When I heard him on CNN saying that “productive negotiations” with Iran were ongoing, I decided not to believe him until Iran confirmed it — and Iran didn’t, fake news daw — but stock markets rose and oil prices fell anyway. Nobelist economist Paul Krugman is thinking insider trading.
ADVENTURES IN FANTASY DIPLOMACY
Paul Krugman
March 23 2026It’s Monday morning. Donald trump has for the time being called off plans to bomb Iran’s civilian infrastructure. He has done so because, according to him, highly productive negotiations are underway involving the government of Iran and an invisible six-foot white rabbit and his Canadian girlfriend.
Hi, I’m Paul Krugman. What I just said is not strictly true. Or it’s not all true. Trump did not say anything about the invisible rabbit or the Canadian… but the gist of it is true. He said that there’s highly productive talks underway, and shortly afterwards the Iranian government and Iranian state media said no, they aren’t, this isn’t happening.
Not gonna say that Iranian state media is necessarily a credible source but the odds are that they are in fact telling the truth and the president of the United States is either lying or fantasizing, or both. There’s really no reason at all to believe that anything like what he said is happening is in fact happening.
Why do I say that, aside from the fact that Trump has not exactly been truthful about a lot of things. Beyond that, there are three important reasons to believe he might be making this stuff up.
First, he put himself in a very bad spot with his threat to commit a massive war crime if Iran doesn’t open the Strait of Hormuz, and must be looking for a way out. Another president in another time might say that, on careful consideration we have recalibrated the policy, or something like that. Trump doesn’t do that. Trump is always winning. Never admits that he’s had a setback, never admits that he’s changed his mind. So, saying that, oh, but the Iranians have, you know, come to the table, probably big strong Iranians with tears in their eyes, but anyway, that the Iranians have come to the table and that’s why we’re not doing what I said we would do is a very Trumpian out.
Second, why would the Iranians be making a deal at this point? We can talk a lot about how the war is going, but it’s pretty clear that, as the Iranians are likely to see it, they’re winning. I mean, they’re not winning militarily, but that was never on the cards. They are… they have successfully turned what was supposed to be a lightning decapitation of their government into a protracted contest in relative ability to bear pain. And all indications are that the Iranians are nowhere near cracking. And all indications are that the U.S. — although obviously we’re not losing thousands of people and we aren’t having our whole life disrupted, but the American public really doesn’t like higher gas prices — it does not believe Trump. The clock is ticking for Trump on this in a way that it’s apparently not for the Iranian regime. So Iran has the upper hand here. Very hard to see why they would be wanting to make a deal until they basically humiliated us substantially more.
Finally, consider possible motives. Imagine that you were somebody close to Trump, somebody close enough to actually have an influence on his decisions, as well as inside knowledge. Here’s what you could have done. Really, just between last night and now: you could have sold a bunch of crude oil futures at very high prices. Brent was over $112 over the weekend. Then bought them back immediately after Trump’s announcement of, you know, triumphal progress, but before the Iranians said that it is not happening. And you know you could have turned a very very nice very large profit.
To say that insider trading might be driving US policy would have been outrageous in the past. Who thinks that that’s beyond the realm of possibility now. So all of this could be happening.
Last point to make here. Think about how much America’s position in the world has been weakened not just by apparent failure to subdue a fourth rate power but by the fact that everybody now knows that you cannot trust anything, cannot trust any promises the US makes. You cannot count on the US carrying through with promises [or] with threats. Not just promises, but threats are also not incredible in the sense of not being at all credible. And that the default assumption should be that anything that this administration says is a lie. That is a really really bad thing.
That we’re [a] world power is not simply a matter of missiles and bombs although we seem to be running low on those, too. It’s very much a matter of people taking what you say and what you promise and what you threaten seriously, and we are not ruled by serious people.
Have a great day. https://www.youtube.com/watch?v=Tc120RAcx48