Saturday, March 14, 2026
Oil Prices Are Not the Only Costs Rising
The war with Iran is driving up more than gasoline prices. It is beginning to hit semiconductors, medical imaging, backyard gardens and even children’s party balloons.
While much of the world is focused on how Iran’s essential closure of the Strait of Hormuz is damaging global energy markets, other key industries risk getting hit by similar price inflation. That’s because Hormuz is also a major shipping route for helium and fertilizer, which both affect a wide sector of the economy and are now experiencing price spikes as ships bottleneck on both sides of the strait.
“The longer it goes on, the more serious it’s going to get,” said Rich Gottwald, CEO of the Compressed Gas Association.The expected price icreases come as the Trump administration attempts to assuage voters’ concerns over cost-of-living, and Republicans worry that the war’s ripple effects will hamstring their prospects in November.
Iran has now effectively blocked ships from crossing the strait, through which 20 percent of the world’s daily oil and natural gas supply travels, inflicting pain on global energy markets by driving the price of crude to roughly $100 a barrel. Iran’s new leader, Ayatollah Mojtaba Khamenei, indicated Thursday that won’t change soon, pledging that “the lever of blocking the Strait of Hormuz must also continue to be used.”
About a third of both the global helium and fertilizer supply passes through Hormuz. Half of the global supply of urea – a nitrogen-based fertilizer– and almost a third of the ammonia supply run through the straits, according to the American Farm Bureau Federation.
Prices are already spiking since global supplies are taking a hit right as many agricultural producers are beginning their Spring plants. Urea prices have jumped 30 percent since the Trump administration began bombing Iran, according to the Fertilizer Institute.
Meanwhile, helium spot prices have doubled since the war began, said Anish Kapadia, CEO of market research firm AKAP Energy. Qatar’s state-run energy firm halted liquified natural gas production in the first days of the war and it is estimated it will take months to get it back up and running. The nation is a major producer of helium, which is a byproduct of liquefied natural gas production.
Semiconductor manufacturers heavily rely on helium to prevent certain chemical reactions in production, Gottwald said. MRIs also need helium to cool the magnets the machines need to function. Welding is also heavily reliant on helium. Meanwhile, party balloons account for about 10 to 20 percent of the market.
Interruptions or price spikes to semiconductor manufacturing could hit global markets for everything from computers to smartphones to vehicles to medical equipment.
“A lot of the world doesn’t run without semiconductors and you can’t make semiconductors without helium, period,” Gottwald said. “That will probably add pressure from a political perspective from all different countries around the world.”
The losses are already beginning to mount. Pressure on the helium market won’t deflate for months because Qatar’s natural gas production facilities were damaged in the fighting, said Anish Kapadia, CEO of market research firm AKAP Energy. After the strait is reopened, he said, it would then take a while to put back into place specialized transportation containers, which are chilled to a temperature close to zero Kelvin, roughly negative-460 degrees Fahrenheit. So, even if the Strait of Hormuz were to reopen today, it would take two months for the market to return to normal, he said.
The U.S. is the world’s leading supplier of helium, followed by Qatar. But, like any other commodity sold on the global market, the price of domestic supplies will jump as shortages ripple through the international supply. . . . . If the shutdown lasts for two months, he expects “broader stress” and an increase of 25 to 50 percent.
“If the disruption stretches to three months, I would expect genuine shortages outside the best-buffered regions, especially in parts of Europe and Asia,” which are particularly reliant on Qatar’s supply. The majority of semiconductor manufacturing takes place in Asia.
Fertilizer demand in the U.S. is hitting just as the spring planting season begins. The squeeze is hitting farmers on two fronts, with rising diesel fuel and fertilizer costs, American Farm Bureau Federation President Zippy Duvall wrote in a letter to Trump this week. He noted that the cost increase could drive inflationary pressure on the U.S. economy while also threatening national security if fertilizer shortages cut production and drastically raised food prices.
“These supply chain shocks are expected to drive already record-high input prices even higher at a time when farm margins are already extremely tight and many farmers are underwater,” he wrote.
While the U.S. produces some types of fertilizer, other countries are heavily reliant on imports, particularly during seasonal demand peaks. For instance, 97 percent of potassium used in the U.S. is imported, as well as 18 percent of nitrogen and 13 percent of phosphate, according to AFBF. The crops that rely heavily on spring fertilizer applications include corn, cotton and wheat.
“We are deeply concerned that failure to act could lead to disruptions to the food supply chain not seen since 2022 when food price inflation reached 40- year highs,” Duvall warned. This time, without the strait fully open, there are few signs of relief.
“Storage fills, plants shut down, and the product simply does not reach the global market,” the center noted. “This is a harder form of supply disruption with no workaround.”
The irony will be that if prices surge at home, the Felon may have set the stage for Republican election losses in November. Of course, all of this would have been thought through by a competent administration - something America clearly does not have currently.
Friday, March 13, 2026
Trump’s Unpreparedness for the Iranian Oil Crisis
Two weeks after the United States and Israel launched an air war on Iran, there has been no let up in the conflict—or its financial repercussions. On Thursday, Iran’s new Supreme Leader said that his country would keep closed the Strait of Hormuz, a vital shipping lane through which about a fifth of the world’s oil flows, and more vessels in the Persian Gulf were attacked, including two oil tankers that were set ablaze off the coast of Iraq. On world markets, the price of a barrel of crude jumped to more than a hundred dollars.
Here in the U.S., the price of gasoline has risen by about more than twenty per cent since the war began, and energy analysts warn that it could rise a lot further if the Strait isn’t reopened. The Dow has fallen by about four per cent. Donald Trump, having plunged the country into a potentially disastrous war, with no clear rationale or exit plan, is flailing around for ways to mitigate its economic consequences. On Thursday, he suggested in a social-media post that the U.S., as the world’s largest oil producer, makes a lot of money when prices go up—an argument that even the most slavish G.O.P. congressman facing a reëlection campaign might hesitate to embrace.
Perhaps the most startling thing about the whole situation is that the Trump Administration was apparently surprised by, and unprepared for, Iran’s capability to inflict economic pain on the U.S. and its allies. This despite the fact that during a showdown in Trump’s first term the regime in Tehran used the same tactics of threatening to block the Strait and of attacking oil infrastructure in neighboring Gulf states that are allied with the U.S. Whether out of arrogance, capriciousness, or collective amnesia, this recent history was ignored.
In 2018, after rashly pulling out of the nuclear deal that the Obama Administration had negotiated, Trump launched a “maximum pressure campaign” against the Islamic Republic, which included extensive sanctions on its oil industry, the country’s biggest revenue generator. The response from Tehran was robust. In February, 2019, the Navy commander of the Islamic Revolutionary Guard Corps said that if Iran had no buyers for its oil it would take military steps to close the Strait. Ultimately, it backed off—it was able to continue exporting oil to China and other countries that ignored the U.S. sanctions—but the government and its foreign proxies did carry out a campaign of aggression in and around the Gulf. In May and June of 2019, four oil tankers docked in the United Arab Emirates were sabotaged and two freight vessels, one Japanese-owned and the other Norwegian-owned, were damaged by Iranian mines in the Gulf of Oman, which sits below the Strait. Months later, in Saudi Arabia, drone attacks struck oil-pumping stations that were operated by Aramco, the state-run oil giant.
At the time, there was speculation that tensions between the U.S. and Iran could spiral into military conflict—Mike Pompeo, then Trump’s Secretary of State, had described one of Iran’s attacks on Aramco facilities as an “act of war.” The Columbia report considered various scenarios, including small-scale hostilities in the Gulf and a major war that closed the Strait of Hormuz and drew in other countries in the region. In the latter scenario, the price of a barrel of crude could spike up from sixty-five dollars to “$110–$170 after one month, $95–$125 after six months,” the report said. The good news, it went on, was that “none of the parties are interested in pursuing massive escalation and have shown little will to do so even as the crisis in the region has worsened.”
Enter Trump 2.0, whose addled mind seems to have difficulty keeping a thought in place for a few days, let alone for the six years that have passed since the previous showdown in the Gulf. . . . Trump signed the order for Operation Epic Fury, with eminently predictable results. Having survived the initial U.S.-Israeli onslaught, the Iranian regime rolled out an expanded version of its playbook from 2019, exploiting its choke hold on the Strait, while launching missile and drone attacks on U.S. bases and energy infrastructure in the Gulf states.
With the Strait effectively blocked and hundreds of tankers stranded, many millions of barrels of oil are stuck at sea. And as onshore storage facilities have filled up Saudi Arabia, Iraq, and Kuwait have shut off some of their wells because they have nowhere to put the oil they produce. In volume terms, the hit to global supply is now the largest ever, energy analysts say, and, the longer the conflict goes on, the worse it will get. On an corporate earnings call last week, Amin Nasser, the chief executive of Aramco, said that a lengthy closure of the Strait would have “catastrophic consequences” for the world’s oil markets. Gas prices haven’t hit six dollars yet, but in parts of California they have come close. At a national level, the average price has risen from $2.94 a month ago to about $3.60, according to the American Automobile Association.
The previous time that Trump almost blundered into an economic catastrophe was on “Liberation Day,” nearly a year ago, when, from the Rose Garden, he announced punitive tariffs on dozens of U.S. trading partners. Financial markets, including the U.S. bond market, which lies at the heart of the global financial system, promptly went into a tailspin. . . . And with the midterms on the horizon the last thing that he and other Republicans want to talk about is higher gas prices.
But it turns out that doing a wartime TACO is considerably harder than doing a peacetime one. The decision to cease hostilities isn’t Trump’s alone; Israel and Iran also have a say. The potential loss of face is much larger: at least seven American service members have been killed in Operation Epic Fury, while more than a hundred have been wounded. And oil wells and refineries can’t be turned back on overnight. “Many processes are out of (Trump’s) hand,” Marko Kolanović, a financial commentator who was formerly co-head of global research at JPMorgan Chase, remarked online last week.
An extended period of higher energy prices would hit low- and middle-income households, many of which are already struggling to keep up with the cost. It could also feed through to higher inflation, which could prompt the Federal Reserve to keep interest rates on hold, or even raise them. Assuming the Senate confirms Kevin Warsh, Trump’s nominee to replace Jerome Powell as Fed chair, an interest hike seems like an unlikely outcome, but the possibility of the Fed not responding to higher prices also raises awkward possibilities. If investors come to think that the central bank is going soft on inflation, there could be a big sell-off in the bond market. That would leave Trump in the same predicament he was in last year after Liberation Day.
Nothing is certain, except the fact that the President is floundering, making conflicting statements from one day to the next about how long the war will last. As it continues, rule at the whim of a strongman seems to be giving way to rule by slapstick. . . . Trump is turning into Oliver Hardy. Earlier this week, he said that he launched the war based on information he received from Steve Witkoff, Jared Kushner, Pete Hegseth, and Marco Rubio that led him to believe Iran was preparing to attack the United States. The search for the fall guy is on. Only the truth is we are all Trump’s fall guys—not just Americans facing higher fuel bills but the inhabitants of other countries, particularly energy-importing ones, such as Japan, Germany, China, and India, which will bear the brunt of higher prices. Hopefully, that will be the full extent of the economic damage caused by Trump’s recklessness. It can’t be guaranteed.
Thursday, March 12, 2026
The Felon Ignored All of the Dangers of War With Iran
In the least charitable—and probably accurate—view, President Trump went to war with Iran out of a delusional faith in himself. He believed that the worst-case scenarios that have deterred past presidents from attacking Iran wouldn’t come true for him, because he is Donald Trump.
In the most charitable—and probably accurate—view, the president had reasons to believe that all of the catastrophic warnings about the most hair-raising consequences of an attack wouldn’t come to pass this time. The 12-day war, which Israel and the United States fought last June, demonstrated that they could strike Iran without provoking catastrophic retaliation. Having endured that assault on the country’s military infrastructure, and then wave after wave of protest by its own citizens, the Islamic Republic was isolated and weak. So why shouldn’t Trump exploit that fragility to land a death blow against a murderous adversary?
I could nearly convince myself of these arguments, except that almost no other foreign-policy question has been studied harder over the past 20 years or so than the likely effect of U.S. military strikes on Iran. The many years spent pondering and preparing for a potential attack on Iran are the reason that the first days of the war were, for the most part, a bravura display of American power. Yet all of that study also pointed out the risks: spiking oil prices, the spread of violence throughout the Middle East, civilian casualties of the sort now evidenced by an apparent U.S. missile strike near an Iranian elementary school. When past presidents balked at the possibility of war with Iran, they weren’t just dodging a hard choice; they were deterred by all of the obvious reasons a conflict could perilously spiral. Nobody should be shocked that the expected is now coming to pass.
To begin, there’s geography. Just 35 miles across at its narrowest, the Strait of Hormuz links the Persian Gulf to the rest of the world and is surrounded on three sides by Iran. One-fifth of the world’s oil and liquefied-natural-gas supply passes through an Iranian turkey shoot. Fighting for its survival, Iran has the capacity to choke fossil-fuel markets by launching sporadic attacks on passing tankers, enough to deter companies and their insurers from justifying that risk. A hard fact of geography was always going to be a hard fact of war.
Another daunting obstacle to victory is the nature of the Iranian regime, a theocracy that celebrates martyrdom and has spent its entire history preparing for what it considers an inevitable war with the United States. Every time protests fill public squares, I allow myself to believe that the terrible government in Tehran will crumble. But its willingness to kill to survive is the biggest obstacle to its toppling. And Trump intervened after the regime killed tens of thousands of its most determined foes. Calling for revolution after the revolution has been crushed is belated timing, to say the least. . . . thus far, decapitating the regime has succeeded only in replacing one Ayatollah Khamenei with another. By all accounts, the son is no less fanatical than his father and believes with theological certainty that the most brutal means justify his righteous ends.
Because airpower isn’t likely to dislodge the regime, the crucial question was always going to be “How does this end?” The lesson that the Trump administration seemed to learn from the failed planning for postwar Iraq is that planning isn’t worth the effort at all. When asked what comes next, Trump can manage only several contradictory answers, sometimes in the course of a single sentence. But the most plausible of these answers is that the administration finds a faction in the government willing to cut a deal favorable to the United States . . . . It’s hardly encouraging that the administration doesn’t have a plausible candidate for this job after nearly two weeks of conflict—and that the existing regime hasn’t begun suing for peace, even though it’s fighting for survival.
By trumpeting unachievable objectives—unconditional surrender, regime change—as his war aims, Trump has given his enemies the opportunity to claim survival as victory. He’s left himself with no evident end point to what he recently called a “short-term excursion.” If he had wanted to weaken Iran’s ballistic-missile threat—a worthwhile aim—he could have focused U.S. strikes on launchers and production sites. . . . . Or he could have allowed Israel to carry out attacks, with U.S. support, which might have limited fallout in the Gulf. If he wanted to topple the regime, he could have helped organize and support the opposition, nurturing and supplying the movement to better equip it to succeed. Instead, Trump ignored the obvious and went to war. Now the obvious is seeking its revenge.
Wednesday, March 11, 2026
Tuesday, March 10, 2026
The Felon Has No Idea How to End the War With Iran
In September 1996, I visited Tehran for the first time. I stayed at the Homa Hotel, formerly a Sheraton. I wrote at the time that fixed above the door in the lobby was a sign that read, in English, “Down with U.S.A.” As I pondered that sign, I remember thinking something like: Wow, that’s not graffiti! That’s firmly attached. That won’t come down easily.
Now, we’re more than a week into the war with Iran launched by President Trump and Prime Minister Benjamin Netanyahu of Israel, and the biggest question I have is this: What if the necessary is impossible? What if the transformation of Iran is so much more important than the war’s critics admit, but so much more difficult than the war’s designers understand?
Yes, nothing would improve the prospects of the people of Iran, Lebanon, Iraq, Syria, Gaza, Yemen and Israel more than removing the Islamic regime in Tehran.
But what if that regime is also so embedded — in mayoralties, schools, police stations, government jobs, the banking system, the military, neighborhood paramilitaries — that, despite its unpopularity with a majority of Iranians, it can’t be removed without plunging the entire Iranian landmass, about a sixth the size of the United States and home to 90 million people, into chaos? What if the only quick alternative to Iran’s Islamic autocracy is not democracy but disorder on an epic scale?
Nothing underscores the embeddedness of this regime more than the fact that Iran just replaced its supreme leader, Ali Khamenei, killed early in the war, with his son Mojtaba Khamenei, said to be another hard-liner.
[E]vents are telling me that Trump and Netanyahu should take their military achievement and call it a day, at least for now. Why?
First, it is obvious that Trump and Netanyahu started this war without any clear endgame in mind.
Netanyahu, I suspect, would probably be happy to turn Iran into another big Gaza and to just keep “mowing the grass,” or periodically putting down threats there, as he was so inclined to do in Gaza. As the Haaretz military analyst Amos Harel put it: “A few months ago, Netanyahu described Israel as a modern Sparta. But to preserve its militarist identity, a Sparta requires permanent military friction — of a kind that would also enable its ruler to remain in power — regardless of the price it exacts from the country.”
Keeping Israel at war with Iran, Hamas and Hezbollah enables Netanyahu to drag out his corruption trial and avoid a commission of inquiry for his failure to prevent Hamas’s Oct. 7, 2023, invasion. (If you think that is too cynical, you don’t know Netanyahu.)
For his part, Trump has been all over the map when talking about the morning after in Iran — and saying truly ridiculous and often contradictory things that reveal a commander in chief who is just making it up as he goes along. One day it’s regime change, one day not; one day he doesn’t care about Iran’s future, the next day he will have a say in choosing the country’s next leader; one day he’s open to negotiations, the next day he is demanding “unconditional surrender.”
I thought the Middle East analyst Hussein Ibish summed up the Trump strategy in Iran concisely when he wrote: “It goes like this: The U.S. and Israel bomb and destroy assets. Then (fill in the blank) Iranians will secure (fill in the blank) political change that will achieve (fill in the blank) U.S. war aims.”
Would you invest in a company whose leader, without warning, embarked on a radically new business strategy and then, in the next week, described its goals in five different ways? That is a flashing red light.
That said, Trump and Netanyahu appear to have significantly knocked back Iran’s nuclear capabilities and its ability to project power through its navy, air force and missiles. That is good for the Iranian people, given how many have been killed by the regime controlling that power, and it is good for the region. The wise thing to do now is pause and see how this plays out on what I call “the morning after the morning after.”
But the morning after the morning after, I’d bet on an explosive debate and infighting among the ruling elite in Tehran. Many voices of the people, merchants and reformers in the regime will surely declare to Iran’s hard-liners: “Look at the disaster you have brought upon us. If this is a great victory by Iran, what does defeat look like? We have lost our savings, our economy, our environment, much of our military and the friendship of all our immediate neighbors. What future do we have?”
Just consider the infighting we are already seeing between Iran’s president and hard-line military factions over the wisdom of Iran attacking its Arab neighbors in hopes of getting them to pressure Washington to stop the war. Who knows what could emerge between the Iranian people and the regime, and within the regime, over time when the war stops and the true bill for Iran’s extreme behavior comes due.
To be sure, no one can guarantee that this morning-after-the-morning-after politics will end in a change in the regime or of the regime. But it has every bit as much a chance as just bombing Tehran and Beirut into rubble and hoping a popular uprising will emerge.
We are already seeing a desalination plant in Iran being bombed, and, in retaliation, Iran striking Bahrain’s desalination plant. If that trend spreads, people are going to run out of water very fast. The potential for Iran’s becoming an even bigger environmental disaster than the ayatollahs have already made it is very real; no one will be able to live there.
Iran’s regime is a disgrace — a menace to its own people, to its neighbors and to a rules-based order as much as any other nation. I pray that it can pass into history soon, at a reasonable cost, and unlock the Iranian people’s enormous potential to contribute to humanity.
But endlessly bombing it, destroying more and more military and civilian infrastructure and just hoping that Iranians seeking democracy will come together — with barely any internet to communicate with, and where moving anywhere on the roads can be deadly dangerous — and topple this entrenched killer regime on their own … well, show me where that has ever happened in history.
My guess is that this regime will break only from the top, which will be a process that will start only after there is a cease-fire.
The best that the Trump-Netanyahu bombs-away strategy can do is start that process; just tilting Iran onto a better track where it is less of a threat to its own people and neighbors would be a significant achievement. The worst the strategy can do is so devastate Iran with endless aerial bombardments that it becomes ungovernable for anyone. That would be a disaster of incalculable proportions.
Monday, March 09, 2026
Americans Are Paying the Price for the Myth of Trump’s Competence
At some point, early Wednesday morning, the cost of the Iran War will top $10 billion. The Center for Strategic and International Studies released a paper last week pegging the cost of this latest misadventure at $891 million a day. I’ve seen higher estimates, but CSIS is a respected nonpartisan outfit, so let’s go with their number for now. The report states that the vast majority of this money had not been previously budgeted, especially the spending on munitions. One Patriot interceptor missile costs close to $4 million, and we’re apparently burning through them. And “War” Secretary Pete Hegseth promises that we’re just getting revved up.
Donald Trump may have told British Prime Minister Keir Starmer over the weekend that the war was “already won.” But also over the weekend, a pre-war intelligence report was leaked to two Washington Post reporters showing that the National Intelligence Council, a panel of independent intel experts, seems to think that dislodging the regime could take a very long time indeed—at $37 million an hour, a rate that is almost sure to rise, especially if ground troops get involved.
Meanwhile, gas prices went up about 60 cents a gallon in the war’s first week. The Dow fell 453 points Friday. (It’s well below 50,000 now, so I guess that means, per Pam Bondi, that we’re now allowed to take the Jeffrey Epstein scandal seriously.) Also on Friday, the Bureau of Labor Statistics announced that the U.S. economy lost 92,000 jobs in February. In the year-and-change since Trump returned to office, the economy has added around 140,000 jobs. In a year. The St. Louis Fed estimated last spring that simply to keep pace with the growth in the number of people who age into the labor force, the economy needs to add around 150,000 jobs a month. In other words, everywhere you look, the news isn’t merely bad. It’s terrible.
We’ve seen numerous examples in these last 13 months of Trump’s mendacity and malevolence. Unfortunately, a lot of Americans will never see him that way. There are those who adore him unconditionally, but beyond these dead-enders, there are others who know he’s not a good person but aren’t all that bothered by it.
That’s hard for millions of us to accept. But I hope to God that these people are finally starting to move themselves toward the conclusion that, even if they aren’t that troubled by the mendacity and malevolence, the man is just wildly incompetent. A mountain range of mythmaking has gone into creating the Trump persona over the years; by him, by a pliant business press in his real-estate days, and, since he entered politics, by a right-wing media that would make the old Soviet press agencies blush and a party of cowardly sycophants, most of whom know very well that he shouldn’t be in charge of a high-volume McDonald’s let alone the executive branch of the federal government but would rather let the country collapse than say so. . . . . And I was staggered during the 2024 campaign at all the voters who believed him when he said he’d bring down prices on day one.
Really. Who is that—okay, I’ll supply my own word—stupid? Presidents can’t control prices. Prices—of eggs, beef, oil, refrigerators, computers, you name it—depend on dozens of factors. Xi Jinping, who runs a command economy in a country where most electronics happen to be made, probably has far more control over the prices of refrigerators and computers than any president ever will. The price of beef has more to do with decisions made in Brazil than in Texas—and certainly at 1600 Pennsylvania Avenue. We all learn this in school. So how did so many millions of Americans unlearn it?
Trump is going around now talking as if he has the power to appoint Iran’s next leader, as if it’s no more complicated than naming the next GOP chairman of Mississippi. As if there won’t be factions within the Iranian populace that will fight the elevation of anyone with the taint of a Trump association to the death. Again, who can possibly believe his nonsense?
His poll numbers are bad. But they’re not nearly as bad as they ought to be. The man is, whatever his other faults, just way in over his head. Maybe Democrats should say that more often. The fact that he’s costing taxpayers a billion dollars a day on a war most of them didn’t want may be a good place to start.
Sunday, March 08, 2026
The Economy’s Warning Light Is Flashing Yellow
The job market is weakening, inflation is still too high, and we’re at serious risk of a once-in-50-years oil shock. This is almost the exact set of conditions that triggered the stagflation of the 1970s, which at the time was America’s worst economic crisis since the Great Depression. At the moment, the economy is still far from that kind of doomsday scenario, but the direction of travel is disquieting. The economy’s warning lights might not yet be flashing red, but they are certainly flashing yellow.
The jobs report released this morning showed that the U.S. labor market lost 92,000 jobs in February, causing the unemployment rate to rise to 4.4 percent. The numbers for the previous two months, which had suggested decent job growth, were also revised downward: January now showed fewer job gains than initially estimated and December showed overall job losses. These new numbers continue the trend of last month’s revisions, which showed that the economy had added just 181,000 jobs in all of 2025, a tenth of the jobs that had been added the year prior. Taken together, the numbers suggest that 2025 appears to have had the most months with negative job growth since 2010—the midst of the Great Recession—and that 2026 is off to a similarly slow start. . . . . the native-born unemployment rate has risen by half a percentage point since Trump took office.
The labor market is not the only sign of trouble. A report released by the Commerce Department’s Bureau of Economic Analysis on February 20 showed that economic growth slowed dramatically in the final months of last year, from 4.4 percent in the third quarter down to just 1.4 percent, bringing total yearly growth to its lowest level since the pandemic decimated the economy in 2020.
The worst job numbers since the Great Recession, the slowest economic growth since COVID, and the worst inflation in nearly two years—these are not the signs of a healthy economy. And we haven’t even talked about oil yet.
As I wrote this morning, the U.S.-Iran war carries a very high risk of triggering an energy crisis if it lasts for more than a few weeks—the kind of crisis that experts believe could cause the price of oil to double or triple from its current level. That risk jumped almost immediately after my article was published, when Donald Trump posted on Truth Social that the war would not end without Iran’s “unconditional surrender.” The price of crude oil promptly shot up to about $90 a barrel and may go higher still. Meanwhile, Qatar’s energy minister, Saad al-Kaabi, has begun warning that oil prices could rise as high as $150 a barrel within weeks and that the situation could “could bring down the economies of the world.” As recently as yesterday, the oil markets were responding relatively calmly to the outbreak of war. Now panic might be setting in.
All of this looks eerily similar to the 1970s. At the beginning of the decade, the economy was already struggling. . . . . Then came the 1973 Arab oil embargo, and everything fell apart. Oil prices nearly quadrupled from late 1973 to early 1974. Because so much of the economy is dependent on energy, that caused the price of everything else to go up too. Inflation reached double digits. Meanwhile, consumers pulled back from spending, which, in turn, forced businesses to start laying off workers, setting off a vicious cycle. Economic growth plummeted, unemployment spiked, and the economy fell into recession.
The current situation is not yet 1973 all over again, and it doesn’t have to be. The biggest difference between the situation then and the one we face now is that this time the pain is mostly self-inflicted. When Trump came into office, inflation was falling, job creation was strong, and the economy was projected to grow quickly. Only after the imposition of his global tariffs did things take a turn for the worse, and only after his decision to wage war on Iran did the world face the prospect of a full-blown energy crisis.
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