The Morning Dispatch: The Russia-Ukraine Holding Pattern

Plus: A key inflation index hits a 40-year high.

Happy Thursday! Congratulations to future Hall-of-Fame pitcher, cancer survivor, and all-around good guy Jon Lester for calling it a career on Wednesday after 16 seasons, five All-Star Game appearances, and three World Series championships.

Quick Hits: Today’s Top Stories

  • The Bureau of Labor Statistics reported Wednesday that inflation, as measured by the consumer price index, hit 7 percent year-over-year in December, the steepest annual price increase since June 1982.
  • According to preliminary data from the National Law Enforcement Officers Memorial Fund, 458 federal, state, and local law enforcement officers died in the line of duty in 2021, a 55 percent increase over 2020. 301 of those deaths were attributed to COVID-19, 84 to felonious assaults (including 61 killed by firearms), and 58 to traffic-related causes.
  • The State Department announced Wednesday it had sanctioned eight DPRK-linked individuals and entities for their ties to North Korea’s weapons and missiles program. North Korea has launched two test missiles off its east coast in recent weeks.
  • new peer-reviewed study from American, Chinese, and Italian researchers published in Advances in Atmospheric Sciences found that global ocean temperatures in 2021 were the hottest on record. “The long-term ocean warming is larger in the Atlantic and Southern Oceans than in other regions and is mainly attributed, via climate model simulations, to an increase in anthropogenic greenhouse gas concentrations,” the authors write.
  • Rep. Kevin McCarthy declared Wednesday he will not voluntarily cooperate with the January 6 Select Committee, hours after Rep. Bennie Thompson, the committee’s chair, requested information about the House minority leader’s conversations with former President Donald Trump before, during, and after last January’s attack on the Capitol. Thompson told CBS News that former White House press secretary Kayleigh McEnany met virtually with the committee for several hours on Wednesday.
  • GOP Rep. Trey Hollingsworth of Indiana announced Wednesday he will not run for reelection this year, citing a pledge he made when first running for office in 2016 not to serve more than four terms. He is the 14th House Republican thus far this cycle to retire from Congress or seek another office.

The Russia-Ukraine Holding Pattern

(Photo by DENIS BALIBOUSE/POOL/AFP via Getty Images.)

Russia’s peacekeeping operation in Kazakhstan appears set to end nearly as quickly as it began. After several days of metastasizing unrest in the former Soviet republic last week, President Kassym-Jomart Tokayev appealed to his neighbor to the north for help quashing what he described as an attempted “coup d’etat” that had been carried out with the help of “foreign militants.” The Russian-led Collective Security Treaty Organization (CSTO) promptly deployed forces to extinguish clashes between protesters and Kazakhstani security forces—but not before the country’s cabinet resigned and the death toll climbed to more than 160.

In a virtual meeting with other leaders of the defensive alliance’s member states, Russian president Vladimir Putin vowed to prevent any future “color revolutions,” referring to rebellions in Georgia and Ukraine responsible for the overthrow of Russia-friendly governments. “The measures taken by the CSTO clearly show that we will not allow anyone to stir up trouble at home,” he said.

“Crucially, our organization and its secretariat have been able to take all the necessary decisions in a swift and well-coordinated manner,” Putin added. “In fact, we had very little time and had to act in a matter of hours to prevent the foundations of state authority in Kazakhstan from being undermined, and the situation inside the country from deteriorating, as well as to stop terrorists, criminals, looters, and other criminal elements.”

With the situation in Kazakhstan stabilized and the risk that additional Russian deployments will be necessary sufficiently mitigated, Moscow is now freed to once again set its sights squarely on the border regions of Ukraine, where more than 100,000 Russian troops and accompanying armaments remain gathered in possible preparation for a military assault. The Kremlin has reportedly deployed attack aircraft, including attack helicopters and fighter jets, signaling a forthcoming offensive.

It’s against this backdrop that the Biden administration launched another diplomatic blitz this week in an effort to talk Putin down. Delegations from the U.S. and Russia—led by Deputy Secretary of State Wendy Sherman and her Russian counterpart Sergey Ryabkov—convened in Geneva on Monday. While both sides walked away from Monday’s nearly eight-hour conference in good spirits, they remain far apart in their expectations of the other.

2021 Ends With an Inflation Bang

Just because it was expected doesn’t mean it wasn’t shocking: Year-over-year (YoY) inflation hit 7 percent in December per the Bureau of Labor Statistics’ consumer price index (CPI), the largest annual price increase the country has experienced since June 1982.

It’s been about nine months since inflation started to take off in earnest, but—as Derek Thompson and Morgan Housel helpfully discussed on a recent “Plain English” podcast—the burden of these higher costs has not fallen on all Americans evenly. CPI is calculated by using consumer surveys to determine what Americans are spending their money on, and then amassing a variety of those goods and services—food, housing, transportation, energy, etc.—in one theoretical basket. The Bureau of Labor Statistics then weights each individual line item by importance, and measures the cost of that total basket over time. The topline figure it spits out—7 percent this month—is a helpful benchmark for policymakers, but it says very little about any one person’s financial situation.

Gasoline, for example, is weighted at about 4 percent of the CPI basket, and—although prices fell 0.5 percent from November to December—it cost 49.6 percent more in December 2021 than in December 2020. Hotel room prices have jumped 27.6 percent this year, used cars cost 37.3 percent more, meat is up 14.8 percent, and men’s suits and sport coats are 10.7 percent more expensive. If you’re a traveling salesman who drives town to town and has bacon for breakfast every day, you might look at that 7 percent overall number and think, That’s it? Conversely, you may live in a city and rent an apartment (+3.3 percent YoY), take public transportation (+2.4 percent YoY), subsist primarily on fresh vegetables (+2.4 percent YoY) and pasta (+2.8 percent YoY), and be wondering why everyone is freaking out.

But far more Americans are feeling the squeeze than aren’t, as evidenced by the fact that 84 percent of respondents in a recent Fox Business poll reported feeling “extremely” or “very” concerned about inflation. A plurality of them labeled it the “biggest issue facing the economy.”

Worth Your Time

  • Derek Thompson has a “simple” plan to solve all of America’s problems: an abundance agenda that focuses on increasing the supply of essential goods. “America has too much venting and not enough inventing,” he writes in The Atlantic. “We say that we want to save the planet from climate change—but in practice, many Americans are basically dead set against the clean-energy revolution, with even liberal states shutting down zero-carbon nuclear plants and protesting solar-power projects. We say that housing is a human right—but our richest cities have made it excruciatingly difficult to build new houses, infrastructure, or megaprojects. Politicians say that they want better health care—but they tolerate a catastrophically slow-footed FDA‪ that withholds promising tools, and a federal policy that deliberately limits the supply of physicians.”
  • There’s been a lot of doom and gloom about the future of the country in the national conversation of late, with pundits of all political persuasions increasingly arguing the United States could be on the path to civil war. In his latest column, Ross Douthat argues that everyone needs to take it down a few notches. “The problems that undergird the civil-war hypothesis are serious, the divisions in our country are considerable and dangerous, the specific perils associated with a Trump resurgence in 2024 are entirely real,” he writes. “But there are also lots of countervailing and complicating forces, and the overall picture is genuinely complex—at least as complex, let’s say, as the informant-riddled plot against Gretchen Whitmer. And as with that conspiracy, it’s worth asking whether the people who see potential insurrection lurking everywhere are seeing a danger rising entirely on its own—or in their alarm are helping to invent it.”

Presented Without Comment

Twitter avatar for @NoahpinionNoah Smith 🐇 @Noahpinion

Kroger’s profit margin is 1.52%

Elizabeth Warren @SenWarren

What happens when only a handful of giant grocery store chains like @Kroger dominate an industry? They can force high food prices onto Americans while raking in record profits. We need to strengthen our antitrust laws to break up giant corporations and lower prices. https://t.co/DMa9Z7adFr

Toeing the Company Line

  • Jonah has some thoughts about President Biden’s speech in Georgia on Tuesday. “Biden staked his entire presidency on taking the high road; on not being like Trump,” he writes in Wednesday’s G-File (🔒). “He cribs Obama’s better rhetoric about there not being red states and blue states but the United States all the time. And he threw it all away yesterday.”
  • Alec took a crack at the Biden speech in a Dispatch Fact Check, as well. In addition to what we covered in TMD yesterday, Biden also misled on former President Trump’s absentee voting, the partisan breakdown of filibuster use, and his own involvement with the civil rights movement.
  • On Wednesday’s Dispatch Podcast, Sarah, Steve, Jonah, and David discuss Omicron and—you guessed it—President Biden’s Georgia speech. “Maybe for the first time of Joe Biden’s presidency, I’m angry,” Sarah said. “I’m a little outraged. And I don’t use that word lightly.”
  • In this week’s Vital Interests (🔒), Tom Joscelyn breaks down the State Department’s annual Country Reports on Terrorism and argues it “shows why jihadism will continue to be a major international security concern—even if many others in Washington have already moved on.”
  • The Biden administration took a victory lap last month when—contrary to many economists’ predictions—shelves were stocked for Christmas despite ongoing supply chain issues. But was it White House policies that saved the day, or adaptations from American businesses and consumers? Check out Scott’s latest Capitolism (🔒) for more.
  • Speaking of Cato Institute economists, Ryan Bourne was on The Remnant for the first time this week, joining Jonah for a conversation about the economics of COVID-19.

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Charlotte Lawson (@lawsonreports), Audrey Fahlberg (@AudreyFahlberg), Ryan Brown (@RyanP_Brown), Harvest Prude (@HarvestPrude), and Steve Hayes (@stephenfhayes).

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