President Donald Trump said Monday that once the war with Iran is over, gas and oil prices will “drop like a rock.”
Many economists disagree. The profession even has a phrase for what happens to prices during a global conflict or supply shock: “rockets and feathers.” As in, prices shoot up like a rocket, but they slowly fall back like a feather.
This is not the first time Trump has run afoul of basic tenets of economics. Since returning to the White House, he has regularly given explanations, made predictions and taken actions that would lead to a failing grade in an Economics 101 course.
While campaigning in 2024, he promised to “bring prices down, starting on Day 1,” a pledge that economists dismissed as fundamentally impossible. Once in office, he implemented broad tariffs, insisting that they would be funded by foreign countries despite repeated warnings that the costs would be passed on to consumers. Then his war with Iran prompted the closure of the Strait of Hormuz, which triggered a surge in oil prices, fractured global supply chains and created severe fertilizer shortages — the exact catastrophic consequences that economists had long predicted.
None of these are partisan issues. While economists who advise Republicans might disagree with those who counsel Democrats on the virtues of tax cuts or deregulation, there is broad agreement on how inflation, tariffs and the global supply chain work. In fact, a 2006 survey showed there is a strong consensus among economists on a wide range of subjects, from why gas taxes are good to why agricultural subsidies are bad — two more areas where Trump has run afoul of their recommendations.
Read Lily Becker’s analysis here.
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Should Trump’s presidential library land deal be canceled?
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Some Miami residents are suing Trump, arguing that a sweetheart land deal for his presidential library brokered by Florida Gov. Ron DeSantis is a violation of the emoluments clause of the Constitution. Trump has said he wants to run the library as a hotel.
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Here are some more highlights of the president’s actions over the past seven days:
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- Brought his son Eric, who leads the Trump family business, on a delegation to China with government and business leaders
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- Claimed that he played no role in selecting the contractor for the Reflecting Pool project, after having said repeatedly that he was personally involved
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- Held a press conference in which Centers for Medicare & Medicaid Services head Dr. Mehmet Oz said 1 in 3 Americans are “under-babied”
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The news can feel overwhelming. But each week, we pause to highlight a person, organization or movement sticking up for their principles. This week’s challenger is Spanish Prime Minister Pedro Sánchez.
While many European leaders have distanced themselves from Trump on issues such as the wars in Iran and Ukraine and the future of NATO, the current leader of Spain has made news recently for essentially heading up the opposition. Elected in 2018, Sánchez is a social democrat with a populist bent who was already on the opposite end of the political spectrum from Trump. But he’s gone farther than others by refusing to allow Spain’s air bases to be used for the Iran war, opposing Trump’s demand for NATO members to spend more on their militaries, and condemning the removal of Nicolás Maduro from power in Venezuela, among other issues. All this may give a boost to Sánchez as he runs for re-election next year, as a recent poll shows a majority of Spaniards view Trump as a “threat” to Europe. Read more.
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For the first time in three years, inflation is rising faster than wages. With no apparent end in sight to the Iran war, the situation is not looking to get better any time soon. Consumer prices rose 3.8% in April compared with a year earlier largely due to the surge in oil and gas prices. Unfortunately, wages couldn’t keep up — which means that, adjusting for inflation, hourly earnings fell 0.3%. Real wages fell even more from March to April. Perhaps then it’s no surprise that poll after poll after poll shows the president’s approval rating cratering when it comes to the economy. While most politicians with polling this bad might be concerned, Trump is not. When asked about whether he’s thinking about Americans’ financial situation when negotiating with Iran, he replied “I don’t think about Americans’ financial situation. I don’t think about anybody.” (Trump added that all he thinks about is stopping Iran from getting a nuclear weapon.)
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— Stephanie Ruhle, host of “The 11th Hour”
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Sign up for The Tea, Morning Joe’s signature afternoon digest. Get Joe Scarborough’s takes on the day’s headlines, conversations with Morning Joe’s roster of lawmakers, reporters, strategists, authors and, for the first time, a direct line to all of them to ask your questions and leave your comments. Subscribe at ms.now/morningjoenewsletter.
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