Oil Prices Surge as Iran War Expands

0:00If you're a parent and want to help set up your child for success, then IXL is right for your family. As an effective and affordable online learning program, IXL covers math, language arts, science, and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20. Visit ixl.com slash 20 to get the most effective learning program out there at the best price. A text says, you're on my mind. A bouquet from 1-800-Flowers says, you're my everything. Heartfelt moments belong in the real world, not just your phone.

0:40For 50 years, 1-800-Flowers has helped millions of people make memories that'll last a lifetime with gifts they'll cherish forever. Their expertly curated arrangements and gift baskets shipped nationwide with a 100 % satisfaction guarantee. Don't wait for the next big moment. Make it when you visit 1-800-Flowers.com slash SXM today. That's 1-800-Flowers.com slash SXM. We've been listening to President Donald Trump speaking in Doral, Florida. His most extensive remarks on the now 10-day war in Iran to date, the president made several claims, some familiar, reiterating why he says the United States went to war, outlining what might be called a preemptive doctrine.

1:18The president saying at one point, as he has said before, quote, they would attack us. They had attacked their neighbors. And that's why he wanted to enter the conflict first. In his view, he made other claims that were unsubstantiated, pressed by reporters, for example, on his allegation of Iranian friendly fire and many other assertions. We have special guests standing by. We've been watching this with you. So I want to bring them in, former diplomat and longtime journalist Rick Stengel. and on the economic side, where we have seen the gas and oil prices really change the dynamic to start the week.

1:51Our CNBC colleague and economics expert, Steve Leisman. Welcome to both of you. Rick, what stood out to you in this, the president's really longest remarks about Iran since he started this war? Thanks, Harry. What stood out to me is I think he got spooked by the oil prices going over 120 today. the stock market going down. He felt he had to come and try to explain what was going on, but he still can't explain exactly why he's doing what he did. He didn't call it a war. He called it an excursion. This time, he basically used every possible rationale to explain it. Eliminate their nuclear threat.

2:34Eliminate their ballistic missiles. Help Israel. Help the flow of oil. The question is, what is the actual purpose? What is the actual outcome he desires? And, you know, when you don't know where you're going, any road will take you there. So he can declare victory at any time. And I think that was the message that he was saying today to try to calm the markets, to say, you know what, this ends when I say it ends, I can declare victory and we can go home and everybody can go back to normal. But again, as I've said before, Ari, This is an incredibly dangerous thing just because he says it's very complete.

3:08Whatever that means doesn't mean that it is. And there's lots of consequences for the rest of the world still to be seen. Steve, there's a lot of questions we have for you tonight, including our viewers and fellow citizens concerned about gas prices and planning their already tight budgets. But first, I want to get you on the most newsworthy part of this, which is what did you hear in the president's view, or we could call it a theory to be charitable, on the economics of this war and the days ahead? He he made some kind of broad statements about why things economically will ultimately be OK. Well, if I could take a step back, Ari, I think the question here is one that was just raised, which is, is this something the president can turn off?

3:56I generally agree with the idea that the president looked at the situation in the markets, looking at the situation with oil prices and decided to take a step back. Certainly his rhetoric about this ending very soon is different from his rhetoric in his tweets on Saturday, where he talked about a continued extensive bombing campaign against Iran. What the key to the situation is here economically is one journalist tried to get at it. There wasn't a follow-up, unfortunately, which is the opening of the Straits of Hormuz. 20 % of the world's oil goes through there. And the extent to which there is an economic, a continued economic impact from what's happening, it will be key as to the ability of the U.S.

4:34government or allies to keep open the Straits of Hormuz. They are closed now, as far as we understand. And what's unclear is if the president stops now, does that is can the U.S. open? Can the U.S. keep them open and resume the flow of oil? That will be the key right now. A massive increase in the price of oil, an increase in the price of gasoline that could be temporary if the straits reopen, but it could be long lasting if they remain closed and dangerous for quite a while. And Steve, did he sound to you like someone who had been meaning to get around to an energy and economic update and now is doing so?

5:12Or did he sound reactive or day trading off the terrible start to the week for the markets and by extension aspects of the Trump plan? Well, you have to look at the idea that the notion that this would be over very soon or that quote that came out, which, by the way, turned around the market, was done before the markets closed. So it does strike me that the president is being quite deliberate in this kind of rhetoric in order to have an impact on the stock market and on the oil price. We've settled down the last, I looked, about$85 a barrel. It had been as high as$116. And the way to think about it, Ari, is consider 10 people in the desert and nine bottles of water.

5:53What is that bottle of water worth? And it ends up being sort of infinite in the sense that commodity prices are priced in a way of the value of the last barrel. And if this remains closed for a while, that will be a difficult situation for the U.S. economy for quite a while. And one that could cause, well, certainly what I'm seeing is economists on Wall Street raising their lives of a recession if they see continued high oil prices the way they are. Yeah, really, really helpful getting your breakdown on that. I want to show Rick a little more of where Donald Trump talked about what he views as the risk to reward.

6:34And again, it's not so much a criticism as an observation that unlike every other major Middle East action that we've had in the last 30 plus years, this one came without a presentation to the country. So whether you call that back foot or leading from behind or delayed, the country, the nation, including the people who go and fight these wars on our behalf, are learning after the fact why we did what we did and why we're going to do, I guess, what we might do for however much longer. I say that by introduction to hear the president discussing what he called the Iranian potential, the threat. Take a listen.

7:11If we didn't knock out Midnight Hammer If we didn't knock out their Iranian potential If we didn't do that with Midnight Hammer They would have had a nuclear weapon They would have used it long before now And at a minimum Israel would have been annihilated Threatened our overseas bases And soon could have reached even our homeland Iran is a very powerful country

7:32Steve Liesman:They were going to take over the Middle East If we did not hit them They were going to take over the Middle East Rick, two basic questions One, is the factual part of that claim true, as best we know I mean, U.S. intel, etc. And then second, is that working? If this is another preemptive war doctrine Because this president's decided to pick and choose What the preemptive war will be, where the threat is Do it without Congress, which we've learned and seen Is already very controversial, widely opposed Can you assess both of those for us? Yes, Ari. What he said was false. The idea that Iran was an imminent threat to the United States is absurd.

8:17They don't have missiles that could reach the United States. They were not two weeks away from a nuclear weapon. People estimate they were years away, five years, even 10 years away. Remember, Trump said eight months ago he had obliterated the nuclear threat in Iran. The idea that they could reconstitute a threat in a few months after spending decades trying to build a nuclear weapon is crazy. And so that is just a false premise. It's a false premise for going to war. They were not an imminent threat. In fact, my argument is that we invaded them precisely because it was not an imminent threat, because they were weak, their economy was damaged, their nuclear threat was diminished.

9:04That's why we hit them. So much of what he said is absolutely false. And Americans should realize that he took us to war on a false premise. And now I don't even remember what your second long question was, Ari. Well, that's on me. But the second question was whether you can assess his foreign policy claim that he will choose the preemptive war and it will work. That, again, it's early days, but that his actions, including militarily eliminating part of the Iranian leadership, now replaced by another hardliner, and the other actions to constrain this country will work to the U.S.'s and perhaps allies' benefit in the region.

9:49Well, the truth is it may be effective for eliminating whatever Iran's threat was in the Middle East. I don't know about you, but I don't want to live in a world where superpowers can preemptively invade another power because they think that that power is threatening them in some way. This gives a permission structure for Russia in Ukraine. This gives a permission structure for China in Taiwan. It's a much darker world, a world of this kind of hyperpower world where people can control their interests where they live. So I don't think that's a good thing. And I think it sets a terrible precedent.

10:26Yeah, I think you're reminding everyone how this works. Great power politics, if you're the biggest guy on the block, so to speak, in the short term, they can be very appealing. In the long term, the 20th century is littered with the great cost of that. And world wars started by powers that thought, well, we'll control this country and this region and this land. And it didn't work out well if you lived in those countries, let alone to say nothing everywhere else. I'm simplifying, Steve, because we don't have time to do 20th century history for the whole hour. So I hope people can handle the summary.

11:02I want to show. Go ahead. I'll do it real fast, Ari, which is we have no track record of going into a country and creating a stable democracy. I spent six years in Russia, watched that failed program. We watched Iraq. We watched Afghanistan. And the results are less than overwhelming. The president talked about having this formula from Venezuela. I'm not quite sure what that is, but this is not and fundamentally, Ari, I know this is not your question, but fundamentally different from the Liberation Day tariff, something the president has the power to turn on and turn off. Turning off war and turning off and the results of this, the way you smash something and the pieces fly everywhere, there is no telling how this works out.

11:46And we have very little, not a very good track record informing countries in the wake of these types of military actions. Yeah, so sober points from both of you that are worth considering, whether people are listening in Washington, on Wall Street, with the markets, and around the nation, because ultimately there has to be an informed foreign policy on behalf of the American public, even if this president has cut out Congress for now. We were watching the press conference on a breaking news night. My thanks to Steve and Rick. Appreciate you guys. We're going to fit in a break. James Carville is here on the other side looking at the politics of protest, economics, rising prices against this unpopular president, the Ragin' Cajun.

12:25We'll have a lot to say, I bet, next.

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13:21Visit IXL.com slash 20 to get the most effective learning program out there at the best price. A text says, you're on my mind. A bouquet from 1-800-Flowers says, you're my everything. Heartfelt moments belong in the real world, not just your phone. For 50 years, 1-800-Flowers has helped millions of people make memories that'll last a lifetime with gifts they'll cherish forever. Their expertly curated arrangements and gift baskets shipped nationwide with a 100 % satisfaction guarantee. Don't wait for the next big moment. Make it when you visit 1-800-Flowers.com slash SXM today. That's 1-800-Flowers.com slash SXM.

13:58Well, we're looking to keep the oil prices down. We went artificially up because of this excursion into a very positive thing. I mean, this was an excursion that a lot of people wouldn't have done. I knew oil prices would go up if I did this, and they've gone up probably less than I thought they'd go up. But I don't think anybody thought we were going to be this quickly successful. President Trump speaking moments ago tonight in his first extended remarks on the Iran war, a press conference where, as you just heard, he discussed the surging prices today that have rattled his administration. We are joined by James Carville, legendary political strategist, advisor to presidents, Democratic heavyweight, knows his way around the arc of history and how unpredictable it is.

14:44Your reaction to the press conference and the president's claims about oil prices.

14:49Steve Liesman:First of all, what we know, we know we took out an 86 year old leader who was a hardliner and was replaced by his son who is 56 year old and a hardliner. So that didn't work. We know that Putin talked to Trump on the phone for one hour today. We know that after the conversation, Trump threw in the white flag. All right. We know these things actually happen. Now, the fact checkers are going to have to dig through to see if it's 55 or 58 different lies that he said. And I had to stop counting and I'm not even a fact checker. All right. They were cascading. They were going so fast. And one other thing I say, Ari, the political ramification immediate is J.D.

15:34Steve Liesman:Vance is a winner and Marco Rubio is a loser. Because J.D. Vance and Tucker Carlson are more of the isolationist wing of the Republican Party. Rubio and Emma Moore interventionists. The isolationists won this fight. And its ramifications are going to go out beyond just this afternoon. And that is also because you read this as them looking for a way to wrap up? I look at it. Did we just get it out? Putin, again, we know what happened. We know he talked to Putin for an hour on the phone. And we know he said this thing is wrapping up. That it is them. And we know we replaced a bad guy with a bad guy.

16:22Steve Liesman:We know all of that. And he can he can tell as many lies he wants. He can stand as long as he wants to. And we know that there were some strong isolationist tendencies in today's Republican Party. And my guess is, is that they were helped by this debacle we have. But we'll see. The the intersection of American foreign policy and politics is thin to the point of a combined blur. We could talk about Vietnam. We could talk about Iraq. We could talk about Obama coming out post-Iraq. Everyone's lived through that. And I'm curious whether your political read is that Donald Trump maybe started to learn in the last couple days that which he didn't remember or care about from history, because he seems more alert, James, to the high prices and the pushback.

17:14Steve Liesman:Well, I guess what I'd say is this was a domestic ego. I mean, when somebody goes and pays 50 cents a gallon more than they did before, that's not an illusion. All right? That's really not. That's like real money. And as your previous guest said, which was a very intelligent point, the$120 stuff has already been bought. You're going to see that at the gas pump, and they're going to have to take this cheap off, assume that it stays cheap, which I have no idea. You have to ask an economist. I don't think they know any more than you and I know. So that's going to be there. And we know that this put a terrible strain on people's pocketbook when they couldn't afford it.

17:53Steve Liesman:And this was a domestic event. It wasn't just a foreign policy event. We had a merger. Yeah.

18:01I know that you keep an eye on everything. You didn't just stop doing political communication when the direct mail stopped or the physical newspapers. is an interesting thing about you. And it may be the one thing you and the president have in common because you both jump on the podcast and TikTok. I say that by introduction to the fact that people are using whatever methods they have, including TikTok, to say what they think about this Iran war that Trump started out of nowhere. Take a look. The White House said a draft is on the table. America can also not really win this war because Americans don't want to fight this war.

18:38They're showing you the missile strikes and the destroyed warships. What they're not showing you is the 15 million people in Tehran that are breathing in poison. The Republicans said Tom gets to do whatever he wants. A billion dollars a day almost is being spent to rain death and destruction onto random civilians in the Middle East with my tax dollars. Where does the speed of today's communication, including online, fit in with a war that has remained unpopular every day of its first 10 days?

19:08Steve Liesman:Yeah, well, everything he does is unpopular because he's the most unpopular president in history at this person. Once you become unpopular, everything you do, Greg's look. But what's really impressive is watching the clips of these young, I don't know what you call them, influences or whatever you want to call them. They're pretty intelligent. They're pretty aware of what's happening to them, and they're pretty aware of what's happening in their future, and they're pretty aware of what's happening in the country's future. So you can't stop this technology from being influential, being a part of it.

19:37Steve Liesman:It doesn't matter if you're 28 or 81. It's still the way you got to communicate in this day and age. Does it matter that Congress was sidelined through this? Well, it's going to matter that Congress was sidelined. I mean, I'm reading stories even right here to the New Orleans airport. I'm three-hour wait. And this is going to go out longer and longer and longer and longer. I do not know how it's going to end. But I heard Senator Mark Warnup talk about it last night And they wanted some reforms in ICE Who doesn't want reforms in ICE? And some reforms in the Border Patrol And they're going to have to do that if they want to push forward on this And I think Democrats can push forward on it But they're not just going to do it with the same old shooting people in the street No, they're not going to accept that We have Hakeem Jeffries sound I want to play just a clip of, of course, the Democratic leader talking about this because with everything else going on, you know, some Americans are aware that we have this DHS clash.

20:40Others are just out busy living their lives. This is dragging on with the Democrats saying, as you just referenced, there's got to be some change. Take a look. What we need is a change in policy, not simply a change in personnel. Now, Kristi Noem was a disgrace. He was totally unqualified. She was a pathological liar. She called American citizens domestic terrorists without any justification whatsoever. But we need dramatic, bold, meaningful and transformational changes to get ICE under control. Your view of that and whatever the reasons, as the dust settles, is it important that a big cabinet member was ousted, that the protests that started in Minnesota and picked up steam now have this change in personnel, even though there's much left to be done in the view of the Democrats?

21:31Steve Liesman:Well, long after Christy Norma's forgotten, which is not going to be very long for now, people are going to remember that they invaded American city. They shot American citizens. And that's going to stick with people way long after her bedroom on the 737 for the Department of Homeland Security. So, I think that Hakeem is doing a good job. I think he framed it up pretty good. And, hey, hey, dude, I got news for you. You're hanging there for some more months because come January, you're going to be one powerful dude. I promise you that. You think he's going to be Speaker Jeffries? Oh, I don't think there's any doubt.

22:10Steve Liesman:And I think it's not even going to be close. No, I don't see anything, and particularly after this debacle today, this war was never popular, and the surrender is going to be less popular. James, I got some other questions with you, including Donald Trump's troubled jobs numbers, which predate the war, but also tee up the midterms you're talking about. James stays with us. We'll be right back.

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24:37We're back with James Carville on a big news night. We were following the president's address. We got some fact checks from experts. We've been talking to James about a range of topics. I want to go to something that's a big deal for everyone, regardless of what news day it were or what the president is trying to do abroad. We'll put up the new jobs here. If you look at the last 13 months of Trump, very clearly you see under 200K there. That's his first 13 months in office. If you look at what he came out of, meaning how was Biden doing, what was the economy doing going into this administration?