How Russia is disrupting the US election (again) – Yahoo Finance

American security experts expect Russian hackers to attack voting systems and stir up trouble in the final days before the midterm elections on Nov. 8. That would fit the pattern of aggressive Russian interference that marred the 2016 presidential election and has continued in various forms ever since.

But Russia is influencing the 2022 midterms more overtly, through its war in Ukraine and the corresponding disruptions to global food and energy markets. As Americans finalize their voting decisions, inflation has become a top concern, and for good reason: Prices are increasing at an average pace of 8.2% per year, considerably more than incomes are rising. A surge in the cost of staples such as food and rent leaves many Americans with no way to offset their declining purchasing power.

When voters struggle, they blame incumbents, which is why President Biden and his fellow Democrats face long odds of keeping control of Congress in November. Democrats appeared to be gaining momentum at the end of the summer, as gas prices fell, Congress passed popular legislation and many voters grew disgusted with the rightward lurch of the Supreme Court. But voters also seemed to hope inflation would dissipate quickly, which it hasnt. Polls now suggest Republicans are solid favorites to win the House, with decent odds of taking the Senate, as well.

Inflation has no single cause, and some Biden critics want voters to think of the Democrats 2021 stimulus bill as the main trigger of higher prices. But Russian acts of aggression, both military and economic, are probably the biggest factors pushing food and energy prices higher.

Russian President Vladimir Putin attends the summit of leaders of the Commonwealth of Independent States (CIS) in Astana, Kazakhstan October 14, 2022. REUTERS/Turar Kazangapov

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Ranging from higher oil prices to a global food crisis all the way through to the imminent threat of energy security in Europe, the conflict has certainly taken its toll, Moodys Analytics economists wrote in a recent report on global commodity markets. Higher oil and gas prices have dealt a huge blow to purchasing power in major developed nations such as the U.S. and Germany, pushing them to the brink of recession.

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Ukraine is thousands of miles from the United States, and Americas economy is far more protected from Russias war than European nations that need Russian energy, or developing nations with little financial cushion. But the United States also participates in global markets, and when prices go up anywhere, they typically go up everywhere.

The Russian war against Ukraine has pushed prices up in several ways. Ukraine is a major grain exporter, and Russia has interdicted some of that trade, causing shortages and higher prices. Strict sanctions imposed on Russia by the United States and Ukraines other allies have caused further shortages, even though those sanctions aim to exempt staples such as food.

Then theres Russias oil and natural gas, which accounts for more than 10% of global production. Russia has used that leverage to starve Europe of desperately needed natural gas, and keep oil markets tight. Russian ally Saudi Arabia seems to be helping, by imposing a cut in oil production on the OPEC+ oil cartel. That has helped Russia earn a windfall in oil revenue, while consuming nations have to pay more.

This is not mere collateral damage, the unintended economic consequence of military action. Russian President Vladimir Putin actually practices what strategists call hybrid wara military war on the battlefield coupled with nonmilitary efforts to harm anyone opposing him, and weaken their resolve.

Russia is in a hybrid war with the collective West, Tatiana Mitrova, a research fellow at Columbia University, said during an Oct. 12 energy forum. In the West, people do not actually understand that they are at war with Russia. But one goal of this war is to wage maximum damage for the West.

President Biden is an obvious target for Putin, given that the United States is the leading donor of military gear and other types of aid to Ukraine. Putin famously meddled in the 2016 presidential campaign on Donald Trumps behalf not because Putin is a closet Republican, but because Trumps opponent, Hillary Clinton, was a Russia hawk. Putin had reason to think Trumps approach to Russia would be softer. Trumps endorsement of Putins views on the very topic of meddling in foreign elections proved Putin to be right.

Russia's President Vladimir Putin is seen on a display in the background as U.S. President Joe Biden speaks about "gas prices and Putin's Price Hike" during remarks in the Eisenhower Executive Office Building's South Court Auditorium at the White House in Washington, U.S., June 22, 2022. REUTERS/Kevin Lamarque

Can Putin harm Biden? Thats arguable. World energy markets were already tight before Russia invaded Ukraine on Feb. 24, because of a global economy rebounding from the COVID downturn and capacity cutbacks in the energy sector stemming from deep losses in 2020. Russias Ukraine invasion spooked markets and pushed oil prices up by about 35%. But Biden clapped back by releasing oil from the US reserve. Oil prices now are slightly lower than they were before Russia invaded. US gasoline prices have retreated from summer highs, but theyre still about 10% higher than before the invasion. So American voters may have some lingering anxiety that they take out on incumbent Democrats on Nov. 8.

Another coming shock is a surge in heat and electricity prices this winter. That has everything to do with Putins energy war and an acute shortage of gas in Europe, now that Russia has pulled the plug. US natural gas prices havent surged as much as they have elsewhere, but were not immune to those price hikes, either. Higher utility bills wont hit with full force until after the election, however.

Energy is a key component in many manufactured and processed goods, including food. Thats one explanation for grocery costs that are up 13% during the last year. Theres also a global shortage of fertilizer, because Russia and Belarus (also subject to certain sanctions, as a Russia ally) produce key components. Fertilizer accounts for nearly 20% of a typical American farms operating costs, and near-record prices raise the retail price of food. So does the higher cost of energy for farm equipment and transportation.

Food inflation may be a bigger problem for Biden now than gasoline costs. Soaring gas prices during the spring directly correlated with a decline in Bidens approval rating, which then recovered as gas prices fell. But the average family only spends about 3% of its budget on gas. Food is about 12% of total spending, or four times as much as gas. That 13% hike in food costs means many families are struggling to pay for something they cant do without.

Bidens approval rating has been around 43% since early September. For Democrats to keep control of Congress, Bidens approval rating probably needs to be 50% or higher. Its not going to get there by early November. Thats not all because of Putin, but hes a factor: Inflation would be lower if there were no war in Ukraine, perhaps a lot lower. Thats true everywhere, but for the next couple of weeks, a key target of Putins hybrid war will be the American election system.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman

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How Russia is disrupting the US election (again) - Yahoo Finance