The Welfare-Warfare State, Redux

By Kevin D. Williamson

Monday, March 30, 2026

 

Corporate welfare on the supply side usually means finding ways to enable makers and sellers of goods to increase their profitability without increasing their productivity or efficiency—which usually ends up meaning higher prices for consumers, either explicitly so (as in the price of sugar, one of our most highly protected commodities thanks in part to Marco Rubio, the po-faced Florida featherbedder and kept boy of the sugar barons who insists that sugar subsidies are a national security issue) or in less obvious ways, as in the removal of lower-cost alternatives from the marketplace (these being effectively excluded by incumbent-friendly regulation or anti-trade measures). Sometimes, corporate welfare means pushing on both ends of the string at the same time, as in the case of American farmers, who receive subsidies intended to lower the price of production (discounted insurance and artificially cheap water, for example) simultaneously with programs meant to raise prices (e.g., creating artificial demand for corn via the ethanol program). But, of course, farmers simply must be on welfare: Without federal subsidies, evidently, no American could figure out an economically viable way to sell food to the fattest nation in human history.

 

Corporate welfare is usually a bad policy for many reasons: Industrial protectionism, for example, may protect profit margins and employment in the short term but often harms industries in the longer term: For example, protectionism led to some of the American automobile industry’s very worst years in terms of innovation and manufacturing quality. (Go drive a 1975 Granada sometime, if you can, and marvel at the wonder of how Detroit made a “luxury” car with a 4.2-liter engine slower than a 40 horsepower Volkswagen Beetle, taking longer to go from zero to 60 than you’d need for a full performance of Sublime’s not entirely unrelated song “Drunk Drivin’.”) Competition is how things get better and cheaper—block competition and you block the evolutionary process that powers quality and affordability.

 

The other big problem with artificially high prices for politically connected businesses is that consumers—many of whom also vote, damn their eyes!—really really hate hate hate high prices.

 

So we end up doing extraordinarily stupid things to protect touchy consumers from high prices—using one dumb economic policy to try to blunt the effects of another dumb economic policy. Right now, we are subsidizing Iranian and Russian petroleum production by suspending sanctions—and, hence, backstopping the economies of two hostile regimes, one of which we are actually in a shooting war with as I write. The Trump administration also has led the effort to discharge significant amounts of oil from worldwide strategic reserves, which is the perfect lose-lose policy. The amount of oil in question is meaningful in terms of strategic reserves but not very much in terms of the worldwide oil market (less than three weeks’ worth of the oil that would normally pass through the Strait of Hormuz)—which is to say: We’ve left ourselves more economically vulnerable to petroleum supply interruptions while waging open war against a major petroleum power (and supposedly supporting the other side in a war involving the other), accepting a significant strategic cost in exchange for virtually no meaningful economic benefit. The average price of diesel in the United States over the weekend was just under $5.50 per gallon, which will hit the wallets of Super Duty drivers as well as everybody who consumes things that move by truck or train (most U.S. freight trains are diesel-electric), which means, effectively, everybody not currently enjoying an 18^th-century standard of living on a small subsistence farm.

 

At the best of times, Americans get bitchy when the price of filling up the fuel tank goes up, and these are not the best of times: We are, rather, the better part of a decade into elevated inflation thanks to the COVID-era disruptions and the continuing orgy of government spending for which that awful epidemic provided a convenient pretext. Donald Trump, because he is an imbecile, is doing everything he can think of to make that inflation worse: disrupting regular trade, imposing taxes that put upward pressure on prices, providing direct financial subsidies to politically important groups (farmers again) where possible, pressuring the Fed to cut interest rates, dreaming up new ways to inflate housing prices (such as 50-year mortgages), etc.

 

The upshot of that is that we are offering sanctions relief to the petroleum-dependent country with which we currently are at war (undeclared, unauthorized, and illegal) because apparently we cannot afford to fight a war with Iran without simultaneously subsidizing the economic activity controlled by the very same fanatical miscreants we supposedly are trying to depose.

 

Writing in The American Conservative in 2018, William S. Smith took a familiar line: Donald Trump is not the problem—the awful old conservative establishment is the problem. “[W]hile political conservatism is in crisis,” Smith wrote, “Trump is not the cause. By embracing an ideology of military interventionism alien to American constitutionalism—while tolerating an ever expanding welfare state—conservatism lost its way.” Conservatism did, in fact, lose its way, then found its way to Trump and … let’s call it “an ideology of military interventionism alien to American constitutionalism” executed while “tolerating an ever expanding welfare state.”

 

If you want to be charitable to Smith and the kind of Trump apologia circulated for years by the likes of The American Conservative (which I don’t, especially, as a matter of fact) then I suppose you might argue that 2018 was too soon to see what Trump really was–too soon for some people, anyway. For others who were perhaps in possession of historical reasons to be suspicious of Trump’s piggish caudillo politics, it was clear from the beginning that right-wing populism was always the shortest route to the “welfare-warfare state” that libertarians and certain paleoconservatives used to talk about all the time. Trump was by no means less belligerent than the so-called neocons (most of them not actually neoconservatives) that figures such as Ron Paul and sundry Trump sycophants rail against—if anything, Trump always has been more belligerent and combines his belligerence with an old-school mercantilist-colonial mentality—“Take the oil!” and all that nonsense. Trump may have leaned more heavily into the welfare—refusing even to consider entitlement reform, for example—than into the warfare, but jackass populism is no less the enemy of a prudent foreign policy than it is the enemy of a prudent fiscal policy. Jackassery is an all-purpose product, and Trump is an ass of such exceptional asininity that Apuleius could have written a book about him.

 

Prices are up at the pump. Overall inflation remains elevated and very likely will be driven higher by those rising petroleum prices and other war-related disruptions. Security lines are literally out the door at American airports. American troops are dying in a Middle Eastern war (undeclared, unauthorized, and illegal) with goals that are vaguely defined and a rationale that changes from minute to minute. The national debt continues to explode with no signs of abating, while unfunded entitlement liabilities stand at nearly $80 trillion.

 

I do not make a habit out of making predictions. (Never voluntarily give a hostage to Fate.) But, given all of the above—and given the character and the temperament of the people running the show in Washington—I would say that there is a nontrivial chance that we end up looking back on $5.45 diesel as the good ol’ days.

 

In Closing

 

The promise of strongmen, and would-be strongmen such as Donald Trump (who is too weak of a character to be an actual strongman), is that they will bring order. They promise that they will put an end to petty partisan squabbling and “bureaucracy” and “special interests” and do the obvious right thing—which, for some reason, only they can see. They insist that they have no time for things such as regular legislative order and the tedious committee process, niceties of legal procedure. Even regular liberal democrats can turn to that mode quickly when the political need arises: Some of you will remember Bill Clinton’s insistence that the investigation into his sexual relationship with a White House intern (and the perjury and other offenses associated with it) was a “distraction” from “the American people’s business.” The strongman’s promise is that he is immune from such distractions, that he is ready to use “common sense” and—all together now!—“run this country like a business,” or at least “run the government like a business.” But the country is not a business, and neither is the government. And, in this case, Donald Trump was never much of a businessman to begin with but a coddled New York City real-estate heir who ruined the splendid fortune he inherited and then made his living as an entertainment grotesque—as one wag put it, he always acted like he was Conrad Hilton but is really more like Paris Hilton.

 

But from the airport to Iran to the Treasury to the risible cast of characters—Pete Hegseth, Kash Patel, et al.—installed in high office to utterly predictable effect, the evidence is here before all those with eyes to see: Autocrats talk about chaos and promise to bring order—and then they talk about order while they bring chaos.