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The 3 Phases of Trump's Quagmire in Iran
Trump’s defenders argue that his contradictory actions are strategic. It’s more likely that panic has him flailing. His gut instinct led him to make a colossal mistake, and he has no idea what to do next.
Mar 30, 2026
President Donald Trump launched the Iran war based on his “gut instinct.” Global financial markets—the North Star that guides Trump—are telling him what his advisers and congressional Republicans won’t: His “gut” blew it badly, and his efforts to appease the markets are making the debacle worse.
He has proceeded in three phases. We’re now at the Trump panic phase.
Phase No. 1: Trump’s Gut Was Wrong and the Markets Scolded Him
Trump ignored the facts and relied on gut instinct to launch the war without making the case to America’s allies or the public:
We were having negotiations with these lunatics, and it was my opinion that they were going to attack first.
Trump’s baseless opinion contradicted the justification for war that Secretary of State Marco Rubio had provided to Congress a day earlier. Rubio said that Israel was going to attack and that Iran would retaliate by attacking US interests in the region.
Even worse, Trump ignored long-predicted consequences:
- Iran attacked neighboring countries aligned with the United States;
- It closed the Strait of Hormuz to the US and its allies, disrupting one-fifth of the world’s oil supply;
- The global price of oil surged from $72 per barrel to more than $100 per barrel;
- Because Iran’s major source of revenue is oil—accounting for 35% of its federal budget—Trump funded the enemy’s war chest; and
- Global financial markets plummeted.
Phase No. 2: Trump’s First Effort to Calm Markets Helped Putin
Trump’s initial assurance that the war would be over in “four to six weeks” offered the markets only sporadic and temporary relief. So he started down the slippery slope of eliminating longstanding sanctions on Russian oil.
Oil and natural gas are Russia’s most important sources of revenue, accounting for 30% to 50% of the federal budget. Sanctions had forced Russia to charge India $22 per barrel in January, putting Russian President Vladimir Putin’s economy on an unsustainable path. But on March 5, Trump issued a 30-day waiver allowing India’s purchases from Russia.
Trump’s waiver was a boon to Putin, but the global price of oil kept rising and the markets kept falling.
Phase No. 3: Trump Panicked and Made Matters Worse
On March 11, Trump released 172 million barrels from the nation’s Strategic Petroleum Reserve—the world’s largest supply source of emergency crude oil. But the oil would not make a dent in the global market, would take 120 days to deliver, and would leave the Strategic Reserve at its lowest level since 1982.
The price of oil kept rising, and the markets kept falling.
On March 13, over the objections of the European Union, Trump removed sanctions on Russian oil that was already at sea. It was another gift to Putin, but the price of oil kept rising and the markets kept falling.
On March 20, Trump lifted sanctions on 140 million barrels of Iranian oil “currently stranded at sea.” In addition to providing Iran with $14 billion windfall, his action contradicted Trump’s contemporaneous claims that he had “won” the war and was considering “winding it down.”
As Brett Erickson, managing principal at a firm that specializes in financial crime and regulatory issues, observed: “You don’t unsanction Iranian oil if you’re winding down. This is the action of an administration that has no exit ramp and knows it. The word for that is desperation.”
Meanwhile, the price of oil kept rising, and the markets kept falling.
Trump’s panic became clear on Saturday, March 21, when he threatened to commit a war crime:
If Iran doesn’t FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!
By Monday morning, the price of oil was skyrocketing and Asian and European markets were sinking. Shortly before the US stock market opened, Trump panicked again. He withdrew his threat and said that because the US and Iran had held “productive” talks, he was postponing the attack on Iranian’s energy infrastructure for five days.
The price of oil dropped more than 10%, and global markets soared. Meanwhile, it appeared that insiders with knowledge of Trump’s planned announcement made hundreds of millions of dollars in pre-announcement bets that crude oil prices would decline.
But then Iran’s foreign ministry denied Trump’s assertion about settlement talks, although through intermediaries the US and Iran had exchanged messages that “appeared to be short of negotiations.”
Within a day, the price of oil resumed its upward climb and the financial markets fell.
Panic begets panic. On March 26, Trump announced a 10-day extension to April 6 of his prior threat to commit a war crime by attacking Iran’s energy facilities. He asserted that settlement negotiations were proceeding while at the same time issuing contradictory statements about his war plans:
The Iranians “were begging for a deal,” but “they better get serious” and “talks were going very well.”
He wanted US allies to help secure the Strait of Hormuz, but didn’t care if they refused.
“We already won the war,” but Trump was massing more than 50,000 US troops in the region and threatened a ground assault on Iran’s main oil production facility.
He “may or may not” use the military to secure Iran’s uranium.
Trump’s defenders argue that his contradictory actions are strategic. It’s more likely that panic has him flailing. His gut instinct led him to make a colossal mistake, and he has no idea what to do next.
Worst of all for Trump: The financial markets are finally on to him.
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Blaming the Poor While the Rich Sneak Off With the Welfare
While the spoiled offspring of millionaires and billionaires skip out on taxes, Republicans want to take food stamp benefits away from millions of poor kids.
Jun 17, 2025
Republicans want to stop subsidizing Americans who benefit from government-funded health programs. But by far the greatest American subsidies go to the millionaires, the 10% of Americans who own 93 percent of the stock market.
That's in part because of the so-called tax expenditures, which include mortgage deductions, interest and dividend exclusions, and reduced rates on capital gains, and which go almost entirely to the 13.7% of Americans who report enough income to itemize their taxes. According to the Center on Budget and Policy Priorities, "the cost of all federal income tax expenditures was higher than..the combined cost of Medicare and Medicaid."
A 2015 NBER study found that 70 percent of federal spending on housing was in the form of tax-based deductions that largely benefit the rich. Families with expensive homes can take a tax break of up to a half-million dollars when they decide to sell. And the wealthiest among us can take a mortgage interest deduction for a second home, which might even be a yacht.
Yet while the millionaires subsidize their estates, the proposed Republican budget would make drastic cuts to low-income housing programs.
Daddy-Made Millionaires
It gets worse. The tax designers have figured out how to gift their heirs with billions in redirected tax revenue. In a massive subsidy for the super-rich, the tax code includes a so-called stepped-up provision which allows the super-rich to leave much of their multi-trillion-dollar stock market fortunes to their children with all the accumulated gains magically erased, and thus, in many instances, without a single dollar in taxes coming due.
If daddy and mommy's stock has grown from $10 to $100 over the years, the kids won't pay any taxes on that $90 gain, and society's potential revenue is wiped out. As baby boomers age and pass away, more and more privileged children will become accidental millionaires.
Yet while the kids of millionaires skip out on taxes, Republicans want to take food stamp benefits away from millions of poor kids.
Subsidies on American Lives
With regard to big business subsidies, economist Dean Baker says: "These government-granted monopolies likely transfer more than $1 trillion a year ($8,000 per household) from the rest of us to [those] in a position to benefit from them. In 1980 we were spending about 0.4 percent of GDP...on prescription drugs and other pharmaceutical products. Currently we spend more than 2.3 percent of GDP."
Big Pharma welfare forces us to pay much more than other countries for our medicine. According to The National Library of Medicine, "In 2022, U.S. prices across all drugs (brands and generics) were nearly three times as high as prices in 33 OECD comparison countries....In 2022, U.S. prices for insulin products were nearly ten times as high as prices in 33 OECD comparison countries."
And taking the pain to an absurd extreme, Forbes reports that "Sovaldi (a breakthrough treatment for hepatitis C) cost $84,000 for a 12-week course when it was initially launched in the U.S. In contrast, the same treatment is available in other countries, such as India, for less than $1,000."
Yet while medication for the elderly becomes evermore expensive, Republicans have proposed the largest cuts to Medicaid in history, taking health insurance away from millions of Americans.
Republicans: It's Good to Lose Your Medicaid
House Speaker Mike Johnson said, "Work is good for you. You find dignity in work." Oklahoma Senator James Lankford said, "It’s not kicking people off Medicaid..It’s transitioning from Medicaid to employer-provided health care."
Condescending enough?
Republicans say they only want to eliminate waste, fraud and abuse. To do this they're wasting lives, defrauding their constituents, and abusing the privilege of leadership.
Prosperity Sharing: Not Just for the 10%
To win back voters, Democrats should propose a nationwide public fund through a Financial Transaction Tax.
Jun 02, 2025
The Alaska Permanent Fund, established by a Republican governor nearly a half-century ago, has allowed Alaskan residents to share in the profits from oil and mineral extraction in the state.
As The New York Times explains, "Similar socialized funds—sometimes called sovereign wealth funds—are common in other conservative states." In fact, The National Interest reports that "the great majority of states that have a domestic sovereign wealth fund are solidly Republican states." Texas, Wyoming, and North Dakota, for example, all maintain multi-billion dollar public wealth funds.
Democrats need to think even bigger if they want to win back respect—and the vote. They need to consider that American productivity goes well beyond oil and gas, that it's the result of 75 years of progress in technology and medicine and finance and numerous other industries, and that it derives from the sweat and inspiration of all of our parents and grandparents. Stock market gains reflect our productive past. All of us should reap some reward from that long-term effort.
All families, rich or poor, would share in America's prosperity.
New wealth should not be taken only by the 10% of Americans who own 93% of the stock market. While the S&P 500 has gained a pre-inflation average of over 10% annually over the past half-century, the returns on that growth have accrued passively to the richest among us.
Large-scale public wealth funds have been proposed to correct the imbalance. Funding will ideally come from a Financial Transaction Tax or some form of levy on market capitalization. The argument for a Financial Transaction Tax has been made for years by Dean Baker and Sen. Elizabeth Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.). An alternative is a small tax on stock holdings. The Peoples Policy Project noted that "at the end of 2017, the market capitalization of listed domestic companies was $32.1 trillion. A one-off 3% market capitalization tax would thus bring in around $1 trillion of assets."
Current U.S. stock value is over $50 trillion. Just a 2% tax on that amount would return $1 trillion. Each one of America's 127.5 million households would earn nearly $8,000 per year. All families, rich or poor, would share in America's prosperity.
Of course, the millionaires who own almost the entirety of the stock market will resist even a small percentage payback to the country that made them rich. Despite the unlikelihood of getting the super-rich to part with their money, there's a good reason—other than the fairness of recognizing society's contribution to long-term wealth gain—for stockholders to embrace an American Permanent Fund. As noted by reliable financial sources, consumer spending directly influences stock market performance. With the massive trillion-dollar surge in consumer spending, stock market growth is likely to make up that tiny transaction or capital holdings tax, and then some.
It's certainly worth paying a nominal amount to stimulate the economy and boost one's own stock portfolio.
But where is the political will to make this happen? Perhaps a proposal by Democrats for a nationwide public fund through a Financial Transaction Tax will convince a cynical middle-class America that the Democratic vision focuses on the needs of society rather than on rich individuals.
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