Publications: Notes at the Margin

Trump in Fantasy Land (February 9, 2026)

 

President Donald Trump lives in a fantasy land where there are no checks on his actions. As the “consummate” salesman, his energy trade deals have sold perhaps 200% of the oil and gas the United States will produce over the next few years. Meanwhile, his “blockade” of renewable energy projects on private and public lands will contribute to a severe domestic electricity shortage. Simultaneously, his administration’s comical effort to address China’s dominance of rare-earth minerals, while it may be great theater, will not address the growing global capacity gap.

 

Regarding the rare-earth race, the United States and its allies face a critical shortage of the technicians needed to compete. Today, most of the engineers and technicians with expertise in the field live and work in China. The US has few such experts and only one world-ranked educational institution capable of producing more. It will take decades to train the talent needed. The Trump administration’s financial engineers might be able to create rare-earth market institutions, but they cannot design or build processing facilities and will be hard-pressed to secure the skilled workers who produce finished products.

 

The United States also faces significant obstacles in the artificial intelligence field. The major technology firms plan to spend $600 billion on AI-related capital expenditures in 2026.[i] Up to $100 billion of that will go to constructing infrastructure if the labor and inputs can be found. History shows that rapid capital expenditure programs, such as this one, accelerate inflation and thus boost interest rates. However, the lack of electricity to meet burgeoning demand will have the greatest impact, exacerbated by the Trump administration’s resistance to solar and wind projects.

 

Squeezed electricity markets will likely delay or halt data center construction projects, with the resulting impact reverberating across many other markets, including oil.

 

These factors will contribute to the United States falling further behind China in the global economic race. President Trump’s ill-conceived and regressive policies have accelerated the US’s collapse. One can imagine that, had he been leading the United States in 1941 on the day after Pearl Harbor, he would have ordered Americans to go to war using Model T cars and wind-powered frigates.

 

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