ESCAPE ALL THIS.
>> ALI VELSHI, MSNBC, WARSAW.
>> ALL RIGHT.
AND BACK HERE AT HOME, INFLATION
HAS BEEN SURGING SINCE BEFORE
RUSSIA INVADED UKRAINE.
BUT THERE IS NO DOUBT THE WAR
HAS IMPACTED THAT SPIKE IN
COMMODITY PRICES FOR THE
EVERYDAY AMERICAN.
WHY EXACTLY IS ALL OF THIS
HAPPENING?
AND WHEN IS IT ACTUALLY GOING TO
END INTHAT IS THE FOCUS OF A
RECENT EPISODE OF THE PLAIN
ENGLISH PODCAST.
LISTEN TO THIS.
>> IT'S ONE THING TO HAVE A
COUNTRY LIKE RUSSIA WHICH
EXPORTS LIKE 10% OF THE WORLD'S
CRUDE OIL, TO HAVE THAT ECONOMY
BRIEFLY STOP EXPORTING THAT MUCH
OIL, AND AS A RESULT, PRICES FOR
BARRELS OF OIL GO UP 20%, 30%,
BUT THEN MAYBE THEY MIGHT COME
BACK DOWN AS PUTIN MAYBE
WITHDRAWS FROM TRYING TO SIEGE
KYIV OR OTHERWISE CHANGES HIS
POLICY.
BUT WHAT WE HAVE SEEN IN PAST
INFLATIONARY SPIRALS IS THAT THE
SUPPLY SHOCK, THE MACRO ECONOMIC
PHENOMENON
PHENOMENON, BECOMING A
PSYCHOLOGICAL FUNAUMPHENOMENON.
PEOPLE SAY IF THE PRICE OF BREAD
AND WAGES IS GOING UP 10% EVERY
MONTH, I NEED TO BUY A LOT OF
BREAD RIGHT NOW.
I NEED TO GET OUT AND GET AHEAD
OF THE ECONOMY, GET AHEAD OF
THESE PRICE INCREASES AND START
SPENDING AS MUCH MONEY AS
POSSIBLE.
AND IF EVERYONE STARTS FEELING
THAT WAY, THEN YOU SUDDENLY HAVE
A HUGE SURGE OF DEMAND, WHICH
INCREASES INFLATION EVEN MORE.
AND THEN THINGS BECOME A LITTLE
BIT MORE UNHINGED.
>> FASCINATING.
SO DERRICK THOMPSON, STAFF
WRITER AT THE ATLANTIC AND HOST
OF THE PLAIN ENGLISH PODCAST IS
JOINING US.
APPRECIATE WE WERE ABLE TO GET
YOU UP AND GOING.
I WANT TO READ POLL NUMBERS OUT.
NBC NEWS POLL OUT ON THE
ECONOMY.
83% OF AMERICANS CONCERNED ABOUT
INCREASED COST OF GOODS AND
SERVICES.
82% CONCERNED ABOUT NUCLEAR
WEAPONS.
AND 74%, 3 OUT OF 4 AMERICANS,
SAY THE U.S. WILL SEND AMERICAN
COMBAT TROOPS TO FIGHT IN
UKRAINE.
THEY'RE WORRIED ABOUT THAT AS
WELL.
WALK US THROUGH SOME OF THE BEST
AND WORST CASE SCENARIOS HERE AS
WE'RE TAKING A LOOK AT TOTAL
ECONOMIC OUTLOOK.
>> BEST CASE SCENARIO IS THAT
THIS WAR ENDS RELATIVELY
QUICKLY, NUMBER ONE, AND NUMBER
TWO, AN ISSUE I TALKED ABOUT THE
PODCAST BUT WASN'T IN THAT QUOTE
IS THAT THE ISSUES THAT WE'RE
SEEING IN CHINA RESOLVE
THEMSELVES.
CHINA HAS SHUT DOWN IN PART
BECAUSE OF A COVID WAVE IN
SOUTHERN CHINA.
THOSE ISSUES RESOLVE, AND THEN
FOR A VARIETY OF REASONS,
INFLATION BEGINS TO COOL IN THE
U.S.
SUPPLY CHAINS BEGIN TO RECOVER
AND DEMAND COMES DOWN A LITTLE
BIT FOR SOME OF THE SERVICES AND
HARD PRODUCTS IN HIGHEST DEMAND.
THAT'S THE BEST CASE SCENARIO.
THE WORST CASE SCENARIO IS
BASICALLY EVERYTHING GOES WRONG.
DEMAND IN THE U.S. KEEPS GOING
STRONG, WHICH IS GOOD IN A LOT
OF WAY BUT BAD FOR INFLATION.
SUPPLY CHAINS CONTINUE TO BE
SNARLED, COMMODITIES BECAUSE OF
THE WAR IN UKRAINE BECOME
CONTINUALLY ELEVATED AND WE ALSO
HAVE SIGNIFICANT SUPPLY CHAIN
PRESSURE FROM THE SHUTDOWNS IN
CHINA.
YOU HAVE ALL THAT TOGETHER AND I
COULD ABSOLUTELY SEE INFLATION
IS NOT GOING TO STOP AT 7%, 8%,
IT COULD CONTINUE TO SOMETHING
LIKE 9% OR 10%.
LATER THIS YEAR.
>> CAN WE JUST PLAY A LITTLE BIT
MORE FROM YOUR PODCAST IN WHICH
YOU TALK ABOUT HOW UKRAINE IS
ACTUALLY FARING IN THIS WAR, AND
THEN WE'LL TALK ABOUT IT.
>> THE WAR IS GOING VERY BADLY,
AND UKRAINIANS ARE WINNING.
THEY HAVE PREVENTED THE ASSAULT
ON THE CAPITAL.
EVEN THE CITIES THAT THE
RUSSIANS HAVE CAPTURED OR
DESTROYED, THEY DON'T FULLY
CONTROL.
IN THE SENSE THAT THEY HAVE NOT
CREATED SUCCESSFUL MILITARY
REGIMES.
THERE'S SOME PLACES THAT WE
DON'T KNOW MUCH ABOUT BECAUSE
THEY'RE CUT OFF NOW.
BUT NONE OF THE LARGER CITIES
ARE UNDER FULL RUSSIAN CONTROL,
NOT MARIUPOL, NOT KHARKIV, NOT
KHERSON.
SO THEY HAVE NOT SUCCEEDED IN
DOING REALLY ANY OF THE BASIC
THINGS THEY SAID THEY WOULD DO.
>> YOU WERE SPEAKING TO ANNE
APPLEBAUM THERE.
IT SEEMS AS IF GOING INTO THIS
THING, THE UKRAINIAN ORDER,
UKRAINIAN MILITARY WAS
UNDERESTIMATED.
THE RUSSIAN ARMY, RUSSIAN
MILITARY WAS OVERESTIMATED.
NOW IT SEEMS AS IF PUTIN IS
MAKING AN ABOUT FACE, SAYING I'M
JUST CONCERNED ABOUT WESTERN
UKRAINE, BECAUSE UKRAINE COULD
FEEZALLY BE WINNING THIS WAR,
HOLDING OFF RUSSIAN FORCES.
>> YEAH, AND WINNING IN BY THIS
DEFINITION MEANS THAT UKRAINE
WOULD HOLD AROUND KYIV, THE
CAPITAL.
THEY WOULD CERTAINLY KEEP THE
WEST.
AND THEY WOULD FIGHT RUSSIA TO A
STANDSTILL IN THE EAST AND
SOUTH, FORCING PUTIN TO THE
BARGAINING TABLE TO MAYBE ONLY
CARVE OFF PART OF CRIMEA OR PART
OF DONBAS, THE REGION IN THE
EAST.
THIS WOULD BE A FANTASTIC
SCENARIO FIRST AND FOREMOST FOR
UKRAINE WHICH IS FIGHTING ITS
HEART OUT AGAINST THE RUSSIANS,
BUT TO CONNECT TO THEPRIEVE YG
QUESTION, IT WOULD BE GOOD NEWS
FOR THE REST OF THE WORLD.
RUSSIA AND UKRAINE ACCOUNT FOR
25% OF THE WHEAT EXPORTS.
CORN EXPORTS AS WELL, 10% OF
THOSE GLOBALLY.
SO IT WOULD BE FANTASTIC FOR THE
GLOBAL ECONOMY AND FOR GLOBAL
WELFARE FOR THE WAR TO END, AND
FOR INFLATION SPECIFICALLY, U.S.
INFLATION IS DRIVEN UP BY A LOT
OF FACTORS BUT ONE FACTOR IS THE
UPSURGE IN COMMODITY PRICES THAT
HAS HAPPENED IN PART AS A RESULT
OF THIS WAR.
THE SOONER THIS WAR ENDS, THE
SOONER YOU HAVE INFLATIONARY
PRESSURES COME DOWN ON
COMMODITIES AND THE U.S. ECONOMY
CAN CONTINUE TO GROW WITH
INFLATION NOT AT 8% OR 7%, BUT
CLOSER TO 3% OR 2%.
>> THE SOONER UKRAINIANS CAN GET
BACK TO THEIR LIVES AND MORE
LIVES ARE SAVED.
DERRICK THOMPSON, THANK YOU.