Donald Trump KNOWS Iran Has WON the War and is Risking a GLOBAL DEPRESSION—Doug Bandow

Episode 12 July 21, 2026 00:26:35
Donald Trump KNOWS Iran Has WON the War and is Risking a GLOBAL DEPRESSION—Doug Bandow
Going Underground Hosted by Afshin Rattansi
Donald Trump KNOWS Iran Has WON the War and is Risking a GLOBAL DEPRESSION—Doug Bandow

Jul 21 2026 | 00:26:35

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Show Notes

On this episode of Going Underground, we speak to Doug Bandow. Former Special Assistant to Ronald Reagan and Senior Fellow at the Cato Institute. He discusses the risk of a global Great Depression following the resumption of the war on Iran and the looming prospect of a catastrophic energy shock in the US, why Donald Trump knows he must end the war on Iran quickly, whether the echo chamber of neocons around Trump can tell Trump he made a mistake by starting the war, the Gulf States’ view of the war on Iran and their defence against Iranian capabilities, whether Iran could already have a nuclear weapon, Trump’s potential pivot to Ukraine as the NATO-Russia proxy war continues to escalate, and much more.

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Episode Transcript

[00:00:00] Speaker A: Foreign. Ratanshi welcome back to Going Underground, broadcasting all around the world from the uae. A week today since two UAE oil tankers were lethally struck by Iranian cruise missiles in the Strait of Hormuz, billions now face a threat to their economic well being. Trump threatening water supplies in Iran awaits more Netanyahu orders in Washington. Amidst continued genocide in Gaza, Iran has been retaliating against resumed US Aggression following the memorandum of Understanding fiasco. Flip flopping on a ceasefire seemed expected in what many fear will now further exacerbate the global economic slowdown catalyzed by Trump and Netanyahu. This as Trump has militarily threatened countries all over the world, from Oman, Mexico and Cuba to Nigeria and Denmark, let alone ICE agents killing at home. Emblematic of American chaos is Wednesday's scheduled New York court appearance of Venezuela's kidnapped President Maduro. Joining me again from the U.S. capitol, Washington, D.C. is Doug Bandao, former special assistant to U.S. president Ronald Reagan and now senior fellow at the Washington think tank, the Cato Institute. Doug, thanks so much for coming back on Going Underground. Given the flip flops, we never know what might have happened by the time this is being broadcast to millions around the world. But do you think that Trump understands? I should actually say, yeah, the picture's slightly grainy there. So perhaps something has happened in Washington, D.C. since Netanyahu has been there. But anyway, do you think Trump knows that Iran, Iran controls part of the Strait of Hormuz geographically and that Iran has won the war? [00:01:39] Speaker B: I think he knows that they control part of it. And I think he's probably afraid they've won the war. But he can't admit any of that. And he knows he needs to change that. And the only tool he imagines he has is to use the US Military. Didn't work before, it's not working now. But Donald Trump is not one to check reality when his ego isn't strong. Mistake. [00:02:00] Speaker A: And you repeatedly, repeatedly in recent weeks, I noticed you've been invoking Herbert Hoover. You might have to explain why that's a tragic comparison for the American people and the global people all over the world. [00:02:17] Speaker B: Well, Herbert Hoover was the US President when the Great Depression emerged. And Trump a few a couple weeks ago said he didn't want to be Herbert Hoover, that he understood that destroying the world energy markets could bring the entire world to a recession or depression. So he seemed to understand the danger of that. And he certainly risks that if he kind of causes most of the industrialized world not to get the energy that it needs. One can imagine the chaos that's going to result and that will engulf America as well as the rest of the world. [00:02:54] Speaker A: Yeah, 100 years ago. But then, of course, he's been pointing to the CPI figures in the past few days. After all, I don't know whether they're rigged inflation down. I don't know whether the American consumer is feeling that at the moment. And how existential then is it for ordinary Americans, given that economic turmoil, according to the official data, isn't being felt? But, I mean, you know, you're there in the US you can see what ordinary Americans are feeling. [00:03:27] Speaker B: Well, so far, gasoline prices are up. You know, most other prices have moderated to some degree. Now they're higher than they would be given these policies, tariffs, for example, and other policies. But Americans have been relatively lucky to be isolated from a lot of this. But that isolation will end at some point because we're coming to the end of the oil supplies that had been, you know, on the oceans back when the shooting started. And even the US Gets hit by world energy prices. We've seen those start spiking up because nobody's going to try to run the strait where missiles and drones are flying about. So if this continues and oil prices really start reaching upward, Americans are going to be paying a lot more, and then the screening will start. It's less than four months till the congressional elections. Republicans in Congress are going to be very worried. You know, American friends and allies around the world in Asia and Europe and the Middle east are all upset by this. Trump's going to have a lot of folks clamoring for an end to this if he doesn't get it over with very quickly. [00:04:34] Speaker A: Surely that's going to be more important than anything Netanyahu tells him or Epstein, blackmail or anything. Isn't that going to be the key, the main determinant of whether this war continues towards fundamental catastrophe? [00:04:51] Speaker B: I believe that's right. I don't think that he feels any particular loyalty, for example, to Netanyahu. I suspect he's also, in fact, feels betrayed to some degree that Netanyahu promised him easy win, three or four days regime and change. You can go home and have your big parade and an archer triumph and you've won. And none of that happened. I think he knows that he was misled, that the question of his political future, to have a Congress heavily dominated by Democrats would be very dangerous for him. To have the Republican Party damaged significantly would be bad for him to have it ruined for the next presidential election. I mean, all of These things matter to him. So I suspect that he really knows he's got to get this over. And my hope is that sense of self preservation takes over very quickly, because if it's just his ego, I mean, he really could take the world over the edge. But if he worries about his reputation for the future, then there's hope that he might decide he's got to get it done. [00:05:54] Speaker A: So it's up to an analysis of his ego. And I suppose the voice is in the room. I just heard the other day that the Energy Secretary didn't even know about the attacks on Iran in February 28th. It wasn't consulted before it happened. You were special assistant to a president. What are the dangers of this echo chamber? I mean, and who would you say populated? Hagsett? Netanyahu? Mariam Adelson, John Radcliffe? Who. Who are the people in the echo chamber? [00:06:23] Speaker B: Well, this is a very great danger. Now, every president risks that. You know, nobody likes to tell the president bad news. Everybody wants to convince him that everything's going wonderfully. You bring people into the Oval Office, they get weak knees, you know, and all of a sudden they're amazed by the surroundings. They want to tell the President how much they love him. So that's a risk with every President. But we've never had a president who's so brave to be. Kind of had everyone tell him how wonderful he was as this president. So that pressure is extraordinary. On military matters, Hegseth matters, though it's not clear how much he's respected. But on this issue at least, he's clearly been pushing us very hard. Netanyahu, at least until recently, mattered a lot. On this, he may have been damaged a bit by this. Susan Wiley, the chief of Staff, seems fairly smart, but what she does is she doesn't like to oppose him when he's made a decision. The problem on this is she, I [00:07:21] Speaker A: should say, was an assistant to Netanyahu before Susan Wild. [00:07:26] Speaker B: Unfortunately, there are a lot of folks who have a lot of connections out that way. The problem with this is that he's kind of stuck in it. I mean, the military leadership were clearly very skeptical before it started. You know, Vance to hit JD Vance, to his credit on this at least, was very skeptical about it. Marco Rubio didn't say a lot, but also seemed a bit skeptical. The problem is none of them want to lose their standing before him. So it's very hard for them to come and tell him that he has mightily screwed this up, and the only answer is to quit. You know, they have to convince him that he's not going to get the obvious win that he wants. The only win for him is to stop it. And that I think is, you know, is he prepared for that? He's gotta be willing to make that judgment. I don't know anyone who's willing to risk their career with him to tell him that. And that's desperately what we need right now. [00:08:24] Speaker A: And what about Iran's tactics? What have you made of how they've reacted to a superpower, nuclear superpower, two nuclear powers attacking them? [00:08:34] Speaker B: Well, the Iranians do have to be careful not to overreach. I mean, they have, you know, they hold the strait. That gives them enormous leverage, but they need to be prepared to make a deal when they can. I think what they were worried about here was that it was pretty clear Trump was violating the MoU in terms of the strait as well as the issue of Lebanon. Now it's not clear that he actually read the MOU before he signed it. Did he actually know what was in it? It was somewhat ambiguous. You send over a couple of real estate developers, a childhood friend and your son in law and expect them to work out negotiations with Iran. What could possibly go wrong? The point is that I think he realized he was in trouble, he got a lot of flak for it and thought that he could force the Iranians to back down. They are holding firm. I think the danger here is they have to be prepared at some point, I think, to make a deal. And the question then is, how do you communicate that to Trump while indicating he's got to make the real concessions but that they're willing to let him in a sense get away with some of his victory claims at home as long as they get the substantive wins in the Middle East. [00:09:44] Speaker A: Can you understand Iran's military tactics? A mistake, do you think, for it to be hitting GCC countries that are hosting US military assets or comprehension Understandable, given they don't want to hit the two US carrier strike groups, two amphibious groups, 15 named cruisers just by this studio. I don't know how many US vessels are out there actually now. [00:10:12] Speaker B: It's terrible that they're doing this, of course, because the Gulf states have not initiated combat. I don't think we're surprised simply because Iran views them as being vulnerable and frankly, Iran views them probably as being the only target that's likely to make a real difference on the United States. That hitting the bases has done enormous harm to the US Military. That can be viewed as direct retaliation in terms of the US Government and then hitting the Gulf states. They are trying to get the Gulf states to tell the US to end this. So it's a tactic that I'm not surprised about. I think that it's wrong. You're hitting people who did not hit you. But look, the way this war has gone, the US Went after them twice in the middle of negotiations, launched an aggressive war. I'm not surprised that Iran has basically said all of the rules are out the window. And tragically, the Gulf states are targets in this. [00:11:10] Speaker A: How do you think the UAE has defended itself? Of course, we don't know about the minimizing of the effectiveness of Iranian retaliation has been in Kuwait and Bahrain. I mean, I'm in Dubai. I can't see any damage. [00:11:22] Speaker B: My sense, I mean, of course the Emirates have been probably the most effective militarily of any of the Gulf states. So they do have capacity to help defend themselves, more so than most of the other Gulf states, Saudi Arabia, too. And I think there may very well be behind the scenes activity going on. I mean, our presumption is that there is discussions going back and forth. I mean, I'm sure, for example, that Iran has held off making direct civilian targeting, for example, of desalinization plants. I don't think on that. [00:11:57] Speaker A: What did you think of Trump explicitly talking about water supplies to be targeted? By the time this is being broadcast, perhaps water facilities in Iran have been attacked. [00:12:07] Speaker B: My assumption is he's trying to scare them because we went through this before, that he would destroy Iranian civilization. That created a huge response around the world. And my bet is that it also privately he heard from all the Gulf countries saying they are even more vulnerable on those issues. So if the US Starts targeting desalinization plants in Iran, I imagine that is the one tactic that might cause Iran to strike back directly its civilian targets within the Gulf. That could be catastrophic. And my hope is that these countries are weighing in very strongly with the administration saying it does not want to go there. But my betting is he's trying to threaten, he's trying to scare them. He knows he's lost, he needs concessions. So he's trying to scare them even if he can't win them. [00:12:57] Speaker A: Doug Bandao, I'll stop you there. More from the former US Presidential special assistant after this break. Welcome back to Going Underground. I'm still here with the former special assistant to US President Ronald Reagan and senior fellow at the Cato Institute, Doug Vander. Doug, we were talking about Iranian retaliation. Of course, there's no IAEA inspections anymore. After what Trump has done, no one really knows whether Iran has gone against its original fatwa of Khomeini. It was initially against nuclear weapons. What do you think the dangers are that Iran has a nuclear weapon now? [00:13:38] Speaker B: I don't think it's likely that it has one under the former supreme leader. He seemed resolutely against it. From everything I understand, there was some frustration in the regime because he didn't want to go that way. He wanted to be cautious. He wanted to make Iran kind of a near nuclear state with the possibility of getting one. He didn't want to push all the way. And given the attack on their nuclear facilities last year, I don't think anything is likely been done, you know, since then. The danger, of course, is we've got a new leadership that's more angry, more antagonistic, probably more nationalistic, and they have a much better reason to want a nuclear weapon. Donald Trump has demonstrated pretty conclusively that without nuclear weapons, it's hard for them to defend themselves. That, you know, again, they don't have to do that right now. The point is a Strait of Hormuz has turned out to be their nuclear weapon and given them extraordinary leverage that they may have thought they might have had in the past, but they never used it. And this is the extraordinary thing. Donald Trump has created the entire problem. They wouldn't have the enriched uranium if he hadn't gotten rid of the jcpoa, the nuclear accord that Obama negotiated. And then last year, he attacked them in the middle of negotiations. This year he attacked them in the middle of negotiations, and they struck back at the straits. So he's the one who's created the problem of both the nuclear issue as well as the Strait of Hormuz. [00:15:04] Speaker A: Now, the cost, of course, I mean, were you even surprised by the budget that were being talked about in Congress for this war in Iran, let alone the continued amounts of money given to dictator Zelensky in Ukraine, despite Trump saying he was not following Biden's policies, do you think that is going to face some kind of problems? I know that you've mentioned it in the past. Lindsey Graham was also the Budget Committee chair. If we leave genocidal Lindsey Graham to one side, who is Ron Johnson, and could he help in vetoing some cash, American cash that could be spent better on the American people? Veto cash for the war in Tehran and the war in Russia. [00:15:51] Speaker B: Orland Johnson is a senator from Wisconsin, a Republican, who's taking over the Budget Committee. He's much more a budget hawk. There aren't a lot of them in Congress. But he's actually one person who worries about a $2 trillion deficit every year where the US is piling up debt. The US interest payments every year is a trillion dollars just for interest. So he's likely to ask some questions. And we even heard in terms of Pentagon spending, when the administration went in for its latest request, it wanted a roughly 40% increase in total military spending. And then it's gone in for all this extra spending on the war. Even some of those Republicans who in the past didn't want to oppose Trump have started asking questions. They know their constituents don't want this war. A majority were against even when Trump started it. And that's one of the first wars that's ever happened for America. They're even more against it today. So I'm hopeful that Congress might finally grow, you know, a bit of a backbone and might be willing to take Trump on and communicate to him that there's no blank check here, that they also want this war over with and want it over with quickly. [00:17:02] Speaker A: Do you think Russia has been waiting for the effects of the war in Europe to rebound and boomerang on the economies of NATO nations? I mean, do you think Russia is now tired of the fake Trump peace deals that is going to finally end this war? I mean, there's no Reagan like detente that's going to happen that the president you advised. [00:17:29] Speaker B: It certainly looks like Russia has expected that the Europeans and ultimately the US Would pay a price. I mean, the Europeans have suffered very badly. Getting rid of cheap energy sources has hurt their industries enormously. It's hard for them to raise the money to keep funding the war in Ukraine. It's pretty clear Trump has kind of grown tired of it. He didn't solve it the way he wanted. Congress still wants to support it. But even there, you don't get the same levels of enthusiasm. And I'm sure that Putin and the Moscow government are all watching this and taking that into account as they plan for the future, that they can assume, I think, that that interest will continue to flag. It'll be interesting if they decide there's a point to approach Trump where they think, perhaps especially after the Iran debacle, that they might be able to convince Trump to try to take a more favorable stand and get the war over with with Ukraine. [00:18:27] Speaker A: Or, of course, he could pivot to that war and seek further escalation. Isn't that the problem? [00:18:33] Speaker B: As far as I can tell, Trump does have some respect for Vladimir Putin. And I think Trump Also recognizes it's one thing to escalate against Iran. It's quite another thing to escalate against Russia. Even he commented kind of about when someone complained that Russia might be helping Iran. He noted that, well, we've been helping Ukraine. So I think Trump has some awareness there. So my hope is that he has some caution. He's also complained about the problem of having Russia cooperating with China. So I do think that Trump has some understanding of some of the furies that the US Position has helped unleash. [00:19:12] Speaker A: Russia didn't have much to say about Trump talking about sending Patriot missiles and manufacturing Patriot missiles capability to Ukraine. I noticed there are two drone factories. One in Suffolk in England, where I'm from, one in the Loire in France. These drones are being manufactured in Western European countries. Are you surprised Russia hasn't targeted these drone factories, given the drones are hitting directly into the Russian Federation and they're manufactured in England and France? [00:19:45] Speaker B: Putin has been pretty cautious in terms of any direct Russian military action. You know, my bet is that they probably looked at trying to find indirect methods, sabotage and other things. You know, a direct military strike on those factories really would raise the temperature, and it would raise questions of, you know, what would be the result. People would call upon the US to act. I think Putin wants to make sure that he doesn't get direct military involvement from NATO, but you can certainly imagine he's not happy about these. I suspect he looks at the Patriot promise and doesn't believe it's serious. That is, to get those factories going will take a long time. And if they're set up within Ukraine, I have no doubt that the Russians would do their best to destroy them and probably would succeed. [00:20:30] Speaker A: But do you think Putin missed a trick in not being more hawkish earlier? I mean, Trump seemed a bit friendlier to NATO than he was in the initial period of this second term. [00:20:42] Speaker B: I think from the standpoint of Russia, I mean, the whole irony here is that, you know, the point is the Russians never wanted Ukraine into NATO. If that hadn't been proposed, we wouldn't have had this war. So from a Russian standpoint, they don't want to directly confront NATO, which theoretically could bring in all of those countries into a conflict. I think that's why he's been cautious. He's been criticized at home over it. But I certainly understand that caution. I don't know how the US Would react. I really don't want to have to find out. I think that is Putin's view as well. [00:21:15] Speaker A: And as for NATO Itself. [00:21:19] Speaker B: Well, NATO itself. The problem is, I mean, NATO is going to have a hard time acting seriously without the United States. It's going to take a long time for the Europeans to try to take over responsibility. So from the Russian standpoint, the really big actor is the US but they recognize there are those treaty commitments. There are a lot of hawks in the Republican Party. So, again, do you want to tempt fate? You know, if you believe you can win, then you decide you're not going to go all the way because that might bring in the full NATO against you. You don't want that. [00:21:52] Speaker A: Although, of course, NATO is a de facto fighting the war with Russia. It's not Ukraine, unless you count the last Ukrainian, the famous phrase of Lindsey Graham. I mean, do you think, actually, for all of what we've been saying by Trump, at least Trump hasn't gone to war with China during the presidency so far, not directly. Unless you believe that the war in Iran is actually an attack on China. It, of course, does affect China. [00:22:19] Speaker B: Yeah. The good news with China is Trump does seem to be relatively cautious there. He cares much less about geopolitics. He doesn't seem to be that enthused with the Taiwanese. He cares most about trade with China. So that's one of the. I mean, the joke is that because of the oligarchs. [00:22:35] Speaker A: Is that because the oligarchs that bankroll him are all in with China by definition? [00:22:41] Speaker B: Actually, I think a lot of this has to do with him. He tends to like authoritarian leaders. I think he respects Xi. He likes the idea this is a guy who runs a country of 1.4 billion people. And I think there is a level of respect there. I think the economic action is something that he likes. I mean, again, he's a focus on business. He's never been focused on kind of geopolitics. And he probably just understands this is a big, powerful country that, you know, it's far better for the US to have friendly relations. And he recognizes they can invest over here, they can buy our stuff. He's, you know, in many ways, he may be the only person in his administration who's not a China hawk. But the good news is he's the one who makes the final decisions. And on this issue, you know, he's been much more moderate than some of us feared. [00:23:28] Speaker A: Yeah, he obviously didn't know Iran was the largest car manufacturer in West Asia or anything much about Iran. I mean, do you think a future president, though, will go off to China? [00:23:39] Speaker B: Well, a future president. I mean, again, the Issue of Taiwan is the dangerous one. No one here wants a war with China. I worry they underestimate how important that Taiwan is. And there's a lot of talk in the Washington policy community. Well, of course the US has to defend China and I keep telling them maybe you need to talk to the American people. I doubt they want a nuclear war with China over Taiwan. They don't even know where Taiwan is. They don't want to fight a war 6,000 miles from home. That does make me very nervous in the future. I think American policymakers underestimate that risk. I think the Chinese are very serious and no one on earth, especially China and America, but no one on earth wants a war between these two countries. [00:24:22] Speaker A: Well, just finally I know Western Europe is now seen economically as a basket case region. You intimated as such with the Nord Stream destruction and so on, their energy collapse, let alone their economies. But I noticed you did offer some hope. The only hope I've seen actually. You said that EU President Antonio Costo had authorized some informal contact with Moscow in any. Any hopes you. You identified this character in American conservative of any kind of dialogue. All the dialogue is happening with the rest of the world. Western Europe is like this isolated boomerang sanctioned area of earth. The western peninsula of. Of Eurasia as it's being called. [00:25:07] Speaker B: Well, let's look at it next year. What happens in the French elections? What happens to the UK if they have to hold an election? What happens in Germany? You see the rise of the AfD, you see the rise of the national rally. Both of those tend to be anti war lafarge. In Britain his position is not quite so clear. [00:25:30] Speaker A: But supporting Andy Burnham has taken over as Prime Minister in Britain today. [00:25:35] Speaker B: But France and Germany, I hope there that maybe for practical political reasons that he's one who'd recognized this isn't getting them anywhere. I do think you could see a shift in Europe come and I think those elections will help matter. If the politicians see their electorates making pretty clear that they are tired of that they don't want to keep spending the money, they don't want the confrontation, then there might be some real pressure to get negotiations going. That's absolutely necessary. Europe needs to be willing to make a deal with Russia. Everyone needs to come together and say none of us benefit from this. [00:26:10] Speaker A: Doug Bandao, thank you. [00:26:12] Speaker B: You're welcome. [00:26:14] Speaker A: That's it for the show. Our continued condolences to all those of you bereaved or affected by today's NATO nation wars of aggression. We'll be back with a brand new episode on Saturday. Until then, keep in touch via all our social media if it's not censored in your country. And head to our channel goingundergroundtv on rumble.com to watch new and old episodes of Going Underground. See you.

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