of everything, and most especially the media, shape our minds into believing it is a good thing that billionaires own everything. 

They make us believe that any change to that order would be catastrophic. 

They make us believe that our societies are in decline, not because the billionaires have siphoned off all the wealth to their off-shore accounts but because small boats are “invading” our shores. 

For decades, they had us believing the planet was doing just fine despite what all the scientists said. It was simply down to each individual to be more responsible: to cycle more, to recycle more, and to switch to long-lasting lightbulbs. Now that climate chaos is upon us, they tell us we will just have to adapt to hotter summers and colder, stormier winters. 

The only consistent element is that the billionaires never address their own role in engineering this ecological disaster. Their choice to prioritise rocketing profits over the health of the planet is never scrutinised by the media they own. 

Last year the writer Omar El Akkad published the book One Day, Everyone Will Have Always Been Against This on the West’s complicity in Israel’s genocide in Gaza. One can already see how prophetic the book’s title is. 

A British government led by Sir Keir Starmer that deeply colluded in the mass slaughter in Gaza is now recasting itself as an opponent, under the new leadership of Andy Burnham. 

Similarly, the billionaire-owned media is slowly taking a less enthusiastic stance on Israel, doubtless hoping that Israeli voters evict prime minister Benjamin Netanyahu in the forthcoming general election so that media can have a freer hand to rewrite their script. Then they will gradually accept as a given that what Netanyahu did – though not Israel – was a genocide. And of course, they will have always been against it. 

Any lie can be repackaged as a self-evident truth once you have absolute narrative control. The naked emperor can be magically clothed, if the media so decides. 

Amid this pervasive unreliability, there is one North Star by which to navigate. Anything that benefits the billionaires cannot be trusted. As long as they are in charge, we will continue squabbling among ourselves, victims of their self-serving story-telling. 

Saturday, September 19, 2026

When people picture the Irish who went to Britain, they picture a man with a shovel.

I worked for Irish contractors that used to import Irish labor to work on Britain’s roads and construction sites; the most famous was Murphy’s and it was a brutal place to work many Irish workers told me. The poem went like this:

 

“You never work for Murphy’s McAlpine or John Laing

For they’ll have you behind the mixer doggin’ In the sand.” 

 

The Irish Band the Dubliners have a song called MacAlpine’s Fusiliers and there was another song I remember titled Building up and Tearing England Down.

 

When I lived in London one of the famous Irish pubs that came to mind was The Elephant’s Head in Camden Town. I was in Camden with Roger Martinez and we were outside that pub but I never went in and it’s a much trendier area now I think.

 

And this Irish guy I worked with used to say all the time, “The craic is good in Cricklewood, where glasses are crackin’ amd Paddy is Jackin’” Jackin refers to quiting your job. Also, when I left England, the NHS was being saved by immigrant doctors in particular. Many English doctors left for the US where medicine is a business and having your own practice is such a prestigious accomplishment. I do recall lots of Irish women as nurses too but never realized the depth of Irish female immigration. My own great grandparents on both sides came from Ireland.  Richard Mellor



 

True Irish Stories on Facebook

When people picture the Irish who went to Britain, they picture a man with a shovel.

 

Here's what the numbers actually say. For much of the twentieth century, more Irish women emigrated than Irish men. Between 1946 and 1951, for every hundred Irish women who left, only seventy-three men did.

 

And a huge number of those women went into one job.

 

Britain founded the NHS in 1948, and immediately discovered it couldn't staff it.

 

So they came recruiting. Advertisements went into the Irish national and provincial papers. On 6 August 1949, the Connaught Telegraph ran a notice telling readers that a recruitment officer named Miss Lavelle would be touring the region in the coming weeks — Ballina, Westport, Castlebar, Claremorris.

 

Through the 1950s and 60s, NHS staff travelled all over Ireland, took rooms in local hotels, and interviewed teenage girls for nurse training.

 

The offer was simple and it was enormous. Training in Ireland was limited and expensive. In Britain it was free, and it came with a bed in the nurses' home. For a seventeen-year-old from a farm in Mayo with no money, that was a life.

 

Thousands went.

 

The scale is staggering. By the 1960s, eleven percent of every nurse recruited to hospitals in the south-east of England had been born in the Irish Republic. By 1971 there were 31,000 Irish-born nurses in Britain — twelve percent of the entire nursing workforce.

 

At one Liverpool hospital, of 641 recruits over those years, 350 were from Ireland. Just over 38 percent were English. Several of the Irish nurses interviewed later said the English were a minority in their own training class.

 

One of them described it plainly: they were the backbone of the NHS.

 

They were seventeen and eighteen years old, a long way from home, homesick, and everybody called them Paddy no matter how often they protested.

 

A Sligo woman named Nessa, who started training in Yorkshire in 1957, put it simply years later — the hospitals would have been short an awful lot of staff if the Irish nurses hadn't been there.

 

The men who built Britain got a ballad.

 

The women who kept it alive got nothing at all.

 

Was your mother, your aunt or your grandmother one of them? Which hospital? 

Friday, September 18, 2026

Don't Let Blinken, Biden and The Democrats off the Hook on Gaza. War Criminals All




From Democracy Now


A coalition of Palestinian and progressive groups is urging universities, think tanks, elected officials and others, to refuse to hire or collaborate with a group of 20 former Biden officials accused of "promoting, lying about and covering up the Gaza genocide." 

 

The "Drop the Genocide 20" campaign has targeted former Biden staffers including Antony Blinken, who served as secretary of state, Jake Sullivan, former national security advisor, and Brett McGurk, Biden's Middle East coordinator — all of whom were pivotal in backing Israel's war on Gaza. 

 

Since his time as secretary of state, Blinken was given a book deal with Crown, an imprint of Penguin Random House, and has often participated in public speaking events including at Harvard's Kennedy School.

 

The campaign is also demanding the Biden staffers be banned from any future political appointments. 

 

"The culture of bipartisan elite immunity is what drives U.S. war crimes and support for war crimes. … This dynamic is a key reason Biden officials knew they could arm, defend, and cover up the genocide in Gaza for 15 months, and simply move back into liberal spaces, nonprofits, and future governments.” 

 

Congressmember Rashida Tlaib is among those to have signed the pledge. 

Russian elections: stagnant politics and economy, unending war

Russian elections: stagnant politics and economy, unending war

by Michael Roberts

Russia has elections to its parliament (Duma) starting today. This will also be the first legislative election in Russia to take place amid the ongoing war in Ukraine. At stake are 450 seats in the lower house of the Federal Assembly. Half of the seats (225) are elected by party-list proportional representation with a 5% electoral threshold in number of votes. The other half elected in 225 single-member constituencies (circuits) by first-past-the-post voting (plurality voting).

United Russia, the party of President Putin, will win again, but maybe without a super-majority (310 seats) it needs to make constitutional changes without having to rely on support from other parties. Most of the opposition parties support Putin’s presidency to one degree or another. The Communists usually finish second, but may well perform worse this time as there is a scond Communist ‘A Just Russia’ group that could take some votes.

There is only one party opposed to the war in Ukraine, the ‘liberal’ Yabloko. Yabloko attracts a thin layer of young people who want to express their opposition by voting against United Russia. Yabloko was initially allowed to stand in the party ticket but was then excluded from this and many of its candidates in individual constituencies were also blocked. 

Eleven members of the Yabloko have become defendants in criminal cases and 12 party members have been added to the register of foreign agents, among them party chairman Nikolay Rybakov, and his deputies Boris Vishnevskiy, Vladimir Dorokhov, and Lev Shlosberg. Another deputy of Rybakov, Maxim Kruglov  was sentenced to 7 years in prison by the Zamoskvoretsky Court of Moscow on June 24, 2026, for publishing information on social media about civilian casualties in Ukraine during the Russian invasion, including in Mariupol and Bucha. But there are still a handful of Yabloko candidates still standing, any election leaflets for Yabloko are being gobbled up even though distributors can get temporarily arrested by the police for 3 hours just to disrupt their agitation.

The most famous antiwar dissident is the Marxist Boris Kagarlitsky, arrested in July 2023 and now serving five years in a prison colony. But there are others. In November 2025, members of a small Marxist study circle in the city of Ufa were sentenced to 24 years, accused of “terrorism” and “conspiracy to overthrow the government” for reading works of Marx. 

But the majority of voters still support the war and with the Duma election result inevitable, apathy dominates and political stagnation is the order of the day. The Russian economy mirrors the poiltical stagnation. The war in Ukraine goes towards completing its fifth year with no resolution in sight. At the start of the war, Western analysts forecast a quick collapse in the economy and the ruble. They continue to forecast calamity five years later. But the Russian economy has survived and has every prospect of being sufficiently stable to continue the war through 2026 and beyond. Russia has a relatively low stock of debt and taxes can be raised again. The central bank can print money and the government can continue to nationalise businesses to strengthen the war economy.

On the other hand, after a boom period based on the massive switch into an arms economy, in the last year or two economic growth has slowed, inflation remains high and civilian investment has been drained for the war effort.  Russia’s economy entered 2026 weaker than it was a year before, with growth declining and oil prices well below budgeted projections. In effect, the Russian economy, like many others in the OECD, is in “stagflation” (where price inflation stays high, but output stagnates).  Russia’s ‘military Keynesianism’ is no longer delivering, as before. 

First-half economic growth was half the pace recorded a year earlier and almost seven times slower than during the wartime economic boom of 2023-24. The war in Iran has temporarily pushed Russia’s oil revenues to their highest level since the start of the war in Ukraine, enabling the federal budget spend to rise 16%, with about one-third going to the military and weapons production.  As a result, Russia’s military-industrial sector has continued to expand.

Civilian manufacturing, however, remains in contraction, falling 3.2% from a year earlier and 4.6% compared with 2024 levels, according to May estimates from the Center for Macroeconomic Analysis and Short-Term Forecasting. 

In its ‘baseline scenario’, the Russian Ministry of Economic Development lowered its forecast for Russia’s GDP growth in 2026 to 0.4% from 1.3% and for 2027 to 1.4% from 2.8%. So no collapse, but no boom. Small businesses, already struggling, will remain burdened by higher taxes and finding it difficult to secure credit. There is a severe shortage of labour to sustain businesses. Indeed, 68.7% of small and medium-sized businesses reported loss of revenue in 2026; it is likely many will close down.

Russia’s annual inflation rate rose to 6.3% in August 2026, its highest level since November 2025, up from 6% in the previous month. Inflation remains stubbornly high, so keeping interest rates up, squeezing small firms and households.

However, average wage rises are still outsripping price rises, so for many, especially those working in the arms sectors, real incomes continue to rise.

As for the impact of the war, there are rumours during the Duma election that the government may announce forced mobilisation to cover casualty losses. Putin has denied this will happen. It would certainly increase anti-war sentiment. In the meantime, war spending is now over 7% of annual GDP. Despite increased taxation, the sharply rising spending to pay for the war is draining Russia’s sovereign wealth fund. 

But the Russian economy still has enough funding to maintain the war and there is little reason to expect any collapse. It will be a different matter if and when the war ends. War production is basically unproductive for capital accumulation over the long run. Russia’s economy will revert to civilian capital accumulation when the war ends. Then Russia’s productive sectors will be exposed. A post-war slump is very likely.

The Russian economy remains fundamentally natural resource-linked. It relies on extraction rather than manufacturing. Russia remains technologically backward and dependent on high-tech imports. Russia is not a substantial player in any of the cutting-edge technologies, from artificial intelligence to biotechnology. It has yet to produce technologies fit for a competitive export market beyond arms and nuclear energy. The underlying message is that Russian economy and its politics will remain stagnant for the rest of this decade.