Economist Robert Reich delivers 8 ‘sobering realities’ about Russia’s Ukraine invasion

With Russian troops, under orders from President Vladimir Putin, having invaded Ukraine, the Biden Administration and its European allies in the North Atlantic Treaty Organization (NATO) are moving ahead with tough economic sanctions against Russia. Liberal economist Robert Reich analyzes the effects of those sanctions in an op-ed/listicle published by The Guardian on February 24, describing eight “sobering realities” about the Ukraine crisis.

“We must do what we can to contain Vladimir Putin’s aggression in Ukraine,” Reich argues. “But we also need to be clear-eyed about it, and face the costs. Economics can’t be separated from politics, and neither can be separated from history.”

According to Reich — who served as secretary of labor in the Bill Clinton Administration — the Biden/NATO sanctions being “imposed or threatened” will “complicate Russia’s global financial transactions” and possibly “reduce Russia’s gross domestic product” but “will not cripple the Russian economy.”

“What sort of sanctions would seriously damage Russia? Sanctions on Russia’s enormous oil and gas exports could cause substantial harm,” Reich explains. “Russia produces 10 million barrels of oil a day, which is about 10% of global demand. It ranks third in world oil production behind the United States and Saudi Arabia.”

Reich warns, however, that the type of sanctions that could inflict really severe damage on the Russian economy would also “seriously harm consumers in Europe and the U.S.”

“Although the U.S. imports very little Russian oil or natural gas, oil and natural gas markets are global — which means shortages that push up prices in one part of the world will have similar effects elsewhere,” Reich notes. “The price of oil in the US is already approaching $100 a barrel, up from about $65 a year ago. The price of gas at the pump is averaging $3.53 a gallon, according to AAA. For most Americans, that gas pump price is the single most important indicator of inflation.”

Reich goes on to describe other possible fallout from the Ukraine crisis, ranging from Russia growing closer to China to less discussion of President Joe Biden’s domestic agenda in the United States.

Reich observes, “Foreign policy crises tend to drive domestic policy off the headlines, and weaken reform movements. Putin’s aggression in Ukraine has already quieted conversations in America about voting rights, filibuster reform, and Build Back Better — at least for now. Large-scale war, if it ever comes to that, deadens reform. The First World War brought the progressive era to a halt. The Second ended FDR’s New Deal. Vietnam stopped Lyndon Johnson’s Great Society.”

Reich wraps up his op-ed/listicle by warning that Putin and his allies in the Kremlin will do everything they can to promote and exploit the bitter political divisions troubling the U.S.

“Putin’s means of keeping western liberal democracy at bay isn’t just to invade Ukraine, of course,” Reich writes. “It’s also to stoke division inside the West by fueling racist nationalism in Western Europe and the United States. In this, Trump and Trumpism continue to be Putin’s most important ally.”