If you listen to Trump and his enablers you would believe the economy is going through a period of explosive expansion. In reality it is much more like a continuation of the Obama recovery which even Obama supporters like me felt was too slow and not enough of it reached the working class. In reality we may be seeing the first signs of a crack in the dam that is holding back the impending Trump Recession. Let’s explore.
Some time back Trump unilaterally pulled out of the Iran Nuclear Deal. To my recollection this was the first time that America ever broke an international arms treaty. Iran was, and still is, living up to its end of the multi-nation deal. Under Trump America’s word is valueless. Trump is conducting America’s business in the same manner he conducted his personal business for decades; make a deal and then break it.
As part of pulling out of the deal Trump is imposing sanctions on the sale of Iranian oil in an attempt to starve their economy. The only country that has the ability and capacity to quickly replace the Iranian oil on the international market is Saudi Arabia. While I am under no illusions about what the Iranian regime is like; it’s not like the Saudis are a bunch of Boy Scouts. Just over a month ago the Saudis murdered a journalist in their Turkish Consulate. The world called for an American economic retaliation. Due to his own folly, Trump found himself dependent on Saudi oil and was unable to take any action.
One choice was not to impose the sanctions. That would not play well with Trump’s dwindling political base. He has portrayed the Iranians as evil to the core and after all they are brown skinned which is reason enough for Bubba to hate them.
The next option was to impose sanctions on both Iran and Saudi Arabia but then Trump risked the Saudi’s not making up the Iranian supply which would cause global oil prices to spike. That would cause a recession in America and an economic disaster in much of the rest of the free world. Most of all in that process his financiers would suffer economically. That was totally unacceptable to him.
Trump chose the third option. He imposed the sanctions on Iran and punted on Saudi Arabia. In addition to the possible economic repercussion of a Saudi sanction consider the fact that the Saudis are also business financiers of the Trump and Kushner business enterprises.
This is a classic case of taking an action without considering its probable repercussions. (Anyone who considers the Middle East stable is flat out a fool.) Trump figuratively found himself over a barrel of Saudi oil.
If you are willing to ignore the moral implication (which Trump certainly is willing to do) this time he got away with a mistake. The problem is that Trump makes mistakes like this frequently. If you keep doing the wrong thing in life eventually it catches up with you.
Trump is banking on all his mistakes not coming back to haunt him during his administration. This time he got lucky. How long can his luck hold out? Trump is a short term player. His administration is basically an organized criminal enterprise. His objective is to enrich himself as much as possible during his reign.
When his luck runs out he will bail like he always does. John Q. Public will be left holding the bag and it will be full of overdue bills, not dollar bills. Will Saudi oil lubricate the skid or is this just a tremor before the “big one”?
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