The tragedy of Trump's mistakes

Yes, as the poet Alexander Pope said - to err is human. But while everyone makes mistakes, some are more prone to them than others. That is why democracy exists - to subject decisions that affect large numbers of people to a process of decision-making that includes checks and balances. The history of authoritarian and absolutist political power is full of figures whose mistakes turned into disasters not only for themselves but also for the societies they ruled.

There is no more important decision than starting a war against another country. America, however, made it without the slightest regard for its own system of checks and balances and without reasoned debate. Like the ancient emperors, the lying, impulsive US President Donald Trump remains outside the control of the legislative branch. He is surrounded by lackeys who tell him only what he wants to hear. The disastrous result is now obvious: America is once again drawn into a war in the Middle East that has already claimed thousands of lives (mostly among civilians) and in which it has almost certainly committed multiple war crimes.

No one knows how long the war with Iran will last, how many more war crimes will be committed, and how many more innocent people will be killed. But Americans seem so used to Trump’s violations of human rights and the rule of law, and so inundated with a constant barrage of shocking news, that they have barely managed to organize a protest. Even in universities, which are usually the center of protest and dissent, fear reigns. As in all repressive regimes, the threat of economic consequences or worse (visa cancellation, deportation from the country, or criminal prosecution) has had the desired effect.

As an economist, I am often asked what the consequences of Trump’s war of choice against Iran will be for the US and global economies. The short answer is: the longer it lasts, the greater the damage. But even if the war ends quickly, the consequences will remain. Vital supply chains have been disrupted and a number of oil and gas facilities have been destroyed. Most estimates suggest that it will take years to repair.

It is not just oil and gas supplies that are at risk. Unlike the oil embargo of the 1970s, fertilizer production is also at risk, and food systems around the world depend on it. Moreover, this crisis began against a backdrop of other serious global and economic shocks, from the Covid-19 pandemic and Russia’s invasion of Ukraine to Trump’s global tariff war and the dismantling of the rules-based international trading system. All of this has contributed to rising inflation and a deepening affordability crisis.

Before Trump returned to the White House, inflation was on a downward trajectory, although still well above the central banks’ 2% target. However, the increase in tariffs has significantly slowed this trend, and now inflation is rising again around the world. Many countries, including the United States, are already experiencing an affordability crisis, exacerbated by American policies. As a result, there is a risk that central banks in all countries will either raise interest rates or at least slow down the pace at which they have been lowering them.

All of this, in turn, will exacerbate the affordability crisis (buying a home or paying off credit card debt will become more difficult) and slow the growth of the US economy, which is already shaken and traumatized by Trump’s chaotic policies — on trade, immigration, and fiscal policy. Were it not for the unlimited spending on artificial intelligence (AI) data centers — which support roughly one-third of US growth — the US economy would be truly anemic. And with Trump’s regressive tax cuts for billionaires and corporations already in effect, the US has less fiscal space to absorb potential disruptions, both those caused by Trump’s actions and those related to AI — from job losses to the bursting of the tech bubble.

Trump's claim that America benefits from this situation as a net exporter of oil is absurd. Yes, Exxon will benefit, and American consumers will have to pay prices set by global markets, which have already risen significantly. In this situation, America should, of course, impose a windfall tax. But that will not happen under the current administration, which is completely controlled by the fossil fuel industry.

Former US allies in Europe are also suffering from Trump’s energy price hikes and supply shortages. If European authorities link electricity prices to gas prices (which is exactly what they did at the start of the Ukraine war), they will only make things worse. But if Europe chooses a strategy of restoring sovereignty by reducing its dependence on the US for technology and defense, it will strengthen its position now and in the long term.

No matter how long the war lasts and how long the current stagflationary conditions persist, the long-term consequences of these events will be extremely serious. Hopefully, the world will realize that the “variability” of solar and wind energy is much easier to manage than the constant dependence on fossil fuels and the associated whims of unpredictable authoritarian figures like Trump and Russian President Vladimir Putin. If Trump’s war accelerates the global green transition, it will be a significant ray of light in the darkness.

In any case, another nail has been hammered into the coffin of the peaceful, borderless world that our ancestors sought to build after World War II. With Trump, the country that laid the foundations of that world has set out to destroy it. From a new Cold War with China to the apparent instability of global supply chains, there is little reason for optimism. And with democracy weakened in the United States, human errors and their consequences are piling up very quickly.

The author is an American economic expert; he is the winner of the Nobel Prize in Economics; is a professor at Columbia University; was the chief economist of the World Bank (1997-2000)

Copyright: Project Syndicate, 2026. (translation: NR)