There is only one small detail that Russian leaders have forgotten: inflation is presently increasing dramatically. The Consumer Price Index (CPI) has increased 15%, and the Producer Price Index (PPI) 28%. The price of bread has increased 41% over the last 12 months. The Central Bank maintains negative real interest rates, and public expenditures are heating up the economy. Russia will have to deal with these macroeconomic contradictions to avoid huge economic crises in the months and years ahead. In other democratic countries - but not Russia - these price increases reduce a leader's popularity. But even in Russia's authoritarian regime, inflation creates a bad environment for new military adventures.

World leaders should demonstrate more vigor in repudiating this event, for many reasons. First, Georgia itself has no economic importance, but the conflict shows the vulnerability of the energy supply in the Caucasus. Second, Georgia won't be the last target of the Putin-Medvedev government's aggression; they want more. Third, the G-8 and the United Nations Security Council have the power and the duty to contain this new-old Russia before it is too late. It's a multilateral task; the U.S. has to contain its own instinct to police the world and to act alone, guns in hand, shooting fast. The end of military occupation should not induce the end of our preoccupation with Russian attitude in the Caucasus.