Wednesday, July 4, 2018

What did Donald Trump do today?

He forgot how supply and demand work.

Trump spent most of the Fourth of July holiday in seclusion at his Virginia golf course, but he found time to rail against the rising gas prices that are likely to hurt Republicans during the midterm elections.

Specifically, Trump tweeted: "The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!"

OPEC isn't strictly speaking a monopoly, but the cartel is effective at setting world oil prices--which is precisely what a cartel is for. It exists to serve the interests of its member nations, and not those of American consumers, which is why energy independence has been a high priority for most administrations since the late 1970s.

Trump imposed 30% tariffs on solar panels in January, putting a stop to about $2.5 billion in planned solar installations and costing thousands of jobs in what had been a surging industry.

The United States does indeed have defense agreements with various OPEC member nations, like Saudi Arabia, Kuwait, the United Arab Emirates, and Qatar. (Trump has also threatened war against some OPEC members, like Iran and--as was revealed yesterday--Venezuela.) But those agreements exist for reasons beneficial to the United States: those countries buy American weapons, the U.S. buys their oil, and their leased air bases allow the United States to project military force all over the Middle East and Central Asia. 

Why does this matter?

  • A president who can't understand why other countries won't act against their own interests just because he demands it is never going to accomplish his goals.
  • Past a certain point it doesn't matter whether a president can't or won't learn the basic facts of a situation before taking action.