Economic analyst Steve Rattner blasted President Donald Trump on Thursday’s “Morning Joe,” after the president admitted he has no plan to reopen the Strait of Hormuz, as his war with Iran drags on.
During a prime-time address to the nation on Wednesday, Trump encouraged other countries to “take the lead” in reopening the waterway, insisting it would “open up naturally” when the conflict ceases. He also touted the United States’ own oil supply, arguing it did not “need” energy from the Middle East.
“I think of all the things the president said last night, that was one of the most incredible,” Rattner said. “The idea that we’re just going to go leave and let the Europeans somehow figure out the Strait of Hormuz is really ridiculous.”
“Yes, the Iranians may want the strait open for their oil, but it doesn’t mean they have to open it for everybody else’s oil,” he explained. “So the idea that because they want to get their oil out, they’re going to let everybody else’s oil out, doesn’t make any sense in the world to me.”
The former Treasury official used several charts to show just how vital the passageway is to the global economy. As he noted, 20% of the world’s oil passes through the strait, from countries like Saudi Arabia, Iraq, the United Arab Emirates, Iran, Kuwait and Qatar.
“Virtually all of it has to pass through the strait,” he said. “We have no alternative.”
Rattner’s next chart showed how Trump’s war has already caused the largest oil disruption in history.
“Many of us remember the 1970s,” he said. “The 1970s embargoes cost us less than 10% of the world’s oil. This is 20% of the world’s oil.”
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The “Morning Joe” economic analyst said such a disruption “filters all the way through our economy,” even in ways “that may not be obvious.”
One of those ways, according to Rattner, is through inflation.
“What’s been happening is that the economists have been gradually raising their inflation forecasts for this year,” he said.
As a result, the former Treasury official said the Federal Reserve will likely “not be able to cut interest rates the way it expected to,” a move that could effect the cost of car loans and mortgages.
“This will have a significant effect on our economy, regardless of what the president wants to say about how we have all the oil and gas that we need,” Rattner said.
You can watch Rattner’s full analysis in the clip at the top of the page.
Allison Detzel is an editor/producer for MS NOW. She was previously a segment producer for “AYMAN” and “The Mehdi Hasan Show.”