Israel-Iran War: Economic and Strategic Consequences | Kamran Bokhari
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What's up, everybody? My name is Demetri Kofinas, and you're listening to Hidden Forces, a podcast that inspires investors, entrepreneurs, and everyday citizens to challenge consensus narratives and learn how to think critically about the systems of power shaping our world. My guest in this episode of Hidden Forces is geopolitical analyst and forecaster Kamran Bihari.

Kamran is the Senior Director at the New Lines Institute for Strategy and Policy and has served at the U.S. State Department and as a Senior Consultant with the World Bank.

Carmen first came on the podcast in the days after the October 7th attacks to discuss the violence ignited by Hamas, the nature and scope of Iranian involvement, and how various regional actors were exploiting the growing disorder for their own advantage as the Biden administration struggled to stabilize a region that was on the verge of another major war.

In his subsequent appearances, he has provided us with important context for understanding U.S., Israeli, and Iranian strategic aims and limitations, the interests and constraints of other states in the region, including Saudi Arabia and Turkey, how the events in the Middle East are being perceived in Beijing and Moscow, and how events may unfold from here.

The broader war with Iran, which has always set the stage for our conversations, has finally pulled in the United States as a direct counterparty to the violence with its recent dropping of 14 30,000-pound bombs onto three Iranian nuclear sites, the Fordow uranium enrichment plant, the nuclear facility in Antans, and the Esfahan Nuclear Technology Center.

What happens from here and whether the White House's actions will ultimately prove fruitful for America's long-term strategic objectives is the central focus of today's two-hour-long conversation.

In the first hour, Kamar and I bring listeners up to speed on the latest developments, what we know about the initial successes or failures of U.S. and Israeli strategic planners, the Iranian response, immediate risks to the United States and its allies, and how this war is likely to reshape the economic and security order of the Middle East over the next five years.

In the second hour, we widen the aperture to examine how this war will impact the economic and military imperatives of the world's great powers, namely the United States and China, as well as their respective networks of alliances and trading partners. We also discuss the potential economic fallout in the second and third order derivatives that stem from America's attack on Iran.

We end with an exploration of best and worst case scenarios that range from a new investment super cycle in the Middle East to the deployment of battlefield nuclear weapons and new waves of international terrorism in the United States and Europe.

If you want access to all of this conversation, go to hiddenforces.io/subscribe and join our premium feed, which you can listen to on your mobile device using your favorite podcast app, just like you're listening to this episode right now. If you want to join in on the conversation and become a member of the Hidden Forces Genius community,

which includes Q&A calls with guests, access to special research and analysis, in-person events and dinners. You can also do that on our subscriber page. If you still have questions, feel free to send an email to info at hiddenforces.io and I or someone from our team will get right back to you. And with that, please enjoy this timely and deeply revealing conversation with my guest, Kamran Bihari.

Kamran Bihari, welcome back to Hidden Forces. Thanks, Dimitri. Great to be back. So Kamran, we're recording this episode on Monday, June 23rd. We're now, what is it? It's like nine, 10 days into the more escalatory phase of this conflict since Israel began its bombing campaign in Iran under the so-called Operation Rising Lion. You've been coming on the podcast for the last 18 months or so, a little longer, really since a few days after the October 7th attacks. And I think you've done an excellent job

giving us context for the larger war between Israel and Iran and America's proxy war with Iran and how the events that transpired first in Gaza, then later in Southern Lebanon, then the Houthis all fit into this larger geopolitical campaign against the Iranians. Can you help put this latest bombing, both the Israeli and American bombing into historical context for us? How did we go from negotiations

to active negotiations over Iran's nuclear program, to Israel's military campaign, and now the limited US strike from a few days ago? Yeah, absolutely. Look, I have to admit that you and I talked about this offline the night that the Israeli attacks began. And then we spoke about this when the US struck Fordow and Natanz and Isfahan. And we were trying to make sense of it. So

I think it needs to be kept in mind that from the president's point of view, he gave 60 days to the Iranians to sort of reach an understanding.

Now, in between those 60 days, and I forget how quickly this transpired, we somehow went from, well, we're open to the idea of 3.67% enrichment, but that's the limit, to 0% enrichment. This was sort of a shift in the demand from the Trump White House.

And it's understandable because, you know, the president is responding to pressures from different parts of his base. There are those who say that, you know, end this forever wars and we don't want to have to deal with this. America first. And they have a particular interpretation of America first and what it means is.

versus those who think that, who are still America first proponents, but they think that American and Israeli interests are very much aligned, especially when it comes to Iran. And so I think that pressure forced him to move away from, okay, we'll let you do a little bit, just so that we can get a deal,

to no, we just absolutely cannot allow anything that it could potentially be a pathway to nuclear weapons down the line.

So, that was going on. And if you recall, I would say, give or take two weeks ago, maybe a little more, perhaps a little more than a fortnight ago, we saw a shift in the president's public statements. Until then, you will remember that he was saying that I don't think it's a good idea for Israel to go ahead and engage in military activity against Iran while diplomacy is ongoing.

to where sometime around, I would say, two Mondays ago, he roughly, he shifted his position, public position, and started to say, I really don't think that we're going to get a deal. And that to me sounds like they were negotiating, Steve Witkoff and the Iranian foreign minister, Abbas Arakci, and the Iranians weren't budging.

From the Iranian point of view, they're looking at this and saying, you know, this president is against forever wars and, you know, his base is not going to allow to do him. He doesn't want to do this. So the United States is not going to attack us. And while the United States is negotiating with us, it's really unlikely that Trump will allow the Israelis to attack us. So what does that mean? That means that we have room to maneuver. We have wiggle room.

And we don't need to sort of just throw in the towel on 0% enrichment. Let's continue to negotiate. I think that's where they miscalculated. Because the president looked at that and said, oh, okay, so they think I'm bluffing. And now I'm also under – there are divisions within my own base, within my own party on this.

And I really don't want to go to war. But the Israelis are saying that, hey, we have this plan ready to execute. You just need to give the word and let us do it. So I think that's when he gave sort of that

green light or orangish green light or yellowish green light to the Israelis to say, okay, let's see what you can do. I don't think that the president was fully convinced that what would happen, but okay, because what it does is it basically telegraphs to the Iranians that look

I'm not bluffing. If you think I'm bluffing, well, guess again. And I think the target sets were discussed, the no-go areas, broad parameters. But obviously, when Israel is operationalizing that understanding, and they're the ones applying kinetic force,

then obviously things can't be sort of micromanaged and there are things. And we have to assume that for Israel sees Iran somewhat differently than the United States sees Iran just because of geography and they're two separate countries. So I think that's where we got there. And to just sort of last point, which is how did we get to the US getting involved? Well, I think that must've been something that they knew from the get-go.

that if you look at the Israeli arsenal, they don't have strategic bombers. They definitely don't have the massive ordnance penetrators.

And that's something that only the U.S. has. It's not something you can give to an allied or partner country and hope that they could sort of use it. I mean, that's a tradecraft that takes time to develop. And the U.S. has had plenty of experience. And even then, there are still questions as to what kind of damage has been done, how devastated are the Iranians, how degraded are their capabilities because of that. So I think that at some point,

that was bound to happen. But the president was hoping that somehow we could get into a negotiated settlement. And if you recall the report, Steve Witkoff and the Iranian foreign minister spoke at least three times during the start of the Israeli bombardment all the way to when the US pulled the trigger on Fordow with the strategic bombing. So again, I would say that

It's very likely that the Iranians were not budging. And in the end, there was still the matter of, well, if we stop the bombing right now, we don't take out Fordow and even if we have a deal,

How do we know that the Iranians are going to comply with our demand that they open up this facility fully, transparently to the International Atomic Energy Agency? So I guess this was sort of kind of hardwired into it, if that makes sense. Yeah, it does. And I think we'll have a chance to really get into an analysis later in this conversation. But I'd like to clarify some points that you made and then also

get some updates and sort of establish some facts before we move forward.

First of all, it sounds like you're saying that essentially Trump became impatient with the negotiation process. Is that your opinion? Does that describe accurately what you think happened? That's one way of looking at it, that he may have gotten impatient, but there's also the other unknown, which is that, and which nobody knows for sure. We have intelligence. The Israelis have intelligence.

And between the two of us, it's probably the best that the world has on the reality of the Iranian nuclear program. So the unknown is, well, what if they're using this opportunity because they're under so much pressure? And essentially, you know, even after the Israelis are bombarding, that there is an incentive to

perhaps do a secret nuclear test, clandestinely do a test. We don't know if they're running for that. So that's also the unknown. And in intelligence, it's not what you know, it's what you don't know that also shapes decision-making. So I think that that sort of put pressure on Trump and said, do I want to be known as the president under whose watch basically Iran tested a nuke?

Okay. So that brings up another question I wanted to ask, which is about Netanyahu's failed predictions, the predictions that he's made over a decade that Iran was on the cusp of a nuclear breakout. Let's put a pin on that real quick, because I still want to establish something else here. I also think, by the way, when you were describing the Iranian point of view, I think, and maybe this is a good way to ask this question.

Don't you think that the Iranians should have had some hesitation about Trump's willingness to use force or to back the Israelis, given the fact that he was willing to do something that previous administrations were not, which was to kill Soleimani in the tail end of his last administration? Absolutely. Look, we have to assume, we just said, and we talk about it, the whole country talks about it, how Trump's camp is not a monolith. We know Israel is not a monolith.

Certainly, Iran is not a monolith. And you will recall, I've written a long report on how the internal divisions of Iran operate and where they're headed. So it's difficult for them. So on one side, there are those who are urging caution, saying, look, we shouldn't assume Trump to be like other presidents because of what you just said, Dimitri. Look, he killed the head of our Quds Force of the IRGC.

And he's unpredictable and we shouldn't- He's a risk taker. We should be, yeah, he's a risk taker. We should be careful. But then there are those who say, yeah, but he also doesn't want war, you know, and he's taking great risks. He's going, I mean, we're not that big of a threat to the United States. Russia is a bigger threat and look how far he's going to accommodate Putin and whatnot. Obviously, there'll be those who shoot back and say, well,

Putin, that analogy is not right. So I'm just trying to get into sort of a potential debate that has been happening, which I think is a likely debate. I mean, I would be surprised if they weren't debating this internally at the level of, you know, at the highest levels of the Iranian government. And so in that back and forth, there's also the element of

pride, credibility. You know you're going to compromise. You have to compromise. But do you want to completely look like you're completely capitulating?

So there is that pressure as well that you can't capitulate. So you're caught between a rock and a hard place and things are moving by the hour, literally. And so you're calculating and recalculating and assessing and reassessing and updating your net assessment. And so I think it's very difficult for them to arrive at sort of, hey, let's not take chances with Trump. I think that they were also struck by...

these completely conflicting pieces of information that they're getting. So, I think part of what makes this administration especially challenging to cover is that people that work for the president say one thing and then the president often contradicts what they say. So, we actually haven't gotten a clear message on what

the reason is for the US's entry into this war. One obviously stated one is that, and JD Vance, the vice president was recently on the morning shows making the case that this was a limited strike and the motivations were entirely around Iran's nuclear facilities. But Trump has suggested, and I think stated in his tweets or his social, but to some degree or another, that regime change is possibly a motivation as well.

And I think I always say that one of the most important, if not the most important motivations for Trump to do anything and everything is to dominate the headlines and to make sure that his administration is action-packed, that he is getting eyeballs, that people are watching him. And I do think that also his ego and getting credit for things is important. And so the argument, another argument I've heard is that

he thought that the Israelis were doing well and he likes to be aligned with winners. So once he saw that the Israelis were having success, he wanted to jump on the bandwagon. I think what you said is also interesting that he's been convinced by Israeli intelligence. Maybe he trusts Israeli intelligence over his own intelligence. He kind of sidelined Tulsi Gabbard publicly in an interview that he gave on the tarmac somewhere at the White House grounds where he said that he

She's wrong about her assessment that she made some months ago, whenever it was, about how close Iran was to a nuclear bomb. So this raises all sorts of questions, including who has the presidency here. But just in terms of establishing facts here before we continue, one of the really important questions I have is, what do we know about the initial successes or failures of US and Israeli strategic planners here?

Because there are questions about whether or not the United States even penetrated some of these facilities like the Fordow facility. So what do we actually know here? Were they able to breach them? Have they been able to set back their nuclear programs? When will we know, et cetera? All great questions and all great points, Dimitri. So let me address sort of the aspect of Trump's decision-making and the statements that come from members of his cabinet and then the variance with what he says.

So this is sort of a moving target. Who says what, when? It's a moving target, especially when things are changing and you have a president who really wants change.

to come out as a winner. So I do believe that initially he wasn't convinced that the Israelis would actually be able to succeed in their airstrikes. He thought that this would become ugly and it would sort of drag the US in, it would further complicate the situation. But at some point between being saying, "Okay, they think I'm bluffing. I can't show that I'm not bluffing using American kinetic force. These guys were ready to go."

Okay, so let's go ahead and roll the dice. As to sort of the whole thing between Tulsi Gabbard and the president, so what happened is that I think that the director of national intelligence's statement to Congress was a long one.

And there was that one statement where she says that our intelligence says that since 2003, they've sort of not been actively pursuing a weapon. So that's sort of an estimate. That's an intelligence estimate, an IE. But I think I saw other places as well in that same testimony hearing in Congress where she also said,

you know, caveats that and says, there are other pieces of information that suggest that this assessment, we're not so sure about this assessment. We also have reports from the IAEA chief who also said that there are, you know, there's evidence that there has been some weaponization activity. And look, you know, this is sort of, in other words, you're being flooded with information. And the same case with the president. And I think when he

was put on the spot, and I think it was aboard Air Force One, by a reporter that your own DNI says this. So he probably got irritated. And in response, he said, well, she's wrong, or I don't care what she says, or whatever it was. I forget the exact phraseology. And this is what we know. And this is what we're saying.

Here's what I'm trying to do. I'm not trying to at all justify what is happening. I'm trying to explain how I see the variance in these statements, because I have to believe that

This is, and everybody should believe that this isn't a perfect system. This is a very chaotic system by nature, where different people are saying different things. And then the question is, what is the common denominator? Well, Speaker Mike Johnson tweeted that, suggested that somehow there was an imminent attack or something imminent was going to happen. And then another congressman or senator tweeted that, actually I was in the same meeting as the speaker. And

That's not true. There was no imminent attack going on here. I just want to, if you don't mind, I just want to- Sure, yeah. I just want to get to the regime change thing, because this is something I've written about quite a bit. And last Friday, I authored a piece for New Lions Institute with my colleague Faisal Etani on how the Israeli attacks are actually accelerating an internal process of regime evolution that's been in play for years, or at the better part of the last 20 years.

So I think that what the president tweeted on Truth Social was,

isn't sort of clearly saying, "Hey, we're going for regime change." Basically, what he's doing is he's throwing a doubt out there that as to US intentions, the target audience in my view is the Iranian regime that don't assume that we won't go to that length. So because they have to make a decision, the ball is in their court, they have to go and retaliate and the US wants to find an off ramp and that's why. And then the other thing is it's different imperatives.

The vice president, in my view, is speaking to the base, especially those who are basically saying, "Look, you're dragging us into an open-ended conflict and this is betraying the promise." So I think those things need to be kept in mind. But anyway, you wanted to ask another question. Yeah, I think, well, just to piggyback on that, I totally agree. They are speaking to different audiences.

But I think that having more clarity on this is essential because for example, when the United States invaded Iraq, while there were confusing messages being sent in the lead up, for example, Condi Rice saying that we don't want the smoking gun to be in the shape of a mushroom cloud, there was no confusion about whether or not we were leading up towards an invasion. And I think there's a lot more confusion today about whether or not this is a limited operation, whether or not the US is going to get sucked into another major war.

And again, this would betray so much of what Donald Trump has supposedly stood for and what has led so many people to elect him, which is supposedly that he's not going to get his dragon to another war. I want to just get some facts in place before we get into the analysis portion, which is obviously the most interesting and most relevant for our audience. So first of all, like

What has actually happened here? And I'm not talking about, let's put aside because there's a lot that's happened. The Israelis also began this campaign like 10 days ago and they've not just bombed facilities, but they've also actually taken out people. And I think they've targeted mainly the IRGC, but you can correct me if I'm wrong there, or members of the IRGC, the Iranian Revolutionary Guard Corps.

But what has the US done here? It's bombed as far as I've seen three, mainly three nuclear facilities or, well, one of them is a research center. I don't know if they actually, what they do in terms of applied science there. But what do we know about what they've done, where they've bombed and have they been successful? Because I've seen reports that they haven't been.

So we don't have clarity on that. And part of it is, as the chairman of the Joint Chief stated in his press conference with the defense secretary the other day, the morning after the night that we struck those facilities, is that battle damage assessments will be forthcoming and they take some time. And he's right. We don't fully know. What we do know

is that 14 of the GBU-57 bombs, the 30,000 pound bomb, which penetrates deep and then detonates once it hits its target depth, they were dropped. Now, if you dropped 14 of those, and it's not clear to me fully that all 14 were dropped on Fort D'Eau,

And what about Natanz and Isfahan? Because we struck that as well. We do know that submarine-launched Tomahawk cruise missiles were fired as well. My understanding is they were targeting Natanz and Isfahan that the Israelis have also been hitting over the past several days. And there are reports that suggest that that was a request from the Israeli government to Trump that, hey, you're going to go there. Why don't you also...

you know, hit these facilities. That to me suggests that they weren't sure that they actually completely took out Natanz and Isfahan.

As for Fordow, I mean, if you drop 14 of those, and obviously we're talking about a facility that's deep underground beneath a mountain, and there are questions about the range of them. So the reports that I've seen suggest that the maximum range is 200 feet for the penetration of one of these bombs.

and the facility is somewhere at 235 to 250. Again, these numbers are estimates. These are not hard numbers, so we can't assume that they're hard numbers. But what we do know is that 14 of them were dropped. Now, 14 of them have wreaked havoc. Just real quick, and I want you to continue. These generate mushroom clouds. I mean, they look like nuclear bombs when they go off.

These are enormous explosions. These are enormous explosions, but bear in mind they're underground explosions. And there's a lot of dust up, if you will, for a lack of a better term. But the mushroom clouds that we've seen in years past, with the bombing on ISIS targets in Afghanistan, on Taliban, on Al-Qaeda, those were different GBUs. Those were earlier versions of GBUs that were designed to penetrate Tora Bora,

And of course, it depends where they strike and how above the ground they are. And that determines how much mushroom cloud there is in that sense. If you're down that below, then I don't know. I mean, do we have a full understanding of the topography of that facility and the mountain range surrounding it?

Obviously, look, we haven't seen the bombing in real time. Those videos have not appeared yet. I'm pretty sure they were taken. And once they appear, we'll have more. I think that's going to remain classified for a while while they do the battle damage assessments. And so I want to say is that we don't know, but it is reasonable to assume that with that kind of payload, that there's been significant destruction. Now, the question is,

And these are the reports that are circulating. That what about the HEU, the highly enriched uranium that was at this facility? There are reports that 400 pounds or kilograms, I forget which one it is, were actually removed from this site and taken somewhere else. There are lots of questions as to what that means, but that's a question that's still out there. So how useful is it?

If you do not handle that with care, it's kind of like hazmat, hazardous material, and you don't have a good transportation for it, a good storage place, you could irradiate your own population in a worst case scenario. So there are a lot of unknowns. So I'm operating with very little information.

So, let's just talk about responses here. So, the Iranians have already responded, but so far just to Israel. They bombed Tel Aviv. I don't know if they bombed any other cities in Israel. I mean, I've seen images of buildings in Tel Aviv get hit, including the Mossad headquarters, I believe.

as well as an Israeli hospital, I think, was also hit in the bombings. So the Israelis have taken the brunt of the response. The question is, how will the Iranians respond to the US's entry and to the US's bombing? Will they go after embassies and military installations in the Middle East? Will they, as some commentators have suggested, possibly close the Strait of Hormuz or attack other oil facilities in the Gulf?

Where are we now at this point? Are we all sort of just waiting to see what the Iranians will do and hoping that they will, again, do some kind of performative response to deescalate? Yeah. So the model that I'm operating by, the baseline model, so this isn't sort of the full package. And obviously the circumstances are different

from five years ago when the Iranians retaliated performatively in a choreographed manner to the assassination of Major General Qasem Soleimani, the head of the IRGCQF. But that's the baseline model that I'm operating by, is that the Iranians know

They have to retaliate. They cannot throw in the towel. That means capitulation. So they had to do something. So what they did is they struck a facility in a base in northern Iraq, in Iraqi Kurdistan. And I think the name of the base was Ain al-Assad. And they telegraphed through the Iraqi government that,

to the United States that we do not seek greater conflict, but we are responding and let's call it quits. And if you go back to the footage of that time period, Trump said something to the effect that, yeah, it's over. So in other words, the US accepted that and said, okay, let's move on. We

I don't know if you recall, Dimitri, there was a mishap, a major mishap during that retaliatory strike in which the IRGC's aerospace forces accidentally shot a Ukraine Airlines flight leaving Tehran airport for, I think it was Kiev. I do remember that. That was tragic. That was tragic and was bound for Canada. And it had a lot of Canadians of Iranian origin and it was really,

really bad for the regime. They had to do a lot of damage control at the time. Because it confirmed a preexisting bias and belief among Iranians that this regime is totally incompetent. And even in their response to the Americans, they ended up killing their own citizens. Exactly. They're not sure of their capabilities. So we have to assume that. The other thing is, look at

Even if none of this had happened, you know, Iranian weaknesses had not been exposed. And Iranian weaknesses began being exposed last year, last April. I remember writing an article on this and saying that when they first struck Israel in retaliation for the attack on their embassy or their diplomatic compound in the Syrian capital, we saw how

those attacks were neutralized. The hundreds of ballistic cruise missiles and drones, they were neutralized. So that showed weakness on the part of the Iranians. The Israelis struck back symbolically and they took out some air defenses. And then when we had a round two in October after Nasrallah's killing the head of Hezbollah,

Then the Israelis struck even in a bigger way, and that further exposed the Iranian weakness. So moving into this scenario, the Iranians were already weak. Then come the Israeli strike, and they're weak. They know their weakness far more than anybody on the planet. So we have to assume that they're not going to play with fire. They're not about to commit geopolitical suicide. So they're not going to hit the United States in a way that...

is going to basically come back to haunt them. Look, there was a reason why the IRGC leadership was targeted and several levels of the IRGC leadership, several key commanders

And now we have the chief of the staff of Iran's Armed Forces General Command, which is sort of the joint chief position that oversees both the IRGC forces as well as the regular armed forces known as the Ardash. That's gone to an Ardash commander because of the killing of his predecessor who was from the IRGC.

So what I'm trying to say here is that a different type of military force that does not share the ideological zeal or the radicalism or whatnot of the IRGC now has the upper hand. They're filling the vacuum. They're part of them. They now have more seats than

on the Supreme National Security Council, where all centers of power are represented and which makes the final decision and then gets the green light from Khamenei. So what I'm saying is the likelihood of Iran not retaliating in a major way, only performatively, and in other words, to retaliate, to deescalate, find that off ramp are far greater.

That's interesting. So we're going to have a chance to dig into that as well, because I want to have a conversation about the political fallout and also how this might reconstitute Iran's regime as part of this conversation. But let's just talk about theories of war here. So what exactly is the Israeli theory of victory and how sort of aligned is that to the US? I mean, do you think that the Americans would be satisfied with a nuclear deal

that hits all their criteria and the Iranians make all the concessions that the Americans want, will that settle this once and for all? Or is the US ultimately interested, and certainly the Israelis, let's actually segment both of these, but to the extent that they're aligned here, is regime change ultimately the final destination for both of these countries? Okay. So we have to believe that after the disastrous outcomes

of the US moving to effect regime change in Afghanistan and Iraq post 9/11. And let's not forget Libya. Libya- And in some sense, Syria. And in some sense, Syria, some sense, Libya. But let's just stick with... I look at Libya not as sort of like, "Hey, let's go do regime change." It was like, "Let's limit the bloodshed or whatever." And that led to regime change.

So, inadvertently, at least the evidence that I've seen. And in Syria, it was like, okay, one step forward and then two steps backwards, and it was neither here nor there. Well, that's also just a... And I want you to continue, Carmen, I don't want to interject, because I haven't given my opinion here, but that's my concern with what's going on here. We're doing that sort of tweaking thing, that technocratic thing where we take technocrats and we give them weapons.

and they tried to use those to shape the world in a way that just seems impossible every time we try. But anyway, please continue. We'll have a chance to dig into that later in this conversation as well. No, absolutely. And I appreciate you interjecting there because that's exactly where I was going. So let's pause and think for a moment about what happened. We had, at the height of the Afghanistan war, I believe the US had at least 100,000 troops

and there were somewhere in the neighborhood of another 100,000 from NATO allies, which were part of the ISAF mission. In Iraq, at the height of the war, especially during the surge of President Bush's second term, we had somewhere in the neighborhood of 170,000 troops on the ground. Yet, with all those ground forces, and both Afghanistan and Iraq are much smaller countries with much smaller populations.

Mind you, to the listeners, Iran is the size roughly a little smaller than Alaska, and it's somewhere between 92 to 93 million people.

So that's a huge country. It has a very tortuous topography and terrain. There are, you know, Iraq-Iran border for the most part is the Zagros Mountains. The northern rim of Iran is the Al-Burs Mountains. Then there's desert in central southeastern Iran that extends all the way to the borders with or blends into the mountains that shape Iran.

between southwestern Pakistan and Afghanistan. And then there's the Turkmenistan area as well. So this is a huge country. So if we couldn't succeed in doing that, what happened? The United States was in Iraq from 2003 all the way to 2011, December 31st, which is when we pulled out. That was eight years. Okay. Actually a little more than eight years. Yeah. And so we toppled Saddam

We got a new political system going, but let's be very honest here. That country fell into the Iranian orbit. It went from being the biggest enemy of the Iranian state to being a vassal of the Iranians. On top of that, and say that there wasn't a jihadi cockroach in Iraq when the US moved in, and it became jihadist central of the planet with first AQ,

then succeeded by ISIS. And we saw how Mosul was sort of the nerve center of the ISIS caliphate. So that's the result. The result, and again, interjecting, don't lose your train of thought, but for a lot of listeners now aren't old enough to even know this or remember this, or some people have forgotten. But the Bush administration, again, we talk about conflating intelligence and messaging. One of the messages that they tried to sort of convey, but not explicitly, was that the

Saddam was harboring Osama bin Laden, or that Saddam had played some part in 9/11. And that's the great irony that there wasn't, as you said, not even a jihadist cockroach. And a few years later after the invasion, the place was swarming. Yeah. I mean, look, he was a despot.

very brutal, who would kill his own from the Ba'ath party. And those videos are still out there on YouTube. And now they're sort of, you know, with AI, they've been sort of turned into 4K HD versions. So now they've become a bit more clear. But there are videos from that era where, you know, he's publicly purging his own people. He didn't hesitate to kill anybody, even people, members of his family and tribe. So that is true.

And, you know, in some sense, one could argue that, you know, the Iraqis got rid of that monster. But what is the price that they paid? Where are we right now? Iraq is full of Iranian militias and now home to many of those militias that were deployed to protect Assad and they have been pulled back into Iraq.

You still have ISIS lurking out there. Yesterday, ISIS, in a very horrific attack in Syria, blew up a church, killing so many worshipers there. So that thing is not over either. And it's only a matter of time when, you know, as the Iranian, you know, president,

Iranian hold over Iraq weakens and the Shiite militias and its Shiite allies weaken, you're going to see ISIS emerge. So the point that I'm making is that was the outcome of that regime change effort. If you go to Afghanistan, it's even worse. We toppled a Taliban regime. The Taliban, and I remember writing about this back then, they declined combat only to come back and fight another day. And then what happened?

20 years later, several thousand troops having died and killed in action, and a trillion dollars, give or take, later, we basically gave the country back to the Taliban. And we were the undisputed global heavyweight at that time. Also important to note. This is a very different world today. Exactly. For us to be going and trying to do something similar, even without, quote,

quote, boots on the ground, which actually makes it even more difficult. Yeah. And so the limits of air power are very clear. Israelis are very cognizant of the limits of air power. So we had during the 2006 war with Hezbollah, the Israelis could not impose defeat because they went in with air power as a key component of their strategy. Obviously, they went in on the ground, but they thought air power would help. And it didn't work.

And what happened was that it left Hezbollah intact only to grow stronger until they found a way around using intelligence and technology to really hit them hard and really neutralize them. And that between 2006 and 2024, we're talking a long period of time. And so that's something like 18 years. So almost a generation.

So, what I'm trying to say is, I don't think anybody in Washington or Jerusalem is under any illusion that they can effect regime change. Now, what are they doing? Yeah. What is their theory of victory? Their theory of victory, and you're right.

and saying it's different for the US and it's different for the Israelis. There's some common denominator, but obviously, as I said earlier, these are two countries with two different strategic outlooks and imperatives, and therefore there has to be a variance. The Israeli theory of victory is hit the IRGC, which is the center of gravity, weaken it, allow others to fill the vacuum who are not necessarily...

you know, that radical. The mullahs are already gone. Weakened the IRGC. Who do you have left? You have left the regular armed forces. Obviously, they're not completely secular. They're Iranian nationalists. They are shaped by sort of this Islamic identity because they've been also subject to the bombardment, the ideological bombardment from the clergy over the decades. But nonetheless, they remain a more secular, more nationalistic group

and more professional force that is going to approach this situation in a realpolitik pragmatic manner. Now, that's sort of what I think is the Israeli theory here. And in my paper from April, 2024, I didn't know that we're gonna have this war. Although when the paper published,

When I talked about how the clergy is almost gone, and when Khamenei goes, this is going to become even more so a military-dominated state. And at that point, the next supreme leader is going to be a puppet in the hands of the military. But it gets a little bit more, well, gets a lot more complicated because there are two militaries. And the question will be, how will the IRGC and the Arteş share power or not?

That process has been underway for 20 years, as I outlined in my report. What the Israelis did is they accelerated that process. They've accelerated that process. And their hope is, and you can see their leadership. I was listening to President Herzog, the Israeli president, I think he was on CNN yesterday. And then I heard some Israeli strategic thinker speaking to Fareed Zakaria on his show. And they both said that if the outcome is regime change, then that's good.

but acknowledging that it's beyond our capability. So that's the Israeli theory of victory. Sorry, just to be clear, the Israeli theory of victory, they would ultimately be satisfied with an end to the nuclear program? So the nuclear program has been set back and hopefully they've bought themselves a lot of time, which basically means that

They've hit the reset button and the Iranians will have to work far more harder. It's not like they're going to go and do it tomorrow with their facilities destroyed. So that's one thing. But I'm talking about regime change. But what if they don't accelerate that? In other words, what if two years from now, there hasn't been any change? Does that mean that they failed in their

in their effort? I think that if that happens, yes. I wouldn't say it's a complete failure. I would just say that then they haven't achieved their targets. But if you ask me, knowing how the landscape of the Iranians is,

I don't think it's going to be no change. I think there will be change because the Iranian regime structure has been hit and hit hard. And so I do think that there will be some success. It won't be full success. But let's say that, you know, from an Israeli point of view, and they say this openly,

By hitting the IRGC, they're creating the conditions for the weakening of the regime. The other part is that the Israeli Air Force now has superiority over Iranian airspace. That's really, really bad for this regime as a whole, regardless of what faction you're from.

And the Israelis are thinking that they will lose credibility in this Mali. They've sort of triggered, and there's going to be a chain reaction down the road at some point that could ultimately lead to either an internal in-house change or a regime change. In other words, they can't do it, but if their actions lead to it, then that's good. That is their view. The American view is...

that they are not so concerned about changing the regime. Because think about it, the United States is a global power. Its sort of strategic outlook isn't just the Middle East.

And there is a strategy underway around the world, and you and I have talked about it at length, both on the show and off in a line as well, is that they want to be able to have a new architecture where America wants to reduce exposure to the risks out there, with the exception of dealing with China. And even there, they want more greater input from allies. Now,

If Iran sort of descends into chaos, because the worst case scenario is

And this is something on the minds of average Iranians, which is why they're hesitant to, in the current moment, to turn against their regime. Many of them would be hesitant. And we saw this in previous uprisings as well. So, okay, this regime is gone, then what? What if it's chaos? What if we look like Yemen? What if we look like Syria or even neighboring Iraq? Then what happens? And so that's not good from the American perspective, because what happens is,

I'll just give you a small example. A quarter of all Iranians are ethnically Azeri, and most of them are concentrated in the northwest, in that area west of the Caspian Shore, next to the border with Azerbaijan. And that could be detrimental to Azeri national security. There is another significant minority called the Baloch minority.

in the Southeast, who are not just ethnically different, they're also not Shia, they're Sunnis. And they actually have an active rebellion in addition to a public unrest going on, on the border with Pakistan. The Pakistanis see this as really dangerous for them. And so does the United States want now a contiguous shatter belt?

let's say the regime collapses and this worst case scenario, God forbid, comes out, you have a shatter belt extending, a contiguous one, extending from Afghanistan through Iran, through Iraq, through Syria, Lebanon, all the way to the Eastern Mediterranean. So that's not good for the United States. And I don't think that this administration is ignorant about that. They're very well know what the outcome could be. This is why they're more interested in

And the president in his way says, look, you just can't have nukes. Otherwise, make Iran great again. That's what he says. So he's not for regime change. And he is fearful. He has to be thinking that if we hit too hard, then it's like, be careful with how you approach this. Yeah, it's amazing. We just made that region worse throughout my entire adulthood.

And the policy makers in the US were so, and the new conservatives in the Bush administration, which drove foreign policy after 9/11, were so concerned about Saddam Hussein and his nuclear weapons program and his chemical and biological weapons programs that they invaded the country and they shattered it. And I worry about something like that happening again here. Obviously, we're not talking about an invasion,

But I want to take something that I found online and read it to you because it actually speaks exactly to what you said earlier about the concerns of everyday Iranians. And from a commenter on YouTube, he wrote, quote, as an Iranian, I can tell you the situation is no longer just political. It's existential.

We are trapped between two collapsing structures, one internal, one external. On the one hand, we face a deeply dysfunctional government led by the Supreme Leader and the Islamic Republic's unelected institutions. Decades of economic mismanagement, suppression of dissent, and brutal ideological control have alienated multiple generations. No one believes in reform anymore because every attempt has either been co-opted or crushed.

But here's the paradox. We are also terrified of regime collapse because we've watched the aftermath of Western intervention in countries like Iraq, Libya, Syria, and Afghanistan.

Each was promised freedom, each descended to chaos, civil war, or foreign occupation. So no, we don't trust the US or Israel, not because we support our regime, but because you know how imperial powers treat liberated nations in the Middle East. Freedom in their language often means vacuums, fire, and permanent instability.

Right now, many Iranians live with three truths at once. The Islamic Republic is morally and politically bankrupt. The alternatives offered by foreign actors are not liberation, they're collapse. A bad government is survivable. No government is not. We are not silent because we agree. We are cautious because we've learned too well what happens when superpowers decide to, quote, help.

In a sentence, Iran is a nation held hostage by its own regime, but haunted by the fate of its neighbors. We are stuck in a house we hate, surrounded by fires we fear more." Man, I read that and I really wanted to share it with the audience because I found it to be so profound and descriptive what feels to be the honest truth of a country located where Iran is with the history that it's had over the last 50 years.

Absolutely. And I really appreciate you reading from that essay. And really, it encapsulates and captures the reality of, you know, obviously, Iranians disagree amongst themselves like everybody else. But if there is a consensus, that's the consensus, that we're, you know, stuck between two very difficult situations. Look, there are those who are saying that

A lot of people hate this regime. And if you look at it from one sort of lens, which is as follows.

For the Israeli intelligence, for Mossad to be able to operate the way they have been operating in this country increasingly over the years, and now with their ability to strike, eliminate top leadership, and before that, nuclear scientists. This isn't the first time that they've assassinated nuclear scientists. This goes back to the late 2000s. And so now it's only become far more aggravated.

you have to have a significant degree of internal support from elements within society. Now, imagine that. The paranoia that that creates. The paranoia that that creates, but imagine the psyche of people, Iranians, some Iranians, just how much they hate their regime that they're willing to collaborate with Israel towards its end and destruction.

That obviously is a massive problem for the Iranians. They don't know the degree to which they're penetrated. They cannot seal the leaks in their system because they're leaking left and right. And this collapse has been going on from the strategic partners and proxy network outside of Iran. I mean, either in this conversation or in previous conversations that you and I have had off the record,

We've talked about, you've talked about rather how Iran was kind of at the pinnacle of its power in recent years until the attacks of October 7th, when we began to see Israel go after the proxies, Hamas, Hezbollah, which has been significantly decimated. And now the war has come to them.

And they are in many ways strategically isolated in a very significant way. Yeah. I have a colleague from the University of Ottawa and a friend, Dr. Thomas Genoux. Thomas is the French of Thomas. And he has a really great book from the Ahmadinejad era on how he talks about how Iran is geopolitically lonely. So this isn't a new condition.

So he looks at how Iran doesn't have too many allies. So it's a fascinating book. It's an academic work, but it's worth the read for those who are interested. So you're absolutely right. Look, and I wrote articles as far back as 2015 when I used to be at Stratford. I remember writing an article, something to the extent of the limits of the Iranian-backed Shia expansion or something like that. This is 10 years ago.

where I said, look, just looking at sort of the demography and the resources and the geography of this region, there's only so far that the Iranians can go. If they have the Assad regime as their ally, Hezbollah dominates Lebanon. They have proxies like Hamas and PIJ in the Palestinian territories. Iraq has gone from being an enemy state to a vassal state.

And they now have gone from being enemies of the Taliban and to being an ally against the United States. This is during the days of the US occupation. That was the peak. How far can they expand even further? Bahrain, which is a Shia majority country, maybe, but are they going to risk war with the Fifth Fleet that's based in Bahrain in the port of Manama? No, they're not.

Yemen became one of those outposts with the Houthis. So that's why that was so strategic and a strategic add-on to sort of that contiguous sphere of influence on the Northern Rim of the Middle East.

Other than that, I mean, the Azerbaijanis are hostile to them, even though that is a Shia majority country, but it doesn't, religiously, culturally, politically, it's completely the antithesis of what the Islamic Republic stands for. So in other words, they maxed out. And I remember writing a few other pieces over the years, especially I wrote a piece with the title, Iran Passed Its Peak or Something When Soleimani Was Killed.

But there's another point I want to make here, is that the Iranian strategy, there's a straight line, almost an inevitability of what we see today from the Iranian decades old strategy vis-a-vis Israel. The Iranian strategy was to exploit the Israeli Arab, the Israeli Palestinian conflict for its imperial ambitions.

And so that's why they supported Hamas and the Palestinian groups. And Hezbollah was sort of their premier proxy group that sort of almost became like a partner with the Islamic Republic. That's how big it got. So but they pursued a strategy of trying to strategically encircle Israel. And if you notice, the peak of that was the October 7 attack.

October 8 is the day when Hezbollah started to fire rockets in northern Israel. And then I would believe, I don't remember the date, but it probably was a days or just a few weeks later, we saw the Houthis start to attack commercial shipping and target those, they called it, were targeting ships that are connected to Israel in support of the Palestinians. But we know that the Palestinians were just sort of one of those things that were the Iranians and their Houthi allies were using

to be able to sort of project power. Now, as long as there was an Assad regime that didn't need the Iranians and Hezbollah for its own survival, I'm talking pre-Arab Spring, there was an understanding between the Assad regime and the Israelis that, hey, we're not friends, but it's in our interest to kind of keep Hezbollah in check.

And that was sort of the modus vivendi when the Israelis withdrew from South Lebanon in 2000, and even during the 2000, the withdrawal. But when the Syrians and the Iranians through Hezbollah assassinated the Lebanese Prime Minister Rafiq Hariri in February of 2005, and that led to the Bush administration forcing Syrian troops out of Lebanon,

That was something that was very uncomfortable for the Israelis, because as long as Syrian troops were in Lebanon, there was some method to the madness. And they just withdrew because they said, hey, at the end of the day, Hezbollah, what can I do? Because the Syrians are in direct control occupation of Lebanon, so we don't really need to be here. And so when US pushes them out, that works against the Israeli imperative.

And the Syrians maintained their deep influence over Lebanon through their intelligence assets until the Arab Spring in March of 2011 fomented an uprising in Syria. And over the years, very quickly, relatively speaking,

Assad became a vassal of the Iranians because he lost territory. The Iranians had to mobilize somewhere around 100,000 militiamen. And obviously, Iran's IRGC officers and commanders from the Quds Force were managing this militia landscape. But Hezbollah was their partner. And

That became really detrimental for the Israelis. That's when you see circa 20. So they won the war against the rebels in December of 2016 when they took back Aleppo.

And then you see in 2017, the Israeli airstrikes become more frequent in Syria. Why? Because they knew that the Iranians were setting up shop for that encirclement. They tried to keep the Iranians off balance. But ultimately, you know, it came to a point where you had...

October 7. By then, the Israelis had developed all these intelligence capabilities that they hadn't tested out just yet. We've talked about this, you and I, in previous episodes, how

Hamas went from just firing rockets at Israel to actually mounting this sophisticated commando raid, killing so many people, taking so many people hostage. And the Israelis knew that this tradecraft came from IRGCQF. And so they decided that it was time to roll back the Iranians. So from October 7, 2023 to today,

you can see sort of this logic and sort of this rolling back of Iranian influence to now where Iran's regime is struggling at home. Yeah. And people, again, listening, short memories, maybe they don't remember, they didn't learn in the first place, but it's important to remember the context of

which was that Israel and Saudi Arabia and the United States were on the verge of what Netanyahu at the time called a historic peace with the Abraham Accords. And the Iranians were very concerned about getting sidelined in that context. So even though the decision to provide support to Hamas to put on these attacks, and again, we don't know exactly the nature of the Iranian involvement, but we certainly know that they

They celebrated the attacks. The decision to do that may have, while in retrospect looks bad, the decision to not do it would have also left them in the same kind of situation. So they were stuck between a rock and a hard place, which is a consistent theme, I feel like, in the Middle East, which is that there's no good option. And that's true for the Israelis, by the way. I think for the Israelis, there really is no good option for so many of the long-term conflicts that they're dealing with here. So I'm going to move us to the second hour, Kamran, where I want to...

widen the aperture of our conversation to examine how this war will impact the economic and military imperatives of the world's greatest powers, namely the United States and China, as well as their respective networks of alliances and trading partners. I also want to discuss the potential economic fallout and the second or third order derivatives that stem from America's attack on Iran and how this fits into the larger reshaping of the economic and security order of the Middle East that we've been talking about

And then I want to end with an exploration of best and worst case scenarios that range from a new investment super cycle in the Middle East to the deployment of battlefield nuclear weapons.

and waves of international terrorism in the United States and Europe. For anyone new to the program, Hidden Forces is listener supported. We don't accept advertisers or commercial sponsors. The entire show is funded from top to bottom by listeners like you. If you want access to the second hour of today's conversation with Kamran, head over to hiddenforces.io slash subscribe and sign up to one of our three content tiers.

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