Another packed edition. We're talking inflation and the rising price of basically everything. The President is trying to lay blame for it on Putin. Meanwhile, as Russia takes heavy losses, they are ramping up their attacks on civilian targets, engaged in concerning talk about bioweapons and shelling new parts of the country.
⚾️ On a lighter note, play ball! Baseball is back in business. MLB players and owners finally reached an agreement on a new contract. There will be a full 162 games, with the regular season reportedly kicking off on April 7th. Details below.
Now to baseball's pre-existing problem: Games are too long and the fanbase is aging. But I digress...
We also have a little Purim/St. Patrick's Day combo platter when it comes to 'What we're eating' this weekend.
In maybe the least shocking news of the week (for anyone who's bought anything recently), inflation remains at a 40-year high. The consumer price index, which measures a range of goods and services, rose 7.9% in February 2022 vs. February 2021. That's the highest level since 1982.
Prices jumped by .8% month-over-month from January, even more than expected and the fastest pace since January 1982.
And these numbers don't even take into account the surging oil and gas prices since the war in Ukraine started on February 24th. Gas hit $4.33 a gallon average yesterday, a 62 cent increase in two weeks.
Wages are also growing, but simply can't keep up with the rising costs. For perspective, to keep pace with a .8% monthly increase in inflation, you would need a 10% annual salary raise. (Anyone else NOT get that this year?)
Unfortunately, there's nowhere to hide. Some of the biggest increases are for essentials like gas, food and rent. Here's how the numbers break down:
What's behind it? It mostly comes down to supply and demand. The economy rebounded back faster than expected during the pandemic, creating tons of demand. Add to that, the US government pumped trillions into the economy through three stimulus plans (two in 2020 and one in spring 2021) to try to avert a depression. At the same time, there are still major supply shortages, which drives up prices. And then, add in the war in Ukraine, which is now putting additional strain on oil and wheat supply chains, and it's a recipe for disaster.
What The White House Says
'Putin's Price Hike': “Today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike. A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions," President Biden said. He added that Americans should know "the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing." Read Statement
The Republican Response
Deflecting Blame: Republican National Committee Chairwoman Ronna McDaniel criticized the administration’s attempt to blame the war for prices, adding: "Prices continue to skyrocket under Biden and Democrats’ reckless policies. Biden’s attempt to deflect blame is an insult to every American and small business owner struggling to afford the cost of everyday goods."
Reality Check: While the conflict has certainly made the situation worse, particularly as it comes to oil and food prices, inflation was a huge problem before the war and will likely continue to be a problem long after. WSJ
So, what can be done?
Unfortunately, not much immediately. The Federal Reserve is expected to raise interest rates at its meeting next week for the first time in nearly four years. The idea behind that is if the Fed raises the cost of credit, debt-financed spending and investment go down. Demand then decreases and prices eventually stabilize. But it will likely take a long time for those rate hikes to make a dent, in part because rates are so low right now and because the Fed typically takes a gradual approach to increasing interest rates.
Are there other strategies to bring down inflation? Yes, but they wouldn't be popular so don't expect them.
Cutting government social spending: This approach also eases price pressures by reducing demand: When the feds or states slash aid to households, those households have less disposable income to spend on goods and services. Ipso facto: prices will start to come down.
Increasing taxes is another tactic the government could use. Again, less money in consumer pockets=less demand. But that is unlikely.
Price controls and wage controls. Literally that would be the government telling private sector the maximum they can charge for things and putting limits on pay increases. It hasn't been done in the US since the 1970s.
Treasury Secretary Janet Yellen tells CNBC she thinks inflation will likely stay high for another year.
Two weeks into this war, Russia appears to be changing tactics, firing more weapons from a distance. A senior US defense official tells CNN the US has now seen Russia use more “long-range fires, bombardment, missile launches, both from aircraft” and “mobile” missile launchers.
“I mean, just looking at the imagery they are clearly hitting populated areas and causing a lot of damage, so we definitely have seen and independently can verify an uptick in the increase of long-range fires as they have struggled to overcome the challenges in momentum that they have suffered in the first couple of weeks."
Western Ukraine hit: Russia began striking near airports in the west of the country for the first time Friday, as it tries to send a message that no part of Ukraine is safe.
Convoy latest: New satellite images from Thursday show that the Russian military caravan that stretched for more than 40 miles has "largely dispersed and redeployed" as the Russians appear to be making a new move on the capital of Kyiv. Some of the vehicles have moved into forests where they have set up firing positions. Though US officials said Ukrainian troops were able to target parts of the convoy with anti-tank missiles in recent days.
New weapons concern: The US is worried that new Russian chatter about a bio weapons threat actually could be their pretext to using those weapons themselves. The Russian government started spreading claims this week (backed up by Chinese media) that the US has been funding dangerous bioweapons labs in Ukraine. The US denies the claims, saying we only support standard labs looking into therapeutics and vaccines.
Russia has used illegal weapons like chemical against 'enemies of the state' before, including on opposition leader Alexei Navalny and intelligence officer Sergei Skripal. Putin also helped Syria cover up the use of chemical weapons by that government during their civil war.
Diplomacy Latest: The two sides had their highest-level meeting in two weeks. Russian Foreign Minister Sergei Lavrov met with Ukrainian Foreign Minister Dmytro Kuleba in Turkey. But the diplomats failed to reach a cease-fire agreement or any deal to protect civilians caught up in hostilities.
More US companies respond: Goldman Sachs is the first major Wall Street bank to say it will close its operations in Russia entirely. Citigroup says it is looking at "winding down" its operations there. Also, hotel chains Marriott, Hyatt, and Hilton all say they'll pause plans to develop additional hotels in Russia. Marriott and Hyatt say they're "evaluating" whether their current hotels can stay open. (Most of their hotels in Russia are owned by third parties.)
Hospital attack fallout: There's been widespread global condemnation after a Russian airstrike hit a maternity and children's hospital in the southern Ukrainian city of Mariupol. At least three people, including a child, were killed, and at least 17 others are reportedly injured.
President Zelensky called the attack a war crime: "What kind of a country is Russia, that it is afraid of hospitals and maternity wards and destroys them?"
Ukraine says the attack happened during an agreed-upon 12-hour ceasefire to allow civilians to flee the city. (BBC)
The Russian government has had multiple messages about the attack. First, that they didn't target it, then, that it was a legitimate target and home to militias, and finally, that the victims in photos were actors. The Russians have pushed out a lot of disinformation about the attack on social media, forcing Facebook and Twitter to remove posts on Thursday.
Major League Baseball and the MLB Players Association reached a tentative agreement on a new collective bargaining agreement Thursday, ending the league's 99-day lockout of the players and salvaging a 162-game season. (ESPN)
A judge delivered a stunning rebuke of the actor: "There's a side of you that has this arrogance, and selfishness and narcissism that's just disgraceful...you're not a victim of a racial hate crime, you're not a victim of a homophobic hate crime. You're just a charlatan pretending to be a victim of a hate crime, and that's shameful." (Chicago Tribune)
Just 2% of the United States population -- about 7 million people -- lives in a county where the CDC still recommends universal indoor masking, according to the latest Covid-19 community level data, updated on Thursday. (CNN)
The Senate passed a massive $1.5 trillion spending bill Thursday that would prevent a government shutdown and provide $13.6 billion in emergency aid for Ukraine. (NBC News)
It was the first time, after years of lawsuits, that the family that owns Purdue Pharma heard directly from families who had lost loved ones to addiction. (NY Times)
Concerns over nuclear war and inflation — following two years of a pandemic — have Americans more stressed than ever. (NBC News)
Some evidence in the trial of Adnan Syed, who has spent more than 20 years in prison for the murder of Hae Min Lee, will undergo forensic testing that wasn’t available at the time. (WSJ)
And THIS, on repeat. It's a 'cow chase' in LA where the news chopper commentary is just too entertaining.
What we're reading: The New Map by Daniel Yergin (2020). How energy and climate is leading to new conflict.
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