Connect with us

The Dictatorship

America can’t afford Trump’s war with Iran for long

Published

on

ByJoseph Zeballos-Roig

The U.S. economy right now is like the hero of an action movie in the last few minutes: bloodied, but resilient.

After facing everything from stubborn inflation to sweeping global tariffs to a record-breaking government shutdown, America has somehow managed to avoid a recession and soldier on. The labor market, though, is showing bruises as U.S. employers reported cutting92,000 jobs in February.

But, as in an action movie, the economy is now up against its biggest foe yet: a costly war in Iran, a regional power in the Middle East that just happens to sit next to what is arguably the world’s most critical maritime energy chokepoint.

The blows are already coming. The war is costing the U.S. an estimated $1 billion a dayaccording to two congressional sources with knowledge of the matter. Oil prices are now forecast to go higher, while gas prices have already jumped to $3.32. It’s the highest price it has reached in either of Trump’s two terms. The situation is so in flux that gas prices are poised to climb higher than that after this article is published.

The knock-on effects of increasingly expensive oil will be felt next.

The knock-on effects of increasingly expensive oil will be felt next. Higher costs for oil and gas will spread to the costs of other goods and services, particularly those relying on trucks for transportation. Higher prices for airline tickets aren’t out of the question. Grocery bills and electricity prices will also follow suit if the war drags on.

The war with Iran almost instantly wrecked forecasts for lower oil prices this year, one of the only slices of the U.S. economy that had been getting cheaper for consumers. Analysts had previously expected Brent crude to trade at about $60 per barrel in 2026. Instead, Brent crude rocketed to $93 per barrel as of Friday due to the conflict.

On Wednesday, Goldman Sachs published a worst-case scenario in which $100 per barrel of oil becomes a reality in five weeks. That was based on whether Iran managed to choke off oil shipments in the Strait of Hormuz, the Persian Gulf waterway near Iran that accounts for one-fifth of global oil and natural gas shipping. It did, and Goldman quickly updated its forecast for oil prices to cross into dreaded triple-digit territory as soon as next week.

Mark Zandi, chief economist at Moody’s Analytics, recently said“a good rule of thumb” is to assume that for every $10 per barrel increase in oil prices, the cost of a gallon of regular unleaded will rise by 25 cents. Prices at the pump usually move in tandem with crude oil, which quickly climbed after the first wave of U.S.-Israeli airstrikes that killed Iran’s supreme leader, Ayatollah Ali Khamenei.

The country’s clerical regime does have incentives to drive up global oil prices as high as possible in a last-ditch effort to ensure its survival. The Iranian military has already targetedpower plants and oil refineries in the Gulf, and the financial fallout of the war stands to get worse if nothing changes. Qatar warned on Fridayoil prices may reach $150 per barrel within three weeks if the war shuts down commercial traffic in the Strait of Hormuz.

So far, this latest war has only intensified across the Middle East. Trump has statedhe believes the U.S. will keep up its air-and-sea offensive against Iran for four or five weeks, adding, “we have capability to go far longer than that.” Indeed, Defense Secretary Pete Hegseth raised a scenario in which the war lasts eight weeks.

Trump has railed against “affordability” and even called it “a hoax”during an economic speech late last year. So it wasn’t surprising to hear him downplaya possible long-term spike in gas prices this week.

“I don’t have any concern about it. They’ll drop very rapidly when this is over, and if they rise, they rise,” the president told Reutersin a Thursday interview. Yes and no.

Even if the U.S. and Israel call off their military campaign in the next two or three weeks, gasoline prices could remain elevated for a while. Economists have named this tendency “rockets and feathers.” Gas prices shoot up like a rocket overnight. But those same prices fall delicately like a feather over many weeks.

Still, the U.S. is better able to withstand an oil shock than in the past. It enjoys a privileged position as the world’s top oil drillerso it’s not as dependent on foreign oil supplies as it was two decades ago when it launched the second Iraq War. Still, that doesn’t mean the U.S. economy is completely inoculated.

Sugar prices rosethis week with the expectation of Brazilian mills stepping up production of ethanol instead of sugar as a cheaper fuel alternative.

The Strait of Hormuz is associated with oil, but it’s also a vital arteryfor fertilizer transport. Fertilizer prices were already elevated prior to the Iran conflict, dealing a blow to American farmers coping with dwindling markets and lower crop prices.

Now their spring planting budgets face more strain due to rising prices for urea, a version of nitrogen fertilizer often used for corn. Farmers facing fresh hardship could take it out on Republicans in the November midterms.

Many companies spent the past year reshuffling supply chains to avert Trump’s double-digit tariffs. The war is jolting them anew. The top five largest container shipping firms, including Maersk, suspended their operations in the Persian Gulf, per trade analystJacob Jensen at the American Action Forum.

Instead of traveling through the Suez Canal, the companies are sending their cargo fleets around the Cape of Good Hope at the tip of South Africa. The fraught, dangerous environment caused them to add surcharges ranging from $1,500 to $3,500 per container.

The building blocks of prolonged uncertainty are all falling into place.

The building blocks of prolonged uncertainty are all falling into place. Trump remains devoted to his tariffs, which affect just about everyone in the U.S. The White House is scrambling to rebuild a 15% universal tariff regime that the Supreme Court knocked down. If the war in Iran stretches on for months, it will magnify the expected price increasesfor food, furniture and much more.

Trump continues lashing out at long-standing allies, particularly in Europe. Recently, Spain caught the brunt of his fury when the government refused to allow U.S. warplanes to use their bases for the Iran war. Trump then threatened to cut off trade with Spain, a member of NATO and the European Union. No one knows which country will land in hot water with the president next.

Still, don’t count out the U.S. economy just yet. Reports of its demise have been greatly exaggerated before. Famously, it defied a 100% probability call for a recession in 2023 made by Bloomberg Economics models.

Only time will tell if the economy keeps going despite sustaining so many body blows, or if it’s knocked down by another war in the Middle East. The longer the war goes on, though, the harder it will be to stay standing.

Joseph Zeballos-Roig

Joseph Zeballos-Roig is a reporter who has covered economic policy and politics for Semafor, Business Insider and Quartz, among other publications.

Read More

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

The Dictatorship

Jeanine Pirro’s failure to indict Biden speaks to something bigger

Published

on

It’s been a rough start to the year for the U.S. attorney’s office in Washington. Jeanine Pirrothe Fox News host turned top federal prosecutor, has endured a string of embarrassing setbacks since January. According to the most recent reports, Pirro’s office shelved its effort to indict former President Joe Biden for his use of an autopen to sign executive actions while in office. Her office reportedly couldn’t assemble anything even resembling a criminal case.

The autopen inquiry, such as it was, was just the latest collapsed effort from Pirro to punish President Donald Trump’s enemies. Her failures are a sign that even as the Justice Department has fallen under the White House’s control, the law still doesn’t automatically bend to his will. And Trump’s vendettas remain stalled out. The limits to his power have become a little clearer.

Her failures are a sign that even as the Justice Department has fallen under the White House’s control, the law still doesn’t automatically bend to his will.

As if in the market for a new conspiracy, some Republicans have attempted to make hay out of Biden’s autopen usage. In short, Trump and others have claimed without evidence that Biden aides essentially forged the former president’s signature on executive orders toward the end of his term. House Oversight Committee Chair James Comer, R-Ky., went so far as to claim last year that “Biden Autopen Presidency will go down as one of the biggest political scandals in U.S. history.” The supposed scandal has even become something of a meme within the Trump White House, as showcased on the recently installed so-called Wall of Fame where Trump replaced Biden’s portrait with an autopen.

Trump was anything but subtle about his demands that Biden be investigated for, well, something autopen-related. In June, he issued a memo to Attorney General Pam Bondi demanding the Justice Department investigate whether the autopen was part of a grand plot to hide the former president’s alleged cognitive decline. (Biden has denied Trump’s claims, saying last year in a statement, “Let me be clear: I made the decisions during my presidency.”)

The U.S. attorney for the District of Columbia has jurisdiction over federal crimes committed within Washington, making it an obvious choice of venue for this fishing expedition. Pirro’s predecessor, acting U.S. attorney Ed Martinopened an investigation into Biden last spring, according to The New York Timesand it continued after Pirro was confirmed to her role in August. But the probe reportedly suffered, the Times reports, because:

Investigators were never quite clear what crime, if any, had been committed by the Biden administration’s use of the autopen.

It was also unclear whether investigators should focus their attention on the actions of Mr. Biden’s aides or on Mr. Biden himself, given that the United States Supreme Court, in a landmark ruling in 2024, granted broad immunity to presidents for most acts undertaken as part of their official duties.

In recent months, prosecutors determined that despite Mr. Trump’s desire to seek vengeance against Mr. Biden and his aides, there was no credible case to bring, the people said. The prosecutors never brought a potential indictment before a grand jury.

It’s hard to tell whether the autopen case never making it to a grand jury makes it more or less of an embarrassment than other recent fiascos. Last month, federal prosecutors from Pirro’s office failed to persuade a grand jury to indict six Democratic members of Congress on charges of seditious conspiracy. Their alleged crime: filming a video in which lawmakers reminded members of the military and intelligence community that they have an obligation not to follow illegal orders. Speaking of those lawmakers and their video, Trump said in an interview last year that “in the old days, if you said a thing like that, that was punishable by death.” The grand jury’s refusal to indict, though, is a good sign its members disagree.

Pirro has managed at times to be a bit too gung-ho about working toward Trump’s implied goals. In January, Federal Reserve Board Chair Jerome Powell revealed that the Justice Department had opened an investigation into him over renovations to the independent agency’s Washington headquarters. Pirro approved the inquiry last fall, according to the Timeswhich prompted the normally staid Powell to go public after receiving a subpoena from her office. Trump denied any knowledge of the investigation, distancing himself from what Pirro might have hoped would win her praise.

It is for the best that Pirro’s efforts have languished. It is good that the justice system continues to rely on facts and evidence. But her failure to deliver on carrying out Trump’s vindictive agenda can’t overshadow the fact that she felt the need to try at all — and will likely try again.

Hayes Brown is a writer and editor for MS NOW. He focuses on politics and policymaking at the federal level, including Congress and the White House.

Read More

Continue Reading

The Dictatorship

Why arming Kurdish militants against Iran would be playing with fire

Published

on

Recent media reports suggesting the U.S. and Israel are considering support for Kurdish militant groups operating along Iran’s western frontier carry a disturbing echo for those of us who have spent years reporting from and on the region.

In 1991, at the end of the Persian Gulf War, President George H. W. Bush called on Iraqis to rise up against the regime of Saddam Hussein. Kurds in the north and Shiites in the south heard the message. They believed the world’s most powerful military had signaled support for them.

They rebelled.

Shortly after, Saddam’s forces regrouped, and Iraqi helicopter gunships and armored units crushed the American-induced uprising. Tens of thousands were killed. Hundreds of thousands of civilians fled toward the mountains and flooded across borders in scenes that shocked the world.

Some Western geopolitical gambles in the Middle East have been calculated risks. Others were more like reckless experiments that left entire societies shattered.

Too often, actions to empower ethnic or sectarian movements to weaken a hostile government fail to consider the broader chaos that is also unleashed. There is a moral weight to encouraging rebellion with life-and-death risks, a responsibility that policymakers often underestimate.

That’s the backdrop to the idea of arming the Kurdswhich media reports suggest could be an effort to further destabilize or topple the regime in Tehran. Now imagine, amid our conflicting rationales for military action and evolving objectives, if an uprising were attempted inside Iran today.

There is a moral weight to encouraging rebellion with life-and-death risks, a responsibility that policymakers often underestimate.

Iran’s Kurdish population — several million people concentrated largely in the country’s northwest — has long faced political and economic marginalization under the Islamic Republic. For decades, Kurdish militant groups operating along with the rugged border with Iraq have periodically clashed with Iranian security forces.

In the context of the current military action, those internal tensions could swiftly escalate. Tehran has already signaled it would respond forcefully to any externally supported insurgency. Iran’s foreign minister said in an interview Thursday that “we are ready for them,” warning that Iran would confront armed Kurdish groups should they attempt to rise up.

That should not be dismissed as rhetoric. Iran’s security establishment has deployed overwhelming force against internal threats over the years. Iran has killed thousands of demonstrators who took to the streets in recent months over dire political and economic conditions. Any Kurdish efforts to destabilize Iran would almost certainly provoke a swift and violent crackdown.

But the consequences would not be limited to Iran. One country that would be watching a Kurdish insurgency with alarm: Turkey.

For decades, Turkish officials have fought Kurdish militant movements they believe threaten the country’s territorial integrity. Turkish President Recep Tayyip Erdogan has launched numerous military operations against Kurdish forces in neighboring Syria, even when those groups were receiving U.S. support in Washington’s fight against the Islamic State group and the regime of Bashar al-Assad.

Turkey — a NATO ally — views armed Kurdish movements as terrorists, whether they are in Iran, Syria, Iraq or inside Turkey’s own borders. If Kurdish fighters inside Iran suddenly gained foreign backing, Turkish leaders might interpret that as an expansion of Kurdish militancy across the region. That perception alone could trigger new military confrontations beyond Iran’s borders.

But the more troubling question is whether instability in Iran has become part of the strategic calculation.

In the recent history of the Middle East, the collapse of central authority in countries from Libya to Yemen to Syria did not lead to stability or democracy. Instead, those states fragmented into battlegrounds for militias, foreign powers and proxy wars. Millions of people have paid the price.

The implication is stark: What happens to Iran in the long run may not be America’s or Israel’s primary concern.

After all, President Donald Trump said Friday that he doesn’t care if Iran doesn’t become democratic. He would be open to Iran retaining a religious leaderTrump said, so long as he can choose that person. Such assertions dispel any notion that the U.S. is seeking to establish a secular, democratic Iran that represents all of its citizens.

The implication is stark: What happens to Iran in the long run may not be America or Israel’s primary concern.

Equally important in the strategic calculus is that Iran is not a small state whose collapse would remain contained. It is a country of more than 90 million people, with deep ethnic, religious and cultural diversity. If its central government were to fracture — whether along Kurdish, Arab or Baloch lines — with no clear alternative, the consequences would ripple across the region.

Energy markets would be shaken; refugees would surge into neighboring countries, which in turn could be drawn into new proxy conflicts. The Middle East would inherit yet another fractured state.

Twenty-five years ago, after Saddam crushed the Kurdish uprising,the U.S. intervened with humanitarian aid and helped establish a no-fly zone that began to fracture Iraq along ethnic lines while establishing an autonomous Iraqi Kurdistan. For many Kurds, the enduring memory is not the later protection but the initial U.S. abandonment. Meanwhile, Saddam remained in power for 10 more years, terrorizing his people.

Perhaps the architects of Western strategies understand the risks. Perhaps what some policymakers ultimately seek is not a stable, democratic Iran but a broken one.

Fomenting an insurgency is one thing. Living with the disastrous consequences is something else entirely.

Ayman Mohyeldin is a host of “‘The Weekend: Primetime” and an MS NOW political analyst.

Read More

Continue Reading

The Dictatorship

Russia gave Iran information that could harm U.S. forces, officials say

Published

on

Russia gave Iran information that could harm U.S. forces, officials say

ByDavid Rohde

Russia has provided Iran with information that could help Iranian forces strike American ships, aircraft and bases in the region, two U.S. officials with knowledge of the matter tell MS NOW.

“Russia is providing intelligence help to Iran,” said one of the U.S. officials.

Both officials said that U.S. intelligence agencies have not uncovered evidence that Moscow is directing Iranian officials or forces regarding what to do with the information.

“I’ve seen nothing that suggests that Russia is playing a strategic or tactical combat role,” said one. Both officials spoke on condition of anonymity, citing the sensitive nature of the issue.

President Donald Trump on Friday chastised a Fox News reporter for asking him if Russia was helping Iran target U.S. forces.

“That’s an easy problem compared to what we’re doing here,” Trump said during a White House event on the future of college sports., before adding, “What a stupid question that is to be asking at this time.”

Speaking separately at the White House on Friday, Press Secretary Karoline Leavitt played down the importance of the Russian activity. “It clearly is not making any difference with respect to the military operations in Iran because we are completely decimating them,” she said.

And Defense Secretary Pete Hegsteth said in a 60 Minutes interview on Friday that President Trump is aware of “anything that shouldn’t be happening” and it “is being confronted and confronted strongly.”

He added that the Russian activity was not a concern. “We’re not concerned about that,” Hegseth said. “But the only ones that need to be worried right now are Iranians that think they’re gonna live.”

Democrats have accused Trump of failing to criticize actions that Russian President Vladimir Putin has taken against the U.S. interests and for failing to adequately support Ukraine’s effort to defend itself from Russia’s invasion.

Congressional Republicans have also expressed alarm. Rep. Michael McCaul, R-Texas, former chairman of the House Foreign Affairs Committee, told MS NOW, “Russia and Iran are locked in an unholy alliance.”

The Washington Post and The Associated Press first reported on the Russian information sharing with Iran.

David Rohde headshot

David Rohde

David Rohde is the senior national security reporter for MS NOW. Previously he was the senior executive editor for national security and law for NBC News.

Read More

Continue Reading

Trending