We could perhaps impose some sort of information blockade of telecommunications content or services, but that seems counterproductive. Moreover, Russia is fighting a war against terrorists in lots of places, and we wish them well in this work.
In the end our most potent weapon against Russia is our banking system. A systematic denial of foreign exchange by the Federal Reserve, followed by deposit controls by large banks should be sufficient to seriously damage the Russian economy. If the Bank of England and European Central Bank go along, Russia will face a deep crisis.
We cannot know how bad the situation will become, or how much damage to the world’s economy the threat of another European war will do. However, the sharp rise in oil futures two weeks ago bodes ill. At least we can credit midterm elections for focusing the American response, for there’s nothing like the prospect of $5 gas in the weeks before an election to spur action.
Michael J. Hicks, Ph.D., is director of the Center for Business and Economic Research and a professor of economics at Ball State University. Contact him at firstname.lastname@example.org.