Former Nixon speechwriter William Safire liked to joke that the 37th president’s greatest sin was not Watergate, but wage and price controls.

Despite being an ardent anti-communist, Richard Nixon was so desperate to tame inflation ahead of the 1972 election that he temporarily froze wages, rent and prices across much of the American economy.

The move was popular at first. But it could not create more oil, food or housing and, as shortages mounted, the controls instead became a lesson about the limits of presidential power over prices.

Like Nixon, Donald Trump wants to lower prices. He has not imposed price controls, but this week he pressed oil refiners to produce more diesel in an effort to bring down rising prices, even as many are already operating near capacity.

It was part of a broader pattern. As the market resists Trump’s quick fixes, his administration has sought a more direct role in the economy: imposing policy changes, arranging business deals and even taking stakes in private companies.

But a president cannot simply order more supply into existence. And the most reliable ways to reduce demand — higher interest rates, less consumer spending and a slower economy — would be even less popular than high prices.

Fueling inflation

Diesel prices reached a new record this week, and that’s not good news for inflation. Diesel powers much of what happens behind the scenes — trucks, trains and tractors — and unlike gasoline where drivers can change their behaviors, there’s no substitute. When diesel prices go up, it likely will lead to higher consumer prices, especially for groceries.

Trump’s solution is for refiners to produce more. But is that possible?

At a White House meeting this week, the president met with refiners who are already running near full capacity to try to get them to squeeze out even more to lower prices ahead of the midterms. Good luck. The reason diesel — and gasoline for that matter — costs so much is because the traffic through the Strait of Hormuz is drastically reduced, no matter what the administration claims. Adding to the problems is that the world’s second-largest exporter of diesel, Russia, has banned exports until the end of September after Ukraine’s attacks on its refineries.

But as much as the president wants lower prices, he’s still not above keeping a grudge. ExxonMobil, the largest U.S. oil company, was not invited to this meeting. When Trump met with oil executives about Venezuela in January after seizing its  President Nicolás Maduro, the CEO of Exxon said the country was “uninvestable.” Later, when asked about possible deals in the country, Trump responded, “I’d probably be inclined to keep Exxon out.”

Exxon owns three of the largest refineries in the U.S. How serious was this meeting if the president won’t invite one of the biggest players in the industry?

NIMBYs strike again

Another problem for oil companies: If people don’t want data centers in their backyards, they definitely don’t want a refinery.

Currently, there are 130 in the U.S. The Marathon refinery in Garyville, Louisiana, in 1977 was the last full-scale refinery to come online. Since then, many have expanded their capacity to process more oil.

For example, the Marathon plant went from handling 200,000 barrels a day when it opened to 617,000 barrels a day today, making it the third-largest refinery in the country.

Who’s the socialist now?

In addition to the deal that gives the U.S. ownership of Venezuelan oil, since Trump has come into office, his administration has announced plans for the government to become a direct investor in at least 30 companies. The Council on Foreign Relations tracks total investments of $27.7 billion from 38 deals. Call this what you want, but a good working definition of socialism is “public rather than private ownership or control of property and natural resources.”

The libertarian-leaning Cato Institute calls the deal “a gift to socialists all over the world who can now point to it with some credibility as an example of an imperial resource grab,” listing off six reasons why it finds the deal troubling:

• “It expands state corporatism by giving the US government a large, and possibly majority, stake in a major joint oil venture in Venezuela.”
• “The deal lacks transparency.”
• “The deal lacks legitimacy since it was agreed to with a dictatorship.”
• “The legality of the deal is questionable.”
• “The United States is conducting the deal with a dubious private partner.”
• “The deal sidelines the Venezuelan opposition and strengthens the dictatorship.”

Business partners

As part of the takeover of Venezuela’s oil industry, the U.S. is partnering with oil baron Alejandro Betancourt.

So who is he? The Financial Times reports that those who know him describe him as a “wily and divisive insider.” The Wall Street Journal wrote he has close ties to the current leader of Venezuela — installed in office by Trump — and has “faced criminal investigations of alleged money laundering in Spain and Switzerland, though no formal charges have emerged.”

The Washington Post learned that administration officials “lobbied to resolve the case in Switzerland in a way that would avoid criminal charges and end travel restrictions.” And rather than act on a Swiss arrest warrant, the U.S. gave Betancourt a multi-entry visa for the U.S. for negotiations of the deal in Venezuela.

And it’s the weekend…

I’m going to spend some time doomscrolling about if artificial intelligence has a consciousness because from the reports, it seems pretty clear that many AI CEOs don’t know what’s happening with their own technology. But hey, that’s not stopping them from rolling it out.

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