NIMA ALKHORSHID: Hi, everybody. Today is Thursday, March 19, 2026, and our dear friends, Richard Wolf and Michael Hudson, are here with us. Welcome back.
RICHARD WOLFF: Thank you. Glad to be back.
NIMA ALKHORSHID: Let me start here with one of the articles on The Economist. Here is what it says. They call the operation of Donald Trump, Operation Blind Fury. And it says that war in Iran is making Donald Trump weaker and angrier. What is happening right now is somehow amazing that the new escalation is the attack on the Iranian oil facilities, which brought a massive reaction on the whole region. You know, from Qatar to Saudi Arabia, UAE, Kuwait, and even Haifa was hit by Iranian missiles. As we know so far, Reuters reported that Qatar has lost 17% of its production capacity of LNG. And that could be a huge issue for the market. But at the same time, we have the issue of the Strategy Formula. And before, you know, Michael, coming to your understanding of what is going on right now, here is what Scott Bessent said about unsanctioned, because the difficulties coming out of this trade-off for most is just putting a lot of pressure on the global economy. Here is what Scott Bessent said.
SCOTT BESSENT (CLIP): Break the glass plan across the administration and a treasury. We unsanctioned Russian oil. We knew that there were about 130 million barrels on the water, and we created supply that is beyond the Straits of Hormuz. So we anticipated this. We knew that there could be a temporary, and I want to emphasize temporary choke point there. And there was 130 million barrels of floating storage. In the coming days, we may unsanction the Iranian oil that's on the water. It's about 140 million barrels. So depending on how you count it, that's 10 days to two weeks of supply that the Iranians had been pushing out. That would have all gone to China. In essence, we will be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days as we continue this campaign.
NIMA ALKHORSHID: Yeah.
RICHARD WOLFF: Michael, before you even turn it to Mike, everybody should appreciate what that man just said. He just said up is down, down is up, up will make up, go down, and then we'll have down and it'll go up, and we'll use against the Iranians the fact that we're allowing them to sell their oil to China, which, by the way, they were doing perfectly well anyway. You know, when you have to resort to that level of noise and incoherent make-believe, you're pretty close to the end because you've got very little to lose. The credibility is gone, so you're not stretching credulity. It's already out misshapen beyond words, anyway. Anyway, I didn't mean to interrupt. It's just, you really have to take a step back. Mr. Scott Bessent is the best Mr. Trump could do, and that tells you, of course, a lot about Mr. Trump.
NIMA ALKHORSHID: Yeah. Michael, go ahead.
MICHAEL HUDSON: Well, the irony is that this permission trade in Russian and Iranian oil has actually reversed the whole aim of what Trump had tried to do. In seizing Iran's oil, the effect was to achieve the opposite of three basic U.S. aims. And I had the day, since we're running later, to put what I'm saying in order. So I want to just say the three ways in which Trump's attack has just reversed the whole strategy of American foreign policy. First, by closing the Strait of Hormuz, Iran has imposed the military equivalent of sanctions on OPEC oil, forcing resort to Russian oil and Iranian oil, and ultimately in the future of oil from the very countries that the United States was trying to prevent selling. So this has reversed the U.S. sanctions against Russian supplies of oil. And Trump has said that the suspension of sanctions is only going to be for one month or so, as I think Bessent implied, and everything's then going to be back to normal and he's not going to let any further purchases of Russian oil occur.
Well, we now know that that's silly. We now know that the interruption of oil is going to, I think, last at least for the rest of the year and probably into 2027. Now, the second thing I want to point out is the U.S. hopes for the whole last half century, since 1974, has been to become the major financial recipient of OPEC's buildup of foreign exchange wealth funds and foreign reserves. And these savings have been in the form of OPEC purchases of U.S. bonds and stocks and U.S. bank deposits. So destroying OPEC's export capacity now is obliging these countries to start selling off their dollarized reserves to finance their own debt-burdened economies and the own deficits that they're running now that they're not having any inflow of oil exports. And the third point that is something that Richard and I have been talking about for the last half year, the whole enabling myth of the U.S. demands for subsidy from foreign countries, NATO as well as OPEC, is payment for America's efforts to protect these countries against the threats from Russia, China, and Iran.
Well, that whole idea of the U.S. as a protector and deserving financial support through NATO and through OPEC's purchases of arms, U.S. arms that, obviously, we now say, don't work, is destroyed. And Trump's attack on Venezuela and Iran and his threats to attack Greenland, even Canada, have shown that, instead of protecting his allies from Russia, China, and Iran, the United States itself is the greatest threat to world stability. And it's become the world's major sponsor of terrorism in its support for Ukraine against the Russian speakers, Israel against the Palestinians, and al-Qaeda in Syria generally. So, as part of this Cold War system, I think the failure of U.S. arms to protect allies has led them to realize that if they really need military protection against this ridiculous threat that Russia, China, and Iran are the main danger to them and seek to conquer their neighbors, well, then the U.S. arms are not going to help them. Iran's missiles and drones have easily avoided the Israeli and Arab OPEC defenses and, in fact, have depleted them. And that enables Iran from here on in to bomb their attackers at will. And neither the U.S. arms nor the promises to defend them work.
So, what is it that leads other countries not to step in right now and saying we can't afford to let the United States and Israel threaten the entire world economy and plunge our economies into financial crisis and force us to close down entire industries and lower our employment, causing unemployment, while gas prices and the price of heating homes rise and put a squeeze on consumers and force them into debt ? Why are they not rising up and say, "We've backed the wrong horse. It turns out we've got to protect ourselves by intervening and stopping the U.S. attacks." And indeed, Iran has made it clear: "Well, these attacks are not going to stop until we settle the long-term aim. We are going to keep the United States and Israel and any U.S. allies in the Arab OPEC countries out of the Near East from now on. You threatened us with an existential threat that we will be destroyed. Our leaders will personally be destroyed. Our oil will be seized by Donald Trump, who will personally appoint a new leader who will be sort of an Iranian Boris Yeltsin, who will let American oil companies come in and regain control of Iranian oil." That's basically the plan that other countries are acquiescing in if they don't actively step up and they're not doing that yet.
So, basically, Trump has said, "It's our war, but it's your problem." You remember that Texas Governor Connolly said that when the dollar devalued against gold and left only U.S. Treasury promissory notes as world reserves, he said, "Well, if it's our dollar, it's your problem." Well, Trump's saying, "It's our war, it's your problem. Want to solve it ? Do you want to provide the minesweepers to clear out the Strait of Hormuz ? Do you want to supply the war to the troops to fight against Iran ? We're not going to. All we can do is bomb. That's the only thing that we have left. We're not going to supply any troops." Trump said that again today. "No troops. All we can do is bomb. And we're going to target Iran's oil fields again if and if Iran continues to fight for its survival."
Well, obviously, Iran's going to fight for its survival. And, obviously, the United States intends to keep escalating until the entire Near East's, the Middle East's, oil export capacity is ended. So all that world of relying on the U.S. as a source of stability instead of instability is now over. And the U.S.-Iran war looks like, as I said, it's going to go into next year.
I know I've gone a few minutes already, but I want to discuss just one, the first point that I mentioned about the sanctions. America's long-term aim predating Trump's presidency has been to monopolize the world's oil trade by imposing sanctions against oil producers whose policies are against those of the United States, Russia, Iran, Venezuela, and anyone else who wants to exploit oil in competition with the U.S. military and economic bloc.
So by imposing trade sanctions against Iran in 1979, when it grabbed Iran's oil, when it overthrew the military police state of the Shah, and again, when it sanctioned Russian oil in 2022 and then Venezuelan oil last year, the United States had dollarized the world's oil production. And that meant this went far beyond simply pricing oil in dollars. Eve Smith always reminds me that oil trade represents only 5 to 7% of the demand for dollars. It's financial capital movements that really determine the world. And the role of petrodollars wasn't simply in pricing oil in dollars and raising the price. The whole idea of petrodollars was that the OPEC countries were going to keep all of the earnings from their oil trade and send them to the United States. And Kissinger said, "We've told OPEC, you can charge whatever you want. We're not going to let you buy control of any American corporation, not even real estate or farms. You can buy bonds or you can buy stocks. You can finance American industry, but you won't have any control to use your ownership for any of your own purposes, unlike the whole purpose of the United States when it invests."
So OPEC countries account for 40% of the world's oil trade, 20% of the total oil production, but 40% of the trade. So if the Strait of Hormuz lasts more than a few months, this is going to plunge all these oil-dependent countries into a depression. And they've already announced, "We're having to sell off our national funds." [They have] had to sell off securities, presumably U.S. bonds and bank deposits, and also British holdings, in order to balance their budget because the OPEC countries themselves have gone into debt to finance their whole real estate development in a crazy part of the world that really can't normally support real estate development. So world oil prices, along with the international stock market and the foreign exchange rates, have already announced their willingness to sort of compensate for the slowdown in OPEC exports by releasing their own national reserves of oil.
Well, okay, that's going to take care of a few months, but then all of the national reserves that they've saved for just such a war emergency are going to be empty, just like their arms supplies are going to be empty. And all that's going to do is postpone the crisis to a point where when they don't have any more oil to throw on the ground, when they won't let Russia and Iran replace OPEC as the world's major oil exporters, then there is going to be a crash. So, what are other countries going to do ? Were they going to say, "All right, we're going to shift away from reliance on OPEC, which was a key to the U.S. financial system." Forget the trade system, the financial system, the balance of payments, all of these bond holdings and stock holdings and bank deposits. All of that is going to begin to be reversed.
And so, this is what Trump has done is reversed this basic financial aim of U.S. control of the oil trade that was supposed to be the buttress of its ability to control other countries. And so, to further help prevent a serious energy crisis, as we just said, Trump has said, "Well, Bessent has said you can buy Russian oil trade." A lot of this is already on ships. Well, what's going to happen after two weeks or two months when the ships have unloaded their oil ? Bessent and Trump are willing to say, "All right, OPEC still isn't exporting any oil because its oil facilities have been blown up. So, I guess you can continue to buy Russian and Iranian oil as far as the eye can see." Well, what a change that is from what was supposed to be the whole buttress of America's control of oil and hence its energy trade and hence all of the chemical industries and the fertilizer industries and everything else based on the oil trade. All of that is threatening America's closest allies, NATO, Europe, Japan, and South Korea. And yet, if you look at today, the stock markets say everything seems to be just marginally a little bit different. All these problems are going to be temporary.
So the world is closing its eyes to the problems that Richard, [myself] and all of your guests have been pointing out are building up and are going to happen. It's like there's a cognitive dissonance and unwillingness to look at how systemic the whole problem is that Trump's attack and Israel's attack on behalf of the United States with US guidance has caused for the world.
NIMA ALKHORSHID: Richard, moments ago we learned that Iran said that the Strait of Hormuz is open, but nobody is not, it doesn't mean that everybody can use it. China, India, Iraq, and Malaysia so far use the Strait of Hormuz. They could pass through this Strait of Hormuz, but other countries, that wasn't the case for other countries. Richard, there is an article in the Financial Times in which the article argues that Iran's actions in the Strait of Hormuz show the reality of multipolar economic warfare. For decades, the United States dominated, you know, it says that for decades the United States dominated sanctions and used financial pressures as a strategic weapon. Now, other powers like China and India, they're coming to the game, and their response is going to be, you know, different. And it argues that nobody knows what would be the reaction on the part of the United States.
But so far, it seems that the Strait of Hormuz is making that concept much more complicated. Your understanding of what is happening right now in the Middle East.
RICHARD WOLFF: Well, first, the larger context. I understand that people see in Mr. Trump, an incoherent, herky jerky, not a very good relationship with the truth, getting the results not expected. But I don't think he's all that different from the earlier presidents. I mean, the American presidents are nothing to be shaking your head about. I know we always think the last one was better, but that's only because the one we have now is even worse than that one was, and we thought he was better than the one before. And I noticed that it's very popular now, particularly in Europe, to make fun of the quality of leadership that comes from Starmer, Macron, Maloney, Mertz. It is, I admit, I'm caught up in this. This is stunning incompetence and not thinking things through. It was known what the Strait of Hormuz was like for a long time. It's not a new awareness that this is a very vulnerable area and that Iran has an enormous power over it by geography. You don't need to be a great social scientist to see it.
But here's the point: when the wind is blowing in your direction, it's okay to make a mistake, or two or three, because the wind is blowing in your direction and it will correct what it is you mess up. So the United States tries to overthrow Castro in 1960-61. A catastrophic mistake. Couldn't do it, failed at it, you know. But you know, it didn't fundamentally change the dominance of the United States in the second half of the 20th century because the empire was rising, replacing the old Europeans, reshaping the world, doing the very petrol arrangements Michael explains to us just now and in earlier shows. So I want people to keep a framework for understanding. The problem now is that the wind has changed. The empire isn't growing, isn't expanding, it's shrinking, it's being outmaneuvered by a whole new economic powerhouse built above all around the People's Republic of China, but with BRICS and their alliance, they have varied cleverly across so many differences among the BRICS countries, nonetheless welded them into a kind of coalition, which is helping them get through this crisis.
You know, Russia can sell its oil to China. India can kind of swerve around the sanctions and buy the oil it needs from Russia, and on and on and on. Okay, so I want to keep that in your mind. Mr. Trump is now having the problem of decline. When you make a mistake, it doesn't not matter. It gets worse. It makes your situation worse than it might have otherwise been in a different circumstance. And we can already see that in six months. Six months ago, Israel and America attacked Iran.
Now, the consequence for the United States was relatively small. Six months later, they attacked Iran again. The consequences are horrific. What happened ? What happened here ? And yes, you can answer with this specific and that, but there's a larger shift going on that we need to control. All right, having said that, I want to look at some other dimensions of what is happening.
Mr. Hegseth has said to us that they are asking for $200 billion in additional appropriations from Congress to fight this war, which, of course, can't be a war, since you didn't let Congress vote on whether or not to have a war. Congress doesn't get to vote on whether you have one, but now has to be able to vote on whether you can fund the war they didn't participate in. These are signs this is out of control. This is such a bad piece of theater being worked out here that it screams the incompetence and the confusion, but it's much, much worse. The Supreme Court invalidated the tariffs, and there are now mountains of legal cases emerging where all kinds of people, including consumers who are hurt by the tariff, who had to pay more money, as well as countless importing corporations, they want refunds. And they're certainly going to get something. I don't know how that's going to be worked out, and I understand it will take time.
But the $150, and it's not even that, but the $150 billion that was the only new revenue coming into the United States government is now fundamentally compromised. However much of it you will still get, won't be much. Meanwhile, you have proposed a $500 billion, excuse me, a $600 billion increase in the defense budget before the war on Iran. And so now the war on Iran adds another $200 to the $600. That means, let me make sure everybody understands, the current defense budget is in the neighborhood of $900 billion. You're going to add $600 for next year's budget plus $200 for the Iran war. You're virtually doubling your defense expenditures in one year, and you're the country that spends more on defense than most of the rest of the world combined.
I mean, this is so completely off the wall that people are going to wonder: how are you going to do this ? The only conceivable way, short of a tax increase, which he cannot do for political reasons. America never fights wars with tax money. It only fights its wars with borrowed money. Why ? Because you can't get away with paying it with taxes, so you borrow it. Okay, but we are already the world's greatest debtor country. Our national debt is $35 trillion. And we no longer have an AAA rating. Standard and Poor, Moody's, and Fitch, the three rating agencies, now all agree it isn't AAA, it's barely AA.
So you're going to have to borrow $800 billion more, and you're already running trillion-dollar deficits. Now, when you look at this, this is simple arithmetic. And nothing I have said here requires any special information or secrets or nothing. This is all public information available to anyone who looks at the relevant numbers. Well, now what's going to happen ? The only way the United States can borrow the money that its whole foreign policy now requires is by borrowing like you've never seen. And that's the end of declining interest rates. You will notice that yesterday and today, the Federal Reserve, which some had said would lower interest rates, because our economy is heading into a recession, didn't do it and said it can't do it. It has to see what the consequences of this war are. And Michael just suggested they're not going to see what those consequences are for quite a while, since the war is going to continue.
But the whole stock market understands the interest rates are going up. And for the American macroeconomy, this is not good. For the stock market, this is not good. And for the people who just made a lot of money in the last two years betting on geopolitical turmoil by buying gold, you have to remember to buy gold is to take a risk because gold doesn't pay you anything. There's no interest rate. There's no agency that says you get an interest. So gold is an asset which depreciates when interest rates go up, because the money is going to look for where it can get. So, what has happened ? The gold has crashed in the last few days, the last two or three weeks. Since this war started, not only did gold stop going up as it had been doing for two years, it went down in a hurry. Oil went up, of course, but not gold. The stock market is being buffeted by these two people who are losing a lot of money because the gold they stocked up on is losing value very, very quickly.
Well, you know, this is a very dangerous moment. Gold used to be a kind of measure; you could count on it. It was an index of trouble in the world because when there was trouble in the world, all the wealthy people would go to gold hoping to hold on to their wealth. Once upon a time, they went to the dollar, but the very rise of gold right now over the last two years has been built around the fact that the dollar isn't a safe place to go into at all. Okay, now the dollar isn't because it's on worse, not better, and gold isn't. But where the hell is the money going to go ? The answer is it has no idea. That adds a whole new level of uncertainty and chaos to what ? To what Michael was talking about a few moments ago, namely international capital movements. They are being attacked not only directly by everything Michael talked about, but by indirection by these macroeconomic effects of what is going on.
Meanwhile, the United States is scheduled to increase its borrowing and dramatically increase its national debt. By the way, those were both things Mr. Trump promised he would correct. So it won't just be that the man who said he wouldn't have a war has already had big ones, but his deficits are going to be big, his national debt is going to be big, rising interest rates plus the cost of energy going crazy means inflation is going to get worse. There's already investment activity based on that assumption. This is becoming totally, chaotically out of control. And I'm hoping, finally, touching to Michael's point about psychic dissonance, or you know, you only have psychic dissonance if you allow into your brain the contradictions that are around you. America has always been a unique country in the ability to handle the existence of contradictions by pretending that they're not there.
So the people who run this society don't face contradictions. It's all working out. And you know where that comes from ? From an empire that just had a century of rising, and there's no way able yet to cognize the idea it's over. That's not happening anymore. And we better rethink the problems because they're getting worse, as we pretend that they're not there.
MICHAEL HUDSON: Richard, your point about financing war by running into debt instead of taxing the people is precisely what Adam Smith pointed out. One of the central points of the wealth of nations was that he opposed running into foreign debt to pay for wars. And he said, how do we avoid this Britain's foreign debt that's obliging it to levy taxes to pay all of the interest rates on it ? He said, the way to stop this is to finance wars, always on a pay-as-you-go basis. Because if populations felt the real cost of the war to themselves while it was going on in taxes, they would be much less willing to patriotically support it with such eagerness.
And I think that Iran, I talked last week, we did, when Iran insisted that one of the conditions that it was going to have for ending the war, its solution, was that the Arab OPEC countries had to stop supporting the US dollar with financial holdings. It had to break the symbiosis between the Arab OPEC economies and the US economy. And that was the second point that I mentioned above that I wanted to talk about. The U.S. aim has been to dollarize the world's oil trade, or more accurately, to dollarize the economies of the OPEC oil exporters and the financial savings that they've accumulated over the last half-century from this oil trade.
Well, Joe Kent, who the former chief of staff for Tulsi Gabbard and who had his own position as security advisor, just resigned a few days ago publicly and on, I guess, he said yesterday, March 18th, with Tucker Carlson's show, that a major U.S. demand for negotiating a settlement with Iran was to insist that it sell oil and gas only in dollars and to price it in dollars instead of any BRICS or other non-dollar currency.
Well, the whole point of this, as I mentioned, is not the pricing in dollars, that doesn't matter so much. It's the holding its reserves in the form of U.S. loans to the United States, what the United States can grab and use for itself, just as Europe has confiscated 300 billion of Russia's holdings of dollars in Europe. So the investment of OPEC oil profits and resource rents in dollars have led the Arab OPEC countries to be hostage to the United States, and Iran has recognized that. And that is essentially the motivation for it saying we have to break this connection between oil and the dollar. And what's been most important for the U.S.-OPEC relations is precisely what are they going to do with their export earnings?
You don't have to actually own the oil resources in order to control its trade. The sheikhdoms in the Middle East can own their resources as long as the money from these exports, the money from these resources, is all going to be spent, sent to the United States for loans. And these loans are, as you just pointed out, Richard, that's how the United States wants to finance its wars against the world with the world's savings, not with its own money. That's what the dollar standard is. That's the new form of imperialism. And Henry Kissinger made it clear in 1974 that OPEC dollar holdings should not take the form of actual ownership and control of U.S. companies, as I mentioned, but just the more anonymous bonds and stock holdings.
And so this dimension on the capital account is what dollarization of the oil trade really means. And of course, other countries have already been recycling a lot of their money into the U.S. in the form of buying the U.S. arms exports, which, as we're now seeing, have not been able to protect them. They're not really arms for fighting. They are status symbols to be shown on parade, to be shown there, like you'd have an expensive car or a famous sculpture, but not to be used for defense. And all of a sudden, the countries that have been buying U.S. arms have realized, wait a minute, they don't work. And yesterday, in the last few days, there was a lot of attention paid to something that Malaysia's Prime Minister Mahathir said in 2022. He'd been buying very sophisticated American aircraft, I think, for maybe $600 billion worth for the Malaysian Air Force. And then they found out that all these Air Force planes had a kill switch on them. And it turned out that every plane that Malaysia bought can be controlled by the United States. And the U.S. can press a switch, and it's like Stuxnet took over Iran's centrifuges. The switch can enable a U.S. controller to take control of the plane and make it fly wherever America wants.
So if Malaysia or any other country that buys a plane like that wants to fly it to either defend itself against the U.S. ally or attack a U.S. ally, the United States can simply take control of the plane and either crash it or even turn it around and have it bomb its own country. So this whole idea of US arms exports, which is almost as in magnitude, as large as the financial float of the United States, in many cases, all of that has been blown up suddenly. And people are saying, wait a minute, the planes don't work. And even if we buy them, we're not in control of them. This is really bizarre. You know, what kind of an arms trade is that?
So if you look at how happened with all of these savings of the OPEC countries in the 1970s after the oil price increase, well, a lot of them were put in U.S. banks. The U.S. banks lent them to Third World countries, now called the Global South countries. And these loans were unpayable from the beginning. The loans were to enable other countries' dependency on the United States for their food imports, for their trade, and for following the advice of the World Bank and U.S. advisors and the academic community that you should specialize in raw materials, not industrialized, specialize in low-cost labor products, but not high-cost, sophisticated products. They were not doing what China was doing exactly.
Well, all of these loans ended up going bad. And that ended the whole recycling of U.S. bank and bond investment to global South countries when the Latin American and other Global South bonds had to be written down. We're facing a similar situation today, not only with these same global south countries that cannot afford to pay the high prices for fertilizer made out of gas, for oil and gas, and for the export, the food that they have to import that's made with fertilizer made out of this gas. You can see the whole; it's like peeling an onion to see all of the different layers that all of this means. And I provide the analysis for this in superimperialism. I won't go over it here, but I'm making these points to show just what petrodollars may mean today. It now has to do with all of this accumulation of savings that the OPEC countries have had.
Well, we're seeing a lot of their capital investments, the cutters, billions of dollars that it'll cost to replace its gas refinement capacity, and all of the luxury tourist trade that the Arab Republics and the Arab countries have built up. All of this is threatened now, and all of a sudden, they're going to have to liquidate all of these reserves that they thought was going to be their permanent growing wealth. It's all being wiped out, and they're having to sell it all off. And it's as if what was the whole point of their ever trying to become big oil exporters and invest in all of these vast tourist and hotel and real estate and financial projects that they've done. It's been a disaster. Well, I want to just close by pointing out that in Britain, Starmer, in the last few days, has said that if the United States withdraws from NATO, then Britain is, quote, "will not allow American bases to operate in our country's territory."
So, what Trump may have been doing is not only stop breaking the market for U.S. arms exports as a vehicle for savings, he may have finally split Europe away from NATO. And if Europe does break away from NATO, then what's the point of its fighting with Russia ? What's the point of its fighting against Iran ? If the trigger is its need for oil and gas to prevent economic collapse, then the way to avoid it is to stop the whole American Cold War against Russia and China and Iran. And without the support of other countries for this American Cold War, then there goes the whole U.S. strategy of trying to threaten to destroy other countries if they don't support the U.S. aims. The United States is destroying the economies of other countries, but those of its allies primarily. And maybe the allies now say we would rather reorient our trade and diplomacy and financial relations with nations that don't set out on imperial adventurism that destroys our economies. That's basically it in a nutshell.
NIMA ALKHORSHID: Yeah, go ahead, Rich.
RICHARD WOLFF: Yeah. Much of the world was surprised when the questions were asked in the first two weeks of the war, both to the United States and Israel, on one hand, and then to the Iranian spokespeople on the other. What are your goals ? What are your aims ? What do you hope to win ? And the United States gave this confused mixture. They must not have nuclear weapons, which they've agreed not to have anyway. Right, still sits there. Mr. Netanyahu can constantly terrorize his own people by saying he's saving them from the nuclear weapons that Iran will have ready by next week.
You know, even though all the intermediary agencies, the International Atomic Energy, all of them say that they are no positive. Even American intelligence says that they are not that close, even if they wish to. Okay. Well, then it's regime change. Let's leave that for a moment. The Israelis say regime change, but they seem to literally mean killing leadership and supplanting it with somebody else whom they will terrorize, because that's what this is: assassinating the leaders is a terrorist action. Always was. The original notion of a terrorist was applied to people like those Russians who assassinated the czars back in the 19th century. They were called terrorists because they were terrorizing the leadership of that country.
But then, the most interesting thing is the Iranians. They don't say what you would expect, or at least what the journalists expect. They don't say, you must stop bombing us. That won't end the war for them. They make that clear. Wow. That you will do this. No, no. And then they explain, and here's the explanation: We want the United States out of the Middle East. Wow. Everybody goes; they must be crazy. What ? You know, that's like the old joke, you know, slogan, U.S. out of North America. No, that's funny because the U.S. is part of North America. And it's not funny, but it is strange. But now let me explain why it isn't.
The simplest explanation is that Iran's problem isn't this or that. It isn't the Strait of Hormuz or passing ships or none of that. The problem of the Iranians, which they've had to finally figure out, is the presence of the United States in that part of the world. Michael is giving us the details: the petrodollar, the control of capital flows, the pricing of the oil, all of that. Yes, but that's the role of the United States in the Middle East. And even if you change some of it, okay, oil can be traded in Chinese yuan or in Euros or something. That's not the issue. The United States wants to run the world economy this century the way they basically did most of the last century, which should surprise no one.
But the Iranians are saying that's the problem. In my words, your empire isn't quietly going down fast enough. You are bothering us in this part of the world. You're desperately trying to hold on to what you created in the second half of the 20th century in that part of the world. And the truth is, that's the continuum between overthrowing Mosaddegh in 1953 and having this war now. It's an endless process, which they figured out that we, that's our problem, we Iranians.
We've got someone here whose junior partner, Israel, is an annoyance too. But everybody understands without the United States; there literally either wouldn't be a troubling Israel or no Israel at all. So that's not the problem. It's this, it's the don't make another war with Israel. It's bad enough Hezbollah does that. We're not; that's not our problem. It really isn't. Our problem is, and that's why this war is not going to stop until you get out. And the rest of the world goes, what ? A little poor country is telling the United States ? Yes, because that's where we are. The exhaustion of this empire is now. Yeah, you couldn't do it if you were Afghanistan. That's too poor and too small. And you couldn't do it in Iraq, for the same reason. And you couldn't do it even in Vietnam, for the same reason.
But now you got 92 million. You got them right on the border with Russia who can make sure that they have drones and missiles forever. So this is now an unequal fight that suddenly doesn't look so unequal at all. And as people struggle here in the United States, they simply brush; they want us to leave the middle. Big mistake. You're making fun. I understand that helps you deal with this reality. But that's what you're trying to do. You're trying to dismiss what is terribly present. The nagging question: my god, can they withstand the bombing that they're getting from Israel and the United States long enough to actually win ? And as that idea, and I don't know, I mean, Nima, you know better than Michael and me what the answer is or what the Iranian people can and will do, given all the struggles within that country, all the differences, and all the conflicts, as all countries have, but Iran has certainly got its share. Can they hang in there long enough?
Because the more you think about it, the more their leadership's extraordinary statement: we're going to fight until the United States gets out of the Middle East, instead of being crazy, is becoming a brilliant possibility that they seem ready to fight to realize. And then the question becomes: how far down the decline ladder has the United States come so that the ability of the Iranians to endure outlasts the ability of the American people to endure a government doing what this one is doing. And then all I can tell you is what we're talking about here is undermining. That's why I focused on the macro. We are undermining the cohesion of this society by what we are doing. If interest rates go up, if inflation resumes going up, and if the recession hits, all of which is more likely now than it was before this started. Then Iran will go down in human history, as having understood before all the rest of us did that the [US], I can borrow an image from China, [is] a paper tiger.
MICHAEL HUDSON: Well, Richard, I think Iran can hold on longer than the United States and its allies because Iran can simply say to the world, if you don't intervene to stop the United States and Israeli terrorism and destruction, then your entire world economy is going to be crashed, or at least the world economy of America and its allies in Europe and Asia, because we won't let ourselves be killed without bringing down all of the nations that did not stop the United States and Israel. So that's basically its message, and we've already seen its willingness to do this because it really doesn't have a choice. If it stops, it will be killed by Trump coming in and attacking it again and again. That's what its leaders have said, and that certainly seems a realistic assessment of U.S. behavior. So it's up to the world to stop its own economic destruction, and it hasn't even seriously begun to do that yet.
NIMA ALKHORSHID: Do you want to add something before wrapping up?
RICHARD WOLFF: No, it's just I am. I'm still reacting to—had not heard what Michael said about Starmer. And I have, you know, I have half a foot in Europe. My family comes from there and so forth. If that quote, I've never heard Starmer have enough courage to do anything like that. He is at the end of his political career, even though he thought he was in the middle. He has squandered an election in which he blew into office with a labor majority across the houses of Parliament, etc., etc. He has destroyed all of that. He is extremely disliked and unpopular. He's right up there with Macron in France. Just for our audience, they had municipal elections this last weekend, last Sunday. And the governing party of Mr. Macron lost everything. Either the right-wing nationalists or the left-wing, La France Insoumise and that coalition of the left, they did very well. But the middle, which Mr. Macron represents, all gone. Just all gone. And that's usually a foretaste of the national elections coming.
So I have been wondering how long it would it take for the Europeans to recognize that American foreign policy, because, as I put it, it's a dying empire, is no longer willing to have allies you work things out with. It wants tributaries. The ally is interesting to the extent that it enriches us and, therefore, makes us more secure. They haven't done that enough, so I'm going to complain that they are leeches. They don't do anything for us. Stupid, but you can understand where it comes from. You want their support. This decision to attack with Israel was not discussed. The German government made it clear over the last week, Mr. Mertz, and that would be the most important economy with the United States to support. It is, for example, if people don't know, the most important support for Ukraine at this point, Germany.
So not to coordinate with Germany is beyond words stupid. Then to ask them, and not very nicely, to help you, please send us warships, which Michael correctly puts they don't have, by the way, or very few left. And those don't work real well because they haven't had any use for them. And then to be angry that they say, well, you know, Starner initially said yes, and then realized, look at the irony here, realized that his career was over unless he turned against it, because that way he can become a hero for all the British who don't like being treated this way, because the idiotic Conservative Party of England and the even more outrageous Farage Reform Party are gung-ho supporting the United States out of their god knows what you could call the way they think if even the word think is there.
So Mr. Starmer has just discovered that, by being anti-American, he might have the best chance not to disappear. It has nothing to do with Iran or British imperialism, none of which he has ever questioned, and he never will. But you can see another example of the history of capitalism in which I would argue it's always the domestic situation that governs whether you go to war, when you go to war, how you go to war, and when you end the war. And I think it will be the outgrowth of 2027, what happens in this country will bring that war to an end, or Mr. Trump's fear of what is beginning to unfold in the economy will make him have to stop this.
And then the question will be: notice how it's shifting. It'll no longer be what the United States is going to do as if that begins and ends. It will become: what are the Iranians going to do ? If the Americans stop bombing and declare peace, what are they going to do ? And the whole world will be now focused on the Iranian leadership; however, much of it is still alive, to be able to formulate a basis on which to end this war, which they may not be ready to do, putting Mr. Trump in an absolutely unique position given the bravado with which he tries to do everything. He'll have to, but you know, he'll be up to it. Because you know how I know ? Because of the clip of Scott Descent. We're taking away the sanctions on Russia. We're taking away the sanctions on Iran in order to defeat Russia and Iran. We're giving them a ton of money, paying them outrageous prices for what they export. And boy, is that a blow against them ? This is so stupid that you really have to stop and take a deep breath and understand he's probably notice. I'm not sure. He's probably not that stupid, but what's coming out of his mouth is stupid squared.
MICHAEL HUDSON: Well, I'm glad you brought up Starmer because when even the opportunists are breaking away from the U.S., they're the canaries in the coal mine. And if you look at what's happened to Britain just this week, they're very sharply raising their gas prices. The British wage earners are being very tightly, they're being squeezed by the rising cost of heating their homes, of electricity. All of the energy prices that are going to fall on the wage earners and on their employers are going way up, disclosing things. And the problems, not only in Europe, with Mertz and Macron and Starmer, look at Korea. Just two days ago, the Korean parliament approved the $350 billion gift to the United States, saying if you don't raise your tariffs on us, then we will give you $350 billion for you, Donald Trump, to invest and keep most of the profits on, just so we can have the market for our exports.
But what can Korea now export if it doesn't have OPEC oil and gas ? This breaks all of what Trump had promised: the $350 billion from Korea. And then you have the $550 to $750 billion that Japan has promised to send to the United States when Japan is in the same energy squeeze that Korea is. And yesterday, you had the Prime Minister, an anti-Russian, anti-Chinese, pro-American prime minister of Japan here, sitting with her hands very tensely in her lap. Well, Trump said, you know, we're really surprised. Iran wasn't expecting the attack. And surprise is how to win a war, just like when we had and bombed you in Japan. That was a surprise. Of course, you did at first. You had him bombed us in Pearl Harbor. That was the discussion that he was having. You can just imagine the effect that has on Japan and their decision. Just how long can we hold on to our servitude to the United States, relocating our industry there, like Korea's promised to do ? And all for what ? When we could really be making a profit by dealing with our neighbors instead of dreaming of attacking them again like we did in the 1930s. This is maybe Trump will bring about a reconsideration of world peace at the rate he's going.
RICHARD WOLFF: Well, I've gotten several emails today just to give you an idea. And some of them were really, I'm not going to do it, but if I read them to you, it would bring tears to your eyes. People very quickly understood Pearl Harbor was the Japanese attacking a naval military base in that harbor in Hawaii. Whereas what the United States did is drop an atomic bomb on two citizen cities, Hiroshima and Nagasaki, were concentrated population centers. So one country attacked a military target, the other one using for the first and only time in human history nuclear weapons. By the way, we should be discussing next week the statement coming out of the World Health Organization that they are seriously considering the possibility of nuclear weapons being deployed in this war. And when that's all they say officially, but apparently, unofficially, their expectation is that Israel would have to do that because of being at risk of disappearing. And, you know, I don't know what to do with that information, but it gives me a bad feeling in the pit of my stomach.
So I think maybe some conversation would be useful just as one way, however weak it is, of coping with such a conceivable thought.
NIMA ALKHORSHID: Sure, sure.
NIMA ALKHORSHID: Yeah.
NIMA ALKHORSHID: Thank you. Thank you so much, Richard and Michael, for being with us today. Great pleasure, as always.
RICHARD WOLFF: Take care.
NIMA ALKHORSHID: Take care.
Transcription and Diarization: scripthub.dev
Editing & Review: ced