Does the United States suffer from a “resource curse”? Surely, that’s an absurd question. It’s the kind of problem that affects only low-income and underdeveloped countries run by dictators and authoritarian rulers.

The US is, reputedly, the most advanced and biggest economy in the world. So how can that be? If standard economics textbooks are anything to go by, authoritarian China should be much more likely to suffer from such a curse, perhaps due to its near monopoly on rare earths supply. Interestingly, the country is moving full steam ahead in its transition to green energy.

Before the 2007-08 global financial crisis triggered by the collapse of the US subprime real estate market and its financial derivatives, most American policymakers also thought such crises only happened in developing economies. Well, guess what?

In a recent podcast with historian Heather Cox Richardson, Nobel-winning economist Paul Krugman argued that the US did suffer from a resource curse. “[What] we have in the US is an actual resource curse,” he said. “We would not be rejecting renewable energy. We would not be rejecting electro-tech probably if we didn’t have all of this oil and gas.”

The US has the world’s largest combined oil and gas reserves.

Krugman continued: “Our politics are kind of polluted by the power of our own fossil fuel industry, And that’s actually probably ending up being an economic disadvantage … we are not that different from countries that actually have mineral resources that end up to be negatives, not positives for them.”