While the United States produces more diesel fuel than it consumes, the difference is exported. With prices of diesel fuel much higher in many countries, this can pull up the prices of diesel fuel here in the United States.

The price of diesel has not had much of an impact on consumer prices, which rose almost 1% in March over February and 3.3% from a year earlier. But many businesses use diesel fuel for their trucks, farm equipment and construction equipment. Big corporations have begun to increase their prices to try to offset this. For example, the fuel surcharge for UPS rose to 27%, up from 21% before the war started.

But smaller businesses, like independent truckers, are often not able to do this. This means that their margins and income are cut, or they drive less, again cutting their revenue. Small farmers are also feeling the squeeze, not only with diesel prices, but prices of fertilizer are also up.

These higher costs will trickle up to consumers. While there was scant evidence of this in March, some price increases are likely in April and even more after that. While a big part of Trump’s election campaign in 2024 was him saying he was going to fight inflation, his tariff increases that began on so-called “Liberation Day” in April 2025, and then the war on Iran, have already pushed the Consumer Price Index to the highest rate since Trump took office.

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The rise in prices was led by gasoline, up 21.2% in March. While the prices for consumer goods and services other than food and energy, or the so-called “core inflation rate” only ticked up 0.2% in March, the rise in fuel prices started to spill over into other goods and services. Airline fares, where jet fuel is a major cost, rose 2.7% in the month of March, and 14.9% from a year earlier.

This increase in prices and the rate of inflation follows the U.S.-Israeli war on Iran, launched in the last days of February. In response to the massive U.S.-Israeli bombings, with well over 10,000 targets, Iran has retaliated against U.S. bases and businesses in the Persian Gulf and Israel itself. In addition, Iran has taken control of the Straits of Hormuz, through which flowed about 30% of the world’s exported oil, and large amounts of natural gas, urea (used to make fertilizer), and helium, used in chip manufacturing and other high-tech goods like MRI machines.

With a relative ceasefire, Trump administration negotiators led by Vice President Vance are meeting with Iranian representatives for talks hosted by Pakistan. The flow of oil, fuels and chemicals is still just a trickle, mainly ships holding Iranian oil, which now fetch almost twice as much as before the war started because of the rise in the price of oil and the fact that the Trump administration lifted sanctions on their oil. Even though oil futures have dropped back down below $100 a barrel, this is still 50% higher than their pre-war prices. The purchase price of actual, or physical oil, is another $30 a barrel higher. Even worse, with the last shiploads of oil that made it out of the Persian Gulf unloading their oil at their destinations, the soaring price of oil will soon become a physical shortage of oil in more countries.

Not surprisingly, this surge in prices weighed on consumers’ confidence. The University of Michigan’s Sentiment Index fell to a record low of 47.6. This is the lowest in the survey’s 74-year history, lower than the 2008 financial crisis and the oil-price shock of 1979 after the revolution in Iran that ended the reign of the U.S.-backed Shah of Iran and the beginning of today’s Islamic Republic.

With prices soaring, more and more Americans who were living paycheck to paycheck are falling behind. One of the businesses benefitting from hard times are pawn shops, which reported more business in March. There are now corporate chains of pawn shops, whose stocks are at multi-year highs, in effect profiting from economic problems.

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While stock prices rose when Trump announced he was postponing an escalation of the U.S.-Israeli bombing campaign earlier, when he did this again on Thursday, stock fell on Friday. This shows that Wall Street is seeing through his almost weekly proclamations that the U.S. and Israel had “won,” or that Iran is desperate to negotiate an end to the war, that the war would be over soon, etc.

The reality is that Iran has taken effective control of the Straits of Hormuz, only letting through ships with Iranian oil or with cargos destined for non-U.S. allies such as China. Iran has been preparing for this attack for more than three decades, ever since the U.S. egged on Iraq to invade Iran in the 1980s.

Trump is actually the one who needs to end the war, as he becomes more and more unpopular just as the November midterm elections are coming up, threatening a loss of the House of Representatives and possibly even the Senate from Republican control. Trump’s “Plan B” is to further escalate by putting “boots on the ground” as thousands of Marines and Army troops are on their way to the war zone. The administration is also asking for an additional $200 billion in military spending, which could only mean a longer and wider war.

The Trump administration has learned nothing from the trade war with China last year, where the U.S. ultimately had to back down as China matched tariff for tariff and then won with export controls on critical minerals. Nor did the administration learn from the U.S. defeat in Afghanistan. As one pundit said, “While the United States took 20 years to replace the Taliban with the Taliban in Afghanistan, Trump has managed to replace the Ayatollah Khamenei with Ayatollah Khamenei in 20 days!”

On Wall Street, the prices of bonds also fell, meaning that interest rates on the bonds went up. The interest rate on the benchmark ten-year treasury bond has gone up by almost half a percentage point, from 3.96% before the war started to going up by 0.4 to 0.6 percentage points, making buying a home even less affordable.

More and more financial analysts are coming around to the view that Wall Street investors are still underestimating the length and cost of the war, hoping that there will be a quick end. What Wall Street and the Trump administration don’t seem to understand is that while it only takes one side to start a war, it takes both sides to end a war. With Iran holding firm under the U.S.-Israeli bombs, and the weakness of the U.S. side showing when the Trump administration lifted sanctions on Iranian and Russian oil, it is not clear why Iran would want to end the war any time soon.

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San José, CA – The price of regular gasoline has soared a dollar a gallon on average since Trump ordered this country to war with Iran. According to the American Automobile Association or AAA, the average price has gone from $2.96 a gallon a month ago to $3.98 gallon on March 24, or more than 34%.

How high could they go? No one really knows, but according to my “Trump secretly loves California” theory, since Trump has brought the national price of gas closer where the California price was before the war started ($4.63), it is quite possible that $5 a gallon gasoline could be seen in gas stations across the country in the near future.

But gasoline prices are just the visible “tip of the iceberg” for consumer price inflation. Diesel prices are up 43% since the start of the war, even more in percentage terms than gasoline, and are now more than $5.35 a gallon on average nationwide. While very few individuals have cars that run on diesel, most trucks and farm equipment use diesel fuel. The rise in diesel prices will further squeeze smaller farmers and truckers, while the increase in costs will be showing up in food prices and the prices of almost all goods which are shipped to markets.

The cost of urea, the basic building block for nitrogen fertilizers, is also up 45% since the war started. Part of this is because the in response to the U.S.-Israeli attack and bombing campaign, most the major exporters of urea are either directly affected by the war (Saudi Arabia and Oman), or indirectly, as they (Egypt, China, Malaysia and Indonesia) import the natural and petroleum gas used in urea production from the Mideast. This will squeeze farmers even more, and some of the costs will pass through to higher food prices.

Finally, Qatar is a major producer and exporter of helium, which is a by-product of natural gas production. Helium is used in the production of MRI machines, production of semiconductors, and other industrial uses. Helium prices up 70 to 100%, will likely lead to shortages, depending on how long the war lasts.

While Trump has been saying from the start of the war, more than three weeks ago, that the war is almost over, the fact of the matter is that more than 5000 U.S. troops, both Marines and Army, are on the way to the Middle East, signaling another escalation of the war, with U.S. boots on the ground.

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But AI is not on the verge of being introduced, it has been introduced into every sector of the economy possible, and the balance sheets are coming up wanting. Last year MIT conducted a study of over 300 firms and found that 95% of them saw no return whatsoever on their investment in AI. British firm PricewaterhouseCoopers reported in its 29th annual CEO survey that over half of respondents had seen no benefit from AI whatsoever, either in the form of reduced costs or higher revenue.

Despite these gloomy reports and increasing fears that the dramatic overvaluation of the tech companies tied into the AI boom is a financial bubble waiting to pop, the tech moguls are still demanding more investment. For the most part, they are getting that investment, whether into sprawling new data centers or the power stations to keep them online. While cultural backlash to AI “slop” is becoming more and more widespread, it is clear that the capitalist class still sees AI as the future.

In trying to understand why, it is important to disaggregate the hype of AI’s most shameless salesmen, like Sam Altman or Elon Musk, from the actual capabilities of the technology. Essentially at its core all of what we see called “AI” is just a series of mathematical equations whose parameters are set by a combination of pre-existing data and manual rules set by its designers. The process of “training” AI can be likened to feeding paper into a shredder that can then recombine the letters and words to form new sentences. The AI is “incentivized” to make “good” sentences, which tends to mean ones that look like a human could have written them. The same goes for photos, videos, or music: all the AI is doing is regurgitating something it was already fed.

Throughout the entirety of the process, then, human labor still plays the essential role. Humans need to make the works to be fed to the AI in the first place, because if AI is trained on AI generated data it begins to “rot” and produce increasingly poor results. Then humans need to design the mathematical procedures for the AI to be “trained,” and humans often have to intervene forcefully to prevent the AI from breaking the law (by relaying legally sensitive information like how to make explosives or creating images of illegal activity like CSAM). Then, to create the final generated product, the AI needs to be prompted to do so by a human, who needs to write the prompt in such a way that the machine gives them the output they want. The value that AI possesses is the value of embodied human labor within it.

This is plainly not what capitalists believe. They think that AI carries in it the same unique capacity that only human labor power possesses: the ability to create new value beyond that which it cost to produce it. Capitalists do not understand that, out of the portion of capital they advance for means of production, and out of the portion of capital they advance for labor power, it is only the latter that creates new value in excess of that initial advance. To them, it simply appears as a profit in excess of the total cost they paid. While AI’s mystification is particularly intense, the capitalist class has never understood this fact about any machine, or indeed about their entire mode of production: the origin of profit is in the unpaid labor time of workers.

It is no coincidence that AI investment and speculation took off in the last five years, in the wake of COVID’s disruptions and the growing power and militancy of the labor movement that emerged out of them. Capitalists are desperate for the next big technological innovation to save them from the contradictions of capitalism, as Mr. Andreessen himself admitted last month. “If we didn't have AI, we'd be in a panic right now about what's going to happen to the economy,” he said on a podcast, claiming that “declining population” (a racist dog whistle he uses alongside Elon Musk) and “slow productivity growth” would be the “real crisis” that AI is thankfully solving.

What he is facing up to is the idea that without populations of “surplus” human beings to form the reserve army of the unemployed, and with the rate of profit falling continuously as more and more capital becomes advanced and embodied in machines that merely transfer value and do not create it, that capitalists are dinosaurs living on borrowed time. As they look up at the meteor of class struggle and socialism plummeting towards them, they are conjuring phantasms and trying to breathe life into them with dollars and electricity. AI can be a useful tool, a means of production like any other, but it will not save capitalism from itself.

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This is about the same as the increase in the price of regular gasoline nationwide. According to the American Automobile Association, the price of gas had gone up 43 cents a gallon, or more than 14% since the war started on February 28.

I detoured past my daughter’s elementary school on my way home. It looked exactly the same, with a few children playing in the playground, about average for a non-school day. I was thinking of the girls’ school in Iran, which the United States had bombed on the first day of the war, killing some 175 people, mainly young girls, along with their teachers, school staff and likely a few parents. This was one of the United States so called “precision” missiles, which was guided to a civilian target, irrespective of the loss of life.

With the price of future contracts for delivery in April soaring above $100 a barrel on Sunday, March 8, up by almost 40% in the week since the war started, the price of gasoline and other petroleum products have even more room to rise. Diesel fuel is up about 14%, jet fuel is up over 50%, raising costs for trucking firms and airlines, with smaller businesses being hard hit. Larger corporations will use their market power to pass on the costs to consumers, while smaller firms are more likely to take losses, and if higher prices persist, even go out of business altogether.

According to the U.S. military, the war with Iran is costing about $1 billion per day. But Congressional Republicans have given an estimate that is twice as high, or $2 billion per day. Now nine days into the war, $10 to $20 billion dollars have already been spent, and the number grows with each passing day.

Another week and the costs of the war will be almost the same as the money the federal government saved by allowing the Affordable Care Act subsidy expansion to expire. At a time when food aid is being cut, health care is being cut, and more than 300,000 federal government staff have been cut, more and more of the claimed savings from those cuts are being spent on war.

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The job losses were widespread, including manufacturing, construction, transportation and warehousing, information, temporary help, health care, leisure and hospitality, and government all shedding jobs.

In addition, the job creation numbers for December were revised down by 65,000, meaning that instead of gaining 48,000 jobs as previously reported, there was a loss of 17,000. The very good January figures were also revised down by 4000, to 126,000. Taken together, only 7000 jobs were added in December through January, or about 2300 a month.

The unemployment rate also ticked up to 4.4% from 4.3% in January. This is a rise of a whole percentage point from the recent low of 3.4% in April of 2023. In addition, the labor force participation rate dropped from 62.1% to 62%, which tends to lower the unemployment rate, as people with jobs who stop looking are counted as out of the labor force and not unemployed. The increase in joblessness was concentrated among oppressed nationalities as the unemployment rate for Asians, Blacks and Latinos all rose, while the unemployment rate for white Americans stayed the same.

In another sign of economic weakness, U.S. retail sales declined in January by 0.2%, followed by no gain in December. Retail sales figures are not adjusted for inflation, which means that when the changes in prices are taken into account, actual sales fell for the second month in a row (note: these sales figures are seasonally adjusted to take into account the annual bump in sales during the holidays). This decline was led by a 0.9% drop in auto sales, which, as a big-ticket item, often are the first to suffer an economic downturn.

While one month does not decide the direction of the economy (look at the large gain in jobs in January), if large job losses continue, this would be a sign the economy is entering a recession.

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The court singled out Trump’s use of the International Economic Emergency Powers Act, or IEEPA, to levy tariffs on almost all countries and particular tariffs on Canada, China and Mexico – allegedly for facilitating the importation of fentanyl into the United States. The legal basis for the ruling was that the IEEPA makes no mention of tariffs.

This is the first major case where SCOTUS has limited the power of the presidency under Trump.

Trump was not happy about the decision, saying, “I can do anything I want” and re-imposed a global 10% tariff on imports using the Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% in response to a “large and serious” balance of payments deficits. The United States has been running large and serious trade deficits for decades, mainly because U.S., European and Japanese corporations have offshored production meant for the U.S. market, for example Apple’s computers and smartphones.

However, this law only allows for tariffs for a period of 150 days, meaning that Trump would have to ask Congress to agree to an extension in July. This is very unlikely to happen with the midterm elections looming.

Trump is also likely to expand sectoral, or good specific tariffs under section 232 of the Trade Expansion Act of 1962 where imports are a “threat to national security.” He has already used this to put tariffs on aluminum, steel, copper, lumber and wood products. This act is commonly misused because the threat to national security is not defined.

For example, imported kitchen cabinets are being tariffed because the wood products industry is claimed to be important to national security. However, this act requires an investigation and finding by the Commerce Department which takes time and effort and cannot be done on a whim.

In a sign that the chaotic tariff rollout and retractions are not over, the day after Trump declared 10% global tariffs, he raised the rate to 15%, the maximum allowed by law. Still to come will be lawsuits by U.S. companies seeking to be reimbursed for the billions of dollars in the illegal tariffs that they paid. Finally, are the review of the USMCA (formerly NAFTA) coming up in July, where the United States is expected to try to tighten trade rules.

While the SCOTUS decision was a setback to Trump’s imperial presidency, it by no means a return to a more free trade approach.

Both Democrats and Republicans are likely to restrict trade, in particular with China, which is surpassing the United States in one industry after another. For example, Trump used the section 301 of the Trade Act of 1974 in his first term to impose tariffs on imports from China on the basis of “unreasonable or discriminatory” trade practices by a country as found by the U.S. trade representative. These tariffs were maintained by the Biden administration and continue to this day.

Even a future Democratic administration is likely to keep major tariffs, especially since there are now industries benefiting from protection.

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This meant the rate of economic growth for the entire year of 2025 was only 2.2%, as compared to 2.8% for all of 2024. Thus, despite Trump’s claim of “the best economy ever,” Trump’s trade war with the world and his efforts at mass deportations only served to slow the economy.

The biggest drag on economic growth in the fourth quarter of October to December was a drop in spending on goods and services by the federal government. This is due to the impact of DOGE employment cuts hitting in October, and the non-payment of government contracts and their workers during the shutdown (federal workers do get paid when a shutdown ends).

At the same time, the Personal Consumption Expenditures price index, or PCE, on a year over year basis accelerated slightly from 2.8% in the September to October period to 2.9% in the last three months of the year. Taking out food and energy, whose prices rise and fall more than other goods and services, the so-called “core” PCE rose 3% in the October to December period, up from 2.8% in the previous three months.

Trump has said that the war on rising prices is done, and declared victory on the affordability front, despite the reality of consumer prices rising at a faster rate. But the Federal Reserve Bank, which uses the PCE as the measure of inflation, will be looking at the data, making it less likely to lower interest rates in the near future.

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While Trump claimed that foreign companies would pay for the tariffs by being f