The administration of President Joe Biden has once again directed blame for soaring inflation to Russian President Vladimir Putin, but some experts contest these claims, suggesting that the causes of today’s 40-year record inflation precede and transcend the war in Ukraine.
“With the biggest single driver of inflation being Putin’s war against Ukraine, [President Biden] has taken action to blunt the impact of Putin’s Price Hike for families,” the White House said on Twitter Monday.
The phrase “Putin’s price hike” has been used by the White House since at least March, when the Biden administration used the phrase in an official statement dictating the president’s plans to address gas price inflation. For Biden, the term is a useful one, as it deflects blame for agony at the gas pump away from his administration’s policies and towards an unpopular world leader.
“I’ve done everything in my power to block Putin’s gas price hike. Just since he invaded Ukraine, it’s gone up $1.74 [per] gallon, because of nothing else but that,” the president asserted in a speech earlier this month.
However, some experts would take issue with the latter clause of this phrase, which places the blame solely on Putin for an issue that precedes the invasion.
For over a year, oil prices have been on the rise, as the economy bounces back from pandemic-era lockdowns. Experts who spoke with The Epoch Times disputed the Biden administration’s attribution of blame for high oil prices to Vladimir Putin.
“It’s not the war in Ukraine. It’s really domestically caused constraint on the supply side,” Ross McKitrick, a professor of economics at the University of Guelph in Ontario and expert on energy and environmental policy, told The Epoch Times in an earlier interview.
Analysts generally say it is likely that the war in Ukraine has contributed some part to inflation, exacerbating fossil fuel scarcity and making the existing fossil fuel scarcity worse. Before the invasion, Russia reigned as the largest exporter of natural gas in the world.
While much of the world, including European countries involved in sanctions against Russia, have been slow to embargo all Russian natural gas outright, the world economy has reeled nonetheless from disruptions to the energy market, as gas companies are reluctant to incur the risks and negative publicity of working with the Russian Federation. Putin’s government has also cut off natural gas supplies to several European countries deemed unfriendly, including Bulgaria, Finland, the Netherlands, and Poland.
The situation is similar as concerns Russian petroleum, but the EU has found greater success sanctioning oil than natural gas. Earlier this month, the EU adopted a sanctions package to phase out Russian oil over the next eight months, with the intention to undermine Russia’s economy and ability to wage war. A consequence of such sanctions is that global oil supplies feel the crunch in absence of Russian exports.
Though the United States sources its oil and natural gas from elsewhere than the Russian Federation, the country is not free from the international dynamics of supply and demand, and rising gas prices accelerated even more in the months prior to the Russian invasion.
Biden’s claim draws some support from the analysis of Mark Zandi, chief economist for Moody’s Analytics, who agrees that the war in Ukraine is the primary cause of inflation.
“The Russian invasion and spike in oil and other commodity prices is the #1 reason, followed by the pandemic and the housing shortage. Note that often-touted reasons for the outsized inflation, such as stiff regulation of the fossil-fuel industry, strong money supply growth, and corporate greed are not playing a significant role in the high inflation,” Zandi said on June 12.
However, even while identifying the Ukraine war as the greatest factor among many in rising inflation, Zandi does not assign the blame solely to Vladimir Putin, and a number of experts say that Biden’s claim that rising fuel prices are a result of “nothing else but that” is too simplistic.
“Today’s prices are mostly caused by global anti-oil policies, which made prices artificially high before Putin’s war and prevented the world from quickly increasing production in response,” said energy expert Alex Epstein, alluding to one of many potential factors contributing to rising gas prices.
Indeed, gas prices had already risen significantly prior to the invasion. The week before Biden’s inauguration, regular gas prices averaged $2.46 per gallon; on Feb 17, the week before the invasion, gas had already risen to $3.52 per gallon.
Yet the inflation issue has roots much deeper than mere fossil fuel scarcity, reflected in the data of the Consumer Price Index in the antebellum.
In January of this year, well before Russian tanks rolled into the Donbas, the rate of inflation had already soared to 7.5 percent year-over-year—a rate of inflation not seen since 1982, though subsequently surpassed.
A letter from the Federal Reserve Bank of San Francisco noted that inflation had risen more drastically in the United States than in the rest of the developed world, even though Europe draws more heavily from Russian fuel exports, suggesting that at least some of the recent inflation is attributable to national factors.
“The United States is experiencing higher rates of inflation than other advanced economies … the sizable fiscal support measures aimed at counteracting the economic collapse due to the COVID-19 pandemic could explain about 3 percentage points of the recent rise in inflation,” the researchers concluded.
While the war in Ukraine very likely affected the current rate of inflation through higher fuel prices, the matter of inflation is a more complex and nuanced phenomenon, suggesting the White House’s attempts to blame it mostly on the conflict may be misplaced.
Peter Svab contributed to this article.