Denison professors explain financial ramifications of Russia invasion for U.S. citizens
Since Russia invaded Ukraine on February 24, Ohioans on the other side of the globe have faced economic repercussions. Three Denison University professors explained the correlation between global conflict and American citizen expenditure increases in interviews with the Advocate.
Dr. Scott Smitson, visiting assistant professor of politics and public affairs, Dr. Quentin Hedges Duroy, associate professor of economics, and Dr. Andrew Z. Katz, professor and chair of the department of politics and public affairs, shared expertise on the topics of foreign policy, economics, and media consumption.
According to the U.S. Energy Information Administration, the average price per-gallon for gas in the state of Ohio sat at $3.923, as of April 4. On February 21, that number was $3.377. The rapid price increase can primarily be attributed to the sanctions that the United States government has imposed on Russia. On March 8, the administration banned the importation of Russian crude oil. As a result, the gas supply in the country has decreased. In addition, other finance–related sanctions have increased inflation, which also causes an increase in gas prices.
“The United States is sending vast amounts of support–both financial and material support–to Ukraine, and I think that’s the right decision," Smitson said. "But like all things in government spending, there’s repercussions to that."
The pump may not be the only place where American citizens face increased fees, according to the professors. Global conflict can impact grocery prices, tax rates, and the stock market.
“The increase in the price of crude oil also impacts other prices in the economy," Duroy said. “We need oil for transportation. Even things like transporting produce from California to Ohio will get more expensive. Grocery prices are already high–they are going to go higher.”
"These major foreign policy problems are adding to the budgetary strain within our U.S. government, which then is felt by citizens when it comes to taxation rates and interest rates," Smitson said.
Specifically addressing the stock market, Katz explained that the day–to–day circumstantial changes could impact shareholder decision–making.
“People’s perceptions and confidence about things are being challenged," Katz said. "Any sort of sign of major instability in the world will make people concerned.”
Katz and Smitson urged people looking to get accurate updates about the United States' responses to the conflict in Ukraine, as well as the impact that such responses could have on them, to consume a diverse selection of news sources.
“Look at as many possible sources as you can. You want to see what officials are saying," Katz said. "If there seems to be a broad agreement on certain things happening, you can say, ‘Okay, yeah, that’s pretty much where things are.’”
“You have to engage a multitude of sources," Smitson said. "Watch more than one TV network. If you read one type of newspaper, read one that may sit on the other end of the political spectrum."
Smitson mentioned four news outlets—BBC, Reuters, Associated Press, and The Economist—as ones that are "seen as pretty centrist."
In the midst of the economic havoc that has ensued as a result of the Russia–Ukraine conflict, Smitson sees one silver lining for Americans: a sense of political unity.
“We’re seeing bipartisan consensus on this current crisis and conflict. That will have an impact on domestic politics going forward.”
The United Nations General Assembly suspended Russia from the U.N. Human Rights Council on Thursday. In a statement, President Biden called the move "a meaningful step by the international community further demonstrating how Putin’s war has made Russia an international pariah."