Max Blumenthal: War with Iran is burning a hole in America's wallet

Added: 2026-05-13

[00:00:00]Joining us now is journalist Max Blumenthal. He is editor-in-chief of The Grayzone. Max, great to have you with us. Great to see you. Yeah, I want to get to the costs of the war in a moment, but first I'd like to get your views on President Trump's response to the latest Iranian proposals. That in fact was a response to the American plan. Uh President Trump, very characteristically, posted on social media and he two words basically, upper upper case, used all caps, totally unacceptable.

[00:00:30]Uh I mean, is he gradually closing all the off-ramps that are available to end this?

[00:00:35]He can't accept it because he'll be called Taco Trump and accused of chickening out. He can't accept it because of the amount of Israeli influence over Donald Trump, which is total as we saw from the uh Benjamin Netanyahu's softball interview where he's calling for a US special forces operation inside Iran. He can't accept an off-ramp, but at the same time he can't go back to war and he has no cards left to play in this war other than civilian slaughter and the destruction of infrastructure. He cannot open the Strait of Hormuz. There is no military means to do that. The naval blockade is not working. A new CIA assessment has just been leaked showing that Iran is prepared all the way until the fall, all the way up into midterms to withstand this blockade that they've of course been preparing for since well before this war. The CIA assessment also says that Iran has 70% of its ballistic ballistic missile stocks and launching capacity. I would actually think the number would be higher than that, that that's an underestimate. So, what can Trump actually achieve by going back to war? We should also consider what uh Prince Turki Al Faisal wrote in the Saudi publication. This is the former Saudi intelligence minister in Al Sharq al Awsat about Mohammed bin Salman's thinking on the war. It turns out, according to Prince Turki, that MBS wasn't a big proponent of attacking Iran, that he wants credit for keeping Saudi Arabia out of the war because Iran would have in Turkey Al Faisal's words destroyed their desalination plants and basically destroyed Saudi Arabia as a country. So, what does that say about the UAE, which has supposedly been the biggest proponent of going back to war and barking all these threats at Iran?

[00:02:15]They're facing the same problem. So, is Trump going to allow the destruction of all the Gulf vessels that are paying him and paying Jared Kushner? No, he has no cards left to play.

[00:02:25]>> This is all bluster from Donald Trump.

[00:02:26]We're in a frozen conflict.

[00:02:28]And looking at the cost of the war, I mean, the figure that we had from the Pentagon was $25 billion so far.

[00:02:35]Uh there was analysis done uh by the conservative media. The Financial Times actually has an analysis which says it's going to be considerably more than $25 billion when all the uh costs are counted. No doubt there are some people who've made money out of this war. The arms companies for one, logistics companies for another, and those people who have access to privileged information who've been using that information to uh take bets on the oil market. So, let's first talk about the losers of this war. The losers of this of this war are the American public and the global public, the global majority.

[00:03:12]The Trump administration estimates the cost at 25 billion, which is massive.

[00:03:15]The real cost is closer to 1 trillion if you consider what Fed economists are saying in lost economic output. That's like $200 billion.

[00:03:23]Then the failed failure to do rate cuts, interest rates for homeowners in America, this is devastating. That could be another $200 billion in lost economic output. Then you have the $1.5 trillion Pentagon budget that Hagel said he's putting forward. This is which is which is another avenue for corruption. That's going to cost every American household $4,000. So, the cost is enormous to Americans. The lost fertilizer for the farmers who are Trump's base, the gas prices for working Americans driving Uber and so on. It's enormous. Who are the winners of this war? The winners of this war are the people who placed $920 million in crude oil shorts just 70 minutes before Axios access reporter Barak Ravid published news of a new 14-point proposal stirring false hope in a possible deal between the US and Iran.

[00:04:15]He is the main dump for leaks from Steve Witcoff, Jared Kushner, and Donald Trump who are cashing in on the war. He published that 70 minutes after the shorts came in and one insider made a $125 million profit. Now Barak Ravid is finally getting exposed as the main reporter let being leveraged to manipulate markets by the Trump administration to make what is at least $2.8 billion in insider trading since this war began and the Beltway press corps is circling the wagons to defend Ravid, a former Israeli intelligence officer who does not disclose his IDF background on his Axios bio to prevent the US media from reporting on one of the biggest scandals in access journalism inside the Beltway since I can remember.

[00:05:03]That raises another question, Max, and that is you know, is the American public being told the truth about what is going on here? I mean, we talked about the costs. That is not being widely discussed right now, but what about the American casualties in this war? Not just American soldiers who are dying, but also the damage that's been done to American the American military equipment in that region. That's a great question. You know, if you were reporting this day after day, so you could kind of understand that US military bases were taking a beating. I was following this very closely and I have sources in the region, but most Americans weren't being told the truth here until last week when the Washington Post published an analysis based on open sources and their sources showing that 230 structures in US military bases, primarily in Kuwait and Saudi Arabia, were destroyed. I mean, we're talking about a billion-dollar radar system that was the eyes and ears for the US, not just in the region, but all the way into Russia at the Al Udeid Airbase in Qatar. And so so most of these bases are now unusable, and the US is having to shift operations to, for example, Nevatim Airbase in Israel, where the US is actually considering permanent basing because that's one of the only places where they're protected. So, the US public doesn't even understand that one of the effects of Trump's war is the complete loss of US imperial military control on the ground, which has also been used to prop up these Gulf dictatorships by repressing their own population, particularly in Bahrain.

[00:06:36]And looking at the diplomatic track, I mean, you know, as we discussed, President Trump has rejected these latest proposals from Iran. Uh but we understand that during the first round of negotiations that took place uh in uh Pakistan, that was the delegation that was headed by uh the Vice President uh J.D. Vance, uh that the US delegation was constantly in touch with the Israelis during those negotiations.

[00:07:02]>> Yeah. So, I'm wanting to Do you know how big a role is not just the Israeli uh government, but the Israeli lobby in the United States playing in shaping these discussions and where it gets to? We know J.D. Vance got his phone call in Pakistan from Netanyahu, basically telling him, uh you know, stop trying to make a deal. That's not what you're there to do. This isn't a real negotiation. You're there to actually extend the war. And now we see, since J.D. Vance has returned, uh he is being frozen out of the Trump negotiating team by Jared Kushner, whose public investment firm His whose investment firm has received 99% of its own revenue from foreign states, most of them being the Gulf states including the UAE. Jared Kushner has just appointed as the main advisor for Steve Witcoff on the Strait of Hormuz, someone named Nick Stewart from the Foundation for the Defense of Democracies, which was founded as an Israel lobby organization, which is an Israeli intelligence front in Washington. Nick Stewart has actually publicly denounced the concept, the very concept of negotiating with Iran's reformist leadership including its current elected president Peseschkian.

[00:08:16]He's opposed to negotiations and he was just added by Jared Kushner to the negotiating team for an Israeli front organization. This whole war is the product of the Foundation for the Defense of Democracies long-term blueprint and their access to the Trump administration. And many people will say, "No, this this war is all about the bad advice Donald Trump was getting."

[00:08:36]That's not true.

[00:08:38]The FDD lied to Trump, deceived him, and the people around him, and manipulated this entire process and now they're getting exactly what they want because this war has benefited Netanyahu and Israel in many ways while it has harmed US empire.

[00:08:53]I want to get to another center of the conflict, another flash point, and that is what is going on in Lebanon right now. I mean, Israel continues to bomb Lebanon. Hundreds of people have been killed there.

[00:09:05]Um large parts of the country have been destroyed in the Israeli bombing. Uh we understand that in this latest Iranian response to the United States, they're holding very firm on their condition that Israel must stop its attacks on Lebanon for there be to be a wider, more comprehensive agreement. I mean, do you see that happening? Can the US stop Israel? The US has no intention of stopping Israel, nor does the Lebanese government which actually has no no mandate for its upcoming negotiations in Washington on Thursday. In fact, the negotiations are illegal according to the Lebanese constitution. The Lebanese government of Joseph Aoun and Nawaf Salam who controls no party has no popular base is just a functionary backed by the US.

[00:09:53]Uh are completely selling out the Lebanese public and allowing Israel to establish this attempting to establish a buffer zone in southern Lebanon. Israel knows it can't destroy Hezbollah and they have woken up to the fact that Hezbollah is much stronger than they thought it was after the 2024 ceasefire.

[00:10:10]So, their objective is to attack Hezbollah's support base among the Shia public by pushing it out of the buffer zone. The problem for the Israelis is these FPV fiber optic drones have been wreaking havoc on their positions there and they have no answer for them because they can't jam the signals. And these uh FPV drones are doing much more than hammering Israel's armored personnel carriers. They're hammering the psyche of the Israeli public as elections approach in Israel and a powerful opposition is forming against Netanyahu.

[00:10:42]If elections were held today, Likud would lose and it will partly be the result of the lies that Netanyahu has sold the Israeli public about Yeah.

[00:10:51]Hezbollah having been defeated.

[00:10:53]Meanwhile, there's elections coming up in Lebanon. 30% of the Lebanese public is Amal and Hezbollah and supports defending Lebanon with arms. Then you have the Sunni public which does not support normalization and this government with no mandate in violation of Lebanese law is pushing normalization under the cover of peace.

[00:11:14]Uh I just got a couple of minutes left minutes left. I want to get to something else, another development here. There was an opinion piece which was published in The Atlantic. Uh it was written by the conservative uh writer Robert Kagan.

[00:11:25]He's a senior fellow at the Brookings Institution. And he said, "Iran has won." And more importantly, that things will change. Talking about things will change in the Persian Gulf. How surprised are you that this came from Robert Kagan? Uh I I In In a way, I'm not surprised because he is a very strongly anti-Trump figure from the kind of second line of neoconservatives, whose wife, Victoria Nuland, served both Dick Cheney and Democratic administrations. So, it you know, you what you're seeing here is a cold, hard, hegemonic perspective, Robert Kagan being the co-author of the Project for a New American Century, call for a benevolent US hegemony after the collapse of the socialist bloc, along with William Kristol, who is strongly anti-Trump. And they understand that Donald Trump's This is very much Donald Trump's war. So, in some ways, he's presenting a partisan perspective. The war is hurting Trump. He wants Trump out. But, it's also a cold, hard, imperial perspective, which is that by going along with Israel and enacting Israel's agenda in Iran, the US has lost imperial power, which is amazing because Robert Kagan is someone I would I would consider a supporter of Israel. And the editor of The Atlantic magazine is Jeffrey Goldberg, who actually volunteered as a young man to serve to serve as an Israeli prison guard.

[00:12:43]So, you you're seeing actually the sort of the liberal Zionist or centrist Zionist actually pulling away from this war.