|
 |
Friends,
Trump gas — like Trump shoes, Trump cologne, the Trump Bible, Trump shoes, Trump NFTs, Trump crypto, Trump resorts, and Trump University — is turning out to be a ripoff.
The average cost of gas tracked by the AAA was $4.17 a gallon yesterday. The station at the end of my street is selling it for over $5 now. If you drive a Mini-Cooper, as I do, which demands premium grade, you’re shelling out over well over $6.
To put this in perspective, the average price for a gallon of gas in the U.S. the day before Trump launched his war was $2.98. Between then and today, the U.S. has experienced the largest increase in gas prices in 60 years, nearly a 40 percent jump.
Despite the tentative cease-fire in the Middle East, a gallon of gas is expected to cost at least as much for quite a while.
Even if Iran soon allows all tankers through the strait, Trump gas is likely to remain pricey because it’s likely to take months to repair and reconstruct the oil infrastructure that’s been destroyed in and around the Persian Gulf.
Crude futures — bets that traders are making on the future price of crude — have returned to over $100 a barrel, which translates into over $4 a gallon extending for months. Given that the Strait of Hormuz is still largely closed, the actual price that global buyers are paying for real-world shipments is up around $150 a barrel.
The price of gas is always the most conspicuous signal of affordability because most people know precisely how much a gallon of gas costs, down to the decimal point. It’s exhibited on every street corner with a gas station. They know what they pay to fill up their tanks. They’re aware of exactly when gas prices rise or drop, by how much, and what competitors are charging.
No amount of Trump spin can change this reality. Numbers observed everyday on the street have a particular potency. Trump can’t accuse the heads of government bureaus that track inflation of being Democratic hacks and can’t fire fire them and replace them with people who will parrot his lies. Consumers know what they’re paying.
Will the high price of Trump gas matter seven months from now when Americans go to the polls to elect the next House of Representatives and a third of the next Senate? Assuming we have free and fair elections, the answer is probably yes.
Gas prices are a stronger predictor of presidential approval or disapproval than any other broad macroeconomic indicator, such as the overall rate of inflation or unemployment. Historically, every 10-cent increase in the price of gas correlates with a 0.6 percent decrease in presidential approval.
And presidential approval or disapproval is, in turn, a stronger predictor of how the American public will vote in midterm elections than any other broad political measures, such as approval of Congress or of either political party.
It’s been a nightmarish month in every respect. Trump’s war will go down as one of the worst political and humanitarian blunders in history. Thirteen U.S. military personnel died in the conflict. Hundreds more have been injured. A human rights group estimates that 1,665 civilians have been killed in Iran, including 248 children.
America will be paying for this war for many years, in one way or another. Hence, it may be small comfort to think the war will likely contribute to a Democratic Congress starting next January. But I’ll take whatever comfort I can.
So glad you can be here today. Please consider becoming a paid subscriber of this community so we can do even more.
|