The sanctions President Obama announced Monday to punish Russia and its collaborators in Ukraine are intended to inflict economic pain. So a fair measure of their adequacy was the reaction Monday of the Russian stock and currency markets: Both spiked upward in celebration.
While Vladimir Putin matches or exceeds the most pessimistic expectations of his belligerence — over the weekend, Russian forces extended their invasion from Crimea to an adjacent area of Ukraine — the United States and its allies so far are delivering less than they threatened, or than markets expected, in retaliation. Unless the West quickly steps up measures against the oligarchs, bag men and banks that prop up the Russian regime, the result will likely be more aggression.
As it is, Mr. Putin's brazenness continues to escalate. U.S. officials said ballots for a referendum in Crimea on Sunday arrived at polling stations pre-marked and that the supposedly overwhelming vote for separating from Ukraine was grossly manipulated. Last week the Obama administration calculated that Mr. Putin might delay moving forward with annexing Crimea to Russia after the vote; instead he rushed Monday to announce his recognition of Crimea's independence, a necessary first step under Russian law.
The United States and European Union promised to act Monday if the referendum went forward; German Chancellor Angela Merkel had promised “massive damage to Russia, economically and politically.” But the White House on Monday designated only seven Russian officials and four Ukrainians for visa revocations and asset freezes. They included several close political advisers to Mr. Putin but none of the moneymen behind his regime — much less the banks or energy firms that drive the Russian economy. The European Union designated 21 people, also far fewer than would be needed to cause pain in the Kremlin.
The relative good news is that an executive order signed by Mr. Obama gives his administration authority to act more expansively. Russian arms companies are subject to sanctions, as are “individuals and entities” that provide “material or other support to any senior Russian government official.” These authorities could be used to target key figures excluded from Monday's designation; Putin's defense minister and intelligence chief and the chairmen of the state gas, oil and railway companies ought to be on the sanctions list. Officials also have the power to hit any bank or other company that invests in Crimea or is found to undermine Ukraine's sovereignty.
Mr. Obama has been holding back on tougher measures while offering Mr. Putin face-saving ways to de-escalate. While that is not an unreasonable policy, it can't succeed if Mr. Putin is determined, as he seems to be, to crush Ukraine while ignoring Western reaction. It's not too late to force Mr. Putin to reconsider his course, but that will require the West to get ahead of him in adopting measures that inflict real pain, rather than waiting to react to his next act of aggression.
Mr. Obama said Monday he will “calibrate our response based on whether Russia chooses to escalate or de-escalate.” Since a de-escalation looks at this point like wishful thinking, we'll know that the president's calibrations are adequate when they cause Russia's markets to plunge rather than rally.