Nobel economist warns Trump can’t save Americans from soaring prices

During the United States' 2008 presidential race, the phrase "drill, baby, drill" became a Republican mantra thanks, in part, to someone who is now an outspoken Never Trump conservative and an MS NOW host: Michael Steele. At the time, Steele was Maryland's lieutenant governor, and he went on to become chairman of the Republican National Committee (RNC) — where he continued to urge the U.S. to aggressively drill for oil.

At the 2008 Republican National Convention, Steele told a cheering crowd, "Let me make it very clear: drill, baby, drill — and drill now."

Then-Alaska Gov. Sarah Palin used the phrase that year during her vice-presidential debate with then-U.S. Sen. Joe Biden (D-Maryland) — who stressed that he wasn't against drilling for oil (his exact words were "drill we must") but also acknowledged the need to pursue green energy options.

In 2026, "drill, baby, drill" is still a GOP mantra. But liberal economist Paul Krugman, in a Substack column published on March 10, explains why drilling for oil will not protect the U.S. from rising energy prices during a war in the Middle East.

"Donald Trump talked a lot of nonsense about energy during the 2024 campaign," Krugman explains. "But in fairness, some of the underlying premises behind 'drill, baby, drill' were accepted by many people. At the very least, it was widely presumed that U.S. self-sufficiency in oil would protect America from disruptions in oil supplies overseas."

But that presumption was wrong.

The former New York Times columnist continues, "America produces a lot of oil — substantially more than we consume. Although we import some oil, mainly from Canada and Mexico, while exporting even more oil, mainly from Texas, we buy hardly any oil from the Persian Gulf. Yet the closure of the Strait of Hormuz has caused U.S. prices of oil products to soar. Self-sufficiency in oil has done nothing at all to insulate the U.S. economy from Middle East chaos."

Krugman points out that because "oil is traded on world markets," the price is more or less the same everywhere, whether it comes from Texas or the Persian Gulf.

"Some people have been shocked at the way U.S. gasoline, diesel and heating oil prices have soared over the past few days," Krugman observes. "But they shouldn't have been surprised. So does U.S. oil production give Americans no insulation at all from world market events? Not under the current rules of the game…. It's almost inconceivable that 1970s-type price controls or excess profits taxes would be imposed today. So U.S. prices of gasoline and other oil products reflect world crude prices, and the fact that America produces a lot of oil doesn't matter at all."

The economist adds, "If anything, U.S. families are more exposed to Middle East chaos than their counterparts in, say, Europe or Japan, mainly because we drive bigger, less fuel-efficient cars. The people who decided to begin this war should have seen this coming. All the evidence, however, suggests that they didn't."