Opinion: The price to protect freedom, paid at your local gas station – Yakima Herald-Republic

Gasoline? Up. Natural gas? Up. Wheat? Up. The spending power of your bank account? Down, down, down.

The U.S. has been experiencing inflation at the highest level in more than 40 years, reaching a 7.9% annual rate in February, and Russias attack on Ukraine is making matters even worse.

When the COVID-19 pandemic hit, the government poured money into the economy to pull it out of recession.

As people hunkered down to avoid the virus, supply chains faltered and demand shifted from services to goods. Prices for all kinds of stuff shot up as a result.

Now comes the Russian invasion, at an especially vulnerable time for global commerce.

Even though Russias gross domestic product is smaller than South Koreas or Canadas, it is the No. 3 producer of oil and a big supplier of other raw materials. Europeans depend heavily on its exports of fossil fuels. Its industrial metals also are crucial.

Sanctions aimed at isolating Russia have disrupted world trade and sent commodity prices soaring to an extent unseen since the oil crises of the 1970s. Europe may need to ration heating fuel and gasoline. Poorer countries, sadly, could experience food shortages and even widespread hunger.

What to do? First, resist the temptation to mess with financial markets. That goes for everyone, up to and including President Joe Biden, who faces low approval ratings and a midterm election thats shaping up badly for his fellow Democrats.

The markets are doing their job of matching buyers and sellers at the prices each side is willing to accept. Weve even seen some rebounds lately. Let the markets be.

So far, the Biden administration has taken only a few, mostly ineffective, steps to blunt inflation. The White House has warned energy companies against price gouging while at the same time cheerleading for increased domestic production. It also coordinated the release of emergency petroleum reserves with U.S. allies.

Democrats in Congress have proposed waiving the federal 18.4 cents a gallon gasoline tax until after the midterms, which sounds helpful on the surface. But history teaches us that temporary tax holidays can have disappointingly little effect on retail gas prices, since the sellers often just then raise their prices. So dont look to that for much help.

On the diplomatic front, the administration has signaled support for a nuclear accord that could remove sanctions on Irans crude-oil production, potentially restoring 1 million barrels a day to the marketplace. Similarly, it may relax sanctions against Venezuela, which has enormous oil reserves.

Biden and Vice President Kamala Harris have doubled down on promoting electric vehicles and green energy sources as an alternative to pricey oil and gas. Europeans are far ahead of the U.S. on that climate-friendly path, and likely to move even faster now.

For the U.S. economy, the next step is needed ASAP: higher interest rates.

The U.S. Federal Reserve has a dual mandate to promote full employment and control inflation. The job market is hot, so the central bank has room for maneuvering on that side of the ledger. The Fed has been slow to address inflation, however, and now Russian President Vladimir Putin has backed it into a corner.

Fed Chair Jerome Powell told Congress he will push for a quarter-point increase in the federal-funds rate when the Feds policymaking committee meets next week. Thats just for starters.

Chicago Federal Reserve Bank President Charles Evans recently told CNBC that the central bank should increase its base rate to as high as 2% by the end of this year, which would require a rapid series of interest-rate rises.

Jacking up rates to that extent would be strong medicine against inflation, but it also would put a damper on economic growth. No wonder the stock market has taken a hit, and analysts have cut back bullish forecasts. America and Europe are fighting an economic war and, inevitably, their citizens will pay the price.

Russias brutal assault on Ukraine has no silver lining, but lessons can be drawn from it. First, Putin has revealed himself to be a danger that must be confronted, despite the clear economic costs. Europe, especially, needs to reorient its economies to keep Russia isolated. It is heartening to see alliances strained under the Trump administration being shored up to enable a unified effort against Putins aggression.

Most heartening is the brave example of the ordinary people of Ukraine.

For generations, Ukrainians were denied the freedom that Americans have long enjoyed. Given their current life-and-death struggle against aggression, it is small-minded to moan about the price of gasoline at the local pump or groceries at the supermarket.

Lets hope our country can follow the Ukrainian example and pull together to protect democracy, even at $4-plus a gallon.

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Opinion: The price to protect freedom, paid at your local gas station - Yakima Herald-Republic