President Trump continued his explicitly mercantile defense of the U.S.-Saudi relationship Wednesday morning, giving the country credit for a fall of oil prices and a subsequent windfall to American consumers.
Oil prices have fallen substantially since October, when they were around $76 a barrel, and for American consumers for whom gasoline is a large and variable component of their cost of living, a fall in the price of oil can deliver some immediate stimulus to their paycheck.
But everything else about Trump’s tweet is a lot of more complicated. For one thing, just yesterday, Reuters reported that major oil producers like the United Arab Emirates, one of the Trump administration’s closest allies along with Saudi Arabia, was actually pushing to cut back on oil production within OPEC at the international oil cartel’s next meeting in December.
And the question of how the U.S. is affected by the price of oil has gotten far more complicated as it has itself become one of the largest producers of oil, thanks to advances in fracking technology. When oil prices fell substantially in 2015 and 2016, eventually getting below $30 a barrel, business investment in the energy industry fell off a cliff, dragging down the growth rate of the US economy as a whole and creating, in the words of the New York Times, a “localized recession” that hit places like Harris County, Texas and Williston, North Dakota especially hard.
The desire to keep the oil flowing at a reasonable price has been the foundation of the U.S.-Saudi relationship since 1945 and especially following the 1973 Arab Oil Embargo. But the U.S. is the world’s largest crude oil producer and a major plank of the Trump environmental and energy policy has been to shift regulations and land-use rules to be even more friendly to energy companies, who are, of course, some of his most enthusiastic financial supporters.
But there is a way to cut taxes for normal Americans without crashing business investment and, more importantly, making it cheaper to burn fossil fuels and continue the disastrous heating of the planet. It’s to actually cut taxes for the vast swathe of normal, wage-earning Americans, much as the Trump administration promised to do before the election. What happened to that?
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