Great article...thanks for being a voice of reason on ZH!
Btw, interesting that oil is showing up so much in this week's Top 10. I'm surprised Trump hasn't mentioned the idea of an Export Tax or similar to replace his global tariffs pressure vector. Also seems win-win for the election cycle.
I had Grok sketch out something based on some constraints and neo-classical economic theory:
Policy Proposal: Using U.S. Oil Export Policy for Domestic Price Relief (Transient Framework)
As the world’s largest oil producer (~13.5 million barrels/day) amid ongoing global supply shocks (Russia, Gulf/Hormuz disruptions), the U.S. has a unique short-term opportunity to lower domestic fuel prices without heavy long-term distortions.
Core Mechanism: Implement a modest temporary export tax or fee on U.S. crude oil. This creates a wedge between world and domestic prices, diverting more barrels to the U.S. market and capturing terms-of-trade gains from foreign buyers. Revenue can directly fund consumer relief.
Complementary Tools:
* Federal gas tax holiday (suspend 18.4¢/gal gasoline / 24.4¢/gal diesel) for immediate pump-level relief with high pass-through.
* Tax deduction for purchases of domestically produced oil/gas from U.S.-taxpaying companies. This incentivizes refiners and users to prioritize American supply, supporting domestic producers while lowering their net cost.
Economic Logic (6–18 Month Window): In the current tight global market, reduced exports tighten world prices further while shielding U.S. consumers. The approach exploits America’s scale for revenue recycling and domestic preference. Production effects remain limited short-term due to existing drilled wells and high prices. After the shock passes, the measures can sunset to avoid discouraging long-run investment.
This hybrid is administratively feasible, targets relief efficiently, and aligns incentives toward U.S. energy strength during a transient window of opportunity.
As for your oil proposal, I think Trump has a couple of underappreciated attributes. One is his temperament: he just doesn't get shook. He also has generally good political and economic instincts (for example, his idea to top off the Strategic Petroleum Reserve back in 2020, when oil prices plummeted due to the lockdowns--the Dems in Congress blocked this out of spite). So I think his policy of "less is more" with respect to oil prices during this current conflict with Iran has been mostly correct, IMO. He's waived some sanctions on Russian oil, to increase global supply, but otherwise hasn't done the sort of things Grok suggested to you.
One thing to bear in mind is that although we may be one of the world's largest oil producers, we still consume more than we produce. Fortunately, we get most of our imports from Canada, rather than the Mideast, but Trump also has to concern himself with the plight of allies like Australia and Japan, who would be hurt by restrictions on U.S. exports.
Another is that $4.50/gallon gas may be uncomfortable for U.S. consumers, but objectively, it's not that big of a bite (another ~$20 per week?) and worth it, in Trump's view, if it's a temporary price to pay to put the Iran nuclear issue to bed. My guess is that the inflation of recent years was really more due to the federal government paying people not to work, which spiked during COVID, and then carried on via massive fraud in Medicaid, etc. Now that the Trump admin is going after that stuff, it should have a deflationary effect at some point.
Big picture--and I think this is what some bears are missing--the industrial boom from the AI buildout is a lot more bullish for our economy than a temporary tick up in gas prices. Why you'd want to fade the U.S. economy while this is happening, I have no idea.
Great article...thanks for being a voice of reason on ZH!
Btw, interesting that oil is showing up so much in this week's Top 10. I'm surprised Trump hasn't mentioned the idea of an Export Tax or similar to replace his global tariffs pressure vector. Also seems win-win for the election cycle.
I had Grok sketch out something based on some constraints and neo-classical economic theory:
Policy Proposal: Using U.S. Oil Export Policy for Domestic Price Relief (Transient Framework)
As the world’s largest oil producer (~13.5 million barrels/day) amid ongoing global supply shocks (Russia, Gulf/Hormuz disruptions), the U.S. has a unique short-term opportunity to lower domestic fuel prices without heavy long-term distortions.
Core Mechanism: Implement a modest temporary export tax or fee on U.S. crude oil. This creates a wedge between world and domestic prices, diverting more barrels to the U.S. market and capturing terms-of-trade gains from foreign buyers. Revenue can directly fund consumer relief.
Complementary Tools:
* Federal gas tax holiday (suspend 18.4¢/gal gasoline / 24.4¢/gal diesel) for immediate pump-level relief with high pass-through.
* Tax deduction for purchases of domestically produced oil/gas from U.S.-taxpaying companies. This incentivizes refiners and users to prioritize American supply, supporting domestic producers while lowering their net cost.
Economic Logic (6–18 Month Window): In the current tight global market, reduced exports tighten world prices further while shielding U.S. consumers. The approach exploits America’s scale for revenue recycling and domestic preference. Production effects remain limited short-term due to existing drilled wells and high prices. After the shock passes, the measures can sunset to avoid discouraging long-run investment.
This hybrid is administratively feasible, targets relief efficiently, and aligns incentives toward U.S. energy strength during a transient window of opportunity.
Thanks, I try.
As for your oil proposal, I think Trump has a couple of underappreciated attributes. One is his temperament: he just doesn't get shook. He also has generally good political and economic instincts (for example, his idea to top off the Strategic Petroleum Reserve back in 2020, when oil prices plummeted due to the lockdowns--the Dems in Congress blocked this out of spite). So I think his policy of "less is more" with respect to oil prices during this current conflict with Iran has been mostly correct, IMO. He's waived some sanctions on Russian oil, to increase global supply, but otherwise hasn't done the sort of things Grok suggested to you.
One thing to bear in mind is that although we may be one of the world's largest oil producers, we still consume more than we produce. Fortunately, we get most of our imports from Canada, rather than the Mideast, but Trump also has to concern himself with the plight of allies like Australia and Japan, who would be hurt by restrictions on U.S. exports.
Another is that $4.50/gallon gas may be uncomfortable for U.S. consumers, but objectively, it's not that big of a bite (another ~$20 per week?) and worth it, in Trump's view, if it's a temporary price to pay to put the Iran nuclear issue to bed. My guess is that the inflation of recent years was really more due to the federal government paying people not to work, which spiked during COVID, and then carried on via massive fraud in Medicaid, etc. Now that the Trump admin is going after that stuff, it should have a deflationary effect at some point.
Big picture--and I think this is what some bears are missing--the industrial boom from the AI buildout is a lot more bullish for our economy than a temporary tick up in gas prices. Why you'd want to fade the U.S. economy while this is happening, I have no idea.