UKRAINE:

Karl Marx wrote that historical events repeat themselves, occurring first as tragedy, then as farce. The financial tragedy that is still in its first run in Russia seems to have gone into repertory in Ukraine, with a few farcical scenes.

In Ukraine, the state cannot collect taxes from itself, even after coercion of its own employees. At a government conference August 5, Ukraine’s Prime Minister Valery Pustovoytenko held nearly 2,000 regional administrators and state-enterprise directors hostage, asserting that they would not be released until they had paid or pledged their taxes. The ploy brought in $30 million, not all of it in cash. On August 7, he warned the crowd that tax delinquents would be summoned to a “civil-defense exercise” and a week later he had put 500 officials in tents in a walled-in camp. He threatened to take their government cars, garnishee their salaries, impound their personal assets, and open criminal prosecutions. State-owned enterprises owe $1.5 billion just to the State Pension Fund, he complained — so the pensioners are supporting the state, instead of the other way around.