Paul Krugman gives his perspective on Trump’s oil delusions:
It’s amazing, if you think about it: Trump launched a war for oil without talking to the oil companies first.
On the day before, the Bureau of Land Management auctioned off more than 20,000 acres of public land in Colorado for oil and gas drilling. Or I should say, tried to auction the land off — because there were no bids, despite the fact that the land was offered at very low prices.
If they’re not interested in drilling in Colorado, why would they drill in Venezuela?
Krugman goes on to quote Trump’s second inaugural speech, and I’m going to quote it here at greater length:
The inflation crisis was caused by massive overspending and escalating energy prices, and that is why today I will also declare a national energy emergency. We will drill, baby, drill. (Applause.)
America will be a manufacturing nation once again, and we have something that no other manufacturing nation will ever have — the largest amount of oil and gas of any country on earth — and we are going to use it. We’ll use it. (Applause.)
We will bring prices down, fill our strategic reserves up again right to the top, and export American energy all over the world. (Applause.)
We will be a rich nation again, and it is that liquid gold under our feet that will help to do it.
Trump and his followers seemed to believe that oil and gas production were down during the Biden administration, but just the opposite was true. Here is a Reuters article published on March 28, 2024:
The counter-intuitive fossil fuel boom under Biden reflects an awkward truth for his supporters and detractors alike ahead of the November elections, proving that what happens in globally interconnected markets like oil and gas is often well outside the immediate control of the person in the White House.
In Biden’s case, Russia’s invasion of Ukraine pushed oil and gas prices so high that many producers worldwide made record profits, not just those in the United States. The global economic recovery that followed the darkest days of the COVID pandemic also rapidly pumped up demand for fossil fuels.
The profits of the top five publicly traded oil companies, for example — BP, Shell, Exxon, Chevron, and Total Energies — amounted to $410 billion during the first three years of the Biden administration, a 100% increase over the first three years of Donald Trump’s presidency, according to data compiled by Reuters.
So, even as Biden’s policies were encouraging investment in alternative energy technologies, oil was booming, which caused oil prices to drop eventually. And now oil prices are too low to justify more oil exploration or rebuilding infrastructure in Venezuela.
Back to Krugman:
Trump clearly pictures America in 2025 as being like East Texas in the early 20th century — a place where all you have to do is drill a hole in the ground, and oil gushes out….
… But it doesn’t work like that anymore. After decades of oil extraction, gushers are a thing of the past. Today, most of the oil extracted by the U.S. petroleum industry is shale oil. To extract that oil sedimentary rocks must be fractured with pressurized liquids — “fracking.” Now, there are many environmental issues associated with fracking. But even if you ignore those concerns, drilling a new well isn’t worth doing unless the price of oil is sufficiently high.
As in most things, Trump is stuck in the past, floating around somewhere between the McKinley Administration and the end of the 1980s, when Michael Crawford was the hit of Broadway in Phantom of the Opera. And with a long pause in Studio 54 in the late 1970s.
Regarding Trump’s utterly stupid attempt to criminally prosecute Federal Reserve Chair Jerome Powell — Powell’s tenure is over in four months. If Trump thought he could drive Powell out a few weeks early, he appears to be mistaken. Powell is not backing down. See commentary by Jonathan Chait at The Atlantic:
Every affluent Republican, from the tech right to fossil-fuel owners to heirs managing their inherited portfolios, has a direct and visible interest in stable and competent monetary policy. The Republican Party’s respect for the Fed’s independence is already evident in a recent Supreme Court ruling, in which the conservative majority appears to be seeking to create a special exemption for the Federal Reserve from the Court’s general doctrine that presidents are entitled to fire the heads of independent agencies. When Trump messes with the Fed, he is defecating where his wealthy donors eat. Perhaps they will go along with this, too, but he is testing the limits of their acquiescence.
This also is a useful observation:
The apparent source of this desperate gamble is that Trump seems keenly aware that the public disapproves of his presidency and his economic policy making. But rather than move to the center and try to allay the concerns of his wavering supporters, Trump’s response to adversity has been to try to seize as much economic and political power as he can, as fast as possible.
Thus the invasion of Venezuela, which he hopes will provide him with a windfall source of petro-dollars. (Sunday night, Trump shared on Truth Social a mock biography describing himself as “Acting President of Venezuela.”) After floating a proposal to cap credit-card interest rates that stands little chance of passage in Congress, he told reporters on Air Force One that firms that fail to comply with his target by January 20—before any law capping interest rates can conceivably make it through the House and Senate—will be “in violation of the law.”
And he’s also determined to get rid of Powell earlier so he can begin to dictate monetary policy asap. My impression is that Trump want to goose the economy before the midterms. Trump, of course, is the last person on the planet we want to be in charge of U.S. monetary policy. We’d be better off consulting a Magic 8 Ball. But no matter how many times he screws up, Trump appears to have an absolute faith that he’s the smartest guy on the planet and his way is the smart way, or at least the way that’s most advantageous for him.
See also Five Points on the Trump DOJ’s Attack on Fed Chair Jerome Powell by Layla Jones at TPM.
Trump is noticeably terrified of the Democrats retaking the House in the midterms and impeaching him again, which they almost certainly will. So it is interesting that instead of refocusing on the domestic issues he ran on, he’s doubling down on the unpopular crap. He’s trying to consolidate as much global power as he can, I suppose, although he’s pissing off a whole lot of people around the world in the process.
Also instead of trying to please his voters, he’s working hard to change how the midterm elections will be conducted, per WaPo. This is worth reading. The states run the elections and, in theory, can just ignore Trump’s schemes to end mail-in voting and even voting machines — yes, he wants to go back to hand counting, probably because it’s easier to bribe election supervisors than a Smartmatic. But he could cause enough confusion to affect the results.
But it seems to me he’s at least as likely to discourage Republican voters as Democratic ones. By November anyone leaning even slightly left will be prepared to swim with sharks and fight through a wall of ICE agents to get to the polls.
Agree about the flailing but there's the need to deflect from the Epstein files. I think DOJ intends to dump 2 million docs unrelated to Epstein and say that's it. On or about when Trump invades Greenland.
Any chance we can get Greenland to rename itself, Epstein Island?
Hah! Found this a couple of days ago:
https://www.der-postillon.com/2026/01/groenland-trump.html
Some parts of the plan are genius-level – evil genius, but far worse than I imagined. A super-sized, ultra-militarized, ICE that would terrorize blue cities should have been a huge setback for Democrats.
Citizens reacted in peaceful opposition. Trump/Miller wanted a war zone with IEDs and ambushes of ICE to justify calling in the military What they got was the Portland frog, who's morphed into a brigade. People are banging drums outside the hotels where ICE is all night long. People are armed – with whistles – to alert everyone to the presence of ICE whenever and wherever they move. EVERYTHING is being videoed. (They hate that.) Some businesses, alerted by whistles, have locked their doors to prevent ICE from using the bathroom. It's all legal. (Well, the drums outside the Hilton may be "disturbing the peace," but the local cops don't seem to be responding.) It's easy to disregard Noem because she's a serial liar, but she's stymied by the tactics. Her demands are entirely that protests and surveillance by citizens must stop, but legal precedents all the way to the USSC support the legality. (A case went to the USSC regarding the arrest of a driver who used his headlights to signal other drivers of a speed trap. "Interference with a cop doing his duty" didn't stand up against the First Amendment. Repeated rulings have upheld the right of citizens to video cops.)
Minneapolis is suing to get ICE out, even as there are reports ICE is surging more goons. Unfortunately for ICE, MN can point at a the body of a citizen to support the assertion that ICE is way out of bounds. They aren't supposed to do anything with citizens – they have no jurisdiction.
I think it's a pivotal battle. Trump wants to subdue urban centers that oppose his fascist tactics. I think he intends to suppress voter turnout – that's the wrong phrase. Trump wants to virtually stop turnout in Democratic centers. "If you don't vote, you won't die." is my description of the plan. If it was effective, Trump would win elections – so would the GOP. Democratic centers ARE in the cities – it's geographically ideal. But the cities are not rolling over and they aren't bringing violence. So bringing troops in to protect the ICE Brown Shirts is being rejected by the courts. ICE alone won't be big enough. They are ramping up the violence and that's going to cause federal courts to order ICE out. (My prediction)
This was (and is) going to be settled by the decision of the military professionals NOT to be used to control the outcome of elections. I think they won't accept the assignment to intimidate voters or protect ICE which is intimidating voters. I think there's a good chance that the courts will decide that ICE can't be deployed during an election as a safeguard. The more violence they commit, the more certain I am that the courts will give ICE a timeout in November.
Venezuela, Greenland, Powell, the cap on interest, blah, blah, blah is smoke and mirrors. There won't be oil from V. If Powell goes in four months, his scheduled term, and Trump cuts the prime to 2% with inflationary tariffs, we will see hyperinflation. If we take Greenland, I think NATO will kick us out of Europe. And the EU will start an economic boycott. I think Pacific countries will join it, and we'll be in a serious three-year recession, having to live exclusively on what we produce. Trump will be impeached, convicted, and removed for crimes Vance may be equally guilty of. Which might put the Speaker in the WH until 2028.
I'm not saying this will happen this way. The truth may be even MORE bizarre.
“If we take Greenland, I think NATO will kick us out of Europe.”
My suspicion is that NATO will cease to exist. It might be replaced by a European-centric organization. I think it is also questionable if the EU will exist in anything like its current form. Von der Layen and Kallas have done too much damage for incoming governments and Euro MPs to keep things the way they are.
I don’t know if the witless wonders now heading the EU and major European Gov’ts at the moment would want to kick the USA out of Europe but if not, the leaders of Germany, France, a goodly section of the EU administration and the UK will soon be gone legally or otherwise and replaced by people happy to boot the USA out.
The USA has done an extraordinary good job in destroying its credibility and any soft power it had. In a century or so we might start to trust it again if it returns to some kind of sanity but always with reservations. The thought in the back of every other politician in the world is going to be “What if it goes rogue again?”
“the EU will start an economic boycott. I think Pacific countries will join it, and we’ll be in a serious three-year recession”.
Judging by the sentiments and actions here in Canada you might want to think in three decades rather than three years.
Canadians have stopped going to the USA. Canadian snowbirds, usually well off retirees who often would spent several winter month in places such as Florida are exploring places in the Caribbean, Central and South America or maybe Portugal. Canadian snowbirds with property in the USA are selling with no intention of ever going back to the USA.
Once new habits are established they tend to stick. The “We always go to Florida” becomes “We always go to Costa Rico”.
In my province you cannot even buy any US alcoholic beverages. And people are finding that Irish and Scottish whiskeys are a more that satisfactory replacements for US bourbons> Again this will likely become established habit.
On a more macro scale, we are madly searching for new markets and new suppliers to replace the USA. It is no longer trustworthy. And once we have established new trade routes and supply chains, we are unlikely to return to dealing with the USA in anything like the scale we have been. We have been selling most of our steel and aluminum to the USA more or less forever. We are finding new markets and better prices. This means that that USA going to need to find new sources of supply at higher cost.
To return to the retail side, I picked up some very nice Iranian dates and South African apples the other day. We are seeing produce from all over the world that we used to buy from the USA.
Yesterday the price of Milo aka Grain Sorghum or even Millet in some areas fell to near two dollars a bushel locally. I have heard grain elevators in the Dakotas won't even buy it.
Its price is based on corn and demand. But a few years ago demand for Milo was high. Now it is low. In some places, if what I hear is correct, non-existent.
He, formerly known as fearless leader, does not seem to understand demand. During the Covid there was such a glut of crude oil you had to pay the hauler to pick it up in some places. Operating wells were shut down locally and crews laid off due to low demand. Why? Low demand and cost of transportation and refinement due to quality issues.
Krugman does understand demand. He understands business. The Fool does not.
He is way too old to learn now. Aging in dog years (7-1) and failing to learn new trick are the diagnostic indicators Krugman is pointing out to us of what we are up against.
United States…we have a problem.
Sorry to say, but IMO, it's kinda creepy to see Liberals/Democrats jump to defend Big Oil and the Fed, just because… Trump. Sure, Trump is a grotesque idiot gone rogue, now attacking institutions which helped put him in power, but…
Big Oil is the most dangerous force on Earth. For decades, they have funded both the GOP and a very effective propaganda campaign against Science because… Profit.
The Fed is 'independent' from political oversight only because the banksters who created it a century ago (see "Jekyll Island Club", "Aldrich Plan") wanted to avoid Federal control over US Banks. It has always "of the bankers, by the bankers, for the bankers", not "the people". In recent decades, their policies have often tilted toward the interests of the Rich (low inflation protects the value of large assets) over the Poor (low unemployment means more jobs AND higher wages). Of course, Fed 'independence' does provide some protection from Trump's chaotic meddling, so yeah, I'll side with them in this fight, too – but I won't pretend that they're Good Guys.
Back to Big Oil… I finally see a ray of hope there. The men who run those Corps aren't stupid; they've known for decades that Global Warming is real. (They all deserve to rot in Hell for choosing to warm up our only Planet, and for choosing to poison our political system as well as our atmosphere). But I think they may have recognized that there will be a huge backlash against Trump – in Venezuela *and* the USA – and they don't want to get caught in that.
I suspect that Trump plan was: (1) bully Venezuelan Gov't into submission, (2) bully US Oil Majors into building refineries there, reviving the Venezuelan economy, so they would (3) build statues of Trump in a big park across from his new hotel in Caracas.
Not gonna work; people, countries, and Corps don't like being bullied. OTOH, I do expect *some* US Oil Corps (Citgo, Chevron?) to profit handsomely from access to cheap Venezuelan crude for the next few years at least – with minimal investment in infrastructure down there.
I don't see anyone defending Big Oil, just noting that Trump is an idiot to have assumed they would all jump at the chance to get into Venezuela without talking to them first.
But as far as the Federal Reserve is concerned, this is the first I've heard that liberals are supposed to dislike them. FYI in 1935 Franklin Roosevelt initiated reforms to the Fed to take control away from bankers in favor of an independent board of governors. They've screwed up from time to time and tend to be biased in favor of big business, but I think we need something like the Fed to manage monetary policy. Better them than politicians.