The Markets Matter For War—You Don't

Edited by Sam Thielman

JUST IN TIME for the markets to open, President Trump has backed off his late-week threats of a massive renewed bombing campaign on Iran, this one expressly targeting energy infrastructure, a war crime. Trump predictably claims the "perimeters" of a deal are in sight, while the Iranians, just as predictably, say they're neither sending nor receiving delegations for negotiations. Even conservative media is getting irritated by the constant Trumpian cycle of threat, climbdown (or, frankly, attack) and deception throughout. Bless their hearts, they never thought the scorpion they’re ferrying across the river would sting them. 

This latest development follows Iran pressuring Saudi Arabia. You'll recall that the Houthis are closing the Bab el-Mandeb, the gateway between the Red Sea and the Gulf of Aden, to Saudi oil exports. After the Saudis bombed Iraqi militias that are part of the Iranian coalition, the Iranians pulled off the unexpected feat of attacking the Egyptian port of Damietta on the Mediterranean. Not only was that a substantial geographic expansion of the battlefield, it demonstrated that any oil export route through the other side of the Red Sea is vulnerable as well. Oil prices rose. The Saudis, bottled in at the three waterways necessary to export their only commodity, reportedly called Washington and urged Trump to return to a negotiations process that he had long since sabotaged.

The reprieve aids the markets' collective delusion that the war is contained—and even on a path to resolution. (The latest episode of Turbulence passes on some analysis about why this delusion persists, and it concerns gaming some pricing algorithms.) Previous presidents manipulated public opinion for their wars. Trump manipulates markets instead.

Many people, myself included, have marveled that the Trump administration hasn't bothered to manufacture consent for the Iran War. As a result, it's a stunningly unpopular war after only six months. The typical rally-round-the-flag moment that greets the opening phase of wars didn't happen this time. Congress even got around to asserting its constitutional prerogative to declare wars. Trump, whose deputies had called the war "over" in June, kept bombing during the 12 days of strikes in July, unbothered. 

The emphasis on markets and the deemphasis on public opinion is both revealing and a lagging indicator. Trump has demonstrated these past six months that warfare, long insulated from what passes in this country for democratic control, has so hollowed out mechanisms for popular accountability that warmakers no longer need to engage in procedural fictions. But he does fear market pressures: the downward distribution of economic pain that, in an ostensibly democratic country, will result in politicians losing their jobs. To forestall those pressures, the administration—and, inevitably, its successors—manipulates the markets as eagerly as it manipulates the public. Oil markets might even be easier to manipulate, since they're inflected with the motivated reasoning of people who own capital and demand it appreciate in the short term. Tomorrow's problems are for broke boys to worry about.  

Tomorrow's problems are pretty serious. Iran says its only ongoing diplomacy is with Oman. Esmaeil Baqaei, the spokesman for the Iranian Foreign Ministry, said the two neighbors are negotiating a route through the Strait of Hormuz "acceptable to both sides -- neither the northern route nor the southern route -- but one that respects the sovereign rights of both sides and safeguards our national interests and security." What he means by that is that Iran, with Oman as a coerced junior partner, means to secure its hold on the Strait, which is its leverage over the global economy. With the Strait under secure Iranian control, the U.S. cannot attack Iran without damaging something it values more: cheap energy. 

Oil markets are defaulting to the perspective that as long as stuff isn't actively blowing up on a large scale, regional conflict is diminishing, permitting oil exports to return to normal. All Trump has to do here is not bomb and pledge that he sees a path to resolution. But nothing could be further from the truth. From the Iranian perspective, control of the Strait signals a new status quo that the markets have yet to embrace through pricing. From the American perspective, there will be immense pressure for adventurism, like new emphasis on suborning Oman, to disrupt the Iranian hold on the Strait. Then, this morning, the Defense Department announced its framework agreement with Lockheed Martin (and Northrop Grumman) for expanding production of missile interceptors. The interceptors will take time to come online, but when they do, they'll represent another temptation for a future administration to attempt to reverse the post-Iran War status quo. 

Markets won't pay the price for any of this. People will, both in the region and, less lethally, here. But democratic erosion, already long underway for decades in the "national security" sphere, means that American leaders, following increasingly plebiscitary votes for presidents and legislators, won't need to heed the people. Those legislators comfortable with this state of affairs already view their offices as an opportunity for enrichment through insider trading. Market-focused warmaking will only expand in an increasingly undemocratic United States. The past six months of insanity and disaster show that such warmaking is less a constraint on violence than an incentive to accelerate it—all under the illusion that the U.S. can control what it unleashes.

An Iran that remembers 1953 should have long disproven that. But markets care even less about history than they do about the long term. 

ADMIRAL BRAD COOPER has no idea what he's doing. Attempts at soliciting "creative and unconventional ways to pressure and punish Iran" from across the U.S. Central Command analysis enterprise is an admission that CENTCOM doesn't have a military response for Iran's leverage. This, after Cooper was last seen proposing to just drop a ton of bombs for two weeks. Remember that Cooper was the admiral who lost to the Houthis and got promoted for it, only to lose to the Iranians. American professional military education is kind of proving itself to be shit by producing leaders like him.

IN MAY, we highlighted the hunger strikes inside Delaney Hall, the now-infamous ICE camp in northern New Jersey. Today we learn from Jose Oliveres at The Guardian that ICE and its GEO Group contractor are forcibly feeding strikers, including through enteral feedings—not only at Delaney Hall, but throughout the ICE enterprise. Enteral feeding involves the insertion of tubes through your nose and down your throat, to administer liquid calories against the will of the person subjected to such treatment. Everyone who experiences it considers it to be torture. There is an extensive treatment of enteral feeding—and hunger striking—in my forthcoming book The Disappeared: A Father, A Son and The War on Terror. Once normalized in the War on Terror, enteral-feeding torture has spread.