Richard Wolff & Michael Hudson: US Dominance Is Crumbling… Here’s Why Iran Matters

Former MI6 chief Sir Alex Younger states the US underestimated Iran, which demonstrated resilience by dispersing military capabilities, delegating weapon authority, and employing 'horizontal escalation' (firing rockets at anyone in range) to put a direct price on the US. Iran also understood the significance of the energy war, threatening the Strait of Hormuz to globalize the conflict.

The US underestimated the task and I think as of about 2 weeks ago lost the initiative to Iran. In practice, the Iranian regime has been more resilient than I think anyone would have expected. They took some good decisions actually uh as as early as last June about dispersing their military capability and delegating the authority for the use of those weapons... They have embarked on what's technically called horizontal escalation, i.e. firing rockets at anybody within range... understood the significance of the of the energy war and held the straits at threat and globalized... the conflict.

Richard Wolff explains that Iran has dispersed missile launchers and drone airports across its vast, mountainous territory. They can use inexpensive decoys that appear as missile launchers to electronic surveillance, leading the US to waste expensive missiles on fake targets while actual Iranian missiles hit their marks.

They disperse their uh missile missile launchers and their drone airports all over the country... It turns out for a few hundred dollars, you can build something that from the electronic eye in the sky looks like a missile launcher, but isn't one. It's a decoy. And you can then, if you're the United States and you rely on electronics, you can send a $10 million missile package to destroy a $500 decoy.

Richard Wolff highlights the land borders between China, Russia, and Iran (via the Caspian Sea), enabling an unlimited supply chain for missiles and drones from China through Russia to Iran. This mirrors Western support for Ukraine against Russia, creating a 'fantastic, ironic twist' where the US faces a similar challenge.

Iran has an immense border with Russia... And Russia has an immense land border with China... China can build missiles and drones unlike anybody else... And they could ship that across the border... And then Russia... is in a position to... take care of Iran's needs for drones and for missiles forever.

Michael Hudson states that the US anticipated the closure of the Strait of Hormuz and believed it would win by causing regime change through demoralizing the Iranian population by attacking hospitals and schools. However, the Iranian response (e.g., 'one revenge for all' video) shows this strategy failed, fostering greater resolve.

The United States knew very well that Hormuz was going to be closed... it imagined that it could be the winner... The United States believed that it would come out the winner, uh perhaps even before there was the current attacks, that the Iranian government would fall. That's the American illusion, that uh there'd be a regime change uh because America would hurt the population.

Michael Hudson predicts the war will plunge the world into a five-year depression due to the destruction of oil/gas infrastructure, leading to shortages of energy, fertilizer, and helium. This will force countries to question their alliance with the US, which is seen as the aggressor, and lead to the creation of new international institutions to replace the 'dead' UN and Bretton Woods system.

This will plunge the entire world into a at least a five-year depression... the hardest hit countries will be America's allies in Japan and Korea... The US attack... is an attack deliberate collapse of the world economy... The other countries are going to have to create a whole new set of institutions like the United States created the Bretton Woods institutions... to isolate themselves from the United States.

Richard Wolff argues that the US unilateral war on Iran, without consulting NATO allies, is causing the 'final collapse of NATO.' European leaders are bitter because the war risks massive refugee flows into Europe and exacerbates energy price issues, threatening their political stability and rendering NATO a 'paper tiger.'

I'm also struck by the what seems to me the the final collapse of NATO... Nobody consulted us about this war... For the United States to have risked attacking an Iran, provoking the war that could lead to a massive migration into Europe, means that there's a special bitterness among these leaders in Europe that United States has put them at political risk.

Richard Wolff details how Trump's proposed defense budget increase (an additional $800 billion for defense and the Iran war) without new revenue will necessitate massive borrowing. This will drive up interest rates, leading to stagflation and severe domestic economic problems, potentially pushing the US 'over the edge of a fiscal cliff.'

He wants to raise a defense budget to 1.5 trillion dollars... So, he asked for an increase of 600 billion dollars... for the war in Iran, he's asked for 200 billion more... There's no new revenue to speak of... He has to borrow it... the Federal Reserve... is not going to cut interest rates... we're going to raise interest rates... Holy macro, there goes your stagflation.