What Did We Learn?

Apart from never doing that again of course

For those of you who have not watched Burn After Reading the scene is here. A list that I may update over time:

With Enough Rockets and Drones Sovereignty is Possible without Nukes

Iran has beaten the United States to a humiliating defeat, and it has done it without nuclear weapons. There is an interesting contrast in that the one nuclear power in the Middle East - Israel - has been pummeled for a month with conventional weapons. Gradations of escalation matter and when it comes to rockets and drones the Stalin quote “quantity has a quality all of its own” applies.

Blue Ocean Navies Are Not What They Once Were

It is far past time to call BS on the “laundry fire”. If Iran can hit a carrier with a drone or the like, then many other states definitely can. Stand-off distances are now longer, and US gunboat diplomacy is vastly weaker.

This Was an Economic Supply Chain War

Iran won by showing it could inflict vastly more pain on its opponents than they could reasonably take. This is because:

1. US client states had very high share of production in key upstream inputs (ammonia, LNG, oil, urea)

2. That production could be destroyed or damaged

3. That production could be blocked by the enemy

The first problem is hard to fix without interventions like a strategic reserve - and I would remind you all that while Australia passed that legislation quickly the Secure Act remains unfinished business in the US House and Senate.

The second problem looks completely intractable - without directed energy weapons improving or being located outside of drone saturation range there is no clear answer here.

The third also looks intractable - it is hard to stop people making drones and medium or even long-range rockets.

US Defense Suppliers are Completely Unreliable

If the US will not deliver hardware to Switzerland that it has paid for then why should Australia buy submarines from the US? These subs will likely get embroiled in a Taiwan conflict and make Australia a target as with Qatar and UAE - what exactly is in it for Australia? TSMC Townsville would solve the supply chain issue and generate tax revenue from an Australian point of view. In the interim other equipment providers which care about their credibility from Europe, South Korea or Australia should be strictly preferred. The best choice is in country production by local companies, next is localization with an international partner, last-worst is US supply.

US Client States’ Incentives Were Not Aligned With The US

All Gulf states that hosted US bases sought to drive downstream from oil and gas production to add value as well they might because of their structural cost advantage. This just compounded dependencies on them and if they cannot be reliably defended then they cannot be relied upon. The US and Europe likely have to live with this in the short term but longer term this cannot fly. The states themselves will fight tooth and nail to keep the US and Europe hooked because that is what will keep them safe(-ish). Look out for Tucker Qatarlson attacking green ammonia, methanol and non-Middle East sulfur supply soon. It is the job he is paid to do.

Similarly, Israel would prefer the US remain dependent upon the region to keep the US locked into its security which Israel can routinely destabilize with no apparent consequence. On this point Tucker and Netanyahu are on a unity ticket.

US Defense Guarantees are Contingent Upon Inflation

The US political system cannot tolerate inflation - it has played a significant role in the decline of multiple presidencies including Carter, Bush, Biden and now likely Trump. For US’ enemies the message is clear: spike inflation and you can negotiate with the next guy. This makes the US fundamentally weak in the face of any opponent who can generate an inflation shock which is Iran, China and Russia - the big three.

US Inflation is Not Stable Without Secure Supply Chains and Decarbonization

If the US political system cannot stand up to inflation, then the US must fix its vulnerabilities in supply chains that cause it. There is an aesthetic preference on the right for spending more on defense as a macho exercise but to me this looks like people who spend a lot of time on “beach muscles” and skip leg day every time. Leg day is the periodic table and energy - hard, grinding stuff that actually makes you genuinely strong. While US is doing the latest Instagram bicep routine from the guy clearly on steroids, China is doing Bulgarian split squats with a 100kg bar in the weird barefoot toe shoes.