3/17/26: Top Iran Official Assassinated, WH Panic Over DropSite Report, Yanis Varoufakis on Iran War

24:22Like, that's all it took. And, you know, coming with paragliders. Like, we are in a different era of warfare where, yes, like, you know, militarily we have all of this capacity. and obviously we're nuclear armed and they're not and Israel's nuclear armed and they're not, et cetera. And we can bomb them from the air relentlessly. We can target their top leaders and take them out over and over and over. Yes, we can do all of that. But the few things that have really made a difference in terms of tilting this in Iran's favor is the fact that number one, they are willing to take so much more pain than we are.

24:57Number two, they understand, they thought about us and where all our vulnerabilities were much more, much more than Trump certainly thought about them and how they would react. And that's where those comments about, you know, oh, I had no idea they would target the Gulf Arab nations. It's like you didn't need a military planner to tell you that you could just have listened to them. They were broadcasting. This is our plan. This is how we will respond. This is the threat to you. Like, this is what we will do. But because he, you know, didn't bother to take any of this seriously, then he comes in.

25:33Oh, my God, I can't believe they closed the street from his. Oh, my God, I can't believe I'm dealing with this oil crisis. Oh, my God, I can't believe they're hitting our allies in the region. How did you not think any of this through? It truly is extraordinary. And let me go ahead and put Jeremy's reporting here up on the screen because it speaks to this as well and where they are in the total miscalculation, at least on Trump's part of how this would all go down. So Iranian officials say that they have been ignoring. They have basically ghosted Whitcoff. He has been privately requesting for them to talk.

26:07Trump's special envoy has been texting Iran's foreign minister, asking to start talks. Tehran says the war will end only when Iran believes it has established long-term deterrence. And so the story here is that Whitcoff is basically like, hey, guys, let's check in. Let's talk. Let's have discussions. And they're like, no, because you haven't felt enough pain yet, which, again, is their strategy that they have been broadcasting. And Trita Parsi told us was likely before this war ever started that that was the way they're thinking about it, of like, if we don't strike some sort of a blow and cause some significant pain for the Americans and the Israelis, we are just going to be subject to this cycle over and over and over again.

26:44So, again, this is thoroughly, obviously predictable. Now, the Trump administration has planted a story with Barack Ravid and Axios saying, no, no, no, they reached out to us and we're the ones who aren't ready to deal. I will leave it to you to decide, dear viewer, whether Dropsite and Jeremy Scahill are more credible reporters than Barack Ravid over at Axios, who just loves to take whatever the administration gives and running with it. But, you know, Jeremy's sources are on the record and the ones with Barack Ravid are anonymous. So all of that being said, We have Jeremy standing by to break down his reporting.

27:22So let's get to it. This is Ashley Akinetti from the Ben and Ashley I Almost Famous podcast. iVeam is built for losing weight and moving forward. iVeam is built for feeling your best and seeing real results. iVeam is a medical weight loss program built for you. Their approach is individualized, virtual, integrative medicine. 99.2 % of patients who've completed the iVeam weight loss protocol achieved meaningful change, dropping an average of 45 pounds. iVeam, built for your wellness journey. iVeam, built for real life. When you sign up right now, you can get a one month free trial. Start your personalized plan in minutes by visiting IVIMHealth.com.

28:13That is IVIMHealth.com. Subscription required, medication, labs, and supplements not included. Results based on patients who completed the full IV protocol over 68 weeks. Individual results may vary. Not all patients are eligible. Prescription medication may carry risks and should be used only as directed by your provider. Discover a spectacular island destination with crystal blue seas, endless sunshine, and the cool Bahamian breeze. Bahamar, located in Nassau, Bahamas, offers your choice of three luxury hotels. The richly refined Rosewood, the playfully hip SLS, and the stylishly modern Grand Hyatt.

28:53With over 45 restaurants, bars, and lounges, Bahamar serves up delicious dining from world-renowned chefs like Daniel Bolloud and Marcus Samuelson. nightlife venues like the new John Batiste Jazz Club and the Caribbean's most luxurious casino at Baja Mar you'll find every pleasure under the sun and one-of-a-kind experiences for the entire family like Baja Bay our 15-acre lush tropical water park interactive wildlife experiences including our daily flamingo parade world-class golf tennis spa and so much more visit Baja Mar.com today and discover a vacation destination where memories are made for a lifetime I'm Bahamar.

29:33Life spectacular. Let's talk about modern home shopping. It's sort of become a fun side hobby, right? Scrolling listings at night, dreaming about kitchens you've never seen, or backyards you haven't even stepped foot in. All from the comforts of pretty much anywhere. Redfin knows a lot of people like you want to own, but are stuck in this browsing mode loop. That's where Redfin flips the script. With listings that update within minutes, and tours you can book right from the Redfin app, you can see your dream home the moment it appears. Now, liking a listing is easy, but actually landing it, that's where Redfin comes in.

30:10Redfin has over 2 ,200 agents with local expertise. And Redfin agents close twice as many deals as other agents. That means they want to help you win, not just window shop. Redfin is built to help you go from just looking to wait. This could actually be home. So become the newest neighbor on the block. Visit Redfin.com to start finding and start owning. That's Redfin.com. Joining us now is Jeremy Scahill, co-founder of DropSite News, great friend of the show. Good to see you, Jeremy. Thanks for having me back. So, Jeremy, we broke down a little bit of your reporting and the White House's denials via Axios.

30:48Why don't you just break down more, if you can, about these alleged communications that Steve Wyckoff and the White House are denying happened and which the Iranians are saying, yeah, they keep reaching out to us and we're basically leaving him on red this entire time. You know, I think it was on the third day of the Israeli U.S. bombing of Iran, I started hearing from Iranian officials who were telling me off the record at first, they were saying, it's interesting because a number of third countries have been sending messages to Iran saying that the Trump administration wants to start back-end talks about sort of endgame and if Iran is interested in having some kind of dialogue.

31:34And my understanding in that early stage was that Iran's political leadership had made a decision that they were not going to talk for one central reason, that they felt that the primary goal in this war was to send a message that the US and Israel can't just bomb Iran every four months and pretend to be engaging in negotiations. And so, you know, they inform those third party countries that Iran is not interested in talking. And then you started having Trump, once he was informed of this, and this is from the perspective of the Iranians, start saying openly, oh, the Iranians are begging us to talk.

32:10The Iranians want to make a deal. I'm not ready to talk to them yet. And then, you know, some days after that, so this was early last week, I was told by a senior Iranian official that Steve Whitcoff had sent WhatsApp messages to Iranian officials, including Abbas Arachi, the country's foreign minister. And I said, oh, I want to go to Whitcoff and ask him that. That's what I told the Iranians. And they said, well, you know, this is still off the record because we haven't figured out if we're going to respond or how we're going to deal with this. So I was sort of informed of this for several days.

32:45And then I kept pushing the Iranian sources. And I said, I want to go to Whitcoff and ask him about this, because Trump keeps saying over and over that the Iranians are begging him to talk. And the Iranian officials were saying, can you imagine Abbas Arachi, the foreign minister of Iran, texting Steve Whitcoff, the guy who he was supposedly negotiating with when they turned around and bombed. He absolutely has not. And they said, in fact, we're just trying to figure out what our diplomatic response is going to be to this. Do we tell him we're not ready or do we just ignore him? And what they ended up on was, we're not going to respond to him at all.

33:20What they have done, though, is they've told, this is what they've told me, that they've told third-party countries that Iran's demands include a ceasefire that would apply to not only Iran, but to Lebanon and Iraq as well, that they want reparations for the damage that has been done in this war, and that they want a UN Security Council resolution. But they still aren't at that point because they feel that the deterrence has not been established firmly enough yet to try to raise the costs so high that the US wouldn't consider doing this again in a few months time. So then the intermediaries from other countries go back and they've told this to Trump.

34:01And, you know, you get some flashes of reality from Trump sometimes where he's saying, you know, when he says, you know, I think they want to talk, but they're not ready yet. They're not just around the position. I think part of what he is revealing to the public there is that he's aware that Iran's position is we're not going to engage in a ceasefire right now. And so what happened yesterday was I go to the White House and I sent Steve Wittkoff a WhatsApp message, because apparently that's his preferred way of communicating. And I asked, you know, I asked for comment on this. And typically when we go to the White House, they do give us comment, but it'll be, you know, sort of a copy and paste of whatever Trump's latest statement was.

34:42They'll say, I refer you to the president's remarks on this. But in this case, they send this response that read like Trump had dictated it himself for his truth social feed, you know, calling dropside abhorrent and saying that we're carrying water for the Islamic, you know, terrorist regime, and that we're engaging in what they called America last behavior. And the only reason that I think it wasn't Trump doing it is because there were no all caps in it. But other than that, it basically was like a true social post. And, you know, there's an old saying in journalism that, you know, you never know that a story is true until it's officially denied.

35:19And I think this is a case where they then freaked out about this because it's humiliating. And they go to one of their favorite journalists, Barack Ravid, and they spin the Alice in Wonderland upside down version of this. And it's like, they could solve this in two seconds. Show Arachi's text messages where he's begging Steve Wyckoff to talk. That would be my challenge to them. Okay, Steve Wyckoff, let's see the text messages and put them out. Because what the Iranians are saying is there aren't any text messages for anyone to put out from their end. Yeah. Well, and the timeline there makes sense, too, because, you know, you said it was day three where Whitcoff starts reaching out like, hey, guys, you up?

35:56Question mark. And Trump reportedly thought this would be over in four days. So that would be the time period where they're like, all right, we you know, we killed their leader and we've destroyed our other capabilities. They have to be willing to capitulate now. Right. Right. And then, you know, are just completely ignored by them. I wanted to get your reaction, Jeremy, to this news that broke overnight that top Iranian official Ali Larjani and Bastige commander Gullam Reza Soleimani were both killed overnight. This is according to Israel's defense minister, Katz, in separate strikes. You know, how significant of a blow, if confirmed, how significant of a blow is this to the Iranians?

36:35Yeah, I mean, I think it's significant that Israel Katz came out and said this rather than it just being speculation or something in the media. But again, Iran has not confirmed this yet. I mean, Ali Larajani is one of the most important figures in Iran going back to the 1990s, and he was involved with nuclear negotiations going back to the 1990s. He's also a scholar of Kant, a highly educated man. He recently was named as the secretary of the Supreme National Security Council, which is the most important security apparatus in Iran. But he was, I think, viewed, and I've just been talking to sources in Iran, and they said, you know, if confirmed, what this means is that the Israelis have assassinated one of the figures that would have been a more moderate voice in any discussions that lead to the end of this war or sort of what happens next.

37:31And there was some suspicion that I've heard that part of why the Israelis wanted to assassinate Ali Larajani was not just because of his role in the national security apparatus and this war, but also because Trump has been indicating that he may want to just try to make a deal with Iran and may not want to go all the way to completely smashing or dismantling the state. So it's certainly significant. And I think that the pattern that we've seen is that when figures like Larajani or others who are considered in a more moderate camp, that when they're taken out, the people that replace them tend to take a much harder line.

38:14And so how this is going to impact things, I think this is Netanyahu hoping that another phase opens up where there's uprisings within Iran. We haven't seen any evidence of that yet, but I think the Israelis are very much pushing and hoping that that happens and trying to facilitate that happening. And I think it's also, to an extent, an attempt to make sure that there aren't really going to be these kinds of figures around to talk toward the end of the war. Very much like the Hamas strategy, right, back with Gaza. So very much of the playbook. We've all talked about it now a lot over the years.

38:45We do want to talk about Wyckoff. Let's put A8 up there on the screen. Apparently, Wyckoff is a staunch supporter of Israel. I think we knew that. But apparently counts Miriam Adelson as a dear friend and carries a custom pager gifted to him by Netanyahu and senior Mossad officials. I have to be honest, Jeremy, I think I misread Wyckoff. So Wyckoff obviously was one of those people who pressured Benjamin Netanyahu early on in the Trump administration. He pressured the ceasefire, seemed to be somewhat of a diplomat or somebody who was diplomatic in the way that he shed some of the preexisting notions about way things should be able to should happen.

39:21Open to talking to anybody, to Putin. I said, oh, wow, I appreciate that. I praise him a lot here. Is he showing us his true colors? Is he totally out of his depth is the way that the Iranians seem to play it? What's your understanding, having talked to the counterparties on the other side? I mean, I I don't know. I don't know that you entirely got it wrong. And you and I talked about Wyckoff at that time when this first started. You know, I think Wyckoff is also a manifestation of part of what's happened with Trump as well. In his first term as president, Trump was very nervous about sort of waging a wider war against Iran.

39:56There was great consternation about the decision to assassinate Qasem Soleimani. The neocon wing of the Trump base or that administration was a minority player in the running of the administration. And then Trump 2.0 now, you have the Miriam Adelson Netanyahu wing of the MAGA movement that has literally purchased this part of American foreign policy. Trump is not an ideological person. He is a businessman. I don't believe he's a religious man. I don't believe he believes in much of anything. And so he's sort of been purchased to an extent, bought in in other ways. And I think that he sets the tone for what Wyckoff is going to be.

40:37So when Trump was running for president this time, I think genuinely he was telling Wyckoff, you need to force Bibi to do this. And so when those are the deployment orders from Trump to his real estate buddy, I think Wyckoff was a key player in sort of pushing that Gaza deal through. At the same time, though, you have Jared Kushner, who is an ideological religious figure that has a different level of connections to the entire Israel situation. And I think that that Wyckoff has been radicalized immensely. It's not that he wasn't already a Zionist. It's not that he already didn't have some of these convictions.

41:13But I think that those tendencies within Wyckoff were brought out by this whole situation. And he was sort of radicalized to become a fanatical Zionist Israel firster. And it's just, you know, it shows you what happens when you get put in this meat grinder of ideology. And Netanyahu's been doing this since the 1990s, and they have really successfully played Witkoff. And I think that Kushner has also successfully played both Witkoff and Trump. Interesting. Jeremy, I wanted to know what you make of Trump's increasingly desperate efforts to convince U.S. allies to join him in some fool's errand of attempting to reopen the Strait of Hormuz.

41:53It seems that, you know, among the many things certainly he didn't anticipate, he seemed to not believe they would actually close the strait. There's also been reporting that a lot of war planners thought that, yeah, it's possible they close the strait of Hormuz, but that would be very damaging to them as well. But it seems the Iranians have been able to not fully close the strait, but be able to pick and choose. Hey, this ship can come through. Our exports are going out to China. But if you're, you know, an ally of the U.S. or Israel, you're not coming through. you're not going to be able to do what you want to do here.

42:23So what do you make of how central this has become to the war effort? I mean, it's extremely central. And I think, you know, Iran has been war gaming this for many years. In fact, weeks before this war happened, in the month of February 2026, Iran did war games in the Strait of Hormuz that included operations aimed at shutting it down or attacking any, quote unquote, enemy vessels, military vessels that tried to come into the Strait of Hormuz. So, you know, we don't even have to back up that far. We can say that literally days before this war began, the Iranians were wargaming those types of scenarios in the Strait of Hormuz.

43:01I think that, you know, we have to connect this though, Crystal, to the fact that the Marine Expeditionary Units are being deployed. That could be anywhere between 2 ,000 and 5 ,000 troops. These are sort of the 9-1-1 forces of the U.S. military. They may try to take this island, Harg Island, that they bombed repeatedly. 90 % of Iran's oil passes through there. Trump says that he hasn't yet decided to bomb the actual oil that's on that island, but you could see a discussion about trying to seize that as a territory. Trump's having an enormous difficult time getting any nations to agree to deploy.

43:38The German chancellor, who has largely acted sort of like a poodle for Trump since he became the leader of Germany, issued a statement yesterday and multiple German officials said, we're not going to get involved with this. They said the Americans and Israelis didn't tell us about this beforehand. They said they didn't need us. So now all of a sudden they want us to go there. It's not a NATO mission. I think if the Trump administration wants to start attempting to escort ships through there, you're going to be much closer to Iran's coastal territory. You're going to put yourself in range of short range missiles and you have the possibility of many more Americans dying.

44:16I don't think the world really has an appetite for this at all. But, you know, we've seen and you guys have reported on this. Trump doesn't seem to be fully listening to what military advisors are saying. And, you know, and I think that if they're contemplating putting boots on the ground, then Americans should brace for more coffins coming home draped in the American flag. And it's shocking to say that you can't rule out that they're contemplating this right now. But it's real. It's true. And the neocon wing of the MAGA movement is in pole position right now in this White House. Very, very, very true.

44:54Jeremy, thank you, as always, for joining us. Keep it up. Dropside News, link down in the description. We appreciate you, man. Thanks for joining us. Thank you guys for all your work. I-Veeam is built for losing weight and moving forward. I-Veeam is built for feeling your best and seeing results. iVeem is a medical weight loss program built for you. Their approach is individualized, virtual, integrated medicine. 99.2 % of patients who completed the iVeem weight loss protocol achieved meaningful change, dropping an average of 45 pounds. iVeem, built for your wellness journey. iVeem, built for real life.

45:31When you sign up right now, you can get a one-month free trial. Start your personalized plan in minutes by visiting iVeemHealth.com. That's IVIMHealth.com. Subscription required medication labs and supplements not included. Results based on patients who completed the full IVIM protocol over 68 weeks. Individual results vary. Not all patients are eligible. Prescription medications may carry risks and should be used only as directed by your provider. Discover a spectacular island destination with crystal blue seas, endless sunshine, and the cool Bahamian breeze. Bahamar, located in Nassau, Bahamas, offers your choice of three luxury hotels.

46:16The richly refined Rosewood, the playfully hip SLS, and the stylishly modern Grand Hyatt. With over 45 restaurants, bars, and lounges, Bahamar serves up delicious dining from world-renowned chefs like Daniel Bouloud and Marcus Samuelson. nightlife venues like the new Jean Batiste Jazz Club, and the Caribbean's most luxurious casino. At Baja Mar, you'll find every pleasure under the sun and one-of-a-kind experiences for the entire family, like Baja Bay, our 15-acre lush tropical water park, interactive wildlife experiences, including our daily flamingo parade, world-class golf, tennis, spa, and so much more.

46:54Visit BajaMar.com today and discover a vacation destination where memories are made for a lifetime.

47:03Let's talk about modern home shopping. It's sort of become a fun side hobby, right? Scrolling listings at night, dreaming about kitchens you've never seen, or backyards you haven't even stepped foot in. All from the comforts of pretty much anywhere. Redfin knows a lot of people like you want to own, but are stuck in this browsing mode loop. That's where Redfin flips the script. With listings that update within minutes, and tours you can book right from the Redfin app, you can see your dream home the moment it appears. Now, liking a listing is easy, but actually landing it, that's where Redfin comes in.

47:39Redfin has over 2 ,200 agents with local expertise. And Redfin agents close twice as many deals as other agents. That means they want to help you win, not just window shop. Redfin is built to help you go from just looking to wait. This could actually be home. So become the newest neighbor on the block. Visit Redfin.com to start finding and start owning. That's Redfin.com. For more on the Iran war, we are joined this morning by Yanis Varoufakis. He, of course, is an economist. He's a bestselling author. He is a former Greek finance minister and also host of the podcast, The Econo Class. Great to see you, sir.

48:17Good to see you. Very good to see you again. Yeah, of course. So just off the top here, your reaction to the purported goals, to the best we know them, of this war and how this all seems to be going. Well, it is going abysmally for Donald Trump, whatever his goals were. It is a war that he started without much of a strategy regarding how he's going to end it. This is not new, of course. It harks back to Vietnam, Iraq, Afghanistan. there is a very long tradition of the United States pursuing its strategy of forever war on behalf of the military-industrial complex. It works really very well for those who are selling guns and bombs and missiles.

48:58It doesn't work very well for the American people. It doesn't work at all well for the rest of the world. So on the altar of a forever war that suits the military-industrial complex and now the AI-industrial complex or military complex, complex. We are caught in a conundrum that is jeopardizing the well-being of the vast majority of the human species. And we have a Donald Trump who is slowly realizing that he has fallen headlong into a trap of his own making. My assessment is that Trump was actually winning on all fronts up until he made that ridiculous decision, essentially, to fall into Netanyahu's Trump, of, you know, fighting Netanyahu's war.

49:50And from now on, there is nothing can save Donald Trump politically. One of the things we wanted to talk to you about, Giannis, in particular is your expertise with respect to Europe, many of the other U.S. allies. We have been stunned already to see an almost total rejection by the United States' request for assistance in the Strait of Hormuz. Guys, we can go ahead and put B1 up here on the screen. We have a summary of all of the U.S. allies. Japan says it currently does not plan to dispatch naval vessels. We can go to the next one. Australia said it will not do so. South Korea says we will not do so.

50:26The United Kingdom said they will not be drawn into a war with Iran. The European foreign ministers said they will discuss it but are not expected to expand its role. The Germans explicitly say they will not participate. The Danes saying that they're ahead of the EU meeting. It would be wise to keep an open mind. But as a small country, we are not a large, as a small country, large maritime nation, but we don't expect to do so. Italy and then, of course, Greece as well says it will not engage in military operations. It's pretty stunning to say that not even a single one of these people are willing to step up.

50:58I'm curious for your reaction as to why this time they're willing to stand up to the United States and what it means for the U.S. and for Europe. I wish you were right that they were standing up against the United States. They're simply refusing to do, you know, to send ships to a suicide mission, to a mission that is bound to fail. Because let's face it, even if all those naval vessels of every possible flag from Japan all the way to Norway were to accumulate to amass at the state of Hormuz, well, this is a very asymmetrical situation. the Iranians only need, you know, to send one or two drones past these vessels, and they will succeed in what they are interested in, which is to make sure that the insurance costs of these vessels are so high that it's uneconomical for them even to try to pass the straits.

51:59But, you know, where I disagree, and I wish you were right, is that our European leaders, the Japanese, the Canadians, the Australians, are standing up to the United States. They're doing no such thing. So take Chancellor Mertz of Germany, a typical example of someone lacking the moral spine and the intelligence to oppose Donald Trump, Washington, D.C. On the one hand, he says, oh, we're not going to take part in this. Of course, they won't take part in this. But at the same time, he allows Rammstein, the largest American military base in Germany, to be used in order to bombard a United Nations member state and to therefore, you know, become complicit.

52:46Germany is complicit in the violation of international law. The Brits are doing the same thing with their bases in Cyprus. The Arab states, you know, they still maintain the United States military on their ground, and therefore they're opening themselves up to missile and drone attacks by Iran. My country, Greece, our pathetic government, sent a frigate and F-16s to Cyprus to do what? To protect the British sovereign ground of the Akrotiri base, which the United States has been using in order to attack Iran illegally. So our governments are quite pathetic. Let me be very straightforward on this.

53:33On the one hand, they are complicit in the United States attack on Iran. They may not like it, but they are complicit. They're choosing to be complicit in it. And on the other hand, they say, well, we're not going to say any vessels to achieve the unachievable. I'm curious for your view on the likely economic fallout. We can put B3 up on the screen. This was an analysis for the GCC member states. Goldman Sachs predicts that if this war goes on another two months, they're going to see massive falls in their GDP, Qatar and Kuwait in particular. But obviously, there are global implications for the strait continuing to be more or less closed reverberations throughout all of the economies of the world.

54:14What do you expect if this war continues to drag on, as it appears likely to do, given that Iran has projected that they are nowhere near ready to pursue a ceasefire? Well, you don't need to be an economic genius to know that the Gulf states, their business model is finished, that the United States and Israel have killed it. They've killed their economies. And it's not something that has just begun now. Let's not forget that this has been happening now for five, six years. Remember when Trump, in the dying days of his first administration, took out a military commander of Iran, Soleimani. Soleimani was just about to meet his Saudi Arabian counterpart to strike a deal, a peace deal between Iran and Saudi Arabia.

55:03After that, you know, essentially what the Americans, with the support and the egging on of Israel, were trying to do was to stop a detente between Saudi Arabia and Iran. That didn't work because a couple of years later, It was the United Arab Emirates that opened an embassy in Tehran. Later on, it was Qatar. It was even Saudi Arabia in 2023. Essentially, Israel has been at it now for five, six years. What do I mean by being at it? They've been trying to ensure that there's no detente between the Emirates, between the Gulf states and Iran. And, you know, that's the main reason why they entrapped Donald Trump into this attack on Iran at the cost of decimating the business model of the Gulf states.

55:59Netanyahu has succeeded with the complicity, explicit thinking. I don't know whether it was something that Trump understood that he was doing, but nevertheless, he was playing the Netanyahu game of wrecking both the detente between Iran and the Gulf states and the Gulf state economies. But since you're asking me about the economic implications, are the economic implications awful in your own country? I mean, if you are a MAGA blue-collar worker driving 150 miles a day to go to your bullshit job in order to make ends meet, and you have to pay these gas prices, You are destroyed. I mean, Trump came out the other day with an inane comment that the United States is a net oil and gas producer, which is true.

56:51And therefore, he said, since, you know, we are a net exporter, if the price of fossil fuels goes up, we make more money. Well, who are you to say that? Yes, who makes money? Have you asked your own base? Are they shareholders in Chevron? Are they shareholders in Exxon? They're not. They, you know, things were bad enough. they elected you because of the unaffordability crisis or affordability crisis. And now affordability has gone into the dustbin of history. And it's not just that. You know, last year I was one of the commentators, economists, politicians who were arguing that, you know, that his tariffs were not that big a deal, unlike other economists who were pulling their hair out.

57:34Maybe it's because I don't have much hair. I wasn't pulling mine out over the tariffs. And the reason why those tariffs, and you remember the Liberation Day spasm in the stock markets, didn't last long. And very soon after that, markets were gung-ho again and they became bullish again. Well, the reason is because back then the situation was very different to what it is now. The war that he has unleashed against Iran, even if it ends today, is going to have long-term effects. The damage is permanent. It is not temporary. It's not like Liberation Day. Remember last year you had in your country, the United States, you had a massive wave of investment due to AI.

58:19Well, this is going to be stemmed now. Why? Because AI is very energy intense, very energy hungry. And with energy going through the roof, the AI investment spree is severely circumscribed. Then there's another element to this. Last year, this time, around Liberation Day, if you remember, the Fed was in the process of cutting interest rates. Not as fast as Donald Trump wanted them, but they were cutting interest rates. Well, now, with yields going through the roof, 10-year bond yields in the United States, in the United Kingdom, in Britain, in Frankfurt, in Brussels, in Tokyo, all the West central banks are either slowing down the rate at which they're cutting interest rates or they're actually going to start increasing them.

59:19We already saw in Australia an increase in interest rates. So, you know, this is a perfect storm. You have energy going up, AI investment tapering, interest rates going up as I said, even if the war stops today, which it can't because Donald Trump has no way of de-escalating unless he opens the state of Hormuz which the Iranians are never going to allow because the Iranians they felt an existential crisis they were attacked, their leader whatever you may think of Khomeini he was the leader of a member state of the United Nations and he was he was burthered by the israelis and the americans and you know they are they are saying no i mean we're not going to let you come back at us we are going to bring you down and even if it means bringing down the gulf states even if me even if it means damaging significantly bangladesh and india you know these are countries and south korea these are countries that rely on the natural gas and the oil that goes through the states of hormuz so you know donald trump like george w bush before him, like LBJ in the 1960s, has been caught into a trap of his own making, and he doesn't know how to wriggle out of it.

1:00:34Giannis, you have described this previously as a breakdown in the neoliberal economic order. What do you see exactly, the different pieces that make this happen? Well, this breakdown goes back to 2008, the great financial collapse, the Lehman Brothers. you know american-led dollarized capital is never recovered fully from 2008 you have to remember that between 2008 and the end of the pandemic in 2022 the central banks of the west pumped out 35 trillion dollars that is 35 000 billion dollars that was quantitative easing if you remember while at the same time imposing austerity to the vast majority of people in the united states in Europe, in Britain.

1:01:20So if you have this combination of austerity for the many, which depresses demand, and therefore in turn, the secondary effect is that it depresses investment in productive machines, in, you know, real stuff. And at the same time, you print 35 trillion and you give it to the financiers who give it to big business that use it to buy back their own shares. So asset prices go up, but there's no investment. and the only people who invest in this world of ours essentially are the chinese on one on one hand and big tech on the other who are not producing anything except the power uh through you know amazon.com and uber and so on to reach deep into your pockets and take money out which um then is not invested into productive capacity it's it is invested into more machines that create more power for the jeff bezos of the world to put their long arms deeply into your pocket uh you know you realize that this is not a sustainable macroeconomy.

1:02:22And the result is that, you know, we have stagnation in the West. The carnage that Donald Trump said he saw in, you know, the working classes of the United States, which was there, you know, he did have a point when he was raising this. Of course, now he's making it far worse. He invoked that sense of carnage amongst the blue-collar workers to get elected to the White House in order to enrich big tech and the military-industrial complex and essentially promote the agenda of Benjamin Netanyahu and his forever wars in the Middle East. Let me get your reaction to something that Ray Dalio was writing about.

1:03:07So he says his reading of history and sense of what is happening now leads him to believe that if the U.S. were to lose in this way, in that way specifically being unable to take control, retake control of the Strait of Hormuz, there would be a significant risk that losing control of Hormuz would be for the U.S. what the Suez Canal crisis was for Great Britain in 1956, and analogous defeats were for the Dutch Empire in the 18th century and the Spanish Empire in the 17th century. The pattern of events that leads to the breakdown of empires is almost always the same. Do you see this war with Iran as existential for the U.S.

1:03:43empire and the current existing world order? I think it's far-fetched to make such gross predictions at the moment. Let's not forget that we've had many prognostications in the past of the demise of America's hegemony in the late 1960s when America, for the first time after the 1900s, went from being a surplus country to being a deficit country. When Richard Nixon in August of 1971 blew up the Bretton Woods system, which was the pride and joy of American politicians and American financiers and American diplomats and economists. Again, back then, in the late 60s, early 70s, people were procrastinating the end of American hegemony America has lost almost every war that it has waged since Vietnam.

1:04:38Every war begins with claims of mission accomplished and then very soon after that ends up in a quagmire from which the United States extricates itself sometimes very ignominiously. Remember the helicopter departing from the American embassy in Saigon or similarly under Biden from Kabul. So let's not rush into conclusions. There's no doubt that, I mean, all empires at some point collapse or wane. It's true about all the empires that you mentioned, the Dutch Empire, the Spanish Empire, the British Empire. But, you know, the American empire has shown a remarkable capacity to increase its hegemony at the same time as it depletes its soft power as well as its industry.

1:05:36After 1971, we had a remarkable phenomenon, and this is the result of the Nixon shock of August 1971. America went deeper into the red, and the more into the red the United States went, both in terms of its street deficits and its federal budget deficit, the more hegemonic it became. That has never happened before to any empire. Every empire that got into the red very soon after that waned and died. The United States didn't because of the power, the exorbitant privilege of the dollar. Because, you know, sometimes this is a paradox, but it ceases to be a paradox once we start looking into it. People talk to me about de-dollarization and the way in which the dollar is going to be thrown off its throne.

1:06:23Well, you know, I asked them the question, okay, now, what is it that keeps the dollar hegemonic today? And the answer is, it's enemies. So, you know, China doesn't want to see the dollar being dethroned. Why? Because they have four and a half trillion dollars in savings. So, you know, if you had your savings in a Swiss bank account, would you want to see Swiss banks go under? No, you wouldn't. So, you know, the Chinese are the real adults in the room at the moment. and they're doing whatever it takes in order to stop Trump from destroying American hegemony. Not because they are philanthropic towards the Americans, but because they have their savings in US dollars for the time being.

1:07:00They are slowly shifting their savings away from it. Now, when a significant part of the world, including Saudi Arabia, including India, and so on, shift their savings away from the dollar system, that's when the American empire will start withering. Lastly, sir, from me on a different but related matter, Cuba is being threatened directly by Trump. He says, oh, I'm just going to take it. Their electrical grid has reportedly suffered a complete and total collapse, according to the country's power operator. Obviously, this puts thousands of people's lives at risk. The island is effectively under a U.S.-led embargo, doing to them somewhat of what we did in Gaza as well.

1:07:46What do you make of what is happening to Cuba right now, what we're doing to Cuba right now, and how this fits into whatever Trump's aims are around the world? The Trump administration is committing a crime, an international violation of international law and basic moral standards by what it is doing to Cuba. Whatever you may think of the Cuban regime, it is clear, but given that it doesn't have any support from anywhere, long gone are the days when Cuba could rely on the Soviet Union, China, Russia, they may pay lip service to Cuba. The fact that the people of Cuba remain broadly in support of the system of government that they have, broadly in support, with a lot of criticisms and a lot of moaning and groaning and so on.

1:08:43But nevertheless, the fact that this regime is in Cuba is still there just goes to show that it does have still support. The idea that somehow to go back to the pre-Castro era would be liberation is an abomination. Remember that before Castro's revolution, Cuba was effectively annexed by the mafia, by prostitution, by drug cartels. And so starving a whole population in order to force them to overthrow a government that does have an intertemporal support is just an awful abomination of a crime. Now, that, of course, is going to stigmatize our generation, independently of our politics. In the next 100, 200 years, people will think of us as a generation which allowed the genocide in Gaza to continue and to continue even after the supposed ceasefire because it's going on as we speak now, by other means, through starvation, through denying them.

1:09:50You know, they're still operating on children without anesthetics because the Israeli army does not allow, as we speak, anesthetics to go into Gaza. Unbelievable. Well, it may not take an economic genius to figure out some aspects here, like oil prices going up is going to be bad, but we're very fortunate and glad to have an economic genius to help us sort through these many things. Giannis Varoufakis, thank you so much for your time today. Thank you, sir. My pleasure.

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