Pondering Stagflation in the US after Russia invades Ukraine

Posted By on March 2, 2022

I’m not an expert on how the events in Ukraine will impact the world, but I do pay close attention to geopolitical events, the financial markets and the economy … FlagCityUkraineand can’t help but wonder how this will reshape our future.

For the past year or so I’ve been grumbling about how the Biden administration’s “war on energy” is an inflation trigger. Partisans on the left will point to all the other factors contributing (pandemic ending, lack of workers, shipping bottlenecks, etc), but besides the excessive Federal Reserve money-printing and Congress throwing money around so freely,  the inflation trigger in my mind was the political left making a target of US oil companies, restricting exploration, new oil leases, fracking and stopping pipeline projects. After the November 2020 election, we went from energy independent and exporter to begging OPEC and Russia for oil under President Biden. The price predictably went up 40% causing everything shipped or dependent on energy to rise. The price – wage spiral begins just as the world attempts to reopen as the pandemic winds down (shocking to read “Low inflation. Will it continue?” from January 5, 2020 <= the answer is obviously no).UkraineWarMap_Feb2022

Now enter war. More uncertainty, debt funding to help Ukraine fight Russia, build up NATO and provide relief for potentially millions of refugees. This is certain to stymie growth worldwide and likely in the U.S. too. Still prices and wages are rising … even as growth slows. We now have almost all the ingredients for stagflation.  Inflation is one thing but we do have answers and ways to deal with it, stagflation is another … think of it as inflation’s evil twin.


I ran out of time on this post to go into my boring memories of 1970s inflation and stagflation (my original plan), but I did want to include a link to Megan Greene (Harvard Kennedy School) talking a little bit on a segment of Marketplace last week (left leaning for those thinking all my brainwashing is from right leaning news organizations). Listen to her if you have a few minutes.


Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.
My Desultory Blog