In short
Podcast Summary: Breaking Points with Krystal and Saagar - Episode 3/9/26
In this episode of Breaking Points, hosts Krystal Ball and Saagar Enjeti delve into a series of pressing geopolitical issues, discussing the ramifications of escalating tensions in the Middle East, the selection of a new Iranian Supreme Leader, and the potential for wider conflict involving the United States and its allies.
Key Topics Discussed
- Oil Apocalypse
- Recent Israeli airstrikes in Tehran have caused significant damage to oil facilities, leading to fears of an "oil apocalypse."
- Reports indicate that black rain, contaminated with oil, is affecting the Tehran area.
- The discussion highlights the immediate economic implications, with oil prices soaring potentially over $100 per barrel, leading to predictions of significant price increases at the pump.
Expert Insight
Rory Johnston
- Rory Johnston, an independent oil analyst, provides an analysis of the current oil market disruptions.
- Johnston forecasts that if the conflict continues, oil could reach $200 per barrel, with dire consequences for global fuel prices.
- He describes the potential for demand destruction across various sectors, emphasizing that developing countries could face severe shortages.
- Selection of New Iranian Supreme Leader
- The episode shifts focus to the appointment of Moshtaba Khamenei, son of the late Supreme Leader Ayatollah Khamenei, as Iran's new Supreme Leader.
- Trita Parsi discusses the implications of this leadership change in the context of heightened U.S.-Iran tensions and the likelihood of Iran pursuing nuclear weapons.
- The hosts emphasize that the new leader's selection signals Iran's commitment to a hardline stance against U.S. and Israeli interests.
- U.S. Involvement and Reactions
- The podcast highlights the involvement of U.S. Senator Lindsey Graham, who allegedly colluded with Israeli officials to persuade President Trump towards military action against Iran.
- Graham expresses a zeal for war, suggesting that a regime change in Iran would lead to economic prosperity for the U.S. and allies.
- The hosts criticize Graham's rhetoric, pointing out that it reflects a broader pattern of American interventionism that ignores the potential for devastating consequences.
- Global Consequences and Predictions
- The episode touches on comments from Professor Jeffrey Sachs, who asserts that the world may already be in the early stages of World War III.
- Sachs's claims are substantiated by reports of Russia providing intelligence to Iran and potential financial support from China.
- The hosts discuss the potential for increased global instability, including the possibility of nuclear powers engaging in conflict.
- Escalation of Violence and Domestic Impact
- The conversation warns of the implications of U.S. engagement in the Middle East for domestic security, citing possible retaliatory actions by extremist groups in the U.S.
- The discussion reflects on historical patterns of American military interventions and their fallout, emphasizing the need for accountability to prevent future conflicts.
Key Takeaways
- Geopolitical Landscape: The ongoing conflict in the Middle East, particularly between the U.S. and Iran, is escalating, with significant implications for global oil prices and security.
- Leadership Dynamics: The selection of a new Iranian leader underscores a shift towards a more hardline approach, complicating diplomatic relations and nuclear negotiations.
- Critique of U.S. Policy: The episode critiques the U.S. foreign policy establishment, highlighting the motivations behind military intervention and the neglect of its ramifications on global stability.
- Call for Accountability: The hosts stress the importance of accountability to avoid repeating the mistakes of the past in U.S. foreign policy.
Conclusion This episode of Breaking Points encapsulates the complex and volatile nature of current international relations, particularly the U.S.'s role in the Middle East. It poses critical questions about the future of U.S. foreign policy and its potential consequences on global stability and domestic security.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOOil Crisis Overview
2:47 to 4:08
Discussion on the oil crisis highlighted by recent events in Tehran.
“We're going to be joined in a second by Roy Johnson.”
Expert Insights on Oil Prices
4:09 to 7:17
Rory Johnson discusses the impact of the Iranian conflict on oil prices and supply.
“So that's what's coming down this morning, this sort of oil-filled rain that we have right now on the Iranian capital after the strikes took place.”
Market Response and Consumer Impact
7:18 to 9:33
Exploration of how rising oil prices will affect consumers and the economy.
“During that period, we were all locked in.”
Strategic Petroleum Reserve Discussion
9:34 to 11:28
Discussion on the role of the Strategic Petroleum Reserve in managing the crisis.
“So those would be your diesels, your jet fuels, et cetera.”
Global Supply Chain and Future Outlook
11:29 to 14:01
Analysis of the global oil supply chain and potential future disruptions.
“It's actually shocking to me that up until this point, the Trump administration has so kind of stubbornly refused to entertain the idea of an SPR release.”
Impact of Gulf Crisis on Oil Production
14:01 to 18:10
Learn how the ongoing conflict in the Gulf is affecting oil production and prices.
“And the other issue is that a lot of the producers, most notably Iraq and Kuwait, don't have a lot of domestic storage for their for their crude.”
The Rise of a New Iranian Supreme Leader
18:11 to 20:10
Discover the implications of Iran's new Supreme Leader and his hardline stance.
“I grabbed a Sky Pop protein soda thinking, sure, we'll see.”
Consequences of the New Leadership in Iran
20:11 to 25:46
Understand the potential consequences of Iran's leadership change on regional stability.
“So let's go and put D1 up on the screen.”
Failed Diplomacy and Potential Off-Ramps
25:47 to 28:00
Analyze recent diplomatic efforts and their failure to de-escalate tensions with Iran.
“And no one's going to come in from the outside to rebuild the country.”
Escalation of U.S.-Iran Tensions
28:00 to 30:00
Learn about the recent diplomatic breakdown and military escalation involving the U.S. and Iran.
“immediately actually re-escalated the situation.”
Show all 22 chapters
The Role of Israel in the Conflict
30:00 to 33:10
Discover how Israel's actions are influencing the dynamics of the Middle East conflict.
“And then Israel, of course, directly interested in broadening this war as much as they possibly can.”
Potential for Broader Regional Conflict
33:10 to 35:40
Examine the possibility of a wider conflict in the Middle East, including Iraq and Bahrain.
“In fact, they don't want Iran to be stable.”
U.S. Diplomatic Responses and Casualties
35:40 to 37:58
Understand the implications of U.S. diplomatic actions and the hidden costs of the conflict.
“Leslie, let's put this piece of news up on the screen.”
Jeffrey Sachs on World War III
40:05 to 42:00
Listen to Professor Jeffrey Sachs discuss the implications of current global conflicts and the potential for World War III.
“So we wanted to ask in this show, just how bad are things and just how bad could things get?”
Geopolitical Impacts of Oil Dependency
42:00 to 46:08
Explore how global oil dependencies shape geopolitical tensions and conflicts.
“So we have directly impacted their interests in terms of their energy landscape.”
World War III: Understanding Modern Conflict
46:08 to 50:04
Discuss the nature of potential global conflicts and the evolving landscape of warfare.
“Really what I'm the most worried about is the climb up the escalation ladder, which we talked about, from oil and to water.”
U.S. Military Strategy and Global Dominance
50:04 to 54:16
Examine the implications of U.S. military strategies on international relations and the risk of escalation.
“and we are also asserting to the world that we are going to try to dominate the entire world.”
Regional Stability and American Interests
54:16 to 56:00
Analyze the reactions of Gulf countries to U.S. interventions and military presence.
“You have status and force agreements with every one of these countries.”
U.S. Military Presence in the Gulf and Its Implications
56:00 to 57:40
Explore the current state of U.S. military involvement in the Gulf region and its impact on allied nations.
“We don't know how many right now as part of this fight.”
Lindsey Graham's Role in U.S.-Israel Relations
59:50 to 1:06:00
Analyze Lindsey Graham's influence on U.S. foreign policy, particularly regarding Israel and Iran.
“Turning now to the person who should be having the most fun in this war, Lindsey Graham.”
Historical Perspectives on American Intervention
1:06:00 to 1:10:00
Discuss the historical context of American intervention in foreign conflicts and its repercussions.
“We would ask what the foreign country may have on that official and promptly charge him or her with high treason.”
Consequences of War and Accountability
1:10:00 to 1:14:33
Explore the lack of accountability for political leaders after disastrous wars.
“who hated Trump, as you said, are sucking up to him more than ever.”
Transcript
Automatic transcript. May contain errors.0:00Bibi Netanyahu:This is an iHeart Podcast.
0:02Lindsey Graham:Guaranteed Human.
0:03Saagar Enjeti:Hey, it's Bobby Bones. You know, Eddie and I recently stopped by Yeah in Nashville. It's an incredible nonprofit empowering kids through music education. Thanks to Hyundai, we recorded a special podcast episode while we were there. How do you think learning an instrument helps kids with confidence? Learning an instrument allows them to discover a little bit further of who they are and be comfortable with it and then share a little bit about that with others. And if it's done in an environment that is celebrating and championing them, then that confidence can only go up. The full episode is out now, presented by the Hyundai Ioniq 9.
0:41Saagar Enjeti:To donate and learn more about YAH's mission, just visit yahrocks.org.
0:46Trita Parsi:You know that moment around 2 p.m. when you realize you haven't eaten protein, but you also don't want a heavy shake? I have a solution. Sky Pop Protein Soda. It tastes like soda. It's light, bubbly, refreshing. but with 10 grams of complete protein, zero sugar, and only 45 calories. So I don't have to think about it. I'm just packing lunches, answering emails, doing everything, and I just grab one to go. It really does feel lighter than those big functional drinks, and you're still getting real benefits and not something you've forced yourself to drink. Sky Pop Protein Soda. Reach for the sky.
1:16Trita Parsi:Get yours now at Target.
1:17Bibi Netanyahu:Support for the show comes from Public, the investing platform for those who take it seriously. On public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets, which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20 % year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one-of-a-kind index, and lets you backtest it against the S &P 500. Then you can invest in a few clicks.
1:50Bibi Netanyahu:generated assets are like etfs with infinite possibilities completely customizable and based on your thesis not someone else's go to public.com slash podcast and earn an uncapped one percent bonus when you transfer your portfolio that's public.com slash podcast paid for by public investing brokerage services by open to the public investing inc member finra and sipc advisory services by public advisors llc sec registered advisor generated assets is an interactive analysis tool output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com slash disclosures.
2:18Bibi Netanyahu:Hey guys, Sagar and Crystal here.
2:20Jeffrey Sachs:Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.
2:27Rory Johnston:This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.
2:33Jeffrey Sachs:So if that is something that's important to you, please go to breakingpoints.com, become a member today and you'll get access to our full shows, unedited, ad-free and all put together for you every morning in your inbox.
2:44Rory Johnston:We need your help to build the future of independent news media, and we hope to see you at breakingpoints.com.
2:52Rory Johnston:Turning now to oil. We're going to be joined in a second by Roy Johnson. He's an excellent oil analyst, but we do have to show you some absolutely apocalyptic images coming out of Tehran. Let's go and put these up here on the screen so we can show all of you. The first here is some of the destruction. This is an Iranian reporter standing in front of an oil facility in the middle of Tehran, one of the largest facilities which supplies the entire city. These are reportedly Israeli airstrikes, which not only struck the facility, but these black clouds started coming all the way up into the sky. And authorities there in Tehran are now reporting risks of acid rain, black clouds, and smoke across the entire city.
3:35Rory Johnston:So you can see that the entire thing was on fire. There were storm drains from which oil was actually flowing into civilian infrastructure that remained on fire. I mean, literally out of the scene of a movie. We also have this video from a CNN reporter who was on the ground in Tehran, actually showing the raining oil on top of everything in the surrounding vicinity. Let's take a listen.
3:58Saagar Enjeti:I want to show you something else because it's also raining. But you can see that the rain, the rainwater is actually black, also saturated. it appears with oil. And then if we look over there, you can see that the water that's running down here also is black. So that's what's coming down this morning, this sort of oil-filled rain that we have right now on the Iranian capital after the strikes took place.
4:26Rory Johnston:Oil-filled rain. And of course, that was immediately responded to by the Iranians who are targeting a lot of oil facilities across the region. So to get into all of that, where the price of oil will go and where the markets stand as of right now. We're going to welcome Rory Johnson. He is an independent oil analyst. He's going to join the show now. Joining us now, as I said, is Rory Johnson. He is the founder of CommodityContext.com, and he's a longtime friend of the show. Rory, thanks for joining us. Thanks for having me. Yeah, not under the best circumstances, unfortunately. I've been following your work quite a bit.
4:56Rory Johnston:Independent oil analyst has really forecasted things with a very honest view. And so we want to start with Donald Trump's first truth social and reaction to crude oil futures going over$100 per barrel. Let's put it up here on the screen. He says short-term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay. Only fools would think differently. So Rory, are you amongst those fools who think differently here about the price of oil? And where do you see things right now?
5:26Lindsey Graham:I'm definitely among the fools on that one. I think, as I was saying at the time when the president, you know, truthed that, it's kind of the worst thing he could say in the current moment. I think the important thing to keep in mind here is that the main thing the oil market is attempting to handicap is the duration of this disruption through the Strait of Hormuz and the broader attacks against infrastructure in the region. So when the president says, you know, don't worry, it's a short term thing, no biggie. I think the market's concern is that he actually believes that, because if he actually believes that, then this could this could go on much longer than anyone had feared.
6:03Lindsey Graham:I mean, going into this, I did not think there was any chance. I never thought I would see this in my career. This is the largest scale disruption of energy systems, at least since the 1970s. and potentially if this goes on much longer, potentially the largest in history. So if this continues going on and the president's statements make it seem like this is all under control, this is absolutely not under control. This is massive and prices are exploding. And the longer this goes on, the worse it's going to get.
6:34Jeffrey Sachs:How bad could it get?
6:36Lindsey Graham:I mean, it's one of those shocks where the supply loss is so large that what you need to do is you need to incentivize demand destruction across a whole variety of sectors, air travel, freight, consumer consumption, everything needs to go. And what, you know, when we think about the way this would manifest, basically, we have two sides of this. Either the prices rise and the incentives and shipping need to rise to such a level that people begin to risk making the transit through the Strait of Firmose, or the war ends and the Strait reopens. Otherwise, if we still have this 20 million barrel a day loss of supply from the gold system, and just to put that in perspective, that is roughly the exact same size of disruption, the size of demand loss that we kind of saw at the peak of COVID demand destruction in March and April of 2020.
7:26Lindsey Graham:During that period, we were all locked in. You know, planes were not in the air. So what we're talking about is kind of what price would be needed to replicate the conditions of the bottom of COVID. That's the kind of scary part about this. And the way this would play out is, you know, basically we in advanced kind of wealthy countries probably are just going to pay much, much higher prices to pump because those prices will be needed to incentivize those supplies of those fuels remaining in our economies. The rest of, you know, the developing world where they can't afford these imports, this is going to manifest as outright shortages for them.
7:59Lindsey Graham:So that's this way you're already seeing gas lines. You're seeing everything else. This is something that we already at this stage, we've already had such a massive kind of air bubble in the system of the loss of disruption and exports already. This is already a kind of a historic crisis. If this goes on longer, there's no telling how high we could go. $200 a barrel. It's like it's very, very easy to just say numbers that are higher because there is no number high enough to incentivize the level of destruction that we would need to see.
8:25Rory Johnston:That's crazy. Let's put C6 up on the screen. This was your analysis. You say, as someone who routinely mocks perma-bullish clickbait oil forecasts, I want to be exceptionally clear. Crude will go to$200 per barrel on route higher unless traffic through the strait resumes. Not clickbait, rather brutal physics and necessary economic incentives. So to put it into perspective, you know, everybody, not everybody's a barrel expert. What does that mean? What does that mean in terms of gas prices at the pump? Last time we talked Russia, Ukraine, you thought potentially$6 a gallon. What does that look like,$200 a barrel?
9:02Lindsey Graham:Yeah, so even as we stand right now today, the price of our Bob gasoline kind of futures are implying that we've already jumped back above$4 a gallon in the US. And that is going to stick and continue going higher. So yeah,$5,$6 a gallon. This is going to be, again, we need to just do something to break the demand cycle. And those are the prices it's going to take. What I should note is that while gasoline is going, you're going to mainly feel the loss of or the oil price spike in the gasoline price. What we're seeing is an even more acute disruption in middle distillates. So those would be your diesels, your jet fuels, et cetera.
9:40Lindsey Graham:And part of that is because the Middle East, in addition to being obviously the world's largest kind of single conduit of oil exports or crude oil exports, is also a major supplier of jet fuel to Asia and largely diesel to Europe. And the diesel to Europe replaced the banned imports from Russia following the invasion of Ukraine in 2020, which is roughly the last time that the oil market was exploding. And we were talking, you know, the last time I first jumped on this show. And this is the kind of situation we're seeing again. Even in the opening salvo of this, what we saw was jet fuel demand in Asia jumped to the equivalent of more than$200 a barrel already.
10:17Lindsey Graham:And part of what's crazy here is that the refined products market, particularly in Asia, is going to front run the impact that we're seeing from crude. And that's because, you know, as of a week and a half ago, tankers were still flowing out of the Strait of Vermeer. So it takes a month to two months for those tankers to get to their destinations. So it's going to be a month or two until we start to feel the loss of those crude supplies in those global refining systems. But what we're already seeing is that refineries, particularly in Asia, where they depend on this feedstock, they're terrified.
10:47Lindsey Graham:Their worst case scenario is shutting down. They don't like shutting their facilities down. It's very complicated, very expensive, very tough to get them back up and running. So they have preemptively reduced operating levels, let's say from 90 % to 65%, in order to kind of extend the runway. But what that's done is it's immediately cut supplies of diesel, jet fuel, et cetera, to the region. So this is why the product's impact is front running what we're even going to see in crude.
11:13Jeffrey Sachs:So we are obviously much more energy independent than we were in the 70s. Are there tools at the U.S. government's disposal that they could use to help blunt the impact for consumers?
11:24Lindsey Graham:Yeah, so I think the most important and obvious kind of tool in this toolkit is the Strategic Petroleum Reserve. And we actually saw, I just woke up and saw the news that the G7 with the United States is considering a release of strategic stocks through the IEA, potentially upwards of 300 or 400 million barrels, which would, that's exactly what should be happening right now. It's actually shocking to me that up until this point, the Trump administration has so kind of stubbornly refused to entertain the idea of an SPR release. And partly because they tied themselves in so many knots, lambasting the Biden administration about the use of the SPR in 2022, which again, at that time was a historic crisis.
12:04Lindsey Graham:And then because, you know, even in the big beautiful bill last year, the Trump administration had attempted to get more money for the SPR to refill because the SPR is effectively out of money now. The Biden administration had refilled, you know, 60, 70 million barrels, but then they ran out of cash because the rest of the cash had been remitted to Congress. They need more money to get to fill the SPR and they weren't able to get, I think the actual appropriation request dropped from like a 1.2 billion to like 118 million or Those are rough numbers. But, you know, you had a massive cut in that volume of crude, which is$100 million for refilling crude in the S.P.R.
12:41Lindsey Graham:is basically nothing. And we needed a lot more than that. So I think that's the situation we're in right now.
12:45Rory Johnston:So, Rory, what we've seen right now is effective closure of the Straits of Hormuz. I know that there are other pipelines which are operating. However, the Iranians, there's been other some reporting about potential strikes on those. If we do see shutdown with Aramco, also LNG, what does that look like, you know, for our global energy market? As you're saying, it's just demand destruction. People were just in the developed world in Africa. It's like, stop driving. You're not going anywhere. Is that what it looks like? Basically.
13:10Lindsey Graham:And I think, so there's important differentiation here. So when we talk about the closure of the Strait of Vermeuse, that's, let's say, you know, these numbers are all over the place. Let's say 20 million barrels, roughly 20 % of global supplies travel through the Strait. When those were effectively shuttered, I think of it as like a kinked garden hose, right? So, you know, nothing's coming through. But if it only lasted a day or two, you could just unkink the hose and things just kind of flow back to normal. What we were seeing in the attacks against energy infrastructure in the region, that's even the larger tail risk than the closure of the strait itself.
13:40Lindsey Graham:You know, if the straight closure is like a kinked garden hose, these facility attacks are more like taking a shotgun and then blasting off the faucet to which the hose is attached. Everything in the oil market is repairable, but that's a far larger, longer kind of repair operation. The other thing we've seen beyond that is that the pressure from that kinked hose has built back up. And the other issue is that a lot of the producers, most notably Iraq and Kuwait, don't have a lot of domestic storage for their for their crude. So when they can't ship it out, they basically start shutting in production.
14:12Lindsey Graham:And what we've already seen is as of yesterday, I haven't checked the numbers yet this morning. As of yesterday, Iraq had already shut in forcibly because of the lack of export optionality. They'd already shut in more than three million barrels a day, which, again, rewinding to 2022, when we would have last spoke. Look, that was the feared loss from Russia was 3 million barrels that we never actually saw. And that feared loss was enough to push oil prices above$120 a barrel. We already have realized that loss in the first week of this crisis in the Gulf.
14:46Rory Johnston:We have a real world loss of what we expected loss in 2022, just to put it into context.
14:51Lindsey Graham:Exactly. And we've already lost it. So that can be turned back on, but it can't be turned back on like, you know, flipping a switch. It's going to take weeks, you know, days or potentially weeks up to a month. And that is, again, these are massive volumes of crude and the system needs to open itself back up. And at this stage, the market and myself increasingly has no confidence that this that this conflict is going to end. Again, I never thought we would get this far. What we'd seen from President Trump up to this stage had been a series ever since, you know, 2019 when he killed General Soleimani.
15:26Lindsey Graham:It was quick, sharp. You had kind of almost a symbolic exchange of fire between U.S. forces and the Iranians. You know, the Iranians would, you know, this also happened in June of last year in 2025 during the 12-day war between Israel and Iran. you would kind of get these kind of feigned attacks that, you know, they weren't the big deal, but, you know, Iran couldn't be seen to just roll over. So it was kind of like we're going to hit you with a couple of missiles and a warehouse or, you know, a base. But, you know, it's not it's not a massive thing. And they can kind of just like, OK, that's fine.
Read the full transcript
16:00Lindsey Graham:And we'll pack up and go away. This time, however, they've gone full bore. You know, Trump has not let up as quickly. It's not been a flashy kind of cinematic event followed by a declaration of victory, which is I still think what he was hoping to achieve here. But the Iranians did not give him that opportunity. And therefore, we are now stuck in this kind of prolonged conflict. And the White House very clearly does not have any kind of durable escape plan. And they did not plan for any of these energy contingencies. We hear about things like shipping traffic, you know, war insurance coverage from the Treasury Department.
16:33Lindsey Graham:You know, this is stuff that if they were really planning this, they should have had this figured out months ago. The fact that we are just at this now, they are clearly reacting and they're flailing.
16:42Jeffrey Sachs:I mean, that is part of what is so crazy to me. Like, literally anyone, if you say war in the Middle East, the first thing they're going to think of is oil. Right? It's like the basic number one of what's going to be impacted if you have some sort of a war anywhere in the Middle East. My last question for you, because I know you've got to run and we really appreciate your time, is how does this ripple, we're focused on oil, we're focused on gas pumps, But how does this ripple throughout the entire economy?
17:05Lindsey Graham:Yeah, so I mean, you know, this is going to feel, if this continues, much like the kind of supply chain disruptions that we experienced in COVID. We talked about this kind of bullwhip effect, that when in COVID we lost all this demand, so supply contracted in and then demand recovered and supply wasn't able to keep up. This is basically we're starting on the second phase of that. We've lost the supply, and it's such a large portion of supply that we can't really make it up easily. so you're going to start rationing throughout the economy that's going to force all of these kind of various industries and countries into kind of more zero-sum competition where the system's not designed to go to to work like that so it's going to be really hard you know to predict the kind of knock-on effects here but if and again if this stage goes all of this is contingent on traffic not you know resuming through the strait but if that occurs what we're talking about is not a global recession we're talking about upwards of like some kind of global depression level event if this occurs.
18:00Wow.
18:01Rory Johnston:Well, sobering words. Again, not not a alarmist person, a very straight minded, independent analyst. We appreciate you as always, Rory. Thank you. Thanks for having me, guys. All right.
18:13Trita Parsi:So let me confess something. I grabbed a Sky Pop protein soda thinking, sure, we'll see. And I was fully prepared for a protein drink disappointment. But it tastes like actual soda, like crisp, cold, refreshing soda, the kind you crave on a hot day, except it has 10 grams of complete protein, zero sugar, and only 45 calories. And it's not thick or chalky and not that guess this is good for me kind of vibe. It's just soda with benefits. Protein doesn't have to be boring or feel like something you just check off your daily list. Sky Pop Protein Soda, big taste, real benefits. Get yours now at Target or Walmart.
18:44Bibi Netanyahu:Support for the show comes from Public, the investing platform for those who take it seriously. On Public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets which allow you to turn any idea into an investable index with ai it all starts with your prompt from renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20 year over year you can literally type any prompt and put the ai to work it screens thousands of stocks builds a one-of-a-kind index and lets you backtest it against the s p 500 then you can invest in a few clicks generated assets are like etfs with infinite possibilities.
19:20Bibi Netanyahu:Completely customizable and based on your thesis, not someone else's. Go to public.com slash podcast and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash podcast. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA, and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com slash disclosures.
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20:11Bibi Netanyahu:Lenovo, Lenovo.
20:17Jeffrey Sachs:Joining us now to discuss a number of recent developments, though, including the selection of a new Supreme Leader of Iran is friend of the show, Trita Parsi, of course, of the Quincy Institute for Responsible Statecraft. Great to see you, sir.
20:28Krystal Ball:Good to see you. Good to be with you guys.
20:30Jeffrey Sachs:So let's go and put D1 up on the screen. As I mentioned, a new Supreme Leader has been chosen. He is the son of the previous Supreme Leader. Tell us about the significance of this and how he may differ from his father.
20:42Krystal Ball:So let me first start off by saying that very few people on the outside really know much about what's going on in the Assembly of Experts, Shoray Khobrigan, who actually elects the supreme leader. And I definitely cannot claim to have any expertise. But from the outside, analyzing this and reading the tea leaves over the course of the last couple of years and months, I think it was quite clear that prior to all of this, Moshe Tawah Khamenei was not a leading candidate. His name was still in there, but there was a lot of resistance to him, not only from the previous Supreme Leader, but also from others.
21:21Krystal Ball:It seems to me that the killing of his father by Israel, the killing of his mother, his wife and his child really actually made him much more of a likely successor to the previous Supreme Leader, particularly also mindful of the fact that Trump came out and said that Khamenei, that Mosheva Khamenei would be unacceptable. the world. It's exactly the type of endorsement that I think he needed, because what the Iranians are trying to do right now with this choice is to signal total and absolute defiance. They chose someone who clearly, mindful of the fact that his wife, child, father, mother were killed by Israel, is in no reconciliatory mood.
22:07Krystal Ball:And as a result, I think, you know, the signal is very clear. The Iranians are sticking to their guns. They're not going to back down, they're certainly not going to surrender. That's the message they want to get across with this choice, even though I'm really strongly confident that he was not the leading candidate had it not been for what just happened last week.
22:26Rory Johnston:Yeah, because his father even preached against a hereditary monarch because he was pointing out the degeneracy of the previous Shah regime. That's what made it even more shocking. But it's like you said, the fact that Donald Trump himself said that's not somebody we want to deal with, it seems very clearly like That is the message intended foremost. It's a wartime leader, somebody who himself has personally suffered. Father is a martyr in terms of not only religious authority, but in terms of national message to the populace and to the world that they're not backing down.
22:58Krystal Ball:Yeah. And look, there's not a lot of interviews with him at all, frankly. He has a reputation of being more hard-lined than his father. I don't know if that's true or not. A lot remains to be seen. Mindful of the fact that he was almost never seen in public before. But if it is so that he is more hardline, I think, unfortunately, the regime is going to go in a much more hardline direction now since they're in a war situation. It just further shows that these type of escalations, conflict, et cetera, is exactly the opposite of what you want. If your desire actually is to move Iran in a much more open minded and liberal direction.
23:38Krystal Ball:We're seeing the clear opposite taking place in front of our eyes in which they just selected a person whose symbolism is to show defiance against the United States and anyone who wants to see reform take place inside of Iran.
23:51Jeffrey Sachs:What does this selection mean for the likelihood that Iran would actually pursue a nuclear weapon?
23:56Krystal Ball:Well, we have a scenario in which the fatwa of the supreme leader is now essentially gone with the supreme leader. That is the main interpretation of these fatwas is that they only last as long as the Ayatollah who issued them is alive. And then they need to be reissued by someone else. I mean, I don't think it will be particularly early in his agenda to reissue it. And there may be a tremendous amount of pressure on him not to do so. Because I think, you know, the shift in mood in Iran is very, very clear. there's a lot of argumentation that this was a mistake for them not to build it. I don't necessarily think that the capacity to do so without being detected, et cetera, et cetera, really was there.
24:40Krystal Ball:But I think there's a strong view in many quarters in Iran that the previous Supreme Leader simply wasn't decisive enough to go in either direction. He didn't build a bomb. And at the same time, he was not willing to do the kind of full-scale engagement with the United States to get a deal done because he kept on refusing allowing any Iranian officials to directly speak to Trump, which I think was a mistake. That is now all, you know, extremely unlikely to happen. I fear very much that the selection of Khamenei Sun now means that any exit ramp that potentially was available is even more difficult to materialize.
25:21Krystal Ball:Now, Trump could potentially just choose to declare victory, walk away and say, look, I killed the Supreme Leader. I destroyed so much of their nuclear program, so much of their missile program. The country has been set back 10 years, he said, and just declare victory and leave it. I don't think it would end there because from the standpoint of the Iranians, if that were to happen, they would actually be in a much worse situation compared to the beginning of the war. because the country is destroyed. They can hardly export any oil. They can't get any cash. And no one's going to come in from the outside to rebuild the country.
25:57Krystal Ball:And their pathway towards sanctions relief is essentially blown up. So I don't think that's an acceptable situation for them. I suspect that they actually would continue the war, even if Trump pulls out. They would continue to target GCC states. They would continue to target Israel. I think they're going to fight until they get an outcome that they believe also puts them, not necessarily in a better position, but in one in which their prospects of getting to a better position is greater, meaning that there is some sort of an arrangement indirectly or directly with the United States. When some sanctions relief, the country can be built up.
26:30Krystal Ball:Again, they can sell their oil, et cetera. And that, you know, at this point, they've lost so much, they have nothing to lose to go even further and trying to make sure that they use their last resources in order to be able to turn the tables around, which is kind of the same situation Trump is in. I think he realizes this was a huge mistake. He's lost and he's not desperately trying to turn the tables, turn this failure into a victory before the market crashes and his own base turns against this war. His own base has not quite yet turned against the war, at least not in a very forceful way. So I think he thinks he still has some time and he's throwing everything at the Iranians in the hope of turning this defeat into a victory.
27:11Rory Johnston:Yeah, very good point. Now, we did originally want to talk to you about some of this failed diplomacy and potential off-ramps you're talking about. Let's put this up here on the screen. It all kicked off with a very interesting statement over the weekend, where the Iranian Interim Leadership Council approved that neighboring countries would no longer be attacked unless an attack on Iran originated from them. This was seen as a potential off-ramp where they said, look, you don't use bases to attack us, then we won't attack you. However, Trump immediately then came out, and let's go to the next one, guys, where he said Iran, which is being beat to hell, has apologized and surrendered to its Middle Eastern neighbors, promised it won't shoot at them anymore.
27:52Rory Johnston:The promise was made only because of an Israeli attack. Your analysis is that his immediate shootdown of that potential off-ramp immediately actually re-escalated the situation. Can you get into it? Yes.
28:04Krystal Ball:So there was very sensitive negotiations taking place initiated by regional states. The Iranians had come to an agreement with them that there would be a movement towards not targeting them unless actually their sword was used for attacks. And in some cases, they have been. This started off then with this video message by Pizesh Kion, in which he actually went further than what had been agreed upon within the Iranian system. He issued a personal apology, which, of course, took all the headlines. This actually generated a tremendous amount of anger within the Iranian system against him. And he came out and kind of retracted it and said that he was misunderstood.
28:43Krystal Ball:And the next step was then for some of these GCC states to observe what happens. Will the Iranians actually implement that and then issue their own statement? It would take a couple of hours. In between, Trump comes with his truth social. And as you see there, he insults Iran, he humiliates Iran, and then he says that Iran will be hit very hard today. And only a short period after that, the United States hits the desalination plant in Reshma Island, which is a major, major escalation. It is also a violation of Article 54 of the Geneva Convention's Protocol 1. So immediately after that, the Iranians started pounding GCC states as well as Israel.
29:23Krystal Ball:And this whole thing just fell apart. Now, it is not entirely clear to me, I've not been able to get to the bottom of this as to whether Trump did this deliberately because he wanted to sabotage that mediation effort or whether this was something that essentially further reflects that the U .S. government is somewhat of in disarray, that the GCC states had informed the U.S. of this deal, informed them of the status of these negotiations. but Trump was not in the loop or didn't care, didn't understand that him coming out and issuing this tweet and going forward with this attack would completely destroy matters.
29:57Krystal Ball:But this is what happened. And the end effect is that this diplomacy collapsed. Now, I do believe that there's some other efforts being made right now to resurrect it, but it tells you how delicate the situation is and how problematic it is if the United States is really just improvising this war at this point.
30:17Jeffrey Sachs:Yeah. And then Israel, of course, directly interested in broadening this war as much as they possibly can. And seeming to, we just talked about how they were blaming the UAE for this drone strike on the desalination plant in Iran. UAE is saying that is not true at all. But you can see the incentives there of Israel. And we can put D4 up on the screen. This is one of the strikes that happened from Iran shortly after this, you know, attempted diplomacy fell apart. That is Dubai International Airport. That is, I mean, I'm sure all three of us have been there multiple times.
30:48Rory Johnston:That was a jet fuel hangar, too.
30:50Jeffrey Sachs:And yeah, to see this is pretty astonishing. Busiest airport in the world, or at least it was. And meanwhile, on the escalation front, let's put D5 up on the screen. U.S. is deploying yet another, so this will be the third one, carrier strike group to the Middle East. Just an extraordinary amount of firepower being amassed in the region. So it looks like this thing is only going in one direction and it is not towards an off-ramp.
31:15Krystal Ball:Certainly true. And I think what you said about Israel's constant messaging that this was done by Bahrain or by the UAE has infuriated these states because it's so clear. The Israelis want these GCC states to fully enter this war because not that that makes a huge military difference, but because it further ruins Iran-GCC relations for decades to come. What the Iranians are doing already now is going to create a tremendous amount of problems between the GCC and Iran going forward. There's a lot of anger, obviously, against the Iranians and the GCC, particularly amongst the states that went out of their way to make sure that this war was prevented and are still trying to stop it.
31:58Krystal Ball:But what the Israelis are doing is that they're trying to get everyone directly involved in this conflict in order to make sure that even once this is over, Iran's relations with these states are going to be in a terrible state for decades to come. If I could just add one thing. As much as we're talking about, like, look, this war is, you know, Trump is improvising it, he's lost control. I think we have to be clear that from the Israeli standpoint, this is a splendid success. It doesn't matter to them if it's Moshtaba or it's Hassan or whoever it is that becomes the next supreme leader. None of these things are important.
32:32Krystal Ball:What's important for them is that the country is being bombed to smithers, that their power is being set back decades, that the balance is going to be shifting in Israel's direction at the end of this, regardless of exactly how it ends politically, the way it ends militarily, is that Iran's resources are now really being drained, and its military capabilities are, even though they may, I don't think they will at all surrender, even if that is not a surrender that it ends with, militarily their capabilities will be set back dramatically, and that shifts the balance of power in Israel's direction, which is exactly what they're looking for.
33:06Krystal Ball:It just so happens to be that the United States is paying for all of it.
33:09Rory Johnston:Right. They don't care at all about a stable Iran. In fact, they don't want Iran to be stable. They don't even care about American gas prices. They don't care about American lives. They care least about the GCC countries. We're the only ones that have any interest. Oh, Asian markets are tumbling? Boo-hoo. You know, they could care less. One of the things we've also seen, though, is the explosion of civil conflict in Iraq. Let's go ahead and put D6 up here on the screen where we've seen Iraqi resistance units who are in direct contact. This was a claim with U.S. forces. It hasn't been exactly confirmed, but we definitely know that there's a lot of stuff going on in and around Iraq where there's been significant consternation.
33:46Rory Johnston:What is the possibility? You've talked about this on the show before about resistance in Bahrain with the Shia population in Iraq, attacks potentially there, and a broadening of some sort of like Arab Spring-style uprising in the middle of all this conflict if it continues to last?
34:02Krystal Ball:We don't know quite yet exactly how strong the Iranian intelligence capabilities are. I mean, clearly they have capabilities, but their ability to actually foment some unrest or support it in Saudi Arabia and the eastern provinces or in Bahrain. We've already seen some sporadic, spontaneous protests, particularly in Bahrain early on. So that is an unknown. But we definitely know that in Iraq, there are plenty of armed militias that are still quite loyal to Iran. They believe that particularly if the Kurds were to go in, I think that definitely would have activated these other Iraqi militias against this.
34:41Krystal Ball:And all of Iraq would have been once again being thrown into some form of a civil war. So, you know, the idea that this would be quick, that this would just entail Iran, all of that was disproven within the first 48 hours. But it can still get much, much worse than what we already have seen, particularly if those groups are activated. We've already seen that there's open fighting now between Hezbollah and Lebanon. And, of course, the Houthis are still sitting tight. Whether they're sitting tight as a warning to Saudi Arabia not to enter the war and they would only go in if the Saudis go in. or whether they're waiting for a moment in which the choke point in the Strait of Hormuz is becoming really, really high.
35:21Krystal Ball:And then they add another problem to it by closing down the Red Sea again, which would really just be devastating to the entire global economy. It doesn't remain clear to me exactly what the strategy is. But I think it's very interesting that so far they've been sitting tight. But I don't think that that is because they don't have the capability or the willingness to get in. And it seems to be a much more complex calculation that they have that is all about timing rather than willingness. I agree.
35:46Jeffrey Sachs:Leslie, let's put this piece of news up on the screen. Saudi American diplomats in Saudi Arabia have been ordered to leave. State Department said to order diplomats to go. Ordered departure of U.S. employees in the kingdom indicates senior diplomats are bracing for possible surge in violence in the war with Iran. What do you make of this development?
36:04Krystal Ball:It shows that at this point, the Iranians are the ones that are determining the geography of this war. They have already been able to hit major CIA stations inside of some of the GCC states. They have also then later on identified where those CIA personnel moved and they hit those places. So their ability to strike, particularly with these drones that are not being picked up by the air defense systems in the same way, precisely because they're moving so slowly. If they were moving faster, they actually would have been detected. It has given the Iranians a significant benefit. Saudi Arabia and the GCC states are now asking Ukraine for help because Ukrainians have now four years of experience dealing with some of these drones that the Iranians are using.
36:51Krystal Ball:So we're seeing, I mean, this war is just expanding. It is providing a tremendous amount of cost. But I do think that the Trump administration has managed to keep the cost of this war rather hidden from the American public, not just in terms of the tremendous amount of money that is being spent, but also the tremendous amount of facilities that are being destroyed. We're talking about some fad radar detectors that cost up to$1 billion that have been destroyed and will take years to rebuild. But also do note that the administration is not saying a word about the number of casualties. They have mentioned the number of dead, not the number of casualties.
37:32Krystal Ball:Yes.
37:32Rory Johnston:Yeah. Great point. And I mean, not to mention even every day I read about some Pakistani laborer who got killed or hurt multiple people in Bahrain and Kuwait. I mean, there's a lot of civilians who've been caught up and not, I mean, and then in Tehran, God only knows the number of people who've been killed, probably in the thousands at this point. It's such a disaster. Thank you very much, sir. I'm sure we'll see you again. Thank you so much for having me.
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40:05Jeffrey Sachs:So we wanted to ask in this show, just how bad are things and just how bad could things get? Professor Jeffrey Sachs, who we've had on this program a number of times, was speaking to Glenn Deason over on his YouTube program. And he said that he believes we are already in the early stages of World War III. Let's go ahead and take a listen to that.
40:24Saagar Enjeti:Israel is a crazy rogue state with half its political leadership in the mindset of the fifth century BC. Reading some text from King Josiah. And Israel has just plunged the world into probably the Third World War, but into a phenomenal economic crisis. The timing, the instigation is Israel's. The fact that the U.S. goes along with it is because it's completely coherent with the U.S. hegemonic project. But this is Israel. Complete madness. And because of the hold of the Israel lobby in the United States, that madness isn't even examined.
41:21Jeffrey Sachs:I don't want to be alarmist, but I also want to be clear-eyed about where we are and where this could go. And already we have, I can put the next piece up on the screen. We have reports that Russia is providing Iran with intel, which makes perfect sense about the locations and movements of American troops, ships and aircraft, according to multiple people familiar with U.S. intelligence reporting on the issue. In the same way, we viewed Russia's invasion of Ukraine as an opportunity, hey, let's get involved. Let's do a proxy war. Maybe we can hurt Russia. Maybe we can degrade their capability. They are viewing this as a similar opportunity.
41:55Jeffrey Sachs:In addition, U.S. also has intelligence suggesting, I'm reading from the CNN report, that China may be preparing to provide Iran with financial assistance, spare parts, and missile components. Three people familiar with the matter said, though Beijing has stayed out of the war up until now, China relies heavily on Iranian oil and has reportedly been pressuring Tehran to allow safe passage for vessels through the Strait of Hormuz. So we have directly impacted their interests in terms of their energy landscape. Although I don't want to overstate that because China, I think some 10 to 15 percent of their oil comes from Iran.
42:29Jeffrey Sachs:So, you know, it's not great for them, but it's not a total and complete disaster the way that it has been portrayed. I mean, the people who are arguing, oh, this is all about hurting China. This is all about hurting China. The math doesn't really math when you consider that the country that is being, you know, one of the countries that is being hardest hit by this is us, their geopolitical rival. So when you look at that, when you look at the fact we're already in this proxy conflict in Ukraine with Russia. When you look at, you know, you've got a proxy conflict going on in Sudan as well. Obviously, we're, you know, in our own hemisphere, Venezuela, you know, kidnapping Maduro and, quote unquote, taking over there.
43:04Jeffrey Sachs:Now we're belligerently threatening Cuba as well. It does have some of the ingredients, and especially with the uncontrolled escalation spiral that we're already in, it does have some of the ingredients of a broader conflagration, especially when you add on the table the possibility of deployment of nuclear weapons, which I don't think either one of us can rule out.
43:23Rory Johnston:I mean, I wouldn't put it at zero, which is scary enough. I don't know what five. What are you at? I'm at like 3%, which is, I mean, it's too high. For what? Nukes or World War III? Yeah, for nukes. Okay, but let's talk about the whole World War thing. So even when people say World War III, the expectation of World War III is it's going to look like World War II. Well, World War II looks nothing like World War I, okay? So the idea that the new frontier battle is going to look exactly like some carbon copy of something that happened 80 years ago, is preposterous. It is going to look actually exactly like it does right now.
43:54Rory Johnston:You and I consider the Ukraine war to be a proxy conflict, yes? Well, okay, that is a global conflict because all of NATO, the United States, sanctions, the entire economic system, all of these U.S. institutions which were designed post-World War II were leveraged against Russia. That literally, to me, is basically warfare. You could call it what you want, whether U.S. boots are on the ground. If Russians are providing intelligence, it's the same thing. Also, who are we to complain? How many times do we do battle damage assessments? And we do more for the Ukrainians than the Russians have done for Tehran so far.
44:26Rory Johnston:And now we're complaining. Good luck selling that to Moscow.
44:29Jeffrey Sachs:I mean, it's sounding close when you consider all of the weapons transfers and the financial support and the intelligence and the training that we've been doing for years and years in Ukraine. And the coup that we phoned in. How about that?
44:43Rory Johnston:Yeah, exactly. Not to turn it into a Ukraine thing, but that already was a proxy conflict. This is a proxy conflict. But it's got a long history in the post-World War II era. This is what global conflicts look like. Afghanistan became globalized. Vietnam became globalized. Syria, globalized. Libya became globalized. Every one of these interventions, the Iraq conflict, right? The war in Iraq was not between the U.S. and Saddam. That portion only lasted like three weeks. It was the U.S. versus Iran versus all of these other – during the Syrians, during Al-Qaeda, like all of these people coming from all over the globe.
45:20Rory Johnston:Same in Syria. I mean Qatar, Saudi Arabia, the United States, Israel, Hezbollah from Lebanon. Like all of these people were involved. So World War III, if you will, is going to look a lot more like this. Because of mutually assured destruction and nuclear weapons between the great superpowers, it will look a lot more like those conflicts that happened throughout the Cold War. It is less destructive in terms of our overall human life, but it could still be an abject disaster. How many people died in the wars in Iraq and Afghanistan? Americans. Maybe 7 ,000, right? I mean there were more people killed in a single hour of combat in some of the world wars in that.
45:59Rory Johnston:But that doesn't mean that the strategic implication was not an absolute nightmare for all of us. So I think that's why we need to recalibrate some of our expectations. I don't think Jeffrey Sachs is wrong. Really what I'm the most worried about is the climb up the escalation ladder, which we talked about, from oil and to water. Because there's no coming back from that. Like once you start going after civilian infrastructure, it's a disaster because everyone has to fight to the death. There's a clip going around I was telling you earlier where Trump said unconditional surrender. I talked about that with Tucker.
46:29Rory Johnston:And Tucker made a comment and he was like, unconditional surrender means that foreign troops get to rape your wife and daughter. Provocative. But, I mean, look at the history of unconditional surrender. That is unambiguously true. Randy Fine and Laura Loomer are all like Tucker says American troops are going to be. It's like that's not the point, guys. The point is is that when you're faced with that, as the Germans were with the Soviet Union, you want to know how many? I mean, I don't know how people talk about it. It's something like 2.5 million rapes that occurred over the battle through the conquest of Germany.
46:59Rory Johnston:It's dark. Like it's really, really dark. Genghis Khan, that was unconditional surrender. And that's the point is that when you impose that on a foreign populace, you have to do either what the United States or the Union Army did to the south during the Civil War is burn their civilian infrastructure to the ground, take away all their food. In World War II, literally have to invade and go block by block the Soviet Union. They incurred 400 ,000 casualties in 1945. Just in the last six months of the war, there were 400 ,000 casualties on the front line in the Battle of Berlin. Think of the United States.
47:32Rory Johnston:How did we get unconditional surrender in World War II? We had to drop two atomic bombs to force them. Well, I don't know that we had to. Okay, well, it was either two atomic bombs, which, I mean, if you look at the decision matrix, it was either two atomic bombs or hundreds of thousands of American casualties. There was no other option. That was it. If you wanted unconditional surrender. And even then, we still had to revise our unconditional surrender to make it so that the emperor could stay as some sort of figurehead. That's what it takes to achieve something like this. And that's effectively like we're on the road now and it's only been eight days.
48:07Rory Johnston:Usually it doesn't even take, it usually takes much longer than this to get to some sort of disastrous position.
48:11Jeffrey Sachs:Also, you have to think of this from the perspective of the rest of the world, right? It was one thing when Trump is like, okay, we're going to dominate our hemisphere, right? We're going to do the, you know, we're going to do whatever we want. We're going to make sure we've installed these puppet regimes or we've kidnapped leaders and we've brought everybody to heel. We're going to do that. And Russia and China, you've got your, you know, China in particular, you've got your spheres of influence. You do what you want over. Okay, that's one thing.
48:37Rory Johnston:They love that. That's one thing. They're like, we believe. We're like, sure. Don Roe doctrine. We're cool with that. Yeah. They're like, then we get Taiwan and Ukraine is ours. Right.
48:45Jeffrey Sachs:But now, especially when you consider we've, you know, Trump has not solved the Ukraine conflict. We are, you know, in endless war in Ukraine. We're locked in a proxy war with Russia and Ukraine. OK. And now you add to the mix, oh, by the way, we're going to destroy Iran. We're going to, you know, do regime change or collapse the regime or whatever in that region. Well, that's not our hemisphere. It becomes clear that the point is to dominate the entire world. The point, the response from the Trump administration to, you know, the decline of our empire and the decline of our superpower status as the sole global hegemon is not to say, all right, let's come to some sort of accommodation with the world.
49:28Jeffrey Sachs:The response is no, we're going to have a$1.5 trillion defense budget and we're going to dominate the entire world. We're going to do whatever we want to whoever we want, no holds barred, law of the jungle. And I have to think that if you're a China, if you're a Russia, if you're any other significant power in the world, that is an unacceptable approach to you. So it is intentionally bringing us into direct conflict with these other countries. And again, this isn't theoretical. This is already happening now, especially with China considering involving themselves directly in our war in Iran. And you can understand why.
50:06Jeffrey Sachs:We're messing with their stuff. We're messing with their oil. and we are also asserting to the world that we are going to try to dominate the entire world. We're going to blow up the UN and these other institutions of global cooperation. We're going to put Trump at the head of the quote unquote Board of Peace and allow him to serve in perpetuity and get to appoint his successor and you have to pay to get in and ultimately he has veto power. That is the direction that they have clearly broadcast to the world. And so yeah, the rest of the world at some point and already is going to have something to say about that.
50:42Jeffrey Sachs:So that's one piece. The other piece here is the possibility of the deployment of nuclear weapons because now you have, obviously, Israel also nuclear power and completely psychotic and parts of it driven by these religious fanaticism, parts of our government driven by religious fanaticism, which makes this whole thing scary as well. Obviously, Iran is a literal theocracy, so you have religious fanaticism there as well. And you had these very ominous comments recently from Netanyahu. Let's put E6 up on the screen, where he is promising some sort of a major surprise for Iran, he says, that will completely destabilize the country.
51:21Jeffrey Sachs:Netanyahu is asking Iranians to lay down their weapons and surrender or face death. He said, quote, the moment of truth is approaching and he will free Iran and make Iran and Israel allies. OK, so we have that. So what is that major surprise? That's a little uncomfortable. And then this also just came out. We can put E7 up on the screen. You've got this guy who makes these like doomsday bunkers that are supposed to be, you know, to allow you to survive drone attacks, ballistic missile strikes, or even nuclear Armageddon. And he claims that two senior cabinet members in the Trump administration are among his clients.
51:56Jeffrey Sachs:One of them texted me yesterday asking me, quote, when will my bunker be ready? So not exactly comforting when the people who are in charge here are preparing their doomsday bunkers and trying to rush delivery, concerned about how quickly they will have access to this anti-Armageddon-proof bunker for themselves.
52:19Rory Johnston:Yeah, I mean, I don't know if it's true or not, but it is crazy. And I do think, you know, to the whole World War point and actually what you were saying about how others will react. I'm very World War I brain. So to me, this it's like everyone's like, oh, this is going to cause World War III. And I'm like, no, I don't think so. If we were to have like a real massive thing. But what it does is it shatters the illusions and the understandings that we all have. So there was the Boer War, which a lot of people don't know about, but, you know, it was between Britain. And what it did is it pierced, like, this idea of splendid isolation.
52:49Rory Johnston:It really heightened the tensions between the Anglos and the Germans. It led to the Triple Entente. But more importantly, it normalized, like, a lot of the modern trench warfare, the concentration camp. That's where a lot of that stuff came from. But what it did is it set the stage for, well, wow, Britain is not nearly as invincible as we all thought. Which means we need to rearm because, oh, it's a paper tiger, maybe. and that's what leads to the Great Clash in 1914. Well, I could see this very similarly. It's like, you have this, I mean, nobody could say that this was essential for US security, just like Iraq.
53:21Rory Johnston:So you have this, you know, foreign adventurous conflict. Some Americans will die, but not hundreds of thousands or anything like that. I'm not minimizing their deaths in any way. I'm saying domestically, we can absorb that. If we could absorb 7 ,000 casualties from the global war on terror, most people, how did the GWAT impact them? Well, we all knew somebody who maybe you have deployed and came back with PTSD. But for the most people, it was high gas prices, bad politics, et cetera. But it wasn't like an attack literally on our everyday civilization. This is very similar. Most people will be very upset, but it's not going to directly impact your life in the way that a real war would.
53:57Rory Johnston:But China, Russia, any of these other countries, what they're watching for is any of the kinks in our armor. Interceptors, for example. The breakdown in the global order. The GCC countries, after this is all over, you really think they're going to be great friends with America? So we have to rebuild all these radar systems. You need permission. You have status and force agreements with every one of these countries. Are you re-signing? I don't think so. I really don't. Or we're going to have to bribe the shit out of them with weapons we don't have. Or we'll have to take from somebody else.
54:28Jeffrey Sachs:And how about this? Let's say China does take this as the opportunity to move on to Taiwan. What then? We're not ready for that. Not militarily. I mean, I think I personally think it would be insane to get in a fight with China over Taiwan ever, but especially at this point. But we're also not prepared domestically to we have not spun up the semiconductor capacity that we need. We're fucked. So, I mean, that's and that's the reason that anyone cares about Taiwan. Really, it's not about human rights and democracy, total and complete bullshit. It's the semiconductors. That's the whole thing. We aren't prepared for that.
55:01Jeffrey Sachs:So what are we going to do then? Then we're, you know, in a direct conflict with China. So I don't know. I mean, I do sort of agree with Jeffrey Sachs and also with your point that in a sense, we are already in that conflict. Now, it doesn't look like World War I. It doesn't look like World War II. To your point, it's not going to, especially in, you know, the nuclear age where you have not just us, but Israel and Russia and China, all these, you know, nuclear powers that are, you know, hopefully not itching to destroy the entire world, hopefully. But in terms of the lines of conflict and being engaged in these various proxy fights, I mean, it's already on.
55:39Jeffrey Sachs:And there's something else that I saw online that I thought was an intelligent point as well. You know, we talked a lot in the show about the possibility of boots on the ground. And we're talking about specifically, you know, probably special forces to begin with, at least raid into Iran to try to recover this loose nuclear material, whatever. But in a broader sense, we already have boots on the ground. I mean, this is a regional war and we have a lot of American service members who are in the region, boots on the ground, getting killed in action right now and getting wounded. We don't know how many right now as part of this fight.
56:07Jeffrey Sachs:So in a sense, it's a bit of a distinction without a difference because there is no doubt there are already American service member boots on the ground in the middle of this war in the theater of combat where all of the action is happening.
56:20Rory Johnston:Of course. Yeah, you're right. We have boots on the ground and the forward deployed bases, which for what to defend who Israel? Well, no, they would say, no, it's not to defend Israel. It's to defend the Gulf countries. How's that working out? How's that working out for the Gulf countries? They're furious.
56:32Jeffrey Sachs:I'm feeling very defended right
56:34Rory Johnston:now. They are furious. On the timeline, Emirati billionaires with massive amounts of money invested here are all posting about how upset they are with the United States. Also, just so people know, the billionaires are the cutouts for the royal family. That's how it works over there. You don't have free speech. You don't put out long essays criticizing the U.S. government without at least tacit admission or without tacit permission from the monarchy and the people who are in charge. These are all messages which are intended for the United States. Again, not that anybody cares. Last point on this, because it really makes me upset.
57:09Rory Johnston:Our actual allies, like really good allies, South Korea and Japan, their stock market, South Korea's stock market is down 14%. Japan is down like eight. It's a disaster. The vast majority of their oil comes from the Middle East, their economies are getting hammered and we're losing, we're taking away possibly interceptors and others. Like those, I mean, South Korea, Japan, these are not Israel where we do 53 billion in bilateral trade. I'm talking about hundreds of billions, trillions of dollars for the global economy. And those people, I mean, get hung, left out to dry by Washington. It's so disgraceful.
57:43Rory Johnston:All right, let's get to Lindsey Graham.
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59:50Rory Johnston:Turning now to the person who should be having the most fun in this war, Lindsey Graham. He's at the height of his powers here in Washington. How did he get there? It turns out by colluding directly with Prime Minister Netanyahu of Israel and their own intelligence agencies using their tactics to lobby Donald Trump behind the scenes and now openly bragging about war and death and all the money we're going to make from this war, how we're even going to free Cuba on Fox News airwaves. It's beyond 2003 madness. Let's take a listen.
1:00:19Saagar Enjeti:This regime goes down. We're going to have a new Mideast. We're going to make a ton of money. Nobody will threaten the Straits of Hormones and we're going to win. Israel and the United States, you just wait to see what comes in the next two weeks. The next two weeks meaning what? We're going to blow the hell out of these people. This regime is in a death row now. It is going to be on its knees. I'm not looking for a fair fight. If we get in a fight, I want to win it. I want to win it quick. I'm in Miami. You see this hat? Free Cuba. Stay tuned. The liberation of Cuba is upon us. It's just a matter of time now.
1:00:58Saagar Enjeti:You see this hat? Make a run great. President Trump said the only way to make Iran great is for the people to take over. We're marching through the world. We're cleaning out the bad guys. We're going to have relationships with new people that will make us prosperous and safe. I've never seen anybody like it. This is Ronald Reagan plus. Donald Trump is resetting the world in a way nobody could have dreamed of a year ago. He is the greatest commander in chief of all time. Our military is the best of all time. Iran is going down and Cuba is next.
1:01:31Rory Johnston:Does he even have a hat that says America on it? You know, I mean, how many hats does this guy have of foreign countries? It's crazy.
1:01:37Jeffrey Sachs:I mean, do they hear him? We're marching through the world. I mean, we're cleaning out all the bad guys. This is 2005 rhetoric. Ronald Reagan plus. It's like, Jesus Christ. I mean, it's worse than 2005 rhetoric. Genuinely. We're marching through the world. Insanity. And yet, you know, he's getting a little nervous about the oil situation, too. I'll read this. I don't think we have this as an element. But he says in this tweet, our allies in Israel have shown amazing capability when it comes to collapsing the murderous regime in Iran. America is most appreciative. Speak for yourself. However, there will be a day soon the Iranian people will be in charge of their own fate, not the murderous Ayatollah's regime.
1:02:15Jeffrey Sachs:In that regard, please be cautious about what targets you select. Our goal is to liberate the Iranian people in a fashion that does not cripple their chance to start a new and better life. When this regime collapses, the oil economy of Iran will be essential to that endeavor. So when they were murdering schoolgirls, he didn't have any problem with that. He was on air, ecstatic, we're marching through the world, blah, blah, blah. Now that the oil is threatened, oh, that's too far. That's a bridge too far, Sagar. We can't have attacking any of the oil impacted. That would be a real problem for Lindsey Graham.
1:02:46Rory Johnston:But here's the reality and the reason why is that, again, America has an interest in a stable Iran afterwards. Why? Because we want the price of oil. We're the global empire. Israel doesn't care. And yet for him to be chimping out over this, it's like, dude, this is what you signed us up for. And let's go and put F2 on the screen because this shit is so crazy. To help make the case on Iran, Graham traveled several times to Israel in recent weeks, meeting with members of the country's intelligence agency. Quote, they'll tell me things our own government won't tell me, he said. He spoke with Prime Minister Netanyahu, coaching him on how to lobby the president for action.
1:03:28Rory Johnston:I mean, you directly have a senator, United States senator from South Carolina, who is traveling multiple times to the country of Israel where he's bragging about it. He's meeting with them. He's being coached by them, coaching them. I mean, they talk about his long game going all the way back to 2015, about him sucking up to Donald Trump after initially getting into it on the campaign trail, about how he historically would butter Trump up, about comparing the Ayatollah to Hitler, and saying that the only thing you have to fear is fear itself, saying FDR, he's like, you're going to be one of the greats, reminded Trump about ripping up Obama's nuclear deal at every turn.
1:04:07Rory Johnston:Quote, White House aides even would call him the annoying, crazy uncle, because he would always be showing up at Trump's golf clubs, just sitting in his ear, talking, whispering sweet nothings about how good it is whenever it comes to Iran. And he's the proponent, not only, as they point out, of Iran, but Lebanon. He wants to widen the war. He's fundamentally with Israeli interests. And look, I won't speculate to Senator Graham's personal reasons for supporting this, but look, here's one at least, I think, fair hit beyond any of the stuff about his own personal life. This guy doesn't have any children.
1:04:44Rory Johnston:He doesn't have any investment in the future of the country. He's in his 70s. This is all just a game for him, Like at an intellectual exercise, he wants to be Richard Russell or any of these other senators and get their name on a building. He had a great Senator Fulbright and get a scholarship named after him. Like that's what's driving him, not any of our prosperity, any of our interests. And that's why it's so sickening.
1:05:05Jeffrey Sachs:This is another reason why the old men in charge of this country, where it's a problem, because they start thinking about their legacy and start doing insane things, apparently, is a problem that we're having right now. Because I think that's part of the calculus for Trump as well. He wants to leave his mark on the world. And I don't think he really, you know, gives a shit whether it's a good mark or a bad mark.
1:05:23Rory Johnston:Or the Ayatollah. He was 86. You know, he was super cerebral. That's what everybody said around him. He doesn't make any decisions. He's an old man. He just wants to die a martyr. He didn't care as much anymore. Yeah, we gave it to him. Congratulations.
1:05:34Jeffrey Sachs:He accomplished his goal with our help. And just look at this next, the response from the Iranian foreign minister to this revelations about Lindsey Graham, which, again, I just want to sit on for a second. Just think of how crazy this is. He is going to a foreign country, getting intelligence from them, coaching their leader about how to drag us into a war, how to convince our president to take us into a war and apparently was successful. So he said here in response to this very article in Iran, an official could never travel to another country to collude with a foreign spy service on how to coach our own president into doing the bidding of foreigners.
1:06:11Jeffrey Sachs:We would ask what the foreign country may have on that official and promptly charge him or her with high treason. And if we were a functioning society, we'd be thinking in the same direction. That is how utterly insane this is. And with Lindsey Graham, you know, you guys may remember going back to he was actually in that presidential primary as like an also ran in the 20, you know, 2016 presidential election. Fierce critic of Trump because he worried that Trump would not be excited about getting into these wars based on Trump's rhetoric at the time as being, you know, against the Iraq war, etc.
1:06:47Jeffrey Sachs:Then he turns into Trump sycophant. Then, you know, he's very critical of Trump after January 6th. But very quickly, he realizes, OK, the way to be able to manipulate this man. And again, this is not to absolve Trump at all. Trust me, I hate the man. And I think he is leading the country and the world into utter disaster. And it is 100 percent all on him. But to understand the forces around him, he thought that the best way to manipulate Trump would be to get back in his good graces as quickly as possible after January 6th. And so that's what he did. And we saw, you know, he was the first to endorse him.
1:07:18Jeffrey Sachs:He has been playing this game for a while now, all to effectuate exactly this outcome. And so when you see him on Fox News and he's the happiest man on the planet, watching bombs rain down and murder little schoolgirls and oil fall from the sky and all of the region in flames. And he's just happy as he could possibly be. Yeah, this is the fulfillment of a lifelong. And I do actually think it's just an ideological goal for him. Like he has been very consistent in his neocon war mongering convictions over many, many years. And here he is. He finally found the guy who was willing to, you know, go where no president had been willing to go before.
1:08:02Jeffrey Sachs:I don't know if you saw Tony Blinken talking about that. The Israelis actually tried to use the same approach with Obama where they were like, well, we're going to bomb Iran no matter what. So you better be with us. And Obama was like, no. And guess what? It didn't happen. You know where I learned about that? The idea that, oh, we had no choice because Israel's going in. No, you had a choice. The choice would have been to say no to Israel, but nobody, you know, he seems completely incapable of doing that.
1:08:27Rory Johnston:The moment I came to love Dr. Parsi is when we were all in school, and he did two or three weeks on that exact decision, the decision point. Oh, really? Of 2009. He made us read all the profiles and everything. And it's funny because all of the students were like hardcore neocons. And so this was like a shocking development to their minds about Israeli pressure. And I really came away from that class being like, man, he really – remember, this was a long time ago for me. So I was in a very different phase of my understanding of the American empire. And I was like, yeah, maybe the Israelis aren't the good guys here.
1:08:59Rory Johnston:I was reading this and I was like, this is a real problem, man. And then he spent weeks actually making us study how the Israelis and the Iranians had actually fine enough relations beforehand, like in the 1980s and a clean break and the new strategy and how they devised it all around Iran. This like blew my mind actually at the time. I guess it was like 23, 24 or something. But that's why it's so important to know that history is that many previous presidents, Obama included, actually had Israelis basically give them some sort of ultimatum. And enough of them were like, they're like, who do you think you are?
1:09:34Rory Johnston:I mean, Bill Clinton famously, who's the fucking superpower here whenever talking to them? So yeah, it could be done. It's only Trump who is either weak, compromised. I mean, who the hell knows? Maybe just dumb enough. Is that usually the simplest explanation is the easiest one? But regardless of what it is, we're in it now. And now that we're in it, there's no off-ramp. There's no off-ramp. People like Lindsey Graham and all of them are in charge. And people should also notice this, is that all of these neocom people who hated Trump, as you said, are sucking up to him more than ever. They're the ones who are now declaring what true MAGA, and you know what?
1:10:08Rory Johnston:At this point, I'm like, what is useful to define MAGA or whatever? It's like, you can have it. If you want this to be it, take it. Go all in. I hope you are, but the only danger, and I worry about this, I wonder if you do too, is how can we make sure that this doesn't happen again? Because this was supposed to be the entire project post-Iraq. And one of the lessons from that is that we allowed these people to be rehabilitated in society. Paul Wolfowitz and Douglas Feith. And I mean, all of these guys got jobs around Washington, Rumsfeld, Bush, Chain. I mean, Bush is like a lib icon now. Oh, he's just a painter grandpa.
1:10:46Rory Johnston:It's like, no, he's not.
1:10:48Jeffrey Sachs:No, that's, I mean, that is the lesson. People need to fucking go to jail. They need to go to jail. There needs to be professional consequences. It's unbelievable that we have some of the very same quote unquote journalists who, you know, cheerleaded the Iraq war, who are now still around to cheerlead the Iran war. It's crazy making. I mean, not only was there not accountability, but in many instances, these people continue to fail upward because as long as you're wrong in a way that is regime and empire compliant, then you're good to go. That cannot continue to be the case if we want to avoid this again in the future.
1:11:23Jeffrey Sachs:And we need to be, you know, thinking about that right now, if we all survive this, because the level of danger that has been created for a financial catastrophe, for a violent catastrophe, you know, the potential blowback impacts. I mean, we already, already what has been done is so consequential and so devastating and, you know, very hard to see how we walk away from this. You just mentioned blowback.
1:11:48Rory Johnston:We didn't even cover this. You used to, a long time ago, we would have, there's some crazy shit going down in New York. It's an ISIS-inspired plot. Allegedly, yeah. NYPD is saying it's ISIS-inspired. Again, you take it for what it is. I want to see the indictment. Anyway, there was an IED. There was something. I mean, what? That's a story, no? In New York City. Right. Austin, I mean, all of these other arrests. Look, you can say false fire, regardless of whether what it is. I mean, it's important that all of this stuff is starting to heat up again.
1:12:12Jeffrey Sachs:I mean, people, look, whether those are legitimate or whatever, people around the world hate our guts, right? And are only going to hate us more the more they watch our bombs fall on innocent schoolgirls and our president lie about it and us throw our weight around the world. You don't think that's going to have consequences here at home? You don't think that I mean, Trump got asked about this. He got asked about that. And he was like, yeah, I guess that. Yeah, that could happen. I mean, just completely blase about the potential consequences for a war that a minority, a minority of the population is wants to fight at all.
1:12:49Jeffrey Sachs:So, yeah, Lindsey apparently is earning his place in history here. No doubt he was extremely influential and he played his cards right. He knew how to manipulate Trump. Again, this all comes down to Trump. The buck stops with him. But he was one of the forces that was pushing in this direction and he got his wish.
1:13:08Rory Johnston:Yeah, no, I mean, his name will ring out. That's for sure. Knowing Washington, though, he'll get his name on a damn building. And then 50 years from now, the Graham Senate office building. That's how the ship works.
1:13:17Jeffrey Sachs:You know, Kyle and I were talking about this. How are they going to spin this thing? Like in the history books, how can you possibly spin this thing?
1:13:25Rory Johnston:They always do. I mean, look, I hate to be a genuine doomer, but everyone said that about Vietnam. Guess what? All those people were fine. They were super rich. You know, it's like nothing happened. It still is seen as a catastrophe.
1:13:37Jeffrey Sachs:It's like synonymous with an American military catastrophe, as is the Iraq war, although they still try to, you know, to spin it. Right.
1:13:44Rory Johnston:You can say Iraq was a disaster. but did anybody really pay a price? Every single one of those generals, filthy rich. None of them paid any price. Not just the generals, all of the political leaders. I knew some of these people. They're all still sitting here, pretty in Washington. Dick Cheney, his obituary said what? He's basically a hero for democracy. George W. Bush is a painter. Like I said, Vietnam.
1:14:05Jeffrey Sachs:Condi's back in the White House. We didn't even talk about that. George Bundy and Robert McNamara.
1:14:11Rory Johnston:These guys, they died fine. Nobody paid any price for that. 50 ,000 people. were killed, not to mention was a million or so Vietnamese, Cambodians, all these folks. LBJ, he died of a heart attack. It was like, at the end of the day, like most of the time, it doesn't work out the way that we actually want it to. It's honestly, it's tragic. We have to fight for it to be different this time. Okay, all right. We'll see you guys tomorrow.
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1:16:31Lindsey Graham:This is an iHeart Podcast. Guaranteed human.
From the publisher
Krystal and Saagar discuss oil apocalypse, new Ayatollah chosen, Jeffrey Sachs says we are in world war, Lindsey Graham coached Bibi on convincing Trump for Iran War.
Trita Parsi: https://x.com/tparsi
Rory Johnston: https://x.com/Rory_Johnston
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