Welcome to our March (and the beginning of spring!) issue, New Rural Virginia readers.  We begin this month with a salute to the incredible bravery of Ukrainians — but also a sobering recognition of the enormous suffering wrought by Putin’s invaders. A major need is food. And one of the organizations that has stepped up is World Central Kitchen, founded by Washington D.C.’s world famous chef José Andrés. They have already served over 1 million meals to struggling Ukrainians and their kitchen in Poland makes 100,000 meals every day.”. You can make a donation to World Central Kitchen here.

Beyond the war in Ukraine, the other issue dominating our news feeds right now is inflation.  Both are pretty big deals, but at first glance one seems a lot more relevant to our everyday lives.  After all, we see directly what $4-plus gasoline does to our pocketbooks, while Russian bombs on Ukrainian cities, terrible as that is, seem pretty far away.  

So the urgent question is, how quickly can we bring those prices back down? Well, there are pundits, politicians and big corporations who are eager to tell you that they can fix it — if we just get the government and all the regulations out of the way. Sounds great — but is it true? That’s the subject of our “What’s really causing inflation today” section.

As always, however, we start out with our local Over the Fence interview, this month with Henry B. Wood of Harris Hollow Foods. He gives our readers a fascinating peek into how globalized supply chains and global inflation can affect even a business with deep roots in a rural Virginia community.

In our Around the Commonwealth section, we look at interesting news coming out of the final days of the Virginia General Assembly session. And last, in our In the News segment, we feature a report on why the conflict in Ukraine is contributing to exploding wheat and fertilizer prices in the U.S.

So it’s a full issue! Happy reading. Is there a topic you would like to hear more about in future newsletters? Just click here to leave us a message. And, if you have not already, please  subscribe!

A Chat Over the Fence with Henry B. Wood, Harris Hollow Foods

By Mary Sherman Willis

Few people in Rappahannock County can speak as authoritatively about the effects of inflation on the business of farming and food processing these days than Henry B. “H.B.” Wood. A tenth-generation descendant of one of the oldest apple-growing families in the county, H.B. now runs Harris Hollow Foods LLC, a national supplier of fruit products. In the past two years of the Covid pandemic, supply chain problems have wreaked havoc. Read the Interview here

What’s really causing inflation today

Welcome to the new world of globalized inflation. For the last 30 years, the globalization of the economy has certainly brought us a lot of goods at cheap prices. But the flip side is that when the global supply chain breaks down, the resulting inflation is going to hit Americans just like it does every other country. There is no "get out of jail free" card just for America. The good news is that the global economy will eventually work its way through the imbalances and stabilize. 

Still, right now, those rising prices really hurt. Here is what you need to know to understand better what is hitting us:

--Who’s to blame for high gas prices? Not who you think!  Our first article investigates the claim of big oil companies (and some politicians) that gas prices would fall if only the Biden administration would authorize the Keystone pipeline and issue more permits for drilling on Federal land.  And shows that a key problem is that Big Oil has spent the past several years sending money to shareholders rather than investing in new oil production.  But don't take our word for it -- As the CEO of Hess Oil says in our linked article, the industry “had five years of under-investment [in oil production} and we’re paying for it now.” For our full take, read here.

--Are big corporations profiteering from inflation? Our second article focuses on the increasing number of monopolistic companies who are using inflation as a cover to jack up prices and record historic profits.  Even as they often continue to underpay their workers.  In fact, American companies are sitting on a record $7 trillion in cash, up 33% from pre-pandemic levels! Fortunately, however, the Biden administration is moving to attack monopolistic practices. For our full take, read here

--Large shareholders hit record wealth as prices keep rising. Our third article explains how inflation does not hurt everybody equally.  In fact, a big dividing line between winners and losers is whether you own a lot of stock or not. If you are one of the 48% of American households who do not own any stock, inflation has no upside. It is a different story if you do have stock, however. That's especially true if you are the CEO of an oil company.  And unlike the rest of us, they probably are not going shopping in the supermarket every day. For our full take, read here

--Finally, when proposing a state tax cut, don’t ignore those Virginians hardest hit by inflation. If no one can simply “stop inflation”, we can help those most in need deal with its immediate impact. So what can our legislators do right now for those hardest hit? Pass an earned income tax credit. That’s the conclusion of Virginia Mercury guest columnist Addison Hunter. Unfortunately, she says, the GOP’s current tax proposal to double the standard deduction would provide zero tax benefit for 80 percent of the 800,000 Virginia families making under $24,000. Read here her commentary in the Virginia Mercury

By allowing political cash for personal use, Virginia remains a campaign finance backwater. (Virginia Mercury, Bob Evans commentary, March 7, 2022) Hard to believe but Virginia is one of only a very few states that still allows legislators to divert unspent campaign donations to personal use with impunity. This year, a bill to change that passed the Senate overwhelmingly — only to be quietly killed by the GOP members of a House sub-committee. One of the GOP delegates said that the problem with the bill was that it wasn’t “perfect”… Who knew that our legislators were so focused on perfection.

Dominion’s proposed charge for solar program is absurdly high (Virginia Mercury, March 10, 2022). In this commentary, Ivy Main explains how Dominion is proposing an absurdly high “administrative fee” for multi-family buildings that want to have solar installations. Is the objective perhaps to make solar an uneconomical option for residents?

Surging Wheat Prices and Fertilizer Shortages: How the War in Ukraine Could Impact U.S. Agriculture, (In These Times, March 16, 2022) Thanks to nature, supply chain logjams, and the Ukraine invasion, wheat and fertilizer prices are skyrocketing. What are the implications for American farmers — and for consumers? Are some big companies taking advantage of the situation to raise prices? The independent, non-profit In These Times reports.