What Went Wrong? Episode 36

This week on Alternate Shots, John Ellis and Richard Haass mark six months of the Iran war and ask: what went wrong? Many things is their answer. They're equally downbeat about Treasury Secretary's "D-Day" and President Trump's rekindled interest in North Korea, although not as downbeat as Stanley Druckenmiller and the South Koreans. The conversation then turns to the devastating research report from The British Medical Journal (BMJ) on professional (American) football players and CTE (brain damage). Bonus: a quick mini-roundup of sports news. 

Hosted by John Ellis and Richard Haass

News Items on Substack

Home and Away on Substack

Produced by Dale Eisinger 

Transcript

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SPEAKER_01 0:00

Hello and welcome back to Alternate Shots, America's fastest growing podcast. I'm John Ellis. I'm 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 0:17

Hi, I'm Richard Haas. I also put out a substack. In my case, it's called Home and Away. Just put one out dealing with the uh second Secretary of War, also known as Secretary of the Treasury, as well as a few other things like Iran on uh U.S. policy towards the two uh Koreas. And it's good to be with you. Not only is this America's fastest growing uh podcast, but this is our last podcast in August. Might be our either ultimate or penultimate summer podcast, John.

SPEAKER_01 0:46

I think that's true. I think that's true. Although we could get just underneath the wire for Labor Day, and that would be officially, I guess, the start of the fall.

SPEAKER_00 0:55

And if we do that, John, what's good is we can both be dressed in our whites, because until Labor Day, it's safe to wear white. So I think we might we might consider that.

SPEAKER_01 1:03

So we have to talk about Iran because this is six months to the day that the war began, and President Trump has declared mission accomplished on his truth social media platform. What say you, Mr. Haas?

SPEAKER_00 1:20

Well, by Mr. Trump's own lights, John, if you look at all the uh various objectives of this war, as best I can tell, not one has been met, unless you count the sort of regime change we've had in Iran, where we ended up with an even harder line crowd running the place as regime change, which I don't think one does. Uh the people of Iran are under greater repression than ever. We still have an extraordinarily dangerous regime. Nothing's been done in the war over the last six months to uh deal with the nuclear program. We have the added problem of a closed strait of Hormuz. U.S. munitions stocks are sharply depleted. U.S. credibility with its allies in the region and globally is is much diminished. So if this is success, John, I simply would say I'd hate to see what failure would look like.

SPEAKER_01 2:11

What do you think about the Oman-Iran deal to set up a tool system, an easy pass for the Strait of Hormuz?

SPEAKER_00 2:19

Is that real or hard to say whether it's real? We also haven't seen the details of it. It's narrower than I would like. I would ultimately like, indeed, I proposed it months ago, some type of a broader cooperative agreement of all the countries that border on the Strait of Hormuz, not just Oman, which to some extent can be dominated by uh Iran. That doesn't deal with the question of who gets to use the strait. And at the moment, uh that issue hasn't been resolved. So I uh I don't think this is that impressive. What we need is a more fundamental understanding between the United States and Iran on transit. We still have our blockade uh on uh Iran. It is still periodically interfering with shipping. There's various reports that a larger percentage of the ships or number of ships are getting through, so-called dark fleet and tankers, ships not using transponders, some are being escorted. And the number, though, optimistically, is still probably less than half the uh pre-war uh volume. But some are uh some are getting through. And again, the straits have been somewhat bypassed by by pipelines and and other things. But no, I mean your question about disagreement, it seems to me it's uh curious but mostly incomplete because it doesn't deal with the fundamental issue of uh the security of transit.

SPEAKER_01 3:39

Admiral Cooper said yesterday, I guess, or maybe the day before, that the strait had been demined, and today said that the strait was open. I'm not sure if by open meaning it was demined, but it it struck me as the sudden opening of the strait doesn't seem to me possible.

SPEAKER_00 4:00

Uh it's uh it's a non it's it's not a s a meaningful comment. You're right. If it means demine, that's one thing. Though it's hard for me to understand how we could be a hundred percent confident that we got each and every mine. But if open means that we have now a benign environment, that's simply not true. Before this podcast is over, for all we know, Iran will shoot a drone at this or that merchant ship or or tanker. Until you have, if you will, open-ended consent on the acceptable rules of of passage, I don't see how anyone can claim that the strait is open.

SPEAKER_01 4:33

What do you think the biggest mistake the Trump administration made, aside from going to war, uh which was kind of a big mistake, but in these six months, what do you think the biggest mistake they made was?

SPEAKER_00 4:47

It's an interesting question. I could stall and think about it, but among the mistakes, uh and then we can decide maybe between us what we think is the I have I have my choice ready. So Okay. One is to think that regime change was possible from the air, the targeted killings and so forth. I think it reflected a fundamental misunderstanding of the institutionalization of Iranian leadership. Then the thought that it could bomb Iran in capitulation, and that showed a real misunderstanding of uh Iranian political culture, resilience, and resistance. The idea that it launched a war without having full stocks in the strategic petroleum reserve, without having uh the consent of our partners in the region or globally, without having in place adequate defenses of either the strait or of uh our partners and allies in the region. I mean, that's just that's an initial shortlist. What am I missing? What is your view?

SPEAKER_01 5:46

Aaron Powell I thought the ceasefire enabling the Iranians to sort of reconfigure and get their act together. And so, you know, that was a pause that benefited them 100% and you know didn't help us 1%, it seems to me.

SPEAKER_00 6:01

Related to that, I would have said an even bigger problem, which is akin to that, was the willingness to allow Iran to sell oil at sea. Essentially, here we are now applying economic pressure. Well, we we gave Iran or allowed Iran to accumulate a cushion. I I understand. Is this the administration? We have, by the way, also allowed Russia. You know, we we, if you remember, we suspended sanctions. Whoever thought in the Treasury Department or the Energy Department or wherever that these sales of oil by Iran or Russia would make a drop of difference in the global price was nuts. What it did though is it helped Russia and it helped Iran without having a meaningful impact on the global price. Yeah, it's a long list of uh mistakes, but as you say, the fundamental one was going to war. Indeed, I'm struck now, John. Here we are, we're putting economic pressure on Iran six months into the war. Imagine we had done this from the get-go. We were, you know, the old regime of Iran was reeling, it was on its heels, the currency was plummeting, people were in the street. Imagine we had gone to Iran and we'd put real economic pressure and said, we, however, and we'd say this publicly, we will relieve you of significant economic pressure if you accept the following conditions. This is about how you treat your people, or this is about your nuclear program, or whatever. Imagine we had done that, the history would be so fundamentally different. It is, it's not just that this was a war of choice, it was a terrible, unnecessary choice. And then it was as that what we've been talking about is how badly implemented it was. But this is really something that never ought to have happened. And the the tale of this, the long-term consequences are enough to make you weep.

SPEAKER_01 7:44

I remember it was a venture capitalist, I think it was John Doerr, who said the the surest path to success is patience. And uh I think about that when I think about the war. But we have to get to D-Day, Richard. Okay. The D-Day was unveiled on Monday by the Secretary of the Treasury, and nobody can figure out what what it is. Do you know what it is?

SPEAKER_00 8:07

Well, I won't say I know. What uh what it seems to be is that he wants to isolate Iran economically. The method for doing so is what used to be called secondary sanctions, whether in the form of sanctions or tariffs, that we go after those who are uh doing commerce with Iran. The problem is several of them are friends, countries like the United Arab Emirates, India, Turkey's an ally, and then you have this other country you may have heard of it, John, called China. And over the last year and a half, whenever we decide to hammer China for this or that reason, they shoot back in the form of, for example, cutting off uh access to rare earth minerals. So again, it's there's uh a ready fire aim quality to this administration, and this is the latest example of it.

SPEAKER_01 8:51

There's a bank in the UAE called uh Bank Meli, and it's supposed to be not doing any business with any Iranians. And there was a report in today's New York Times that you know the bank is open, Iranians are everywhere, it's all business is being transacted. It's a stunning contrast to what Mr. Bissent uh offered up on Monday.

SPEAKER_00 9:12

Yeah, but actually, as bad as this all was, I don't think it was his principal mistake of the week, John. What was that? I think his uh intervention in the bond market and his thinking that he would have a material effect on the price of long-term treasuries by his uh intervention, which was essentially laughed off by the the bond market. And then the piece that Stan Drockenmiller wrote in the Wall Street Journal, Mr. Besson's former mentor, I guess you'd say, or boss or something, was as uh much of a takedown as I've seen in a while. It was a demolition job. And basically said, what you're saying is wrong, what you're doing is unserious. And if you want to affect things in the bond market, then curb inflation concern, do something about the deficit or what have you. But it was quite something seeing the Secretary of Treasury taken to school by one of the luminaries of Wall Street.

SPEAKER_01 10:06

The other thing that was weird about it is that that's sort of the purview of the Federal Reserve Board. It's not really the Treasury's job. And in doing what he was doing, he's putting a lot of credibility on the line. And like 24 hours later, the bond markets came back and said, no thanks. Which is, I don't know, it's a it was a really strange in it, Lute.

SPEAKER_00 10:28

No, it was it was strange. For someone who supposedly spent his career dealing with markets, it was not an impressive set of actions. You know, there's good reason to want to lower the yield on long-term treasurer. It affects so much of the economy and so much borrowing. But the there's only a couple of ways I know how to do it. And that is either, again, you know, for the Fed to raise rates, that would do it, short-term rates. And then there's obviously that we take some serious action to do something about our $40 trillion debt growing at the rate of at least two trillion a year. And if we were to do something on that, I think that would have a salutary effect. But unless I'd missed it, John, I've been really busy uh working on um, you know, my golf game and other such things. But unless I'd missed it, I don't see a whole lot of effort on the part of either the Congress or the executive, Democrats or Republicans. Uh it's almost well, what was it? Was it Mark Twain who said the uh everybody talks about the weather or complains about the weather and nobody does anything about it? That's kind of how I feel about the debt.

SPEAKER_01 11:25

Yes. I mean that everybody knows that the fiscal picture can only be approved by uh cutting spending, raising taxes, and empowering a much more robust IRS to gather up the unpaid taxes that are now, you know, going like water through a sieve, basically. So I agree. It's not uh it's not a good situation, to say the least. Uh you wrote about Korea in Project Syndicate, and then you took that, you copied and pasted it, and put it into Home and Away, which I thought was a little bit of a cheat, actually. Uh because you didn't say this previously, and you know, etc.

SPEAKER_00 12:05

But uh Well God, now everybody knows.

SPEAKER_01 12:08

Well, now it's out there to the fastest growing audience in America.

SPEAKER_00 12:13

We can call this episode no way of a title, busted.

SPEAKER_01 12:16

Well, no, absolutely, because Drucken Miller announced that he or said that he had written his op-ed piece for the Wall Street Journal with the help of AI. So that's you know, that's a problem. And now we have Haas plagiarized plagiarizing himself. That's another scandal.

SPEAKER_00 12:32

Can you plagiarize yourself? That's a really interesting question. Is self-plagiarism a possibility? For the record, I did it without AI. I'm not smart enough to know how to use AI. So being a Luddite has its uh advantages, I would say. Uh John. Yeah, I should have said that uh I lifted it from uh Project Syndicate, but I did include the link to Project Syndicate, but uh in the future I will be uh more uh explicit. So thank you to pointing that out to our many growing number of listeners. I expect to get all sorts of uh hate emails now.

SPEAKER_01 13:04

So you wrote the piece, and of course, Rocketman, well, Rocketman's sister actually is one of my all-time favorite people. Sis.

SPEAKER_00 13:14

Sis as they call it in North Korea.

SPEAKER_01 13:16

Uh uh who's in a death struggle with uh the daughter. So and sis is gonna win, I guarantee that.

SPEAKER_00 13:23

That's what I hear. I I don't bet against Sis.

SPEAKER_01 13:26

But you know, I mean, we're back to Rocket Man. We tried that in the first Trump administration, and now apparently we're gonna try it again. Is there anything good that might come out of this, or are we just Well we're just stuck with this uh rerun, if you will?

SPEAKER_00 13:41

If the definition of success or good is that we get North Korea to give up its nuclear weapons and its missiles, I would say there is approximately zero chance of that happening under this regime. Not negligible chance, zero chance. This is the only reason people care about North Korea. And also North Korea is not stupid. They look what happened to Iran, they look what happened to Ukraine, they look what happened to Libya and Iraq. I could I would not be shocked if the leadership of North Korea said to itself, to himself, not having nuclear weapons can be hazardous to your health. So I think there's zero chance to give them up. And by the way, again, one would just like to think that there was someone in the president's orbit who might have said, hey, before we attack Iran, what's think let's think about the global knock-on consequence. And I would, I would bet, John, shall we say, a significant amount of Bitcoin that uh no one raised that concern. That this is it's it's the sort of thing that actually encourages nuclear proliferation. So no, I don't there's zero chance we'll the president can achieve in this term what he tried to in the last time, no matter how warm his love letters might be. You could conceivably get some type of ceiling on the North Korean program if you think about a version of arms control. I don't think that's inconceivable. The question is, though, does that legitimize what they've done? They broke out of the non-proliferation treaty, and how would Japan and South Korea feel about it? So I think it would be very awkward, because in some ways it would institutionalize the North Korean program, and that might simply encourage South Korea or Japan to uh follow suit. So I don't see any chance right now of accomplishing anything particularly meaningful or desirable with North Korea. What worries me is the other side of the coin, that the way the president's going about it, is not only will we not achieve good north of the 38th parallel, but we'll do real harm south of the 38th parallel in Seoul. And what we have done is just reinforce fundamental, deep-seated doubts about whether the United States is trustworthy and reliable and can be counted on. And yeah, the last I saw, John, was even before these the recent week or two, 70 to 80 percent of South Koreans favored having their own nuclear weapons program. I would think whatever that number was, the number will be higher now.

SPEAKER_01 15:56

Let's just say, for the sake of argument, that we come to an ex some kind of agreement. What does North Korea get in return?

SPEAKER_00 16:04

Oh, if you the only thing I could think of is they would get in return. They what they would want in return is what we couldn't give them. Though I you never know what the Trump administration is some falling off of American support for South Korea, withdrawal of American forces, whatever. To me, the interesting question is whether North Korea would want all sorts of economic relief. And it's not a hundred percent obvious to me because totalitarian regimes, and North Korea really is a totalitarian regime. It's more than authoritarian, it is totalitarian. They might fear the political and social consequences of any economic opening. So we've always presumed that what they wanted was was, if you will, sanctions relief. I'm not a hundred percent sure. They might see that as a little bit of a Trojan horse. Uh, but at least it's worth it's worth looking at in any case.

SPEAKER_01 16:50

And if you're looking at this from the point of view of the Prime Minister of Japan, and you see the President of the United States uh, you know, meeting with Kim, you know, it's it it sends this just incredibly weird signal. Is it really possible that Japan, which is the only nation that has suffered a nuclear attack twice, would think about, okay, we need we need a nuclear program too?

SPEAKER_00 17:15

We're not there yet. The debate in South Korea is far ahead of the debate in Japan. That's um I'm just observing it. But I am beginning to see stirrings of a Japanese debate. And this would have been unimaginable, John, five years ago or ten years ago. So already Japan is much more comfortable with higher levels of military spending, with a more assertive role in the region. The Prime Minister, you know, has talked about the connections to Taiwan and so forth, uh as they're you know, the first island chain, what they call and part of their defense perimeter. They're not there yet, but it's not inconceivable. And depending upon two things. One is what happens with North Korea, or three things. North Korea's nuclear arsenal. Second of all, China. The fastest growing nuclear arsenal in the world is Chinese. The Chinese are on a dash to essentially join the ranks of America and Russia, and they'll get there in a couple of years. They're aiming to have, you know, 1,000, 1,500 nuclear warheads and so forth. So the and the question is then, how does Japan react to those two things, North Korea and China? And then the third thing is to what extent does Japan have confidence in the U.S. uh nuclear umbrella? So the combination of North Korea and Japan nuclear armament and a loss of confidence in the U.S., yeah, I can imagine Japan uh basically saying that it needs to uh establish its own uh nuclear deterrent. And then the question is not just North Korea's reaction, but China's reaction. The issue with stability is both the transition to a country acquiring or developing nuclear weapons, and then once they have them, having secure second strike forces, and so it's a longer conversation and will violate our 30-minute rule. But uh but the transition, if you will, to nuclear stability in Northeast Asia, uh, should the challenges to that ought not to be underestimated.

SPEAKER_01 19:06

So speaking of combat, uh, we're gonna go local here and uh look at a recent study that was posted uh at the British Journal of Ediction, BJM, and they found that they did a survey of professional football players to determine how many suffered from CTE, brain damage, and the numbers were absolutely stunning. Uh a quarter of the NFL players that they that they surveyed suffered from CTE, and the likely number, if you expand it, the list to uh all NFL players is likely to be more like 33 percent or even forty percent of NFL players would have serious brain damage. So we have a situation where broadcast networks basically depend upon the National Football League to deliver the ratings and the advertisers that make their businesses sustainable. Uh you have a football conglomerate that is vastly profitable and its teams are attracting, you know, five and eight, and the Dallas Cowboys are said to be worth ten billion dollars if you and I wanted to buy them. And I'm not sure they would be sold to us, but you know, if we had ten billion dollars, they would consider it.

SPEAKER_00 20:23

Given how much we're we're making from this podcast, John, I think it's only a question of time before we're in the zip code.

SPEAKER_01 20:29

So my question to you is, well, I know that, but uh my question my question to you is you're the father and you and Susan Mercandetti is the mother of a very, very talented, athletically talented young man age 14. Do you allow him to play football or do you say, let's shoot for the Premier League?

SPEAKER_00 20:50

Uh in a word, no. And what it is, by the way, I think the technical thing was that they did autopsies, I guess it is. So you looked at the brains of the deceased football players. Right. And as you say, the actual numbers are probably higher. And it's not just one terrible hit. I think it's cumulative hits in practice and games and so forth. And the equipment can't keep up with the speed, the size, the strength, what have you of the uh players. No, in a word, no. I mean, it'd be one thing if you thought your kid had the ability to play professional football, and maybe that was his one chance for quote unquote success in life. But putting that aside, just you know, 99.999% of the young people who play football are never going to make it in pro football. And the idea through high school or college, they're gonna risk that type of uh injury, it seems to me, just as a parent. I don't see how you could do it. Imagine this were anything else, John. Think of this not as a sport, but as a workplace. If you had any other workplace in America, a factory, whatever, where you had this level of serious injury, you'd have government regulators stepped in. I guess it'd be OSHA or somebody like that. And you would say, This is uh an antenna. situation. But I think the players do it because it's their livelihood. The fans love it. They want the game to be fast and to some extent violent. But I I don't know, I I'm uncomfortable with it. I don't have anything particularly wise to say. But the fact that I would sit here and say I wouldn't want my we just had a grandson. I wouldn't want my grandson when he grows up to do this. And not that I'd necessarily have the final word.

SPEAKER_01 22:23

That's that's quite telling the thing that if we have more research like this, like this BJM research study, then it seems to me a liability issue comes into play. The NFL can has enough money, obviously, to you know endlessly go to court and tie people up, but high schools and colleges don't. And so if you know uh trial attorneys decide to uh turn their attention to some high school in Texas and say you're damaging these kids' brains and you're on the hook for it, then that's where I think it it really has a huge impact.

SPEAKER_00 23:00

Good point. Also I think uh I haven't seen anything on it, but at some point I expect people are going to do the research to find out what are the early warning indicators of CTE and whether there's a way to test for it with MRIs or some kind of scans. But I expect we're going to see a lot more focus on that to catch this, if you will, uh to nip it in the bud for individuals rather than let it get advanced.

SPEAKER_01 23:24

Right. Now I read in the most recent edition of Home and Away that you are not a US open enthusiast, U.S. Open tennis enthusiast and I wanted to ask you if your wife was or if your negative attitude had sort of permeated the house and she went along.

SPEAKER_00 23:45

No, she actually is much more of a fan than I am. It's funny I grew up as a big fan of it, of tennis. Kind of the Connors, MacEnro, you know yeah I'm older not to the Australian era, the Rod Lavers and others, and then there's you know the Federers. I just don't find anybody now who's quite as captivating. I do find the lack of American men who are dominating and you have center and others. I don't know. I just kind of lost interest in that one I I can't play it anymore. Not that I was good not at that level I mean I could never play at that level but ever since I got carted off the court with a torn hamstring my my connection to tennis is attenuated.

SPEAKER_01 24:20

Also I wanted to ask where are you on the Yankees and the Red Sox now?

SPEAKER_00 24:25

Well it's a four-game weekend doubleheader I think on Saturday I don't get the Red Sox. If I look at them on paper and then I look at their record they're the hottest team in baseball this summer. They've had an extraordinary summer and I don't get it. And the Yankees I mean between the the injuries the errors I don't know I just find the Yankees I rotate the Yankees are underachievers the Red Sox are overachievers. I'm guessing on probably a 2-2 weekend that they split it. I'm guessing they split it.

SPEAKER_01 24:54

Well we've reached the 30 minute mark when we promised to keep it that way so thank you.

SPEAKER_00 24:59

Well what's your view on the weekends uh on sport on the you haven't you haven't said anything about either tennis or about baseball very quickly what do you think?

SPEAKER_01 25:07

Uh tennis I'm not that interested in baseball I hope the Red Sox win and uh the golf is supposed to be exciting and uh for some reason I couldn't care less.

SPEAKER_00 25:18

Yeah the FedEx Cup, I gotta tell you, I find uh let me ask you one philosophical question to end it. Baseball always talks about itself as the national pastime. Do you think it still is? No football is I agree I think oh b I think in the football or basketball are prop I actually think both of them are ahead of baseball right now. I uh I think baseball has kind of lost its hold on America's imagination.

SPEAKER_01 25:40

I find it to be soothing you know I like baseball and you can w listen to it on the radio you can listen watch it on TV and you don't it's not I don't know it's oddly soothing.

SPEAKER_00 25:55

Bach can be soothing Mozart can be soothing but it's a sport it's not music.

SPEAKER_01 26:02

But I you know we grew up with uh you know Vin Scully doing the doing the World Series. I mean it's we did Mel Allen I grew up with Mel Allen doing the Yankees Yeah but I mean I remember in the 80s the baseball was on NBC and what's his name did the play by play in Scully and I don't know it was it was spectacular and it's just really beautifully done and I it now it's too busy and the announcers talk too much and but I remember when I was a kid I remember I had a little transistor radio and I'd go to bed and I was meant to go to sleep and I to put the Yank the night games on which is probably why I didn't do better in school because I'd stay up late into the night listening to the Yankee games on radio. Well I think we can cut that part out so thank you all people don't find people don't find it as fascinating as I do. That's really shocking yeah Dale make sure that's gone um uh now we're at 32 minutes so sorry about those extra two Dale will take care of that and thank you all thank you all very much for listening and we'll catch you next time.

SPEAKER_00 27:08

Have a good week