As the week got underway, much of the world’s focus was on Donald Trump’s radical trade tariffs and the impact they’re having on the markets and the global economy. The president, however, seemed eager to emphasize a different priority.
“Oil prices are down,” the Republican wrote in an early-morning item published to his social media platform. A few hours later, he returned to the subject, boasting online, “[O]il prices are plummeting.” By the afternoon, Trump expressed frustration that more people weren’t acknowledging, “[O]il was $76 [per barrel], now it’s $65.”
Around the same time, House Republicans picked up on the cue, declaring in a tweet that the president “is already delivering for the American people!” As proof, GOP lawmakers pointed to “lower oil prices.”
On a superficial level, I can appreciate why Trump and his partisan allies are stressing this point: American consumers tend to like it when it costs less to fill up their gas tanks, so it stands to reason that the administration and its partners will try to take credit when prices fall, even if presidents have a limited impact on the prices of global commodities.
But in this specific instance, there’s a detail that either Trump doesn’t understand or that he hopes the public doesn’t understand. The New York Times reported over the weekend:
U.S. oil prices fell sharply, briefly dipping below $60 a barrel on Sunday — their lowest level in almost four years — as the economic fallout from President Trump’s latest round of tariffs reverberated around the world. The price of crude oil is down more than 15 percent since last Wednesday, just before Mr. Trump revealed his plans to impose stiff new tariffs on imports from most countries. That prices have fallen so far so quickly reflects deepening concern that high tariffs could slow economic growth and perhaps even cause recessions in the United States and the countries it trades with.
To hear the president tell it, falling oil prices is not only great news, it’s also evidence of his genius. But that’s ridiculous: Oil prices are falling because of fears of a possible global recession sparked by Trump’s own misguided economic agenda.
Or put another way, Trump would have people believe that it’s necessarily good news when oil prices fall. But when oil prices fall because of fears of a systemic economic downturn, that’s not worth celebrating.
I realize that no one has ever confused Trump with a policy wonk, but this is a subject he really ought to understand — because of his own recent governing experiences.
Almost exactly five years ago, gas prices fell sharply and quickly, not because of Trump’s agenda, and not because he was an energy policy mastermind, but because the economy had collapsed in the midst of a pandemic-driven recession.
This really isn’t complicated: When supply goes up and demand goes down, prices fall. And in April 2020, demand fell sharply as more Americans worked from home, traveled less and used fewer resources. Simultaneously, demand for other products slowed transportation of goods, which further depressed oil prices.
As the economy recovered, gas prices climbed again. It’s Free Market Economics 101. But Trump and his allies later brushed past the highly relevant details and spent much of the Biden era declaring that Republicans lowered prices at the pump to under $2 per gallon — hoping voters forgot about why, exactly, prices were so low. As it turns out, cheap gas is easy to achieve when the unemployment rate is 13.2%. Indeed, let’s also not forget that in 2008, as the Great Recession took its toll, gas prices also fell. No one was surprised: There was a global economic catastrophe, which naturally reduced demand for gasoline. As such, when Barack Obama first became president, gas cost about $1.81 a gallon. Then, as the economy recovered, demand increased and prices grew — at which point Republicans blamed Obama. Now, amid concerns about a possible second Trump recession, prices are, in fact, sliding lower; but again, that’s not emblematic of a healthy economy. It’s evidence of the opposite, even if the president finds this confusing.
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."
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