Trump is Making an Enormous Economic Gamble
Rising gas prices + job losses = a political danger zone.
Americans are increasingly worried about AI data centers.
A poll conducted by Heatmap last September found that 44% of voters would support a data center being constructed near their home, and 42% would oppose it.
Heatmap asked the question again in a poll in February. This time, 28% said they would support such a facility; 52% said they would oppose it.
Support went from +2 to -24 in a matter of months. The main concern driving this reversal seems to be the fear that when an AI data center is built, energy bills for everyone in the area will go up.
This is a clear political problem for an administration that has embraced the AI industry so fully. So it’s not surprising that, this week, President Trump convened Big Tech executives and tried to do something about it (or, at least, tried to be seen as doing something about it). Trump had executives sign something he called the Ratepayer Protection Pledge, a commitment on the part of companies like Amazon, Google, and OpenAI that they will shoulder the energy costs of their data centers themselves by willingly paying higher utility rates and investing in new power plants.
Many experts are skeptical that this will work, partially because the pledge is non-binding and concerns issues that will mainly play out on the state level, including negotiations over utility rates and permitting for new power plants.1 But regardless of the plan’s effectiveness, it’s clearly good politics for Trump to at least recognize this is an issue, and to give the appearance that he is taking a step towards fixing it.
AI is an issue gaining political salience, and in an alternate timeline, it’s possible to imagine this event having generated big headlines. In this timeline, however, the U.S. is at war with Iran. The data center pledge was buried on page B3 of this morning’s New York Times. It didn’t get much play on TV or social media.
In fairness, Trump himself didn’t seem all that interested. “These are exciting times,” he said at the top of the event. “I think you probably want to speak about war rather than this, but this is very important.” He then launched into several minutes of giving the AI executives an update on the Iran conflict (“Somebody said on a scale of 10, where would you rate it? I said, about a 15”), before turning to the matter at hand.
Before long, however, he started getting fidgety, admonishing the last three speakers to go “really fast” or “very quickly.”2 Finally, Trump called it a day: “I have to go back and look at the war,” he explained. “You know, I have a lot of things happening.”
The moment perfectly encapsulated the current state of the Trump White House: the president was holding an event on an issue Americans care about (rising prices), but it received almost no attention because of his much less popular foreign adventurism. And the president himself played a role in that distraction: his comment at the end about the war was really the only one from the event that went viral.
Last November, on the day that Democrats scored victories across the map on an “affordability” message, White House chief of staff Susie Wiles told journalist Chris Whipple for a now-infamous profile that it was time for Trump to pivot from focusing on foreign policy to highlighting kitchen-table issues. “More talks about the domestic economy and less about Saudi Arabia is probably called for,” Wiles said. “They like peace in the world. But that’s not why he was elected.”
But Trump has shown no interest in such a pivot. (During his 2024 campaign, his advisers reportedly had to work hard to get Trump to stay focused on the economy and inflation, which he would complain to them was “boring.”) In the time since Wiles said that Trump should return his focus stateside, the president has deposed not one but two foreign leaders; he is now engaged in a Middle East conflict that threatens to spiral into a drawn-out war.
If the only impact of that was to distract from policies Trump is pursuing to ease American concerns about the cost of living, that alone would be politically risky, seeing as war with Iran is unpopular and 68% of voters already believe Trump’s focus is in the wrong places.
But when you then consider that the war is not only unpopular on its own terms, but could then also go the extra step of actually worsening the economy and making Trump’s biggest vulnerability bigger: you start to get a sense of just how dangerous for Trump this war could be politically.
Below the fold: My full analysis on the political and economic impact of the unfolding war in Iran… the sleeper votes still to come in Congress on the war… and why Iran ≠ Venezuela …