The press and the general public tend to give credit or blame to the state of the economy to political leaders. This is the case with President Trump, much of whose success, as it is, is focused on the American economy’s good health. But the economy is doing well because of Trump’s economic policies, such as tax rate reductions, or something else that economists entirely do.
Many dynamic factors determine the state of the economy, but only one basic prerequisite — available and affordable energy for manufacturing and selling items, and for transporting, cooking, soothing and entertaining people.
That means primarily liquid and gaseous oil in the U.S. and the rest of the industrialized world. For many natural scientists, in the success or failure of economies, this is extremely significant, perhaps even overwhelming.
There’s less than $55 a barrel today in the U.S. market, and gas is about as inexpensive as ever. We have reduced our oil imports to about 15% of usage and become a small net gas exporter.
Despite improvements in wind and photovoltaic devices, and a decline in their manufacturing costs, our use of oil and gas continues to increase, although at a slower rate. Oil and natural gas in the U.S. are roughly half as expensive today as in Europe or Asia, or the U.S. during the Obama years. Today, as in 1972, it is often as cheap to make things in America as elsewhere, even though our labor is more expensive. Trump’s timing from this perspective was excellent.