Jeffrey Sachs on the Real Origins of the Iran War and the Coming Economic Devastation

The closure of the Strait of Hormuz, a narrow waterway crucial for global trade, is already causing a severe and building worldwide economic crisis. This chokepoint handles an enormous strategic flow of oil, gas, fertilizers, petrochemicals, and other key commodities. The instability means the world cannot afford to wait weeks or months for a resolution.

Sachs states, 'The world economy is reeling... the Strait of Hormuz is closed. As long as it's closed, it means that there's a worldwide economic crisis building. So time is not permissive right now.' He mentions oil, gas, fertilizers, petrochemicals, and aluminum as affected commodities.

The fundamental reason for the US's 'war' with Iran, ongoing since 1980, is not Iran's nuclear program or support for militant groups, but its successful escape from the American Empire in 1979. This 'unacceptable' act followed the 1953 CIA-backed overthrow of Iran's democratic government, which sought to nationalize its oil, leading to 26 years of US-backed Shah rule.

Sachs explains, 'They escaped from the American Empire. They escaped from CIA control. That's not allowed.' He traces this back to the 1953 coup against Prime Minister Mossadegh for asserting Iranian ownership of its oil, leading to the installation of the Shah and Savak.

Israel, under Netanyahu's influence, adopted the 'Clean Break' strategy in 1996, rejecting a Palestinian state and aiming for 'Greater Israel' by overthrowing governments that support Palestinian militancy. This strategy designated seven countries for regime change (Libya, Sudan, Somalia, Lebanon, Syria, Iraq, and Iran), with the US military serving as the instrument for six of these wars, costing trillions of dollars and creating chaos.

Sachs details the 'Clean Break' strategy, stating it 'said we will never accept... a state of Palestine.' He lists the seven target countries and notes, 'Six of those wars have led to bloodbaths and disasters... And Iran was the last.' He clarifies, 'This was Israel's plan, but the US military was used. The US has spent 5 to 10 trillion dollars on this Israel venture.'

Unlike previous oil shocks, further escalation in the Iran conflict would involve the physical destruction of oil, gas, and petrochemical infrastructure in the Gulf region. This would lead to a 'cataclysmic' global economic downturn characterized by stagflation (high inflation and economic contraction), soaring food prices due to fertilizer supply disruptions, and widespread financial instability, potentially cascading into political destabilization worldwide.

Sachs, referencing his PhD work on 1970s oil shocks, warns, 'What will happen in the next few weeks if we don't choose the off-ramp is the physical destruction of a lot of the Gulf region.' He emphasizes that 'these are complex systems they don't get rebuilt so fast,' leading to 'worldwide disruption of food supplies' and 'huge financial effects.'

The US government's decision-making process for critical geopolitical issues like the Iran war is severely degraded, lacking systematic deliberation, expert intelligence, and inter-agency review. Instead, decisions are made by the President based on 'gut hunches' and external influences, with Congress largely abdicating its constitutional duty to declare war, making the system dangerously susceptible to catastrophic errors.

Sachs laments, 'I can't see any process' for deliberation, noting 'this was Trump's decision basically yes led by Netanyahu.' He criticizes Congress for voting that it 'should not have any oversight over this war completely contrary to the whole framework of the Constitution.'