President Donald Trump may need to procure a life jacket to save himself from the cost of his broken promises to his supporters, according to a Nobel Prize-winning economist.
Paul Krugman, who won the Nobel Prize in 2008 for his work on trade theory, argued in a new Substack essay that Trump appears desperate to end the war with Iran because of its impact on the American economy, particularly gas prices. Krugman noted that Trump may be in for rough waters even if the war ends amicably as Trump tries to rehabilitate his relationship with his supporters.
"Can Trump rehabilitate his standing with American voters by throwing in the towel? Probably not, for both economic and political reasons," Krugman wrote.
Krugman noted that gas prices are likely to stay elevated long after the war ends because of an economic rule called "rockets and feathers." He described the phenomenon as "how the price of gasoline responds to changes in the price of crude oil."
"When there is a global shock that causes the price of crude oil to soar, gasoline prices rise like a rocket. But when the crisis is over and crude prices plunge, the price of gas declines only gradually — it drifts down like feathers," Krugman explained.
Since the war began, oil prices have largely followed that trajectory, Krugman noted. He predicted gas prices would likely remain elevated, thereby "thwarting Trumpist hopes of quick political relief from capitulating to Iran."
But the war's impact may be felt most acutely by the souring sentiment of Trump's supporters. Several Republicans have publicly criticized the deal the Trump administration struck with Iran, and some have urged the president to do more to address the rising cost of living for Republican voters.
Krugman noted that "once a leader has lost the public’s economic trust, that trust doesn’t come back just because gasoline prices have receded."
"I would add that it may be especially hard for the Trumpists to make the case that things have turned around when they were never willing to admit that anything was wrong in the first place, insisting even as prices soared that we were living in a 'golden age,'" he wrote.
"So will Trump’s surrender to Iran rescue him and his party from a blue wave in November? It’s very unlikely. I suggest they find themselves some lifejackets," he added.