If the 50% oil price spike is sustained, we might expect to see inflation go up by 1.25 percentage points, and GDP go down by 1.5 percentage points over the next year.

Original statement

“Get the Middle East out of my politics! - by Noah Smith Noahpinion Subscribe Sign in Get the Middle East out of my politics! A manifesto. Noah Smith Sep 12, 2026 ∙ Paid 313 125 26 Share The other day I saw a Harvard Harris poll on the favorability of various political figures in the U.S. Only RFK Jr. (sigh), Marco Rubio, and Mark Carney had net positive approval ratings: Source: Harvard Harris While I understand that these polls all have methodological issues, I was struck by how three figures — Abdul El-Sayed, Zohran Mamdani, and Benjamin Netanyahu — had net approval ratings below almost any American politician. While Mamdani’s low rating might be partially due to his leftist policies and his association with the DSA, it struck me that all three of these unpopular figures had one thing in common — they are associated with the intrusion of Middle Eastern politics into American politics. And I thought: Maybe Americans just want to have nothing to do with the Middle East. Today 1 is September 11, the anniversary of the terror attacks 25 years ago. Though I don’t agree with the leftist line that those attacks were blowback from American involvement in the Middle East, it’s unquestionable that 9/11 inaugurated an era of heavy U.S. involvement in that area of the world — the Iraq War, the follow-up war against ISIS, the War on Terror, greater support for Israel, an increased military presence in the region, and finally the war against Iran. I don’t believe that all of that involvement was a bad idea — in particular, as I’ll argue, the War on Terror, including the fight against ISIS, was generally successful and necessary. But overall, the era of heavy U.S. involvement in the Middle East has been a disaster for U.S. power and prestige, and it’s time for that era to end . This is not a recent conversion on my part; I’ve been in favor of general disengagement from the Middle East for a very long time. Five years ago, in the early days of the Noahpinion Substack, I wrote a post called “How to fix U.S. foreign policy”: How to fix U.S. foreign policy Noah Smith · February 27, 2021 Read full story In that post, I wrote: [D]espite modest progress, we still remain too tied up in Middle Eastern conflicts…The U.S. will never be able to ignore the Middle East entirely, but we can remove ourselves much more than we’ve done…[W]e need to draw down engagement in the Middle East, and increase engagement in Asia. Since then, things have gone from bad to worse, making my message far more urgent than it was at the time. Most obviously, there’s Trump’s disastrous war in Iran , which continues to waste U.S. military resources and make the U.S. look weak while failing to accomplish any significant objective. Recent polls show that a very strong majority of Americans think that the Iran War is not worth fighting . There’s also Israel’s intensified campaign against the Palestinians. This has become the rallying cry of the American left , which has prompted a backlash and crackdown by the Trump administration. As a result of that conflict, Middle Eastern politics is increasingly becoming the focus of American domestic politics. The controversy around Michigan Democratic Senate candidate Abdul El-Sayed, for example, has nothing to do with his policy stances, or even American culture wars — it’s entirely about his stance on Israel/Palestine and his ally Hasan Piker’s comments making excuses for 9/11 and Islamic terrorism. El-Sayed recently apologized for tying a synagogue shooting to Israeli warfare in the Middle East. Many analysts believe that Zohran Mamdani, meanwhile, won the NYC mayorship primarily because of his outspoken stances on Israel/Palestine. And more is on the way. Organizations like CAIR Action that are linked to the Muslim Brotherhood — a sort of international equivalent of the Christian Coalition, but for Islam — are now supporting political candidates throughout the U.S., using the Palestine issue to recruit candidates and win votes. Muslim Brotherhood figures are cheering this effort on from overseas. AIPAC and other Israel-supporting groups, meanwhile, are pouring money into races in order to stop those candidates. Our media, too, is increasingly filling up with the Middle East’s cultural and religious conflicts. Leftist shouters like Hasan Piker, Mehdi Hasan, and Cenk Uygur constantly urge progressives to base their politics around Palestine. Every day, Americans are bombarded with rhetoric like this : This is simply bad for America. We have so many pressing issues to worry about — Trump’s corruption and authoritarianism, inflation, AI, etc. We should not be nominating Democratic politicians based on whether they support Israel or Palestine; we should be nominating them based on their stances on issues of direct relevance to Americans, and on their ability to oppose Donald Trump. Furthermore, mobilizing Muslim and Jewish voters to vote based on Israel/Palestine, rather than on issues of importance to Americans in general, provides fuel for rightist attacks on both groups. What the United States needs, now more than ever, is general disengagement from the Middle East — an end to military adventures, a dialing back of support for Middle Eastern “allies” (including Israel), and a forceful rejection of Middle Eastern issues in American domestic politics. Fortunately, conditions in the world have shifted. The kind of disengagement I’m calling for is a lot more feasible than it was twenty or even ten years ago. The Iran War has shown that Middle Eastern oil is a lot less important for the global economy than it used to be. And the success of the War on Terror and the general decline of Islamism reduce the necessity for further interventions. The U.S. doesn’t need to protect Middle Eastern oil supplies anymore For many decades, the main justification for U.S. intervention in the Middle East has been to keep oil prices low and stable. The Middle East is one of the world’s largest oil producers, and its low extraction costs mean it functions as the world’s “swing producer”. Supply disruptions from the region can cause global price spikes, endangering industrialized economies that depend on petroleum. Oil was a big reason the U.S. intervened to stop Saddam Hussein’s invasion of Kuwait in the early 90s, for example. Obviously, oil is still a very important commodity. But it’s a lot less important to the U.S. than it used to be. Here’s what I wrote when the Iran War began : Blanchard and Gali (2007) looked at economic responses to changes in oil prices in the U.S., and concluded that the economy of the 2000s was only about a third to half as sensitive to the price of oil as the economy of the 1970s had been. Their reasoning is that modern economies are more flexible in general, that they have better monetary policy (i.e. we don’t try to print a ton of money in response to a supply shock), and that we depend on oil less. By their estimates, a 10% increase in the price of oil now (or at least, if “the 2000s” means “now”) leads to only a 0.25 percentage point increase in the CPI and a 0.3 percentage point reduction in GDP over the course of a year or so. Since oil just spiked by 50%, then if that’s sustained, we might expect to see inflation go up by 1.25 percentage points, and GDP go down by 1.5 percentage points over the next year. That would mean inflation would go to around 4% and GDP growth might go down to 1.5% — frustrating and annoying, but not catastrophic…Other estimates seem similarly modest. For example, in a recent roundup , I flagged a paper by Känzig and Raghavan (2025) that looked at the closure of key shipping chokepoints. In addition to having a more flexible economy, better energy efficiency, and more reasonable monetary policy, the U.S. is now a net oil exporter . That means when oil prices go up, the benefit to the energy sector cancels out at least part of the harm to other sectors of the economy. But on top of all that, the fact is that the Iran War simply hasn’t raised oil prices that much! Despite Iran’s closure of the Strait of Hormuz, and Trump’s retaliatory blockade of Iranian oil shipments, oil prices haven’t even reattained their highs from the early 2010s: And in real terms, the spike is even less impressive. If we divide oil prices by average hourly earnings for production and nonsupervisory workers — basically, how many hours an average American worker would have to work in order to afford a barrel of oil — we see that prices really aren’t that high at all: No wonder the U.S. economy is still doing fine, and inflation has only risen a little bit (and some of that may be due to demand from the data center boom). Continue reading this post for free, courtesy of Noah Smith. Claim my free post Or purchase a paid subscription. Previous Next © 2026 Noah Smith · Privacy ∙ Terms ∙ Collection notice Start your Substack Get the app Substack is the home for great culture”

Market context

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Resolution

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