Paul Krugman Spots ‘Potentially Really Terrible’ Economic Risk In Trump’s Iran War

The famed economist warned of what the war could trigger next.

Renowned economist Paul Krugman on Tuesday picked apart the “potential really terrible” consequences of Donald Trump’s Iran war, which has sent oil prices soaring.

Traders currently assume “that this will not go on more than another week or two,” the winner of the 2008 Nobel Memorial Prize in Economic Sciences noted to MS NOW’s Chris Hayes.

But if the war does drag on, “then this is 20% of the world’s oil flows through the Strait of Hormuz, and there’s really no other way for it to get to where it can be used,” he said.

“That’s enormous,” Krugman warned. “That’s a much bigger shock to world oil supplies than the oil shocks of the 1970s. This is just a gigantic disruption to world energy supplies. And the price can go easily, much, much higher than where it is now if it’s sustained. I mean, this is basically impossible and that’s nasty.”

Krugman acknowledged that the U.S. economy is now “less oil dependent than it was in the 1970s” but added that “if you were going to concoct a recipe for somehow revisiting all of the bad things of the past 60 years of U.S. economic history, it would be what’s happening right now.”