Is the US empire in the middle of a long decline? | The Bottom Line

Ajouté : 2026-05-11

[00:00:00]Hi, I'm Steve Clemens and I have a question. Is the USIsraeli war on Iran dragging the world to an economic meltdown? Let's get to the bottom line.

[00:00:14]As Iran and the US wait for the other to blink first, the economic ruin caused by the US-Israeli war on Iran cuts deeper and deeper. It's not just the tens of billions of dollars spent directly on the war, nor the hundreds of billions of dollars of damage to Iran and Arab countries in the Gulf. And it's not just the extra 50% we pay when filling our cars up with gas. The Hormuz standoff is impacting the price of goods and services everywhere. And it's not just Americans who will be footing the bill.

[00:00:42]Around the world, flights have been cancelled, school weeks have been shortened, and factories have been shut down, meaning that workers have no income. So, how far will the financial fallout of the Iran war go? Today, we're talking with Richard Wolf, professor emeritus of economics at the University of Massachusetts, and he's author of The Sickness Is the System: When Capitalism Fails to Save Us from Pandemics or Itself. Richard, so great to have you on today. Look, we have some very serious things going on in the world. uh major conflict, the United States and Israel attack Iran, and we're now well into it, well beyond the little excursion that President Trump uh first framed this around. I want to ask you from an economic perspective or a geopolitical perspective, what do you believe is the roster of winners in this conflict and what are the roster of losers?

[00:01:33]Well, acknowledging that we are not at the end of this story, even the story of the war on on Iran, some things I think are already pretty clear and becoming clearer by the day. And to take it in the biggest picture I can offer you, I believe there is something going on that is genuinely historic in its dimension.

[00:01:59]And I don't believe this very often. And I'm not prone to that kind of uh large picture approach, but here I think it's necessary. And what I mean is that there is and we're living through it, the passing of an empire. As much as the British Empire dominated the 18th and 19th centuries of global development, the American Empire replaced it. It's been about a hundred years. It's been especially the case after World War II when all the other contestants for empire dominance destroyed each other literally in the war, leaving the United States in a in a strange position as the only one in a in a manner of speaking left standing. The dollar becomes the global currency. America builds 750 military bases around the world. It dominates US uh the economy of the Western Hemisphere and the rest of the globe pretty much as well. Everyone should have understood that that was a temporary situation of the world that could not possibly last. And I think the big error, if you like, made in the United States, certainly by our leaders, is not to understand how temporary and how tenuous all of that would be. And they have sustained that illusion through the second half of the 20th century and now into the 21st.

[00:03:46]So they don't face the reality. And what is the reality? the decline of the American Empire, the rise of Russia, China, India, Brazil, the BRICS nations, whatever you want to call it, the other parts of the world that recovered from World War II and went on each in their own way to develop economically and in many cases to outdevelop the United States, which is the unevenness that the world has always shown. But we are led especially by our president, by someone who denies everything I just said and who in fact wants to project and act in the world as if we still had the predominance that came out of World War II. And we don't. And the result is catastrophic mistakes.

[00:04:52]Wars that are lost. Vietnam, Afghanistan, Iraq, and now Ukraine basically. And now Iran. even more dramatically because there the mistake the fact that this is not a workable project. This war has been understood by many Americans from day one of this war from that last day in February. And even the public polls in America have shown unlike all of the other wars since the Second World War that a majority of Americans from the beginning were against doing this and the problem has just worsened for the president and the leadership everyone of the 60 odd days since then. So let me ask just challenge you a little bit just just to uh uh wrestle with this a little bit. A lot of other nations still see a vastly powerful Leviathan in the United States.

[00:05:58]They see it perhaps more unleashed uh than it used to be from arrangements it had had alliances it had more muscular you know did a grab and uh run with the V Venezuelan president. uh talked about the Donro doctrine replacing the Monroe Doctrine in the Western Hemisphere threatened NATO allies over uh potential territorial acquisition of Greenland.

[00:06:21]We've seen uh a kind of muscled up posture uh in Asia and we've seen actions that that you know you describe as evidence of decline. Others see it as evidence of a of of an empire that's reasserting itself and reminding the world that it can be a nasty, brutish force. So tell me where I'm wrong.

[00:06:45]>> You're not wrong. What you are is a wonderful tablet to show the world what the goal purpose and function of our public relations government has been about. Everything you just described and you described it perfectly was designed in large part to create that illusion.

[00:07:09]We are the country that invented what is called modern advertising. We are highly developed in the skills of projecting an image you want people to believe whatever the reality under it is. And the skill we have at that is now coming back to undo us. You you need to appreciate the concept of contradiction that comes out of the work of of Hegel to get at this. So let but let me deal with each of your points.

[00:07:44]I said decline.

[00:07:47]I agree with you. The United States from a position of probably the greatest empire uh the world has ever really seen has still a way to go. It's not Britain.

[00:07:58]Not at all. Britain is where this process ends. There was a time when Britain said almost the same thing. You remember the British Navy? You remember the slogan, the sun never sets on the British Empire, etc. The United States did outdid the British having been part of that empire once. And so it remains, you're quite right, very powerful. And the leadership is, and here's the words I would use, desperate to try to hold on. The decline is already far enough advanced that it is becoming possible over the last five years accelerated by the wars in both Ukraine and Iran. Now accelerated by them the awareness that the notion of an economic empire decline is now presentable in the United States.

[00:09:00]Look at the war in Iran. The lesson to the rest of the world is that a country of 90 million people relative to the United States and Israel who together are 350 million people with the United States its wealth and its military dominance and it can't defeat the Iranians. And believe me, the world is full of people who are deeply internalizing the message that that gives.

[00:09:33]>> Richard, let me read for you something from the national security strategy of the Trump administration issued in November 2025. Let me read this. But the days in which the Middle East dominated American foreign policy in both long-term planning and day-to-day execution are thankfully over. The Trump administration in the sort of ma ma movement, the make America great movement was already saying it didn't want the empire. It wanted to walk away from alliances. It wanted out of all these things where it felt that other nations were benefiting and and ripping America off because of its global deployment. So they were already there walking away from empire. Why did they need the Iran conflict to punctuate that?

[00:10:19]Well, I I'm afraid I have to tell you that that document is an illustration of the PR mentality that this country has that you can talk in these wonderful languages.

[00:10:34]Here's how I would translate into simple English what they were talking about. We as a nation want and believe we can get all the benefits of empire without paying the costs. And you know in the heyday of an empire that is the fantasy.

[00:10:58]The fantasy is we can get all the benefits of India for Great Britain without having to do in India what Mahatma Gandhi thought had been done which was rip that country off 10 different ways over four centuries.

[00:11:18]This is the American fantasy that we are somehow the victims of the colonialism we practiced. Withdrawing from the Middle East in that document translates into Europe and above all Israel will manage all of this for us. We'll continue to have the pro dollar. will continue to have the wonderful benefit of oil being uh paid for in dollars and the dollars accumulating in those Gulf states who then invested here in the United States. Look, this country has paid for the war in Vietnam, the war in Iraq, the war in Afghanistan by borrowed money.

[00:12:03]The irony of the Chinese, for example, if you have a sense of irony, is that they lent the money to the government of the United States, which used it to fight the war, for example, in Vietnam when the Chinese were on the other side of that war. I mean, that is the craziness of how this empire functioned.

[00:12:27]And that document is a statement. And notice how utterly unaware it is of what's about to happen in the Middle East and has now happened. It's not under control. They can't walk away.

[00:12:41]They are not in charge. None of it.

[00:12:45]Every the American military bases in that part of the world are now re steaming wrecks. the the countries in that area are recalculating their foreign policy including the role of the United States in ways that is going to cost this empire in a big way.

[00:13:05]So I think what you have to see is that document is an illustration of how determined and I don't want to minimize it determined and desperate the leadership of this country is not to face the decline, not to build a global program around, for example, meeting the Chinese halfway so we can coexist on this planet. A decline recognition would lead you to do that. Instead, we have one pronouncement after another that China is our adversary and that we will squash and we will return them to the stone age. These are the wild justesticulations of a of a sinking enterprise.

[00:13:59]Even the pope has to remind people of what their verbal allegiance to certain principles is. Look, we're having a debate in this country right now over something that may be worth your attention more than you've been giving it. I don't mean you personally, but but the media in general. For six months, the United States has been killing small groups of fishermen in boats in the Caribbean and on the Pacific coast uh of Latin America.

[00:14:32]No trial, no arrest, no judge, no jury, no summary execution of people who may or may not have in their boats anything that is illegal. But let me stress to you the absurdity of this. Here in the United States, we also arrest drug traffickers. We do. We have a lot of them. We arrest them. When they're arrested, they get a lawyer. They get a chance to confront their accuser. They get a chance to do this in front of a judge and a jury. If and only if they are found guilty of this crime they are accused of they are given a prison sentence. Drug traffic in the United States is not capital crime. We are killing people that we wouldn't kill if they were American citizens. This is the behavior of a system that is in deep trouble and doesn't want you quite to understand it. Let me ask you about two data points that have happened in the last couple of weeks. One is the uh presidential request for defense spending is now $1.5 trillion. The other thing is the president's national economic adviser was on TV talking about the economic moment, calling this a go-go economy. The stock market is high.

[00:15:58]And as a measure of the confidence that Americans have in this moment, credit card spending is just surging. And of course he got whacked right away and says credit card spending is high because of high gas prices, high food prices, inflation going up, etc. So you have these two pictures of of of uh a a government want to invest more and more and more in the defense side and you have clear evidence of stress on the kitchen table uh in their economics at home. So how do these pictures fit together? Are we going to see what does this do to the psyche of of of Americans?

[00:16:34]Well, I'm afraid the damage to the psyche is what we are already seeing, a division inside the United States that is getting harsher and more bitter almost with every day. The support for Mr. Trump is shrinking. His supporters, maybe a third of the country, maybe a quarter, uh, are bitterly angry at all that has happened.

[00:17:02]That's why he's lost a good number of people because they've turned against him. But most of them stay with him or at least so far. Uh but they are becoming angrier and bitter as they find and easy scapegoats uh to blame. But the underlying realities indicate this is not going to stop. And let me point them out. You've mentioned it with the credit cards. I would go further. The income of Americans is not doing well and it hasn't for a while and it's put them in an impossible situation. Most Americans feel they've never recovered from the pandemic of 2020 and 2021.

[00:17:47]The prices have never come back down.

[00:17:50]They continue to rise. Their incomes do not rise uh sufficiently to deal with it. And that's before the impact that we expect uh that's already a little bit underway in gasoline and so on, but is expected to hit food and other items uh down the pike. And depending on how things go with China, it could affect the clothing app appliances and all the rest that come in massive quantities to the United States from China. And while I'm on China, let me remind everyone over the last 35 years, the GDP, the gross domestic product, which is just what economists use uh as a measure of the output of goods and services in one calendar year. We measure that. It has grown between 6 and 9% 5 and 9% in recent years in China.

[00:18:51]Over the same 35 year period and continuing to this moment, the GDP of the United States is growing at about 2%.

[00:19:02]In other words, China is about to overtake the United States as an economic powerhouse. That has to be understood. That is a much greater definition of military preparedness than the portion of your budget that you devote to defense.

[00:19:26]That has to be understood. Having said that, let me address the first part of your point. The proposed increase in the defense budget for the coming year is $600 billion on a base this year of $900 billion. In other words, we're just shy of a trillion dollar defense budget. And we propose an increase 600 billion on a base of 900. That's twothirds increase in one year. We've never done that before. This is the behavior of a government that must be desperate.

[00:20:06]Is it threatened by a great military attack? Not at all. There's no evidence Russia or China, who are the only ones who could do it anyway, have any intention of engaging the United States in a military confrontation. In fact, everything indicates every effort imaginable to avoid that. So what's the point here? Well, my answer would be it is exactly the same as threatening to take over Canada or the Panama Canal or Greenland or the disastrous mistake of attacking Iran. This is showmanship.

[00:20:50]We're going to have more aircraft carriers than anybody else. But our aircraft carrier just left the Mediterranean. You know why? Because it's been out there too long. And there's rebellion among the naval personnel on the boat. Uh I'm talking about the one that left. These are realities. The stock market is doing very well. But here's a little fact that I teach in my courses. The richest 10% of Americans own 80% of the shares. So when you say the stock market is good, you're correct. It's very good for the 10% at the top. For the vast majority of Americans, it's utterly irrelevant.

[00:21:40]>> And why, by the way, is the stock market doing well? Answer. We have been pumping money. our central bank, the Federal Reserve, pumping money to sustain the American economy for the whole period basically since the crash of 2008 and nine and certainly since the the pandemic hit. Where has all that money gone? The answer is most of it has gone into the stock market. We do have a terrible inflation from all that money, but it's concentrated in the stock market, which is lovely for people who own shares, but is irrelevant for the mass of people.

[00:22:26]Final little illustration.

[00:22:29]McDonald's, the largest purveyor of fast food uh probably in the world, but certainly in the United States, their CEO uh together with that of several others is introducing new cheaper meals.

[00:22:47]Why? His answer, not mine. I'm quoting, "Americans have run out of money."

[00:22:56]That's the quote. You can find it. Craft Hines CEO, McDonald's CEO, the big food producers. They're facing a catastrophe of mass inability to buy enough food for their people. That's the reality. a country splitting rich and poor, rammifying into a bitter public. We are unsure in America right now whether Mr. Trump will permit or accept whatever the electoral outcome is in November.

[00:23:36]That's where we are in a country that used to pride itself on making that question an unthinkable question in American history.

[00:23:47]>> Well, on that sobering thought, we're going to have to close this. I want to thank economist Richard Wolf, professor emeritus at the University of Massachusetts. Thank you so much for joining us today.

[00:23:58]>> My pleasure. Thank you for the invitation.

[00:24:02]>> So, what's the bottom line? Despite what politicians and businessmen often say, wars are just never economic boosters.

[00:24:09]They rob growth from us today and from future generations. The Iran conflict alone has disrupted economies not only in Iran and the Gulf States, but everywhere. Sure, economics is a social science and there are different ways of looking at the same thing, but some economists are predicting that this war is going to knock a full percentage off of global GDP. To put that in perspective, the Corona virus pandemic knocked three points off global GDP.

[00:24:33]What's clear is that America and Israel pulled the trigger on this war casually without regard to the consequences. And now those consequences are roaring forward to remind us that violent conflicts are messy. They take unexpected turns and they ought to be avoided if any other options exist.

[00:24:49]Today we are all paying the price literally for not remembering that wars are not cakewalks. And that's the bottom line.