Will the "Economic D-Day" Bring Iran to its Knees or Will It Become Another Trump Foreign Policy Failure?

Treasury Secretary Scott Bessent at his August 24, 2026 press conference

Six months ago today, the United States and Israel mounted a surprise attack on Iran. During the first wave of the attack, Supreme Leader Ali Khamanei, was killed, as well as and many senior Iranian political and military officials. During the next few weeks, massive American and Israeli bombing destroyed Iran's air force, much of its navy and left many military installations in rubble. 

Despite the United States and Israel's massive military power, the Tehran regime is still in power and, in many respects, even stronger than before the February 28th attack. The prolonging of the war, which Donald Trump claimed would end in 6 weeks, shows no sign of ending. What then is the status of the conflict now in its sixth month?

In the latest chapter of the war with Iran, Donald Trump has said that he will wage an "economic D-Day" against Iran, namely impose a massive amount of sanctions designed to force the so- called Islamic Republic to capitulate. What exactly is this new policy and does it have any chance of bringing the current conflict to and end?

Aside from dishonoring the thousands of American troops who invaded France in June 1944 at a great cost of lives lost, the use of the term "economic D-Day" is both a misnomer and a gross exaggeration of what it claims it will accomplish.  Dubbed "Operation Economic Outcast" by Secretary of the Treasury Scott Bessent, who is in charge of imposing the sanctions, the strategy of forcing Iran to return to the negotiating table and accede to Trump administration demands are the goals. But how to actually achieve them is vague at best.

At Bessent's August 24th press conference where he outlined Operation Economic Outcast, it was already clear that the sanctions' threat was exaggerated. If it were to succeed, it was dependent on the cooperation of a wide variety of international actors. Bessent threatened to sanction any state which continued to engage in financial ties with the Tehran regime.

Bessent's press conference didn't make clear what the new sanctions regime was intended to achieve.  Was Iran's collapse the goal, its capitulation to Trump's demands, or a compromise which would provide an offramp for the United States, i.e., a reopening of the Strait of Hormuz?  Bessent's failure to make the objectives of Operation Economic Outcast clear was in keeping with the Trump administration's ambiguity about the outcome of the war with Iran.

The proposed sanctions regime If Iran's neighbors, Iraq and Pakistan, don't adhere to Trump's threat of sanctions, then that will already create problems for the new sanctions' impact. Iraq has been a source of dollars as well as a source of commodities for Iran through smuggling and money laundering. Because Iraq's pro-Iranian militia movement, the Popular Mobilization Forces (al-Hashad al-Sha'bi), depends on the financial ties with Iran, there is no reason to expect them to stop their smuggling operations now.  

Iraq is also dependent on Iran for energy supplies in the form of electricity and natural gas. It purchases 50 million cubic meters of natural gas per day and large amounts if electric power depending on the season . Through such purchases, Iran receives large payments which bolster its economy.  

As for Pakistan, it has made clear that it's not bound by the new US sanctions because it is a neutral party in the US-Iran conflict. Only if the United Nations declares that. the sanctions should be imposed will it then adhere to them.  Further, the United States and Pakistan have developed much closer ties under the Trump administration and high ranking Pakistani military and political officials have served as intermediaries for US-Iran negotiatins.

Given the weakness of Iraq's government, which is caught between competing pressures from the United States and Iran, it is highly doubtful if the Trump administration will sanction Iran.  With the Islamic State active in eastern Syria and parts of northwestern Iraq, the US would be ill advised to undermine its relations with Iraq. Because Pakistan retains its role as an important point of contact with Iran, sanctioning it won't happen either.  

Far more important for the imposing the sanctions is the reaction of  Russia, India and especially China.  After Bessent's press conference, the Chinese government indicated that it would not be bound by any United States sanctions. Even though China imports a considerable amount of Iranian oil, it is treated as an unofficial trading relationship. Iranian oil is off loaded near Malaysia to local tankers which then deliver it it to small "teapot" refineries along China's southeastern coast. 

Although China's imports of Iranian oil have declined form 1.2 to 1.4 million bpd to 534,000 bpd as of this month, the Beijing regime still seeks to have access to this oil because it is able to purchase it as a discounted price.  

Nor is President Xi Jinping keen to help Donald Trump extricate himself from the dilemma he faces in confronting Iran. The more time and effort the United States and its military forces need to devote to the Iran conflict, including maintaining the blockade of the Strait of Hormuz, the less time it has to monitor and push back at China's efforts to increase its power and influence in the South China Sea and the larger East Asian region.

Further, Xi is an authoritarian leader who need not worry about elections and public opinion. Trump's ill-conceived war with Iran has never been adequately explained to the American public.  In the first hours of the attack, the war's endgame was regime change.  The it became a narrative about Iran not being allowed to develop a nuclear weapon. More recently, the war's goals have been reduced to reopening the Strait of Hormuz, which was already open (and toll-free) on February 27, 2026.

Loss of domestic support for the war The "whiplash" effect of Trump constantly changing the discourse and objectives of the war has embarrassed the United States internationally and reduced its credibility as a global power.  Trump's multiple threats against Iran have largely proved to be empty ones. At the same time, his erratic behavior and the war's impact on the domestic economy have led a very large percentage of Americans to reject the war as an unnecessary expenditure of funds which should instead be used to improve the American economy. What Americans think about Trump’s handling of Iran, according to a new AP-NORC poll

It is also clear that the attack on Iran has undermined the United States' military readiness.It has used so many interceptors to shoot down Iran's large collection of cheap drones which have been directed at America bases in the Arab Gulf, and Jordan, and at a large number of other non-military facilities in the Gulf, wreaking extensive destruction. The war has demonstrated that using a $4 million Patriot missile to destroy an Iranian drone which costs between $35,000 and $50,000 to build represents a highly misplaced use of military expenditures Exclusive: US Patriot missile stocks in Europe are ‘beyond critical’ due to Iran war, officials say

In short, Operation Economic Outcast has made both Trump and Scott Bessent look foolish. Virtually, all analyses of the strategy argue that it is bound to fail.  The brutal Iranian regime needs to be toppled, but that can only be done through a coordinated International effort.  Saudi Arabia, the Arab Guf states, and the European Union would all need to become incolved

Unfortunately, Trump's narcissistic style of rule prohibits such as effort.  There is little reason to believe that when Trump leaves the White House in January 2029, the current conflict with Iran will still not have been solved.  In short, Trump's ill fated attack on Iran will certainly go down in the annals of American foreign policy history as one of the worst decisions any United States president has ever made.

Who is Ali al-Zaidi? A New Beginning for Iraq or Another Act of Political Theater?

Who is Ali al-Zaidi? At 41, he is the youngest prime minister to be appointed to that position in Iraq. A billionaire businessman, he never has held political office and lacks political experience. Why, it might be asked, has a relatively unknown been appointed to Iraq's most important post? More broadly, is al-Zaidi's appointment a political breath of fresh air, or is it politics as usual in post-Ba'thist Iraq?

After national elections in November 2025, it took Iraq until May 14th to select a new prime minister to replace outgoing Muhammad Shi'a al-Sudani. The six month period for choosing a prime minister is par for the course in Iraqi politics. Both al-Sudani and former prime minister Nuri al-Maliki fought for the position.

When al-Maliki was on the verge of being selected last April, the Trump administration vigorously opposed him given his close ties to Iran. Trump threatened severe consequences, specifically economic isolation and an end of US military support, if al-Maliki became prime minister. Trump's opposition forced al-Maliki to withdrew his candidacy. Iraqi Politics in Ferment after Trump’s Broadside   

When neither al-Maliki or al-Sudani, nor their suggested compromise candidates, were able to win, al-Zaidi was proposed for prime minister. Faiq Zaidan, the Chief Justice of Iraq's Supreme Judiciary Council and a intermediary in a number of contentious political appointment struggles, played a key role in promoting al-Zaidi. It took seven meetings before al-Maliki and al-Sudani agreed on al-Zaidi's candidacy.

The decision to nominate al-Zaidi was finalized at a meeting at the home of Falih Fayyad. Because Fayyad heads the Popular Mobilization Units (al-hashad al-sha'bi), that venue suggests that Iraq's pro-Iranian militia movement supported al-Zaidi and expects to play a central role in his decision-making process. 

At the same time, Zaidan and the vast majority of Iraqis, both Arabs and Kurds, strongly oppose Iraq's involvement in the US-Iran War and attacks by militia forces on American installations in Iraq. Despite this opposition, some militias continue to strike American interests in Iraq and have even fired missiles into Saudi Arabia, threatening to open yet another front in the war. Thus, al-Zaidi's appointment already points to the problems he will face in balancing the goals of contending political factions Iraq in the Vise

Why was al-Zaidi chosen as prime minister? Given his highly successful career as a businessman, and his ties with the Iraqi government though multiple state contracts, al-Zaidi is seen as acceptable to both the United States and Iran. In terms of domestic politics, al-Zaidi's youth and ties to Iraq's higher education system present an image, especially to Iraq's highly disaffected youth, of a young entrepreneur who might be able to enact critically needed reforms and thus bring about social change.

However, al-Zaidi is a default candidate. No political party considered him its first choice. Instead, he was viewed as a way, even if temporary, to end a long and protracted struggle to select a successor to Muhammad Shi'a al-Sudani. Further, al-Zaidi poses no threat to any of Iraq's powerful political interests. He has no party of his own, controls no militia and lacks a support base in the Iraqi parliament. 

On the other hand, al-Zaidi maintains close ties to Iraq's militia movement which is closely tied to Iran. The al-Junoob Islamic Bank, which he founded and chaired, was cited for money laundering in 2024 for the illicit transfer of funds to Iran. While al-Zaidi heads the board of directors of al-Sha'b University, which he claims is Iraq's first digital university, the university is closely linked to al-Sadiqun (the Truthful Ones), the political arm of one of Iraq's most powerful militias, Asa'ib Ahl al-Haqq (League of the Righteous People).

al-Zaidi's academic degrees in banking and finance, his many contracts with the state, such as heading the National Ration Card and food basket distribution system for the Ministry of Trade in 2017, as well as his serving as CEO of al-Dijla television network and owning a large and highly profitable supermarket chain present an impressive resume.   

In short, al-Zaidi checks off all the required boxes. He presents no threat to any of the major political parties. His image as a successful entrepreneur dedicated to reform is one which pleases the Trump administration.  His ties to the militia movement and financial help he has given Iran makes him welcome in Teheran. Who is Ali al-Zaidi, the businessman named as Iraq’s PM-designate?

Indeed, during his recent visit to the White House, al-Zaidi impressed Donald Trump with his business successes and wealth. Trump not only commented on his good looks - "He's young and he's handsome" - but said the two leaders had a "terrific chemistry." Trump opined that al-Zaidi's influence would spread far beyond Iraq and that numerous American corporations in the energy and infrastructure sectors would be investing in Iraq.

Thus, the Coordination Framework's choice of  al-Zaidi as prime minister was a shrewd move. Initiating an anti-corruption campaign, the "Dawn Offensive" (Sawlat al-Fajr) on June 28th, which has led to the arrest of large numbers of government officials, al-Zaidi sought to send a message to Trump that a new era in Iraqi politics was at hand. Trump views al-Zaidi as pursuing a more independent regional role for Iraq, namely an "Iraq First" policy.

Nevertheless,  after visiting the United States on July 14th, al-Zaidi travelled to Tehran where he signed a number of economic agreements with Tehran.  Although the visit was cordial,  Iran demanded that Iraq pay a long overdue natural gas bill. For his part, al-Zaidi asked Iran to assure the safe passage of Iraqi oil tankers through the Strait of Hormuz but received no assurances from the Iranians. Exclusive: Tehran Pressed Al-Zaidi to Pay $11 Billion in Gas Debt

Ali al-Zaidi: Myth vs. Reality Because no one party dominates the parliament, the selection of a new prime minister has always been a protracted process.  The Coordination Framework, a coalition of Shi'a political parties, has fought over the position of prime minister since Ayad 'Allawi was the first to be chosen as prime minister after Iraq's post-Ba'thist 2005 elections. While 'Allawi was Sunni, all subsequent prime ministers have been Shi'a. Once the new political system was established, a confessional model (al-muhassasa) was instituted: a Shi'a would be prime minister, the president would be a Kurd and the speaker of parliament would be Sunni.

The key decision in choosing a new prime minister is not his leadership qualities. What is most important is the extent to which he is able to satisfy all the key political parties in distributing control of specific ministries and government offices. A spoils system, rather than civic commitment, defines Iraqi politics. All parties seek access to state funds and contracts. As long as state funds derived from Iraq's lucrative oil revenues remain available to Iraq's power brokers, the political system, fragmented as it is, muddles along.  

Citizen needs continue to be ignored Lost in this political shuffle are critically needed services required by Iraq's citizens. Because medicines imported by the state are often sold on the black market, public hospitals either lack necessary medicines or only have expired medications. Before the 1980-1988 Iran-Iraq War, Iraq had arguably the best health care system in the Middle East. Today that system has been seriously degraded.

Electricity is another commodity in short supply. The Iran-Iraq War and 1991 Gulf War devastated much of Iraq's infrastructure.  As a result, between 30-50% of electric power is lost in transit due to dilapidated power lines. Also, much of the natural gas, which is a byproduct of oil extraction, is lost to flaring rather than captured and used to power electricity generation. 

Instead, Iraq needs to import natural gas and electricity from neighboring Iran. Subsidized fees for electricity and the theft of electricity adds to Iraq's shortages. Despite billions of dollars of investment in improving the electricity sector since Saddam Husayn's regime was ousted, much of those funds has been lost to corruption.

Despite it being one of the five countries in the world experiencing the most negative impact of global warming, Iraq's government has done little to cope with the destructive effect of climate change. Agriculture in large parts of southern Iraq has collapsed due to the lack of water caused by a persistent drought and the desertification of arable land. Farmers are forced to leave their land and migrate to cities where jobs are few and far between.Drought in the Land of Plenty: The Impacts of Climate Change on Iraqi Security

The new prime minister's stated vision focus on institutional reform, empowering youth, and diversifying Iraq's economy  from a centrally planned system dependent almost exclusively on oil revenues to a more open and sustainable economy.  How realistic are these goals?

Ali al-Zaidi's platform First, al-Zaidi has given Iraq's Popular Mobilization Units until September 30th to disarm and finally be placed under government control. However, there is no possibility that the PMUs will agree to this demand, leaving al-Zaidi looking weak and unable to control Iraq's internal security.Why disarmament will not solve Iraq’s civic space paradox

Further, al-Zaidi's "Dawn Offensive," whose goal is to clean up the massive corruption which plagues the Iraqi state, is doomed to failure.  Although he said "there is no red line" in attacking corruption, meaning that officials at the highest level will not be exempt from arrest and prosecution, the campaign thus far tells a very different story. 

Arrests have been limited to second and third tier state ministers and their deputies. Most have been officials associated with former prime minister Muhammad Shia al-Sudani's party. While publicly supporting the anti-corruption campaign, al-Sudani's Development and Reconstruction Coaction has privately attacked al-Zaidi's tactics, together with other Shi'a parties in Iraq's parliament. The key issue here is that the anti-corruption campaign is targeting individual politicians, not the institutional structure of corruption which is at the core of the problem  Iraqi PM faces backlash from political parties over his bold anti-corruption drive

According to Iraqi sources, Nuri al-Maliki controls much of al-Zaidi's decision-making. That the main focus of the Dawn Offensive in targeting al-Sudani's supporters would seem to substantiate this argument. If so, al-Maliki has been able to make an end run around the Trump White House and, in a de facto sense, is currently running the Iraqi state.

One of the main grievances of Iraqi youth is their inability to obtain jobs, especially those in the state bureaucracy. This was one of the causes of the October 2019 Revolution (Thawrat Tishrin). Indeed, there have been many examples of university graduates, even those with Ph.D.s in science and technology, being told that obtaining employment was dependent on their paying a large bribe to ministry officials. Often lacking the funds, highly educated youth have been forced to engage instead in menial work. The Killing of Qasem Suleimani and Iraq’s October Revolution: What Western Analysts Aren’t Telling You But What You Need to Know

The chickens came home to roost in Iraq long ago One of the colossal failures of US foreign policy was appointing politicians to powerful political position's in Iraq according to their confessional identity.  Assistant Secretary of Defense Paul Wolfowitz argued, after Saddam Husayn's regime was toppled, that giving Iraq's Shi'a political power would assure continued American influence in Baghdad. 

Wolfowitz's argument was common among neo-conservatives. They argued that, because the Shi'a, like the Jewish people, had suffered historical persecution by Sunni Muslims (who dominated Saddam's regime), they would be forever thankful to the United States for giving them political power.

This argument was absurd for many reasons. First, the Shi'a politicians the Bush administration supported, such as Nuri al-Maliki who was appointed prime minister in 2006, were allies of the Islamic Republic of Iran. Many had lived in exile in Iran while Saddam's regime was in power. 

George Bush meeting with Abd al-Aziz al-Hakim, Dec 2006

'Abd al-'Aziz al-Hakim, head of the Supreme Council for the Islamic Republic In Iraq (SCIRI), formed in 1982 in Iran and led for its first 2 years by members of the Islamic Revolutionary Guard Corps (IRGC), was a key adviser to the Bush administration prior to and after the US invasion of Iraq. All of the Shi'a exiles Bush chose, with Wolfowitz's encouragement, were authoritarian and ultimately highly corrupt. The rule of the turban

Second, Iraqis are much more committed to tribal culture than formal Islam. Virtually, all Arab tribes have both Sunni and Shi'a clans and there has been high rates of Sunni-Shi'a marriages, especially in large cities such as Baghdad. Indeed, Iraqis who visited the White House found it highly insulting when George Bush consistently began meetings by asking whether they were Sunni or Shi'a. (For a critique of post-2003 US policy in Iraq, see my:  From the Promise of Democracy to Sectarian Capture of the State: United States Policy and the Building of a New Political Order in Post-Ba'thist Iraq)

The Iran War: the 800 pound gorilla in Ali al-Zaidi's room This week, Ali al-Zaidi was expected to continue his tour to MENA region and European countries to promote investment opportunities in Iraq. The next venue was to be Saudi Arabia where Muhammad Bin Salman has been keen to invest in Iraq as a means of lessening Iranian influence. 

However, 2 days before al-Zaidi's trip, pro-Iranian militias attacked Saudi Arabia. The attack led to a joint Saudi-American attack on Iraq's militia forces which killed 20 fighters, including advisors from Iran's IRGC. The PMU blowback was immediate and furious. Not only was al-Zaidi was forced to cancel his trip to Riyadh, but obliged to request a meeting at the United Nations to condemn the attack. Meanwhile, the PMU demanded that the Iraqi government develop a response to what it termed the "United States-Saudi aggression." 20 PMF members killed, 32 wounded in attacks across Iraq

What these militia attacks on Saudi Arabia make clear is that Iran will use its Iraqi proxies to prevent the development of further economic ties with Saudi Arabia. Because economic development is purportedly one of al-Zaidi's main calling cards, it is doubtful that Iraq will see Saudi investments any time soon.  Further, if Iraq gets dragged into the US-Iran conflict, US and other foreign investors will be reluctant to commit to new economic projects as well.

Ali al-Zaidi's future as Iraq's prime minister. Iraqis have a saying about the majority of their politicians. They call them "burnt cards" (al-awraq al-mahruqa). These are politicians who have lost their ability to influence politics.  Instead, they become nothing more than pawns for other more powerful political forces to manipulate. Based al-Zaidi's track record during the short time he has been in office, it seems that he too will join the ranks of the "burnt cards.

Israel: From Ethnic Democracy to International Isolation

Myriad anti-Semites, neo-Nazis and radical Islamist terrorists would be delighted if Israel no longer existed. Fortunately, Israel has been able to sustain itself over time. It has maintained the necessary military prowess to defend itself from multiple external threats. But what if currently, the real threat facing Israel isn't from external enemies but internal ones? Could the Zionist state collapse be caused by its current political trajectory to become what some Israeli observers have called a "Jewish Iran,"namely a theocratic autocracy? Gilad Kariv: The Ultraorthodox will turn Israel into a Jewish Iran

The three threats What are the threats which Israel faces?  There are three: regional, domestic and international, namely relations with its Western allies, especially the United States. Even though some of these threats appear external in nature, they really emanate from and are exacerbated by the far-right turn of the Israeli government, namely the current ultra-nationalist "Greater Israel" cabinet headed by Prime Minister Benjamin Netanyahu. His regime has alienated Israel from most countries in the world.  

First, as a result of two attacks on Iran, one in June 2025, and another this past February, conducted by the United States and Israel but actively encouraged by Netanyahu, Iran is a greater threat to Israel and the MENA region than it was before the attacks. Most analysts now feel that the intensive bombing, especially because it occurred during ongoing negotiations between Iran and the United States, will lead Iran to intensify its efforts to develop nuclear weapons. 

Because a military campaign limited to bombing has demonstrated that it can't eliminate Iran's nuclear weapons program, and neither the United States nor Israel is willing to use ground troops to extract Iran's enriched uranium, the only way to control its nuclear program is through diplomacy.  

However, Iran cannot be trusted to negotiate in good faith. If it did agree to outside inspections by the International Atomic Energy Agency, it would impose onerous terms for this concession. These terms would require that the United States and the West end international sanctions and release frozen Iranian funds held abroad. Short of a ground invasion, that is the only way to curtail Iran's efforts to obtain nuclear weapons.

The February 2026 attack on Iran initiated a new war in Lebanon between Israel and Hizballah, Iran's proxy militia which is controlled by the Islamic Revolutionary Guard Corps (IRGC). As Israel's occupation of Lebanon from 1982 to 2000 demonstrates, when it withdrew after experiencing high casualties, it is not possible to completely defeat Hizballah. Instead, Israel finds itself bogged down in south Lebanon, a mountainous region while Hizballah continues to fire missiles at its northern towns and farms.

Not only has Israel's invasion of Lebanon, which has also resulted in multiple attacks on sections of Beirut where Hizballah commanders are said to be headquartered, but it has displaced large numbers of Lebanese in the south. Its scorched earth policies where entire villages have been demolished, many of which are inhabited by Shi'a but many also by Christians, has caused an international outcry. Obviously, the homes and property of many Lebanese who have nothing to do with Hizballah are losing their livelihoods and sometimes even being wounded or killed during clashes between Hizballah and the Israeli Army. 

Israel's campaign against Hizballah has taken a toll on Israel's economy because large number of reservists have been pulled from their jobs to serve in the army. There is little doubt that, if the Lebanon campaign continues for a lengthy period, it will spur more Israelis to consider emigrating to Europe, the United States or Australia or, as has occurred more recently, to Germany Cyprus and East Asian countries. Israel's current population growth rate is 0.9%, far below the population replacement rate. Israel 2025: A Demographic Crossroads; More than 69,000 Israelis left Israel in 2025, as population reached 10.18 million

The second threat exacerbated by the Netanyahu regime's far-right policies has been his alienation of secular Israelis, while simultaneously emboldening those on the far-right who seek to create a "Greater Israel." Under the auspices of far-right Minister of National Security, Itamar Ben-Gvir, who has been convicted 8 times for racism and incitement to violence, extremist groups on the West Bank have received large numbers of rifles and told that attacks on Palestinian civilians in the West Bank wouldn't result in legal reprisals. How Israel's Settler Movement is Creating a New Generation of Terrorist Youth

Another problem is the rapid growth of Israel's ultra-orthodox Haredi population. Israel's Central Bureau of Statistics projects that the Haredim will constitute 16% of the population by 2030, rising to 24% by 2050 and 50% of the Jewish population by 2059-2065. If we add the growth of settlements in the West Bank which include large numbers of ultra-nationalists who believe that God willed Judea and Samaria - the ancient Israeli terms for the West Bank - to the Jews, Israel will become a nation-state controlled by the ultra-orthodox and Jewish ultra-nationalists. (For an excellent analysis of Israel's turn towards politicized religion, see Yoav Peled and Horit Hermann Peled, The Religionization of Israeli Society).

Haredi men, who don't pay taxes and whose families receive government subsidies,  overwhelmingly refuse to serve in the Israel Defense Forces (IDF), except in some instances in ancillary, non-combat roles. Efforts to remove the Haredim's exemption from serving in the military has led to strong condemnation by ultra-orthodox rabbis who feel that serving in the military will "secularize" them. Haredim have organized large scale demonstrations against efforts to enlist their members into the army. Haredi protesters successfully halt draft dodger arrest near Jerusalem, police leave scene - report

These domestic developments suggest that Jewish youth in Western countries, particularly the United States, will find making aliyah (emigrating) to Israel an increasing unattractive proposition. Few will be drawn to living in a right-wing theocratic state. This is especially true if larger numbers of secular Jews leave Israel as a result of its international isolation. Indeed, many Israeli tourist feel uncomfortable admitting their nationality when traveling abroad due to the hostility toward their country. Poll: Most Israelis fear they won’t be able to travel abroad as global anger mounts

Another issue which has yet to be addressed is the impact on Israel's far right turn on its cybersecurity industry. Israel's high tech sector have seen widespread demand for its products throughout the world. In 2025, its profits were one of the highlights of Israel's economy, accounting for 50% of GDP growth. Israel Innovation Authority Releases 2026 Hi-Tech Report

However, during the massive anti-regime demonstrations against Netanyahu's attempt to end the Supreme Court's judicial review power in 2023, the high tech industry was at the center of opposition to it. This opposition was based on ideological, democratic and financial grounds. High tech firms see Netanyahu's undermining Israel's democracy as  creating economic instability, e.g., as seen in the changing value of the shekel, the national currency, thus undermining Israel's attraction as an investment opportunity. It is no wonder that Israel is experiencing a "brain drain" of R&D employees and the relocation of many of its cybersecurity firms abroad. Israel judicial plan sparks brain drain fears, threatens US tech gateway: VC firm

The third problem Israel faces, and perhaps the most profound and dangerous one, is its alienation from former supporters in the West. Much of this shift in support has occurred during the period when Benjamin Netanyahu has served a s prime minister. His full-scale promotion of the expansion of West Bank settlements, all considered illegal under international law, his attempts to use Palestinian Arab voting as a scare tactic to mobilize Jewish votes, and his efforts to turn Israel into an authoritarian state have led some European Union states to decide to end arms sales, cut back on economic agreements with Israel, and recognize an independent Palestinian state in the West Bank and Gaza Strip. 

How the Netanyahu regime' has undermined Western support for Israel Benjamin Netanyahu, who has served as prime minister over three terms totaling more than19 years, longer than any other Israeli prime minister. Under his watch, Israel has progressively moved ever farther to the right. Today, Israel has the dubious distinction of being ruled by the most far-right, ultra-nationalist cabinet since the state was founded in 1948. 

At its founding, Israel was arguably the most democratic state in the MENA region. It garnered widespread Western support. Its leaders spoke English and were adept at interacting with Western politicians in a manner in which Arab political leaders were not. Most European states felt duty-bound to strongly support Israel given the Holocaust which occurred on their soil. A large pro-Israel Jewish voting block in key regions of the United States, such as the Northeast, California and Illinois produced strong American support. 

However, Israel was from its founding an ethnic democracy. Its Palestinian Arabs, those who had not been forced to leave their lands in 1948 by the Arab-Israeli War, or expelled by Zionist forces, and were subsequently absorbed into Israel, are still second class citizens. Much like African-Americans in the United States, they remain to this day on the margins of Israeli society.  

When Netanyahu's Likud Party enacted a law in 2018 which declared that Israel was a "state for the Jewish people," many Israelis and foreign governments condemned it as racist and anti-democratic. Certainly, the law sent a message to Israel's Palestinian Arab citizens that their second class status would not just be de facto but institutionalized Basic Law: Israel as the Nation-State of the Jewish People

Prior to the October 7, 2023, attack by HAMAS terrorists, Netanyahu's far-right government was seeking to strip Israel's Supreme Court of its right to judicial review. Large number of Israelis saw this effort as an attempt to impose authoritarian rule. Nightly demonstrations rocked Tel Aviv and Jerusalem as hundreds of thousands protested in the streets. 

If Netanyahu had been (and might still be) successful in marginalizing the Supreme Court, the single chamber parliament - the Knesset - would have no check on any legislation it passed. Thus, the far right could impose majoritarian rule, constraints on political participation, limit personal freedoms and ride roughshod over minority rights at will. Only the HAMAS attack in October 2023 forced Netanyahu to drop his anti-Supreme Court campaign and turn his attention to the Gaza crisis. Beyond Historical Amnesia, Revenge and the Good-Evil Binary: Solving the Israeli-Palestinian Dispute Once and For All

At first, Israel received widespread international support in reaction to the brutality of HAMAS' attack. However, the policy that the Netanyahu regime pursued in fighting HAMAS soon eroded this support. As civilian casualties rose precipitously (over 70,000 at this writing), especially among women and children, cries of " war crimes," "crimes against humanity" and then "genocide" were directed at Netanyahu and the IDF. Safety Is When There’s No One Dying 

It is important to note that the charges of genocide weren't made by Israel's enemies alone.  A notable example is Brown University professor and genocide scholar, Dr. Omer Bartov, who was born and raised in Israel and served in the IDF. Dr. Bartov wrote an important Opinion Essay in The New York Times, A Genocide Scholar on the Case Against Israel. More recently, he published a book expanding on the reasons why Israel has exchanged its democratic values for ethnonationalism. Israel: What Went Wrong?

A recent report by the United Nations Human Rights on the Gaza War concluded that the IDF purposefully targeted children as part of its military strategy. The Report's conclusion were shocking. In effect, it argued that the Netanyahu regime sought to ethnically cleanse Gaza by reducing the size of its youth population. This report constitutes yet another nail in the coffin leading to Israel's international isolation. “The essence of childhood has been destroyed”: Israel’s deliberate targeting of Palestinian children in the Occupied Palestinian Territory since 7 October 2023

Israel and the United States This month, Brad Lander, a former New York City comptroller and self-described liberal Zionist, won a primary election in New York City. One of the chief criticisms of his opponent, sitting Democratic Congressman, Dan Goldman, was that he was too beholden to AIPAC (the American Israel Public Affairs Committee) which has used large scale funding to defeat candidates and elected officials which is considers insufficiently supportive of Israel. Lander beat Goldman by over 30 points in New York City's congressional district with the largest number of Jewish voters. 

However, AIPAC support has now become toxic. Even Dan Goldman, who took AIPAC money in the past, refused to so in this election cycle. Despite seeking to disguise its support for its preferred candidate through its Super Pac, United Democracy Project, AIPAC is no longer the potent force it once was when it could defeat anti-Israel politicians at will. Brad Lander clinches early victory in NY-10

Although the phrase is no longer commonly used, Israel has been refereed to in the past as "the 51st state." Politicians of both parties often saw a visit to Israel as a de riguer part of their political campaign to demonstrate to Jewish voters their strong support for Israel. However, that is no longer the case.

The following set of graphs and charts point to the declining support for Israel - meaning more specifically the actions of the Netanyahu regime - by the American public. What is notable is the decline among young Americans. Because many young people, especially in the Democratic Party, are increasingly running for political office, this should be seen in Israel as a disturbing trend because these youth awill become the United States' future political leaders.  

If, as the above charts and graphs indicate, support for Israel in the United States, its most important backer in the international community, has experienced a sharp decline, why is this the case? On the one hand, we have Donald Trump's MAGA supporters who oppose the United States' participation in foreign wars. MAGA voters, often tainted by anti-Semitism, see Netanyahu as a duplicitous leader  They feel that he tries to draw the United States into wars which promote his personal political goals, but don't reflect American national interests.The GOP has been a pro-Israel party for decades. Is that changing?

MAGA views reflect a larger American worldview. Most Americans see the United States military involvement in Iraq and Afghanistan as disasters which cost many American (not to mention foreign) lives and squandered trillions of dollars which could have been better spent on needed services and development at home.  

On the other hand, large numbers of Democrats find Israel's destruction of Gaza reprehensible. They also view the wanton destruction and killing of Palestinians in the West Bank and destruction of their property as a process of ethnic cleansing which is often abetted by IDF troops stationed in there. Democrats in the United States Congress are increasingly unwilling to vote for providing Israel with arms and other forms of American foreign aid.  

The solution Grosso modo, solving the problem of Israel's international isolation is not complicated. In November 1947, United Nations Resolution 183 established two states in Palestine - one Jewish (Israel) and one Arab (Palestine). Establishing an independent Palestinian state living side by side with Israel is the key to ending much of the conflict in the Middle East. A truly sovereign Palestinian state would take the wind out of hostile sails in Iran and elsewhere in the region.

The first task is to vote the Netanyahu cabinet out of office in the fall 2026 elections. The second would be for a new Israeli government to end the settler violence against Palestinians in the West Bank, a suggestion Yair Lapid, a Netanyahu opponent for prime minister, has already made.

The next step would be to remove Mahmoud Abbas as President of the Palestine National Authority. Abbas was legally required to hold elections in 2013 which he refused to do. In other words, he doesn't have the legitimate authority to hold his office. Abbas takes funds from Netanyahu and helps Israeli security forces monitor Palestinians in the West Bank, while transferring large amounts of those funds to his two sons. At present, Abbas has lost all support among Palestinians, both inside the West Bank and beyond it.

Throughly corrupt, Abbas needs to be replaced by a legitimate Palestinian leader, such as Dr. Salam Fayyad, a highly respected US trained economist, who previously served as minister of finance and then prime minister. Fayyad was removed from office in June 2013 when he attempted to confront Abba's extensive corruption.

The two-state solution, with Jerusalem serving as a joint capital for Israel and Palestine, is seen by many as a chimera. However, it is based on the 1992 Oslo Accords which was agreed to by both Israel and the Palestinians. During a brief period following the signing of the Accords, a number of joint ventures were developed, bringing Israelis, Palestinians and Jordanian entrepreneurs together in tourism, telecommunications and real estate, indicating what could be the outcome of true, enduring peace between Israelis and Palestinians.

The two state solution would require the active involvement of the United States and the European Union to both pressure the Israeli government and to offer Israel security guarantees and provide economic "sweeteners" to entice both parties to come to a permanent agreement.  

An independent Palestinian state would allow Israel to benefit from financial ties with Saudi Arabia, empower Israel's Palestinian Arab citizens who could serve as intermediaries between the Arab world and Israel, and bring a new level of stability and prosperity to the MENA region.

Autocracy and the International Order: How Trump's Disastrous Iran War Demonstrates the Dangers of the "Great Leader" Approach to Foreign Affairs

By all accounts, the Iran War is a colossal failure. Neither Trump nor his aides can articulate an effective endgame to the conflict or one that doesn't look like an American defeat. Was the war's failure simply a lack of planning and developing effective scenarios for a successful outcome and the day after? Or are there deeper reasons for its failure which need to considered beyond those for which Trump has already been criticized?

The larger issue is Trump's underlying view of the world order. In his vision, there should be a  tripartite division of the world in which 3 leaders, Trump, Vladimir Putin and Xi Jinping, possess absolute control all major decisions which affect the respective areas of influence. Two of these leaders are already institutionalized autocrats. Trump is working hard to undermine American democracy to assure that he becomes an autocrat too. Once he achieves this goal, he will be able to act unconstrained manner in global affairs, unencumbered by any form of checks and balance and the rule of law. Map Shows How Trump, Putin and Xi Could Carve Up the Globe

The Iran War should thus be seen a product of the Great Leader Theory of rule. However, all too often so-called "Great Leaders" inevitably make decisions which come back to bite them (think, for example, of Napoleon and Hitler's invasion of Russia). Believing they are the font of wisdom, whether in domestic or foreign affairs, these "Great Leaders" eschew advisors. As Trump said in a January 2026 interview with The New York Times, he follows his "intuition" in decision-making and only "answers to himself." The Iran War is a perfect example of how this model of rule can produce a global disaster.The Trump Interview: A President Who Answers Only to Himself

A Wannabe Autocrat To understand Trump's model of autocracy, we first need to examine his vision of foreign affairs. As Stephen Miller, his top ideologue, forcibly argued in an interview with CNN's Jake Tapper, the Trump regime's core proposition is that the world runs on force, not normative precepts. Only those nations which possess overwhelming military and economic power can and should occupy preeminent positions in the international political system. Stephen Miller 's interview with Jake Tapper

Second, Trump views the world functioning according to the whims and fancies of the leaders of its three most powerful countries: the United States, Russia and China. International institutions, and the treaties they engender, not only lack power but are meaningless fig leafs designed to mask the real dynamics of the global order. It is Trump, Putin and Xi Jinping, not international institutions, treaties and alliances, who "make the world go round."

Third, Trump's decision-making is grounded in transactional behavior. In the international system, each leader seeks to gain what is best for his (not her as yet) country, devoid of the international norms of the post-WWII rules based order.  Trump makes "deals," not agreements, as his references to the Iran War make clear. There is not long-term strategy because political decision-making is moving from one deal to the next, much in keeping with a the myriad real estate transactions which defined Trump's thinking in his pre-political life.

Finally, Trump rejects the Western alliance. Instead he views the world as carved up into three spheres of influence.  The United States controls North and South America, Putin controls Europe and Xi controls much of East Asia. This view of the world explains why Trump has failed to support Ukraine in its war with Russia and, more recently, has shown lukewarm support for Taiwan (even though the latter is home to TSMC, the world's most important producer of high end semiconductors).

The Iran War and Other Trump Fantasies Following in the footsteps of Vladimir Putin's equally disastrous 2022 invasion of Ukraine (deemed by Russian forces to last no more than 48 hours before Ukraine capitulated), Trump's decision to attack Iran with Israel was also based on a set of faulty assumptions. The belief that decapitating Iran's leadership and the use of overpowering force would lead to Iran's immediate surrender proved to be the most fallacious one. 

Only recently did the world learn, through excellent investigative reporting by The New York Times, that Trump and Netanyahu sought to install former Iranian president, Mahmoud Ahmadinejad, as ruler once Iran surrendered.  In effect, Ahmadinejad would become Iran's  Delcy Rodriguez. A core but faulty assumption was that the attack on Iran would lead to the same outcome as Venezuela. 

No matter that Ahmadinejad was virulently anti-Israel and a despotic leader when in power as Iran's president. After Ahmadinejad stole the 2009 presidential election, widespread demonstrations broke out which he brutally suppressed. But as long as he cooperated with the Trump, like Rodriguez in Venezuela, he would be America's man in Tehran. Early War Goal Was to Install Hard-Line Former President as Iran’s Leader

The Great Leader Theory of rule suffers from a large dose of narcissism which undermines collective decision-making. Putin's invasion of Ukraine is part of his project to create a Eurasian Empire stretching from Europe through Central Asia with Russia at its core. Xi's forcing all Chinese school children to learn his political creed, Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, reminds of Mao's Red Book which likewise had to be memorized.  All three leaders view themselves as the center of the universe.

Trump's deeply flawed worldview is evident from the ongoing war in Ukraine. In the now infamous White House meeting with Ukraine's president, Volodymyr Zelensky, on February 28, 2025, Trump mocked Zelensky for "not having any cards in his hand." Trump and J.D. Vance accused Zelensky of being foolish for not ending the war on Putin's terms, namely giving up significant Ukrainian territory, including some which Russian forces had not yet seized. Trump and Zelenskiy clash, leaving Ukraine exposed in war with Russia

If Trump had be able to shed his "Putin envy," namely his desire to be an autocrat like his Russian counterpart, for a structural-strategic view of the war, he would have discovered that Ukraine was in the global forefront of drone technology. While Russia's population is 3 times that of Ukraine and it has a much larger army, Ukrainian forces have fought Russian forces to a standstill in a four year war, one now longer than Russia's participation in WWII.

Indeed, since the February 2025 meeting, Ukraine's drone production has increased both in quality and quantity. Its drone technology is the envy of military forces globally. Even the US Department of Defense has purchased its new technology as have a number of European Union member states. Ukraine's drones are now capable of penetrating far into Russia, attacking oil refineries and military bases. As Ukraine Hits Oil Refineries, Russians Pay a Heavy Environmental Toll 

Ironically, Trump's Iran War has added more cards to Zelensky's hand. With Iranian drones raining down on Saudi Arabia and the Arab Gulf states, Zelensky has been touring the region and cutting deals in the billions of dollars with the United Arab Emirates, Qatar and Saudi Arabia.  Ukraine Agrees to Mutually Beneficial Defense Deals With Gulf Arab States

Having considerable parts of their oil and natural gas production infrastructure seriously damaged, Iran's neighboring Arab states are desperate to acquire the military technology needed to thwart further Iranian attacks. The 10 year contracts Zelensky signed will bring Ukraine considerable sums of money. These funds, together with a large EU loan, will help Ukraine further to develop its military and continue the war against Russia.

Trump's hostility towards alliances Trump made clear in his first presidential term his contempt for alliances, particularly NATO. For Trump, all alliances accomplish is to place constraints on the world's great powers as they try to pursue their country's (narrowly defined) national interests. In this sense, Trump is indeed an isolationist whose modus operandi is to "go it alone" in foreign affairs.

As the saying goes, "Life is what happens to you as you're making other plans." The Iran War has brought home the stark reality that the United States avoids military alliances at its own peril. Trump, like Putin, never factored in to his personal calculation the role that drones could play in helping smaller armies fight and hold off much larger armies.  

Not only has Iran's use of drones has resulted in the closure of the Straits of Hormuz, it has given the Tehran regime a new weapon (what Thomas Friedman calls a "weapon of mass disruption"). By closing the Straits, Iran has been able to hobble the global economy. The threat of a drone attacking an oil tanker or container ship has stopped virtually all ships from traversing the straits. Further, Iran has declared that it will charge a toll for all ships entering the Persian Gulf.  It’s Crow, Mr. Trump, Not Lobster

Thus, the Straits of Hormuz, which were open on February 27, 2026, the day before the war began, is now closed and creating global economic chaos. All current US negotiations with Iran, through Pakistan mediators, will do at the moment is return the Persian Gulf to the status quo ante, namely back to point zero. Neither the collapse of the so-called Islamic Republic or the end of its nuclear weapons program - the stated reasons for starting the war - have been, or are likely yo be, achieved.

When the disaster Trump and Netanyahu created with the Iran War became clear, Trump turned to his NATO allies, as well as Japan and South Korea, to come to his rescue. Because the US Navy was unable to provide enough naval vessels to assure that ships transiting the Straits of Hormuz would not be attacked by Iran, Trump wanted NATO countries, particularly the United Kingdom, to send ships to help the US Navy open the Straits of Hormuz.  

Not having been consulted on the attack and realizing that it was a path to nowhere, NATO's European members refused to assist the US until a lasting ceasefire with Iran had been achieved. Thus, Trump was put in the embarrassing position of NATO and East Asian allies refusing to bail him out of his foolish and haphazardly planned attack on Iran.

The joint US-Israel attack on Iran led Hizballah, Tehran's Lebanese proxy, to fire rockets into northern Israel. Israel responded to these attacks by invading southern Lebanon. It is now engaged in a war with Hizballah, likely to be lengthy one. As Israel has pursued a scorched earth policy in southern Lebanon, destroying entire villages and killing many civilians, its  reputation has suffered still further and compounded the international criticism it has already received for its destruction of Gaza after the October 2023 HAMAS terrorist attack.

The damage to the United States, America allies and the global economy  The Iran War's closure of the Straits of Hormuz has caused gasoline and natural gas prices to skyrocket in Europe, South Asia, East Asia and Africa. Europe and East Asia's industrialized economies have been deprived of critical supplies of naphtha, (used in many manufacturing processes), urea and sulfur, (necessary components of fertilizers) and helium (used in manufacturing semiconductors). Eight percent of the world's aluminum also comes from the Persian Gulf. The War-Driven Supply Shock Already Roiling Manufacturing in Asia

Trump's war against Iran threatens both the United States' power in the world and the global economy. By the end of this past April, US forces have blown through a massive amount of ordinance in attacks against Iran and defending Israel and Arab Gulf states, including a 1000 Tomahawk missiles (10 times the number the US purchases each year) as well as 1500 interceptors needed to shoot down Iranian drones. Iran War Has Drained U.S. Supplies of Critical, Costly Weapons

It will take years to restore the United States' cache of Patriot Missiles, each of which costs $7 million. and takes several months to produce. A Tomahawk cruise missile costs $2 million.  Under current production which is 600 missiles per year, it will take 3 years to resupply the number of Tomahawks used in the first month of the Iran War. The US Tomahawk stockpile is so low that the Department of Defense has been forced to move the missiles from East Asia to the Middle East. Scaling Patriot Production: The Industrial Base Crisis Explained

In sum, the Iran war has not only damaged US ties with its allies and reduced its military readiness, but has also dealt a major blow to the global economy. Not only are energy prices spiking, but food prices will soon follow, both due to a lack of fertilizer and transportation costs. Because many manufacturing processes depend on oil, the cost of these goods, e.g., plastics, will soon see price rises as well.  Globally, interest rates are on the uptick.The Countries Profiting From the War Oil Shock, as Others Lose Out

Autocracy produces bad international outcomes. What this analysis demonstrates is that the democratic world should indeed rid the world of brutal, repressive regimes such as the so-called Islamic Republic of Iran.  This is especially true given the hundreds of thousand's of its own citizens the regime has killed and its efforts to develop nuclear weapons. Having been pushed to the edge of collapse by Trump's attacks during June 2025, and again this past February, Iran's current hardline rulers will now only intensify their goal of developing a nuclear weapon. 

Trump's ill conceived war has had the opposite effects of what he and Benjamin Netanyahu originally sought to achieve. However,  to curtail the Iranian regime's power requires strategic planning, not impulsive thought and action. To end the brutal regime's hold over its people, 80% of which oppose it, and end its threat to regional stability in the Middle East, necessitates creating an international coalition such as George H. W. Bush formed with the United Nations in 1990 to expel Iraq from Kuwait.

An international naval force - prepared to act over a lengthy period of time - is needed to seize Iran's "shadow tanker" fleet. Drawn from European Union member states and Australia, Japan and South Korea, it would cut off Iran's revenue from oil sales, the lifeline of its economy. As a result, Iran would be forced to the diplomatic table where it would need to seriously negotiate an end to its nuclear program and end its repressive domestic policies to receive economic relief.

We should note that this effort would require negotiations over a strategic plan among democratic states who are committed to the international rules-based order, not the autocratic and self-aggrandizing policies of Trump, Putin and Xi.  What the global crisis caused by Trump's Iran War makes clear is that democratic governance is critical to international relations, not just domestic policies.  

In the global order, the "my way or the highway" approach pursued by autocratic "Great Leaders" will never lead to positive outcomes. Trump's change of mind on how to pursue the Iran War, which constantly changes, has deeply undermined trust in the United States' global leadership. Global problems cannot be solved through autocratic, individualist decision-making. Instead, they necessitate extensive cooperation among democratic states who treat one another as equal partners where all coalition members' views, regardless of economic and military power, are treated with respect. 

The primacy of "Great Leaders" controlling the international order, especially when that term is synonymous with autocracy, must be brushed aside. We can only hope that Putin and Xi are stymied in their aggressive policies and that the United States elects a president in 2028 who relegates Trumpism, both in its domestic and international manifestations, to the dustbin of history.

After the War: What is the Future of the Arab Gulf?

What is the future of the Arab Gulf states after the onset of the Iran War? Given the damage caused by large-scale Iranian attacks on oil and natural gas production facilities, will the Gulf states be able to return to the status quo ante? Or will the Iran War, begun by the United States and Israel, impose permanent damage on the region?

The Iran War highlights two overriding problems facing Arab Gulf states. First, the Iran War demonstrates that the Gulf region cannot avoid the conflict between the US, Israel and Iran. Now that Iran's Supreme Leader Ali Khamenei has been killed, and the clerical leadership been sidelined by the more hardcore Islamic Revolutionary Guard Corps (IRGC), the only way the Gulf states will be able to avoid further Iranian attacks is to end their alliances with the United States and remove its military bases from the region. The IRGC has seized power in Iran 

Because Saudi Arabia and the Arab Gulf states depend on the United States for their national defense, they will not ask the United States to remove its bases from the region. If anything, the Arab Gulf states will seek to strengthen their military relationship with the United States. Indeed, the UAE has gone farther and developed closer military ties with Israel which has installed its Iron Dome system in the Emirates to help protect it from Iranian drones.Scoop: Israel sent "Iron Dome" system and troops to UAE during Iran war

Further, the war has resulted in a blockade of the Straits of Hormuz, both by Iran and now the United States. With passage through the Straits closed for the first time, oil and natural gas cannot be shipped from the Persian Gulf to overseas markets, thus cutting off critical sources of revenue for the Arab Gulf states, as well as Iraq and Saudi Arabia.

Not only are more than 10 million barrels of oil prevented from being transported through the Straits of Hormuz, but nitrogen-based fertilizers, including urea and ammonia, and helium, which is critical to the production of high-end semiconductors, have been cut off from global markets. The Iran war’s impacts on global fertilizer markets and food production Share

As a result of the Iran War, Qatar, Kuwait, and Bahrain's economies are expected to contract by 6.0%, 4.4%, and 2.9% respectively this tear. The United Arab Emirates (UAE) is expected to see a lower than forecasted 5% growth. Saudi Arabia and Oman are projected to have somewhat better growth rates of 2.6% and 2.2%.  However, both these estimates are lower than previous expectations.

Second, if the current Iranian regime is toppled and a new democratic government takes its place, the Arab Gulf states' authoritarian rule will be placed in much sharper focus. Having a democratic and tolerant regime in neighboring Iran would increasingly lead to calls for democratization the United Arab Emirates, Qatar, Bahrain, Oman and Kuwait and even Saudi Arabia.  Indeed, a democratic Iran could compete for foreign investment by Western countries to the detriment of the Arab Gulf states.

The end of an era Beyond these larger macro-concerns, the Arab Gulf faces more immediate problems. Perhaps the most consequential is the bursting of the "safe haven bubble." For years, the Arab Gulf states have promoted a highly successful business model designed to attract investment, tourists and permanent residents. They have argued that their countries provide a safe haven for foreign investment, unique tourist attractions and residential security in an otherwise turbulent Middle East. Luxury Brands Bet on the Middle East. War Has Damaged Their Plans

Based on its regulatory and tax free environment, Dubai became on of the the most sought after venues for foreign investment. Not only did it attract significant FDI, it became the home to a large expatriate community, comprised of many global ultra-rich who felt that their wealth, some of it illicitly gained, was safe in Dubai. Israeli-US war batters UAE economy, wiping $120bn from Abu Dhabi, Dubai markets

During the "calm before the storm," hundreds of thousand's of foreign investors and wealthy expatriates - think of Russian oligarchs - decided to decamp to Dubai. High tech moguls such as Sam Altman and Jeff Bezos looked to the United Arab Emirates as a prime investment target given its large sovereign wealth fund which exceeds $2 trillion. Serving as a crossroads between Europe and Asia led Dubai's airport to become the busiest in the world for international travel.

The UAE and other Arab Gulf states tried to develop an "insurance policy" against being drawn into a conflict with Iran. Dubai, for example, has long held large amounts of Iranian funds in its banks. It has allowed the Tehran regime access to these funds and, in the process, to circumvent international sanctions. Many regime members have enjoyed vacationing in the Emirates.

Nevertheless, all the Gulf states, even Qatar which has hosted members of Egypt's Muslim Brotherhood and the HAMAS terrorist organization, have cooperated with the United States in providing it with military bases. Further, the UAE and Bahrain joined the Abraham Accords in 2020 which drew them closer to Iran's arch-enemy, Israel. As the current war makes clear, trying to "have your cake and eat it too" ultimately hasn't worked.

Despite abundant oil and natural gas deposits, it is difficult envisioning foreign investment in the Gulf states, especially from the West, returning anytime soon. With a population of 93 million, Iran dwarfs those of Kuwait, Bahrain, Qatar, the UAE and Oman. Investors know that if Iran refuses to  end its nuclear weapons program, Israel will continue to "mow the lawn," i.e., periodically to bomb Iran's nuclear facilities.  

That the US could very well join Israel in such attacks suggests that the current turmoil roiling the Arab Gulf may produce recurring conflict rather than end it. Such a scenario isn't one that will attract foreign investors, thereby allowing the Gulf economies to return to pre-war levels of economic growth. This issue is especially true of large scale projects such as A.I. data centers which are costly and highly susceptible and desirable targets in the event of another war between Iran, Israel and the United States. It is also difficult to envision a return of the pre-war tourist industry or large numbers of foreigners deciding to make their homes in the Gulf region.

Finally, ties between the Trump family and the Arab Gulf states have been dealt a serious blow. Extensive real estate developments proposed for the Arab Gulf and Saudi Arabia, led by Trump's son-in-law, Jared Kushner, will not come to fruition. The UAE's 49% investment in shares of Trump and Steve Witkoff's World Liberty Financial cryptocurrency firm will also suffer as a result of the attack on Iran which Trump mistakenly thought would result in a quick victory like the seizure of Venezuelan president, Nicholas Maduro. The UAE's focus will be on reconstruction of its oil production infrastructure, not cryptocurrency

Loss of soft power Likewise the Arab Gulf became a mecca for American universities to establish overseas campuses. In Qatar, Education City hosts Georgetown University, Weill Cornell Medical College, Virginia Commonwealth University School of the Arts, Carnegie Mellon University, Texas A & M University and Northwestern University. In Abu Dhabi, New York University has established a large overseas campus. The American University of Kuwait and the American University of Sharjah complement the United States' academic presence in the Arab Gulf. When War Changes Global Higher Ed

The American university campuses' goal was two-fold. On the one hand, their presence increased the international prestige of the host Gulf states while bringing US academic personnel to their countries. From the American perspective, Gulf campuses would open new channels for tuition from local Gulf state citizens and offer American students a safe study opportunity in the Arab world.

Once the war began, these campuses closed. It is doubtful that they will reopen anytime soon.  This is yet another blow to the Arab Gulf states which will lose the many contacts with the United States academic institutions as a result of the ongoing war.

Iran's nuclear threat  What the Trump administration and the Netanyahu regime have accomplished in attacking Iran and killing much of its top leadership has been to hand control of the regime to hardliners in the IRGC. While it is yet to be seen if the US blockade of the Straits of Hormuz will lead to the Tehran regime's collapse, if it doesn't, there is little doubt that Iran's new leaders will be even more determined than ever to develop a nuclear weapon to thwart future attacks on the regime. 

Having been attacked twice by the United States while negotiations were underway, the hardline leadership in Tehran may feel that the only way to secure the regime is to have nuclear weapons in its arsenal. Ironically, the Iran War, which was meant to end Iran's ability to build a nuclear weapon may make it more likely than ever that Iran does in fact acquire such a weapon. Under such circumstances, the Arab Gulf states face a very bleak future indeed.