The Impact of Iran War on Rhode Island

Nikolas Gvosdev, a national security fellow at the Foreign Policy Research Institute and professor at the U.S. Naval War College, and speaking on his own behalf, joins Bill Bartholomew to examine how The Iran War could impact Rhode Island—both in the immediate term and over the long haul.

The conversation explores the economic ripple effects of global conflict, including energy prices, supply chain disruptions, and federal spending priorities that could directly influence local economies. Gvosdev highlights how national security decisions made in Washington can cascade down to states like Rhode Island, shaping everything from job markets to infrastructure investment.

A key focus is the potential downstream impact on major projects such as the Washington Bridge, where shifts in federal funding and attention could delay or reshape critical repairs and development.

The discussion also delves into the psychological dimension—how prolonged geopolitical instability can affect public sentiment, civic life, and the broader sense of security within local communities.

In this episode:

•  How global conflict with Iran could affect Rhode Island’s economy 
•  The connection between war, federal spending, and infrastructure projects 
•  Why local projects like the Washington Bridge could feel global pressure 
•  The psychological toll of geopolitical instability at the community level

Transcript

SPEAKER_00 0:00

I've been thinking a lot about the impact that the Iran War could have on Rhode Island, not only economically, but psychologically, even from a security standpoint, and asking the question, are we ready? I invited Nicholas Govozdev onto the show. He's a National Security Fellow at the Foreign Policy Research Institute and a professor at the United States Naval War College right here in Rhode Island. Today he's speaking on his own behalf. What's your read right now as currently constituted on the status of Iran? There's a lot of discussion about the validity of potential negotiations happening right now. That's central to a lot. But what's your read as of right now?

SPEAKER_01 0:38

I think the situation has been and continues to be very confused. We get different signals. We get signals sent from the U.S., signals sent from Iran, signals sent from Israel, signals sent from the Gulf, signals sent from Pakistan, all sorts of places, and they're all contradicting each other. And that's to be expected when you are in a war, when you're in a conflict. We call it the fog of war. Things aren't always clear. Things aren't always as crystal as we would like them to be. It's clear that Iran and the United States both have reasons that they would want this conflict to end, but they both have conditions, they both have preferred outcomes. And as long as you're not sure whether you're going to get your preferred outcome through talking or through fighting, you're going to continue to do both. So I think we're going to see, as we've seen even before the conflict started, this current round of it, as we see now, we see efforts to talk, but we also see efforts to use force to achieve objectives. And that includes everything from force against leaders, forcible decapitation of leaders, destruction of equipment, destruction of capabilities. And of course, what's most concerning for the rest of the world is destruction of very critical energy and economic infrastructure, which simply isn't important just for Iran or for the Gulf but for everyone on this planet. And those are two tracks, two clocks that are running right now, and we'll see which one of them rings in terms of a military end of this conflict versus a negotiated end. And a lot's going to depend on resilience on both sides. Can Iran continue to take the level of punishments it's taking? Can the United States and its allies take the level of disruption that this conflict is causing, particularly to their economies? And those remain open questions.

SPEAKER_00 2:45

It's easy to look at the situation from southern New England and think, okay, this is a foreign conflict, and it seems like we were even speaking over the weekend for some people, it seems like this is a movie, and it's something that doesn't impact their life in any meaningful way. I mean, they are starting to get a sense that there's going to be an economic impact, whether it's fuel prices or anything else. But what are some of the very real-world consequences on the hyper-local level for Rhode Islanders, southeastern Massachusetts residents, anybody in this area right now that may already see this as a local story or may need some convincing that this is in fact going to impact their lives?

SPEAKER_01 3:24

I think you've touched on a really critical point. For the last 30 years or so, the United States has been able to intervene in many parts of the world without having much of what we call a local doorstep effect. It's just something we read about on the news, uh we see pictures. Of course, uh families of service members can be more directly affected if uh people are killed or injured, but for the most part, uh these things are separate to us. And that does encourage this. It's almost like a movie or a video game. This conflict is different simply because uh the Persian Gulf and the extended Persian Gulf region, West Asia, uh, is not just uh a region of the world to which we might go to and then come back. It is vital to the economic health of the world. And that's not just simply that we pay for more at the gas pump, although that's certainly the most uh meaningful manifestation. Uh, but this region of the world, Iran, the Gulf states, Saudi Arabia, are critical to the world's supply of oil and natural gas. Uh, and petrochemicals, of course, are the foundations of so many things uh that we use and consume. Uh and so people may not be thinking about the Persian Gulf crisis when they're going down to CVS to fill a prescription, and then you suddenly realize, wait a minute, is the feedstock for some of this pharmaceutical coming uh from a source that is now impacted because it can't get through the Straits of Hormuz? Uh we think about, we don't think about food costs, uh, but having uh food costs that depend on fertilizer and also depend on diesel fuel for many of us. If we're enjoying out-of-season fruits right now, if you've been buying blueberries or raspberries at the store, uh you just look out and see that you're not growing those in Rhode Island right now. Uh, they're coming from somewhere else. And so these costs are passed on. Uh what we call the trilemma, which is the pressure that every government faces to deal with the most basic needs, so food, fuel, and water, uh, is impacted, and in other parts of the world are going to be hit even much harder. We're just about to enter planting season in many parts of the world. We have fertilizer shortages, uh, we need goods and services, we have factories in Asia that produce plastic components that are uh idling because they don't have uh the feedstock that they need. Uh and uh the energy costs as they go up, even though the United States has energy sufficiency, uh we have uh, you know, most of what we use here, uh particularly our natural gas, uh comes from North America, but we're all part of a global market. Uh and over the last few days we've seen uh very dramatic uh satellite imagery showing uh liquefied natural gas tankers uh changing course uh and heading for markets in Asia because Asian countries are now paying willing to pay much higher premiums. So that drives prices up. As prices go up, your energy costs go up. And so let me just give you one very hyper-local uh context for this. Uh all of us in Rhode Island are complaining for the last uh several years about the Washington Bridge. We want that bridge built. Uh, we're always concerned about uh whether or not uh, as so often happens with these types of projects, uh an initial bid comes in and then the final uh cost is much higher than what you expected. Uh this conflict, even if it ends today, if tomorrow magically everything is done and all of these things begin to flow, we will already see costs. And those costs, for example, for the bridge, are going to be passed on in higher costs for steel, higher costs for aluminum, higher costs for uh composites, uh component parts, uh, not to mention the higher costs that will be for uh getting things here uh to pay for shipping uh and uh and all of that. So uh we're going to be paying war taxes, so to speak, uh indirect war taxes, uh in so many different areas uh that you're going to feel the impact in areas where I would think that the governor's office didn't doesn't necessarily think uh a conflict in Iran uh might have an impact on the uh timeline and cost of the reconstruction of the Washington Bridge, but it will. And it's going to have other areas. Uh listening to WPRO, uh, you know, a constant complaint of Rhode Islanders is uh potholes, uh where do you think asphalt uh need is a petrochemical product? So as the feedstock for that uh the price goes up, the price for asphalt goes up. As the price for asphalt goes up, you either have shortages and you don't patch the road, uh, or you're gonna have to pay more. And at the same time, there's gonna be pressure if this conflict continues. Every week this conflict goes on, and we have these delays, uh, you're gonna see political pressure uh to have the gas tax suspended, uh, to try to bring those prices down. And that's a case of where you rob Peter to pay Paul, where great, you can suspend the gas tax, uh, try to keep prices down at the pump for Rhode Islanders, uh, but then you're robbing the uh the roads fund down the road when you're going to need to be fixing things. So uh this notion of hyperlocality that you and others have been discussing is quite critical, and it really speaks to the interconnectedness and why people don't have to be necessarily foreign policy experts, but they do need to be interested in what's happening around the world and not treating this as, well, that just happens, and I may see it on the news or read about it or see it in my social media feed. And so those are some of the areas where you may see uh some direct impacts for Rhode Islanders and people throughout southern New England uh in the coming weeks.

SPEAKER_00 9:26

That's so interesting. You mentioned the residual impact on fuel prices and pressure, perhaps here within Rhode Island to lower the gas tax. The gas tax is used to pay for, in large part right now, this may change, but to pay for public transit here in Rhode Island. So what you're saying is that the war in Iran could ultimately have an impact on services like public transit or anything else downstream if pressure mounts and state leaders are forced to think about reallocation.

SPEAKER_01 12:18

Exactly. And it also speaks to another issue, which is that obviously state leaders uh don't have foreign policy in their purview, right? The governor uh and the uh the General Assembly can't weigh in on foreign policy issues. Uh that's in the purview of the federal government. But the state government has a has the purview of resiliency, state resiliency. Uh how do we deal with shocks? And you know, Nassim Nicholas Taleb's concept of the black swan is that you don't know what the specific event may be, but you want to be prepared uh for potential shocks. And I think one of the things that this, again, if this conflict continues and we start seeing more and more of these pressures, it's going to raise some questions about uh how resilient Rhode Island is, how resilient is our energy grid, how resilient is our ability for consumers as people start to pay more uh to drive. Uh, and one of the things we look at uh from the analyst side is we look at what we call demand destruction. At what point does the price of a barrel of oil uh reach a level where it stops being an inconvenience when you look at you go to the pump and you say, I don't like that it's that price, but I'll still fill it up. Two, it reaches a point where you say, I can't afford to fill my tank. It's not that I don't want to fill it, I don't have ready cash for that, and so I'm gonna stop driving or I'm gonna reduce driving. Uh do we have, we don't have as robust a public transit network where people might say, you know, instead of doing that full commute, say from South County to Providence, uh, I am going to drive to Wickford uh park and maybe take the train. Uh at least cut down on my mileage. Uh it's an option, certainly, but it's not one that we've really we haven't really developed a lot of these options in terms of of having uh the ability to shift on public transit. Uh you need to go 100% on all sorts of energy projects. And the problem, I think, here again in Rhode Island is we've started to identify energy projects uh as team red or team blue. Uh and so people uh say I don't like, I don't want to build new natural gas pipelines, uh, I don't want uh to have more natural gas because I identify fossil fuels, that's Republicans. And then I don't want wind projects, I don't want solar projects because that's green, and that's team blue. And the reality is we need all of these things now. Uh we need to have an in an energy infrastructure in the state uh that allows us to pivot and allows us to build back and forth. And when you don't have the wind projects finished, when you have opposition to uh expanding our use of natural gas, uh, when you have opposition to solar farms, all of these things uh individually may not be uh fatal, but you put them all together, and that's what creates an energy crunch. And so I think uh at the state level, we need to start thinking less about projects as uh my team and your team, and more about we need all of them. And so a silver lining from this is does if this crisis continues, does this produce uh in state leadership uh a renewed vision towards uh, of course, it's a hackneyed phrase, bipartisanship and all of that, but a sense of uh working together pragmatically on things that make this state more resilient uh so that the next war, the next hurricane, uh whatever the next shock is, uh we're in better shape to deal with it than I think we are right now in dealing with uh the fallout of the Iran crisis.

SPEAKER_00 15:55

Yeah, I've been thinking a lot about COVID, and I've been thinking about it in the sense of when we heard President Trump, then 45th President Trump, say about this time of year in 2020, yeah, it should be done by April. And that mixed messaging, that inconsistency is what spooked a, I think, a lot of people having covered COVID on a daily basis back then, even in leadership on a state level, there was it was very difficult to make policy when there was such mixed messaging happening. So obviously, on a global basis, the mixed messaging is uh strategic and also confusing. But why is it problematic for state leaders right now who are trying to get a sense of how long is this going to last? What's the scope of it? What do we need to think about in terms of security apparatus? We have vulnerable spots here, no doubt, in Rhode Island. We are obviously very close, and our our listening audience includes Groton, so uh Groton, Connecticut. So, what do state leaders really need to be looking for signal-wise to understand how to prepare different aspects of state operations, in other words, step them up, because it is so uncertain the scope of a security threat, for example, here in Rhode Island. It could be totally nothing, it could be just a fever dream to think that there's ever going to be either a lone wolf as it's described, type of attack or anything that's coordinated. At the same time, how do you know when we don't really have a clear picture of what's happening?

SPEAKER_01 17:26

Exactly. And that, and and that is again, that gets back to this notion of the fog of war, uh, the confusing signals, uh, the uncertainty. And again, I think the parallels with COVID is it's easy to make uh pronouncements that how something is going to be wrapped up, uh, but uh a lot of the factors uh in a conflict like this are outside of your control. Uh not only what Iran does, but what Israel does. Uh the president, for example, announced, well, we're not going to be attacking uh energy facilities uh over the next few days while Iran mulls his offer to uh reopen the Straits of Hormuz. Uh Israel's not bound by that, and Israel has been striking uh energy targets in Iran, and of course Iran has been retaliating by striking uh energy targets again in the Gulf. So the idea that you just sit uh in the White House and there's a script, and this is what's sometimes known as a script writing in the national security community, where you write out the script you want everyone to play, then they play the roles that you've assigned to them, uh, and then the war game ends the way you want it to because everyone plays their part. Uh that's certainly not something anyone should be counting on. Uh, and and so you have to be prepared for that. What does that again mean for state leaders? It means that uh budget shock. Um, you know, the the Pentagon is asking and saying, look, you want us to fight this conflict? We need more budget supplementals. And of course, so uh we saw during the Iraq War uh 20 years ago uh that uh the needs of that war, uh of those fighting that conflict, and then the one in Afghanistan, uh, meant that uh a lot of money got diverted that you were thinking was going to be made available. And so again, to the extent that the state is still uh waiting on federal funds for everything from the bridge to child care and health care and other things, that some of those funds may not be there. And how are we going to make up those gaps or what are we going to do? On the security thing, let me just, and I don't want to be alarmist and I don't want readers to uh or listeners to uh uh to necessarily uh worry uh unnecessarily, but a a good a degree of concern is useful here. And this goes back to your original point about we often look at what happens overseas as a movie that happens over there. Look at what's happening in Russia. This is a country which is more authoritarian than the United States, more controlled than the United States, and still has a hell of a problem uh with Ukrainian uh uh drone teams throughout Russia being able to launch drone attacks on Air Force bases, on uh critical energy infrastructure. And so if you have Russia, a country which is, as I said, much more authoritarian than we are, can't get a handle on the drone question, uh what does that say for us? Are we really prepared? Uh, if we have teams of people uh with do-it-yourself drones, or they've gone down to the hob, you know, they don't even have to bring sophisticated equipment in from the outside. This is all things you can get off the shelf. Have we really thought through what it means to uh what it might mean if someone uh or groups of people are using drones to uh not just simply attack, but just simply disrupt. Uh you can disrupt uh, I mean, the shutdown is disrupting operations right now in airports as it is, but again, uh to be able to disrupt uh operations at TF Green, uh, to disrupt operations uh over uh power facilities, uh even with even if there's not an attack, but just simply using drones as a way to create problems? And have we thought through that? And do we have a system and a jurisdiction in a state where every uh Hamlet prizes its independence with multiple police forces? Uh do we have uh the communication set up uh that if there is a problem we can track it from from one to the other? And that we have uh state and local and federal interfaces. And again, I mean these it was a real tragedy, uh, but what happened at Brown uh is a little bit of a wake-up call of do you have gaps between, in this case, the university, the city, the state, and the federal government uh in terms of being able to track people, to deal with threats, uh, and then to be able to respond. So I think that again, we we need to start thinking of some of these threats and problems that we associate with somewhere else. Drone strikes happen somewhere else, uh, not here. Uh they can happen here. And uh are we prepared for that? And uh if we're not, we should start, and we need to start getting ready for a number of these things rather than unfortunately, what I often think is our attitude here is we are hyper-aware of these things, then the problem ends, and we kind of return back to our comforting status quo uh without really changing much. And your point about COVID, I think, uh is true. There was a number of things that COVID pointed out. We reacted, COVID ended, people wanted to return to quote normalcy, and uh uh we lost some of those lessons learned. So uh hopefully we don't have a major crisis here that results, but we need to be thinking about uh a conflict in Iran uh continuing. And at some point, an Iranian leadership might say, we've got nothing left to lose uh by uh telling our friends, our supporters, our our sleeper cells, so to speak, in the United States to really start uh uh creating havoc. And uh we need to be ready, and again, I uh I trust and hope that uh all the elements of public safety in Rhode Island uh are tracking this uh so that they would be ready.

SPEAKER_00 23:15

Lastly, as the affordability crisis we're already experiencing continues to defy logic in some ways, to this in in the sense of obviously this is not this is anecdotal, but you just get a sniff test or a sense when you look at housing prices right now or cost of living, you go, mm, that doesn't feel like it can sustain the balance is off, and in fact, numbers of uh numbers and numbers of studies show that it is in fact a cliff that we're approaching. How does a prolonged war of attrition between the United States slash Israel slash any other uh nation that joins, nation state that joins that coalition, how does that, if it becomes a prolonged war, if it looks or feels something like Iraq or Afghanistan, is Rhode Island's economy prepared to withstand this kind of crisis for the long term?

SPEAKER_01 24:07

Yeah, the problem here is that a prolonged crisis uh then impacts the affordability uh debate or the affordability question at a number of areas. Obviously, it it raises prices. In so many areas. So everything from food to fuel to your housing components, those things go up. And that adds a further strain. It adds a problem in that it diverts tax revenue that might have been addressed from the federal level is going to be diverted to national security concerns. The economic slowdown that then happens affects your state tax base. So if you were, you know, for example, we look at our, if we get our gantries rebuilt and start retolling on trucks, you know, you're assuming that the economy is vibrant and that uh lots of goods are transiting because people are buying. Well, in an economic slowdown, you have less transit uh of goods and services because people are buying less, and then your tax revenue goes down, assuming that, again, the gantries are rebuilt and they're able to toll the trucks going through. Uh, and then your revenue base shrinks. And so if you had X amount of dollars budgeted for uh housing assistance or uh childcare or anything else, uh then those funds begin to dry up. Your philanthropy sector gets impacted because their endowments on which Rhode Island Foundation and other things, uh their ability to make grants can be affected if uh their endowment value goes down. Um for Rhode Island also, the longer this conflict goes on in the Gulf, and this is another one of these hidden connections that I think a lot of Rhode Islanders may not be may not be uh focused on, is a lot of our plans in this country, uh particularly the Trump administration wants to see reindustrialization, it wants to see new projects, we want to see things at uh Quanzett, more factories opening up, more defense orders. A lot of that uh investment depended on uh the sense that the Gulf sovereign wealth funds would be opening up their checkbooks to make investments. Well, if this conflict continues uh the way it does, uh the Gulf uh is going to have uh reduced revenue because they're not exporting energy and other uh key commodities. Uh they're gonna have damage to repair. And so instead of saying, here's here's a check uh that we're gonna put into an investment fund that will fund reindustrialization efforts in, say, Rhode Island, uh, that check is gonna be rebuilding uh apartment buildings in Dubai and airports in the UAE, and uh some of that those funds will be less available. And there now is a concern among some within the administration that, hey, a lot of the uh administrations, what we call geoeconomic plans, uh really rested on the idea that the Gulf uh sovereign wealth funds were going to come in and really put up the the prime the pump and put up that seed capital. So if we're looking at economic redevelopment in Rhode Island and throughout southern New England, and some of those plans were tied to uh the reindustrialization efforts, we're gonna reshore uh manufacturing in America, and uh we were counting on um these investments, and either those investments uh don't happen or they're reduced, then we'll see that impact. And again, the spiraling effect that if you were expecting uh you know 500 new good jobs in Quanzit that would be uh you know supporting uh middle class lifestyles, and then those jobs don't materialize, uh then of course this also adds to the affordability crisis. So uh this is again, this is a thing where you can have stress on the affordability question at so many areas that uh that you don't think about. Uh but yet where this crisis will be, we'll be testing that. And that is something. The longer this goes on, um, we are going to see more of these impacts in all of these areas where uh tax revenues are down, fuel prices are up, the cost of building materials for homes goes up uh and and down the line, and it it will immediately impact the affordability agenda, not only at the federal level, but certainly uh the ambitious plans that have been announced at the state level.

SPEAKER_00 28:38

Anything else that you want listeners to know about this conflict, whether it's impacting Southern New England or just a broad broad stroke assessment right here?

SPEAKER_01 28:47

Aaron Powell Just one last thing on this, and and just to also emphasize, these are all my own personal opinions and my own perspective uh uh on these, uh, and I'm not uh reflecting any uh anyone else's perspective uh or uh opinion on this, uh is the again the importance of why a citizen tree doesn't have to be experts on everything, right? We all can't be Persian Gulf experts, we all can't be experts on the Middle East, we can't all be experts on India, Pakistan, or anything else. But we we all as citizens uh in Rhode Island should have a healthy appreciation and understanding of what happens in the world. And having that sense that the choices that we make here, uh including our political choices, uh, when candidates come to ask, particularly at the federal level, when candidates come to ask you for their vote, uh you should interrogate. Well, what's your view of what the U.S. role in the world should be play, should be playing? Uh what's your what's your sense of uh what uh where and under what circumstances uh should uh Americans be asked to contribute blood and treasure? And these should be part of what you ask, not just simply what are you going to do for me at the local level? Uh because uh fundamentally we we are a republic, we elect our uh representatives, we elect our president, uh they act on our behalf, and they respond to our demand signals. And if uh our demand signals are that we're not interested or we don't particularly care, uh then that creates the opportunity for uh, as we like to say, the blank check. Uh sure, as well, as long as the if no one in Rhode Island really cares about foreign affairs, then I don't have to make foreign affairs part of my uh part of my uh platform to my voters, uh, whether I'm running for Congress, whether I'm running for Senate, and then certainly uh at the presidential level. Uh but uh you know voters should think about these things when they're evaluating candidates. They should take advantage of the town halls and other opportunities, both to ask and also to be to be informed and to realize that, yeah, what happens somewhere else in the world, uh like a like a spider's web, uh you trigger the web in one part and you can feel the impacts uh everywhere else. And uh if people thought that what was happening in the world didn't really impact them at home, um they're certainly getting a clear reminder of that uh every time now uh they're driving to the gas station and and asking why they're paying uh now, in most cases, a dollar more per gallon than they were paying a month ago. Uh and uh if that's a starting point to get people more engaged, uh, again, as citizens, uh as voters, uh, that uh, hey, what happens in the world, uh I I have an interest in that, and I may not be the expert, but I want my representatives to know what my concerns are. So if this if a silver lining of all of this is it leads to a rebirth of interest in uh news, foreign affairs, and in civic responsibility, uh then despite the fact that wars are destructive and human beings are suffering, uh if that's a silver lining that comes out of it, uh I would I would count that as a positive.