Trump Started a War and You’re Paying for It at the Pump

Trump’s version of trickle-down economics starts with a spike in gas prices and seeps into the cost of food, airfare, shipping, and everything else you buy.

Trump’s not only launched a gratuitously unnecessary war, he’s obliterated the last shred of goodwill he may have had by spiking gas prices. A totally predictable outcome when you treat war like an impulse purchase at Target.

Gas prices had been at a 4-year low under Trump, with a national average of about $2.98. Which we know because Trump wouldn’t shut up about it. Caveat, he was lying about gas being at a “20-year low”; nevertheless, it’s true that it was cheap.

That was until the No New Wars President started a war with a country he promised he wouldn’t and now oil prices have skyrocketed. Trump can’t tell you why he’s doing this, and he certainly doesn’t want you to know how much it’s going to cost you. Nor does he care. When asked about the spike in gas prices, here are some of his choice soundbites:

"I think it's fine. It's a little glitch. We had to take this detour,"

Prices? “If they rise, they rise.”

Is it worth it? “It’s a small price to pay.”

And anyone not so sure it’s happening? “Fools.”

How it Started, How it’s Going to Go

The price of oil shot past $108 per barrel over the weekend.

When oil spikes, five things get very expensive, fast: gas, airfare, shipping, food, and plastic packaging.

Gas goes first: and the national average per gallon hit $3.40, up from $2.98 last week. That’s practically a 50 cent jump - in a week.

Airfare is next. One third of the cost of airfare is jet fuel, and that jumped by 55% in the last week. The CEO of United said himself, we’ll be feeling it fast. One expert suggested it’s better to book flights with points rather than actual money. (Isn’t it always? Good luck if you don’t have any.)

The cost of jet fuel doesn’t just get passed on to passengers, it also jacks up the cost of shipping. Ground shipping takes a hit as well, since gas prices also affect trucking.

Then comes food. It’s not just the increased cost of getting your food from farm to table, or factory to supermarket. Oil is part of the equation every step of the way. It powers farm and factory equipment. It’s a key ingredient in fertilizer. And it’s in your plastic packaging. All of that stuff accounts for half the cost of your food, and just about everything else you throw in your shopping cart.

This is Just the Beginning

All of that comes in the first wave of price increases. More dominoes will fall.

Airlines start to reduce capacity over 6-12 months. Ground shipping gets a surcharge tacked on within 3-6 months. Shipping from overseas slows down, and that can last for up to 18 months from that first spike in oil prices.

The tsunami hits first, but the boat keeps rocking after. There’s the aftershock that shows up in inflation, which leads to a slowdown in consumer spending, which leads to market volatility.

Different Strokes for Different Folks

This affects different regions differently, and it’s complicated. On one hand, the energy producers - Texas, South Dakota, Alaska - get a boost, since the demand for domestic oil will jump. But that’s only in the areas where drilling actually happens. Everywhere else suffers. Increased oil prices actually hit rural states harder, since they spend almost twice as much on energy as urban areas with better transportation infrastructure.

The Midwest and Southeast better brace for impact. Since those areas depend on manufacturing, they bear the brunt of a drop in spending as people cut back on purchases. And anywhere dependent on car manufacturing takes a hit as people delay buying new cars, which means the Rust Belt should be prepared to absorb a blow.

Those places that depend on tourism and hospitality can expect a terrible season, since travel will become increasingly more expensive. (As if tourism wasn’t already injured by the prospect of masked men plucking random people off the streets and shipping them off to Central American gulags.)

The Delusion Deluge

This administration remains committed to their preferred strategy: It ain’t broke, so there’s nothing to fix.

Case in point: A White House official told CNBC on Friday that the Trump administration believes “the oil markets remain well supplied.”

But experts, analysts, and anyone with eyes willing to look at the evidence will tell you that’s absolutely not the case. To put it in perspective, the last major energy crisis was in 1973, when about 7% of the global oil supply was removed from the market. Oil prices quadrupled.

This time around, Trump has locked up 20% of the world’s oil supply with this war. And there is NO surplus oil to tap into, because the countries with the surplus oil like Saudi Arabia and UAE also use the Strait of Hormuz, which is blocked off due to Trump’s idiocy.

Now, there’s a backstop here. In the 70s, our economy was almost exclusively dependent on oil for energy. Today it’s more diversified and we’re using more renewable sources than ever before— in spite of Trump’s best efforts. We all know how he feels about renewable energy. If Trump gets his way in his relentless push away from green energy sources, it’ll be yet another shot in his own foot.

We’re at a crossroads. That last energy crisis was a disaster because it lasted over a year. Trump could end this right now if he wants. But I’m not running to Polymarket to bet on that. Trump chose this, because he’d rather wage war in Iran than make good on literally any one of his campaign promises to make life better for Americans at home.

Trump yadda yaddas all of this away, calling it “a small price to pay” to stop Iran (from what exactly, I’m not entirely sure) but, he’s not paying it. You are. And he doesn’t give a shit.

Not only is he ignoring the downstream effects on the economy, he clearly hasn’t thought about how it affects his party. Trump makes an idiotic move, and now Republicans have to go out and defend it. And they can’t. And it’s decimating their support. Which is why we’re seeing double digit swings to the left, with Democrats flipping seats in elections across the country, from Arkansas to Georgia to Pennsylvania and beyond. Small price to pay, indeed.