Russia Introduces Sanctions on Russia

Russia has recently banned food imports from the US, EU, Norway, Canada, and Australia. All of which have introduced or supported sanctions against Russia over its invasion of Crimea, and invasion-by-proxy of Eastern Ukraine. Or as Jezelbel put it: “Russia…punches itself right in the dick.” As is well known, Russian support for the rebels, who include many Russian citizens that are current or former Russian intelligence officials, in Ukraine led to the downing of a civilian airliner by Russian trained rebels using an antiaircraft system almost certainly provided to them by Russia.

As is well known in economics, a tariff on imports has the same effect on a nation’s economy as taxing its own exports. Similarly, banning imports will do as much harm as banning exports. The United States will be essentially unharmed; Europe will suffer a bit more, though the value of its now banned exports amounts to a rounding error in terms of EU GDP. Some countries closer to Russia, such as Poland and Finland, will suffer proportionally more. But the Russian people will suffer the most. Russian households spend about 31% of their annual expenditures on food, which is high even for a middle income country. Some of the harm, to both Russians and their former suppliers, will be abated by the fact that the supply of food is inelastic in the short run, you can’t ungrow it. Russia will need to find other suppliers, who will divert food to Russia, the banned countries will have to find other buyers, and divert food from Russia, and to an extent it will wash out. But there will be some delay, and in the short run (the ban only lasts a year) Europe is likely to face lower food prices, and Russia higher food prices. Way to show the West. Choice and quality will likely also suffer.

Punching itself in the dick comes at a bad time for Russia[1]: GDP growth has stalled and inflation, which will likely be made worse now, has risen to above 7%. Russia is selling the self-imposed supply shock as a boon to Russian producers, as if Import Substitution worked wonders in Latin America[2] and didn’t end with a painful debt crisis[3]. This is seriously dumb. What’s next? Putin tries to hold his breath like a bratty child until people give in to him?

I would feel bad and stop making fun of how dumb Russian policy is if Putin didn’t have an approval rating above 80%. Well, I do feel bad for the other 20%; I’m very sorry that these people have to live with or near such awful people. It is important to differentiate, for example I would hope that during the G.W. Bush years foreigners who disliked what the US did[4] realized that a slight minority, at least, disliked what the US did too.







1. I realized as soon as I wrote that that there is no good time to punch yourself in the dick, but this timing is especially poor even so

2. It didn’t

3. It did

4. Let’s not forget that the actions of the US in foreign countries during the Bush years (Iraq especially since there was no self-defense justification) caused the deaths of civilians too. In fact these actions have allowed the Russian propaganda machine to make hay out of the argument that Russia’s actions aren’t unusually wack and that the West is just a bunch of hypocrites who have it out for Russia. Still people, maybe don’t be so easily manipulated by state propaganda, it makes it seem almost as if you’re not that smart.