Cautious Optimism: Episode 24

In this episode of Alternate Shots, John Ellis and Richard Haass navigate a tumultuous week where cautious optimism collided with geopolitical reality.  The conversation ranges from Iran and the fragile ceasefire in and around the Strait of Hormuz to electoral upheaval in Hungary.  The hosts also speak their minds on the attacks aged by both the president and vice president on Pope Leo. They end with the apparent demise of the Saudi-supported LIV golf tour and this coming week’s NFL draft, which will go a long ways toward determining the fate of the once great but recently humbled NY Giants.

Hosted by John Ellis and Richard Haass

News Items on Substack

Home and Away on Substack

Produced by Dale Eisinger 

Transcript

SPEAKER_01 0:00

Hello and welcome to a new episode of Alternate Shots. I'm John Ellis. I am the founder and editor of two Substack newsletters. One is called News Items, the other is called Political News Items. You can find them both at news-items.com.

SPEAKER_00 0:16

I'm Richard Haas. I'm the author of a Substack newsletter that used to be weekly, but now seems to be at least semi-weekly, called Home and Away. And the reason there's more is uh events are relentless.

SPEAKER_01 0:29

I should say so. Yesterday you posted what is normally your weekly home and away, and you were cautiously optimistic about developments in Iran. And I'm going to read you what I just pulled down from Bloomberg five minutes ago. Their three key points are Iran reimposed restrictions on vessel traffic through the Strait of Hormuz, with the Islamic Republic broadcasting that the waterway was closed to maritime traffic. The U.S. military is preparing to board Iran-linked oil tankers and seize commercial ships in international waters to pressure Iran into reopening the waterway, according to the Wall Street Journal. And finally, Israel attacked targets in Lebanon, undermining expectations of an imminent peace deal, with the IDF saying it struck saboteurs approaching its troops in violation of the truce. So cautiously optimistic Friday morning, what chaos today. Where do you think things, you know, give us your take on this?

SPEAKER_00 1:36

Okay. Well, first of all, in my defense, I did say cautiously optimistic, not wildly optimistic. And I did went on to say that there were three reasons I was cautiously optimistic. One is Donald Trump, two is the uncertain leadership situation in Iran, and three was Bibi Netanyahu. And that still holds. But let me make a larger point, John. I'm still somewhat optimistic despite this, and we can circle back and talk about what's going on simply because I don't see the logic of escalation. I mean, if the United States were to attack some more Iranian targets, what does that accomplish that that we haven't already accomplished? And it opens up the risk of potentially Iran going after the energy infrastructure or water infrastructure of its neighbors, which would be a disaster for the United States and the world. And in the case of Iran, right now it still has its energy infrastructure largely intact. And the danger is if this war escalates, that could be a target, either from the United States or again from Israel. And that would be a nightmare given the Iranian economy is already in terrible, terrible shape, first because of their own economic mismanagement for decades, and then because of the war. So I'm sitting here observing, and I just don't see the logic how either side would gain from resumption of fighting or an escalation of fighting. Now, I read enough Barbara Tuckman to know that a lot of history has nothing to do with logic. But I don't feel it's inevitable or baked into the cake that that that bad things happen. Of the three things you you mentioned, the U.S. blockade and the Iranian control still of the strait. So that's the deal. It seems to me that's the trade-off, that Iran relaxes its control of the strait in exchange for the U.S. relaxing the blockade. So the fact that both are back on is a step backwards, but that's that's the basic deal. So I don't I don't see that as insurmountable. And the United States just have to tell Israel to knock it off. And in terms of uh you know, dealing with Hezbollah right now, there's nothing that Hezbollah is doing, to the best of my knowledge, that that poses, shall we say, an existential threat to Israel or anything that would warrant jeopardizing this entire potential or possibility for peace. So, yeah, the last 24 hours, whatever, are a step backward. It shows how brittle this is for the reasons I mentioned, these the three sets of uh leadership. One thing that would help, I was thinking this morning, would be if the United States and Iran were to create some sort of a dedicated technical channel to deal with the Strait of Hormuz, where their militaries or others could could stay in communication, almost like the old incidents at sea agreement the U.S. and the Soviet Union had. And the whole idea here would be to set the operational guidelines for use of the strait, and second of all, to deal with the inevitable incidents, because there's a lot of ships there. There's going to be incidents, there could be something with mines. Somebody may not have gotten uh the email about holding off, particularly given the Iranian leadership situation. So I I would argue that uh in addition to the high-level talks in Islamabad that may or may not resume, I think it's really important to have technical level communications established. Trevor Burrus, Jr.

SPEAKER_01 4:58

You said in the uh home and away piece that you could accomplish the opening of the strait and maybe a few other things, you had to push back the nuclear discussion, but that getting the first thing done would enable at least the beginning of a serious conversation about the nuclear issue. So your view now is that that you can still do part one. Is is Trump under enormous pressure to deliver part two quickly, or can he finesse that?

SPEAKER_00 5:27

I see zero pressure on Donald Trump to deliver part two quickly, part two being the nuclear. I would simply, if I were advising him, I would send a message to the Iranian saying, we're prepared to have a serious negotiation with you over nuclear issues as long as it takes, under one condition. You do not take steps to change the status of your nuclear capabilities. But if we notice you trying to do something with the 60% enriched fuel in the Isfahan zip code, or if we notice some other behavior that we believe is represents a threat, we'll have to respond. And that jeopardizes the ceasefire. But otherwise, we're prepared to, if you will, park this issue and give it the serious treatment it requires in a negotiation. Now, part of the incentive for the Iranians to deal with the nuclear issue in a negotiation is I'm assuming, John, that some or much of the sanctions relaxation will be linked to a successful outcome of a nuclear dialogue. Some sanctions relaxation could be linked to a relaxation of the strait. I would be prepared to parcel it out a few, so to speak, to incentivize the Iranians. But the near-term priority has to be the strait. That has daily mounting economic consequences for the region of the world. The nuclear issue doesn't change anything so long as the status of the nuclear issue isn't changed by Iran.

SPEAKER_01 6:51

One question I wanted to ask you, I'm I don't understand how it would work. The Iranian economy is devastated. The economy is the currency is worthless, inflation is through the roof, et cetera. So let's say part one gets done, there is a peace, so to speak, or ceasefire, and now Iran has to rebuild. Where do they get the money from? Who loans Iran$20 billion or$80 billion to start rebuilding all the infrastructure, housing, office, et cetera?

SPEAKER_00 7:22

I could see Iran getting the money several ways. One is from selling its oil on the world market, its oil and gas. Second of all, some of its neighbors might pitch in as a way of solidifying uh a ceasefire or uh a peace situation. And then Iran could also get help from its traditional benefactors like China and others. Uh, I think all of that is is well within the realm of uh possibility.

SPEAKER_01 7:49

I wanted to ask you too about China. Is it makes sense for China to play a major role in the rebuilding of Iran, or is that is that something they just don't want to get into?

SPEAKER_00 7:59

Aaron Powell It's a good question. I I think it makes sense for China to play a significant role in seeing that the situation doesn't escalate. Chinese are the principal import of Iranian oil, but China also gets a lot of other energy from this part of the world. Last thing the Chinese economy, which has its own share of problems, as you know, uh needs is uh Persian Gulf, you know, the Saudi Arabia, uh Kuwait, a Bahrain, a Ghadar, that are their ability to produce and export energy is disruptive. So China, I think, has the potential to play an interesting role. And the other day there was a report out of, I think, Singapore that the Chinese foreign minister had called his Iranian counterpart and basically said, uh, I think it would be really good if you opened the strait. So, and they're doing that not to help us, but to to help themselves. Around the world, they've played a role in the construction of infrastructure. Indeed, it's been a big part of Belt and Road.

unknown 8:51

Right.

SPEAKER_00 8:51

So I can imagine the Chinese doing some kind of uh, if they're importing Iranian oil, paying for it through, if you will, through a swap arrangement where there's some sort of infrastructure building, that would that would make perfect sense. And the Chinese would like it, because it would give them a long-term handle, or whatever word you want to use on Iran.

unknown 9:09

Trevor Burrus, Jr.

SPEAKER_01 9:10

Finally, President Trump seemed to say, uh, or did say, that peace was at hand, it would all be done in two days, and so on and so forth. Or do you have any idea why he would put himself in the situation where he would be utterly embarrassed by the events of the last 24 hours, or does he just not care?

SPEAKER_00 9:31

It's good you're sitting down because I'm gonna say something. There's so much about Donald Trump I do not even begin to understand. So one of the things, one of the many things I do not understand, and we'll get to several others in the course of this conversation today, but one of them is this persistent happy talk. It's almost as well as if he thinks he can will it to be so, if only he talks it up, or maybe he thinks this puts pressure on the Iranians, or maybe it's simply that he thinks he can buy a day's com in the equities markets and the and the oil futures market. I don't know, but it has no relationship to reality. I don't see it as pressure on the uh Iran and whatever momentary benefits you get in markets, uh we'll see what happens early next week. But the market, you know, energy markets, you know, the price went down whatever it was, 10% plus or minus on Friday. Equity markets went up, what, one, one and a half percent. The problem with what the president's doing, unless there's really good news, is you get the the flip of that very quickly. Plus it it begins to, what's the word, discount the significance of the what the president of the United States says. And if you're the president of the United States, that can't be a good thing to have people to learn that they can safely dismiss what you say because you're just it's just talk-talk rather than anything serious.

SPEAKER_01 10:52

Speaking of President Trump, his favorite uh European leader, Viktor Orban, found himself on the losing end of a uh of an election in Hungary by a truly remarkable margin, and the election was rigged to a degree that he could lose the quote popular vote in quote, and still remain in power. But the vote was so overwhelmingly anti-Orban that he immediately conceded, which I thought was interesting. I mean, it took him like 12 minutes to concede. The new man in town is Peter Modjar, who started, he broke his broke with Orbon in 2023 and started his own party, the Tizza Party. What's your read of the election results in Hungary? And do you think it has larger implications or is it just a local election?

SPEAKER_00 11:41

Take the first thing. Um, first of all, it was welcome, and it showed that uh despite the Hungarian equivalent of gerrymandering, the fabric of uh democratic resilience was pretty robust. I think it also showed that sustained economic mismanagement is not, shall we say, without its political consequences. Also, he'd been around for a long time, I think it's 16 years. And if you remember, like with Margaret Thatcher and Tony Blair, you know, 10 years seems to be the point at which a lot of leaders they get overripe. So 16 years is a really long time. And even though people like Orban were originally populists, after 16 years, you're not the populist, you're the establishment. You own it. You own it. And uh and again, things weren't good. And then lastly, you had corruption on stilts. And so all of this, my senses added up. And clearly J.D. Vance showing up did not turn things around for Mr. Orban.

SPEAKER_01 12:35

That was the thing that really surprised me. I'm not quite sure why uh Trump dispatched J.D. Vance to go there, other than perhaps to take the blame.

SPEAKER_00 12:45

Uh there's there is that theory, by the way.

SPEAKER_01 12:48

Oh, I I'm a hundred percent in on that.

SPEAKER_00 12:50

I think uh I think that in the talks, the the Islamabad talks. So J.D. Vance has been given multiple assignments that he's unlikely to succeed at. Make of it what you will. Yeah.

SPEAKER_01 13:01

No, yeah, it it, you know, J.D. Vance is now the Kamala Harris of the Trump administration. But the president's pollster, one of the president's pollsters, was the pollster for Mr. Orbon. And so they knew, because everybody had the same results, that it was going to be a landslide, perhaps not as large a landslide as it turned out to be, but everybody knew that Orban was going down. And yet uh Mr. Vance shows up in Hungary and spent, you know, uh more than a day informing the voters of Hungary that Orban was uh was Trump's man. I I just don't understand why they would risk attaching themselves to a landslide defeat. I just think one theory.

SPEAKER_00 13:49

It's a hypothesis. I have no evidence to support it. Okay, because they probably probably weren't surprised by the outcome, but Orban had come to assume such an important place in the MAGA and right Christian nationalist pantheon that if he were to go down, it couldn't be because of a lack of American support. So my guess is better to stand, yeah, Tammy Wynette, better to better to stand by your man and show that you were with him completely than to quote desert him in his hour of need and then potentially be blamed. And I think this just reflects, it's interesting how much Orban and what he did, he became the role model for so much of Trumpism and for others. And his playbook, in some ways, became Trump's playbook. So my guess is that it was just better to see this through than it was to run and leave him to his uh lot. And you ask the consequences. I'm not sure what the consequences are, John, that much in Europe, uh, because a lot of the rightist parties are running away from Trump. If you look at what's happening in Italy and other places, they're they're not in a big Trumpian embrace. Also, in some cases, the rightist parties are outsiders, so they still may be helped by the populist swing of the pendulum. Well, see, I think the interesting question, I'd be curious what you think, it's what the Democrats make of it here. That does this, if Orbon was the playbook for Trump, does Orban's defeat provide the playbook to the Democrats about what issues to focus on and how to go how to fight 2026 and potentially even 2028, even though Trump won't be on the ballot?

SPEAKER_01 15:21

Yeah, the Democrats could learn a lot from the corruption issue, it seems to me, because that is increasingly concerned about it is increasingly widely shared, as they say. You know, the interest I was looking at the polling data from Europe and favorable, unfavorable for Trump. The unfavorable ratings in in most of the major European countries are just staggeringly high. And Prime Minister Maloney in Italy, uh, we're going to get to the next topic here because of the Pope. But uh she has been distancing herself from Trump, and then Trump attacked the Pope, and uh and she've suddenly had the sort of resurrection issue, which is to defend defend the Pope.

SPEAKER_00 16:04

Okay, you've done the segue about us.

SPEAKER_01 16:06

There we go. So we're at the Pope.

SPEAKER_00 16:08

That's very good, John. That's very good.

SPEAKER_01 16:10

No, but let well we gotta get a couple of facts here, okay. Yes, sir. Trump won 55% of the Catholic vote in the 2024 election. The most recent poll of Catholics uh in the United States shows that his unfavorable rating is 52 percent, his favorable rating is 48%. So that's really a wash 50-50 statistically. But that poll was taken before the frontal assault on the Pope. What's your take on where this is going?

SPEAKER_00 16:42

What a mistake. I mean, this is I mean, of all the people to pick a fight with, my favorite line of the week was from Peggy Noonan's column on Friday, which is just a brilliant column. First, she does two things. She contrasts the Sermon on the Mount with what you might say the persona of Donald Trump. And Mr. Trump does not comb off well in the crowd. You're kidding. And then secondly, secondly, she goes after JD Vance, who uh had the the word that comes to mind, if you allow me to mix my metaphors, John, is the chutzpah to challenge the Pope on uh his theology, telling him he needed to be careful. And Peggy's Peggy's line was about Vance, who died and made you Pope? It doesn't get better than that. No, I mean this is this is nuts to pick a fight with the Holy Father. Not and you've got 70 million American Catholics. I don't I don't think Trump much cares about alienating European countries, though he might care about alienating the European right. Uh but I I see zero upside. And by the way, can I say one other thing? The Pope, needless, as you might expect, bested Mr. Vance by a long shot in his uh employment of just war theory. There's no way the Iran war, whatever else you think about it on geopolitical terms, it's no way it checks the boxes of a just war.

SPEAKER_01 18:01

Yeah. It it'll be interesting. There are the people, you know, the New York Times, I assume the New York Times, I know Fox News is in the field uh with a poll now and the crosstabs of how Catholics view this as something of interest. And then the second thing that I think will be really interesting is how evangelical Christians will perceive the fight, because Trump's base obviously is evangelical Christians, white evangelical Christians. Catholics 5545 is not is not a number to be uh sniffed at if he loses, you know, if those numbers reverse because of this, uh that's that's about as low as it can go. I mean, you can you can see a 35% approval rating at that point.

SPEAKER_00 18:48

Also, it's important to re- it wasn't just his what I could call the papal wards. It wasn't just picking a fight with Pope Leo. You had the depiction on social media of him as uh Jesus Christ. You had the uh profane language on Easter Sunday. It's almost as if the president is on uh on a tear to alienate Christian voters. And again, I just I just don't understand it. Because I I can't see it being a calculated thing that they said, let's do this, because there'll be a real political bump out of this. So I just assume that for whatever reason, Pope Leo has gotten under his skin, and what we're seeing is uh an undisciplined response, if you will.

SPEAKER_01 19:27

Yeah, I don't I don't think there's any doubt about that. I mean, it'd be crazy to attack the Pope, obviously. And that that raises a question. There was a uh story published in the New York Times on Tuesday, I believe, which uh in which the discussion of whether Trump was crazy or crazy like a fox was addressed by a Times reporter called Peter Baker. Trump is crazy thing, is we have talked about it before on the podcast, is kind of building and building and building. Do you see a point where it's really just gonna become like a concern amongst Republicans as opposed to Peter Baker of the New York Times or you or me or whatever?

SPEAKER_00 20:07

I've been worn down by the last, what is it, 15 months and several years. I have trouble imagining that Mr. Trump could ever say or do anything that would lead hit this cabinet or Republicans general to argue for his stepping down under the 25th Amendment. I just don't, I just don't see that. Particularly this cabinet. The idea that Pete Heggseth or Howard Lutnick or one of these people is going to move against Donald Trump, I find that uh that I find that hard to imagine, John. So even if the notion were to gain traction with the American public that there's something seriously wrong, and clearly there is something wrong. You don't do and say some of the things the president has said. You don't have this, I'll use a generous word, erratic behavior. Uh if everything's just just if you contrast the previous speaking and behavior now as opposed to 10 years ago, you can't say it's it's the same or better. You can only argue over how much worse it is, how much deterioration there is. So clearly there's something going on, but I'm not sure Republicans are prepared to to move against him under almost any imaginable situation. Trevor Burrus, Jr.

SPEAKER_01 21:13

Yeah, it's interesting because now uh the most recent Washington Post poll uh asked this question whether Trump's uh had the mental acuity to continue to serve as president effectively, and 60 percent said no.

SPEAKER_00 21:26

So it's uh How is that compared to what towards President Biden at the end? Was that at about where he was as well, or was it his worst?

SPEAKER_01 21:34

In August of maybe October of twenty twenty-three, three-quarters of uh the people of the United States said that Trump I mean, that Biden lacked the mental acuity to serve effectively in a second term as president. The Biden people interpreted this as they should stay in the race uh because they would beat Trump. It ended badly for the United States. say is history. That did. So speaking of history, the history of golf was lightly rewritten when the Souds backed a new tour called the Live Tour. Is that right? Live or is it Live?

SPEAKER_00 22:15

Live, because it was L I V, yes. 54.

SPEAKER_01 22:18

The Roman Live Tour. Yeah, 54. And uh and so on recent they recently said they would be stepping back from the Live Tour. What do you make of this?

SPEAKER_00 22:30

Yeah the Saudi Sovereign Wealth Fund essentially declared that henceforth it would uh have different priorities. Basically the Saudis have run somewhat short of money in part because they've spent a lot of it rather lavishly and they haven't gotten anything like the return. One of the big deals, I'm not sure people understand, is a lot of sovereign wealth funds mostly invest and get a return on their investment and that throws off money to be used domestically. The Saudis do some of that, but because there's such a larger population than the other say Arab countries with sovereign wealth funds, they've got to spend a lot more rather than invest it in high return things outside the country. So plus now you have the war and that's interrupted a significant amount of Saudi oil exports. Some they can get through the pipelines, but not as much. So they're hurting. And you've already had certain cancellations or real curtailment uh rolling back of some of their big projects, some of these cities in the desert and live, even though the scale of the spending was less I doubt maybe it's cost a billion or two billion dollars over the last four or five years. And mainly to lure all these players to leave the PGA tour and come play there. I don't see the Saudis have gotten any return. No one could see it. You understand this better than I would, but the television deals never really came through. They couldn't get more than a handful of the best golfers and over the last few months you started having defections back to the PGA tour. So I think the handwriting was on was on the wall that Live Live was at the risk of a terrible pun that Liv was increasingly dying.

SPEAKER_01 24:10

Okay.

SPEAKER_00 24:12

Sorry couldn't resist that I've been thinking of James Bond about Live and Let Die.

SPEAKER_01 24:17

I've been kind of we're out of work all the same well there's a very good interview that my friend Jerry Tardy who's the editor of Golf Digest magazine asked Tom Friedman the opinion columnist for the Washing for the New York Times who has spent many many years reporting on the Middle East. And a good golfer and a good golfer a many time winner of senior golf championships I guess I can't remember the name of the club he plays at but he is a good golfer. And uh he was saying uh in this interview with Jerry Tardy that a big piece of this was tourism and that in in uh in having this live tour people would think oh you know we should go play golf in Saudi Arabia. Readman's idea was that they should not do the live tour at all. They should take uh you know twenty acres or twenty square miles of uh oceanfront in uh Saudi Arabia and build out have the five best golf designers come and uh build five great golf courses and then make it a destination golf destination thing for Europeans and maybe even Americans which seemed to me like a very good idea but of course the Souths had no interest in it so it didn't happen.

SPEAKER_00 25:31

He would like yeah he'd do his swing through the Middle East he'd do his interviews and then he'd take a week and uh he would have some fun golf. For the same reason I support the idea. I think it would be I think it would be just swell.

SPEAKER_01 25:44

I was I was gonna say when you're giving a speech to the Sovereign Wealth fund you could get a couple of rounds in.

SPEAKER_00 25:51

Do some investment banking and then go relax on the play so I uh I think that would be a swell idea and I uh I hope the Saudis uh consider it I mean there's gotta be a joke in here about sand traps and speaking of sand traps yes sir we have one last I mean I hesitate to bring this up but the NFL draft is approaching I thought you'd never mention it do do we do we have a new Hacian prediction as to how things are going to turn out or things have gotten complicated for my Giants for two reasons. One is that they have the number five pick and there's a lot of speculation about whether they use it or they trade down for it and they get somebody else's number one pick plus some other picks because the Giants have so many needs, so many holes to fill. Right. But complicating it is one of their best players and interior lineman on the defensive side Dexter Larnes who though he's getting paid north of 20 million a year uh now wants to be paid well north of that. And he's got two years left on his contract and the Giants are trying to figure whether to keep him even though he doesn't seem to be very happy or what they could get for him and maybe they could get more draft choices. So I think the draft begins Thursday night. So this is uh it's almost like the Strait of Hormuz John there's enormous uncertainty uh about what what to expect and what to but I've already made my I was cautiously optimistic there you go that's what I was going to ask you I could be cautiously optimistic about the Giants we can call this episode cautiously optimistic I think we're we can just be consistent straight through there we go all right we'll end with that thanks very much uh to Dale Isinger our producer and Richard we will talk next time. Take care my friend take care