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Russia's decision to grant temporary asylum to Edward Snowden, who has revealed vast documentation on U.S. intelligence gathering, speaks loudly both to Russian-American relations and Moscow's domestic politics. What it especially tells us is that U.S. President Barack Obama's policy of patient, deferential constructive engagements has basically failed.

Mr. Obama's decision to press the "reset button" on relations with Moscow after Russia's massive invasion of Georgia seemed to be a reasonable attempt to restore badly frayed relations, gain Russian co-operation on a variety of issues (from fighting terrorism to dealing with Iran, North Korea and various parts of the Middle East) and encourage Russia to return to the road of domestic democratization at a time when the Kremlin was clearly engaged in a major detour.

Had the plan worked even minimally, the Snowden imbroglio should have been easily resolvable. Instead, Mr. Putin has pulled the nationalism card and we have a major crisis.

Whatever noble goals Mr. Snowden may claim, the White House views his disclosures as an extremely grave breach and wants to see him stand trial. Let us not forget that the administration went so far as to have U.S. Attorney-General Eric Holder promise the Kremlin that Mr. Snowden wouldn't be executed or tortured. There is little doubt how badly it desires Mr. Snowden's extradition.

The prism of the Snowden crisis, however, proves most revealing. We see Russia, which does not and cannot present a direct military threat, engaging nonetheless in risky international mischief, in addition to rampant domestic repression. Moreover, it's doing so through odd domestic and international policy combinations that are ultimately damaging not only to the United States and the international system, but also to Russia itself.

Domestically, the repression has been combined with fantastical behaviour by Russian President Vladimir Putin. On one hand, media clampdowns, parliamentary and presidential elections largely viewed as fraudulent, trials for political opponents, draconian anti-gay laws, measures against human-rights organizations and accusations of political conspiracies. On the other, bizarre adventures such as Mr. Putin flying a light aircraft to guide rare cranes to their habitat, "finding" pre-positioned buried undersea treasures and catching gigantic pikes on programmed fishing expeditions.

It all leaves the impression that Mr. Putin magically floats above politics – an order that is both repressive and ridiculous, political magical realism that takes from Garcia Gabriel Marquez and Machiavelli.

In terms of foreign policy, it is true that Russia has co-operated to some extent on fighting terrorism and allowed U.S. transit flights to Afghanistan, although this was done out of self-interest and was quickly restricted whenever it impinged even minimally on the Kremlin's concerns. However, Mr. Obama's high hopes for Russian co-operation on the North Korean and Iranian threats have been regularly rebuffed. And Moscow's continuing efforts to protect its Syrian client state, despite the killings of tens of thousands of civilians, shows how the Kremlin views Western democratic interests with undisguised contempt.

Mr. Obama, in his fifth year in power, has yet to exact any price for such deadly Russian obstruction – at best, confusing patience with fecklessness. In Mr. Putin's eyes, the "reset button" has freed him to pursue his repressive policies at home and his mischievous ambitions abroad, without U.S. retaliation.

Whereas in 2001, George W. Bush risibly claimed that he looked Mr. Putin in the eye and was "able to get a sense of his soul," Mr. Obama has simply acceded to the Russian leader's games. American forbearance in these other matters has, in a sense, culminated in Mr. Putin's cat-and-mouse game with Washington over the Snowden matter.

Mr. Putin isn't just humiliating Washington – he's testing it. If Mr. Obama is prepared to show that there are repercussions for gross Russian misbehaviour, next month's G20 summit in St. Petersburg (and a possible follow-up meeting between the two presidents) presents an opportunity. At long last, Mr. Obama could send a corrective message by not attending.

Aurel Braun is Visiting Professor of Government at Harvard University and a professor of political science and international relations at the University of Toronto. His most recent book is NATO-Russian Relations in the Twenty-First Century.