Condoleezza Rice on the War with Iran

On the latest episode of GoodFellows, Senior Fellows John Cochrane, H.R. McMaster, and Niall Ferguson, as well as moderator and Distinguished Policy Fellow Bill Whalen, are joined by Hoover Institution Director Condoleezza Rice to discuss the ongoing US and Israeli conflict with Iran.

This conversation guide highlights some of the key takeaways from the distinguished panel’s analysis of the war, and thoughts on how US foreign policy is likely to develop in the days and weeks ahead.

Quote of the Day: What’s the American War Aim?

Former US National Security Advisor and Secretary of State Condoleezza Rice: “The objective that I see here is to render Iran a non-factor militarily in the region. In other words, to neuter Iran’s military power in the region. And we see that in the sinking of their Navy, the destruction of their Air Force, going after the missile capability, and of course after their command and control, quite deep into their command and control. . . If you can achieve the neutering of Iran as a conventional military threat, the weakening of its tentacles like the Shia militias and Hezbollah and the Houthis, and if you can prevent them from having a conventional shield for their nuclear capabilities or their nuclear ambitions, then you have achieved something quite dramatic in the region.”

The Central Issue: Is the US Pursuing its War Aims Effectively?

Condoleezza Rice: “You could say that the engagement here is essentially through the air. . . There was a little bit of confusion about the regime change aspect of this because it’s very hard to change a regime from the air. And it is also very hard to shape the politics afterwards from the air. And so the first lines about giving the Iranian people an opportunity to reclaim their future, that’s fine, but one has to be a little careful and not talk too much about trying to determine the future of Iran if you’re going to keep your objectives relatively limited and the kind of military objectives that I was speaking of.”

Former US National Security Advisor and Army Lt. General H.R. McMaster cautions that American military leaders must remember “how unsuccessful we’ve been in the past in eliminating missile and drone threats exclusively from the air. This is the big problem that we’re facing now. And of course, we’ve learned this many times. I mean, the Allies learned in World War II with the V1 and V2 threat, which it tried to neutralize from the air. We learned it again in the Gulf War ‘91 with the Scud missile threat toward Israel and had to employ special operations forces, special forces to roam the desert, to identify them on the ground. . . So it’s going to be a tough mission, I think.”

Key Takeaways

What are the Likely Economic Consequences of this Conflict?

Niall Ferguson: “I think when you see oil prices up 20%, 30%, and as we speak, an oil tanker ablaze in the Strait of Hormuz, the insurers and the shippers are not coming back. The US Navy can’t provide escort services. It’s got other things to do. Nobody else wants to do them except the French, when the war’s over. Thanks [French President] Emmanuel [Macron] for that. So I think the economic problem is very real. And the reason I think it’s real is that if you have oil at this price, it feeds into inflation pretty fast through the gas price. And with the American public more exercised about affordability than almost any other topic and the midterms bearing down on Republican candidates, this is a problem and we shouldn’t understate it. . . And the longer this strait remains closed, the bigger the shock is going to be.”

John Cochrane sees some possible economic silver linings: “[Iran’s] main export is oil, which has to go through the Strait of Hormuz. So in some sense, they’re putting tariffs on themselves. The other [point] is: Don’t underestimate substitution. Back in 1979, Saudi Arabia. . . and OPEC was the main source of oil and there wasn’t any others, but [now] there’s all sorts of oil, all over the place. And the supply curve of oil is pretty darn flat. So if this lasts a while, there’s a whole bunch of wells in West Texas that can get turned on that weren’t really efficient at current prices. There’s a lot of the North Sea that can get turned on that really isn’t efficient at current prices. So I think that will buffer us as well.”

What are the Likely Political Consequences of the War with Iran?

Condoleezza Rice applies the lessons of American political history: “I would just also make a point about the. . . political shock. There is going to be a difficult midterm for the [Republican] party and for the president anyway. If this had never happened, there was going to be. First of all, historically, with the exception of George W. Bush in 2002 who was riding the wave of 9/11, this happens. And so it’s going to happen. It may be a question of degree. Maybe the American public will take more out on Republican candidates as a result, but I do think we have to recognize that there’s a larger issue here, which is we have been at war with this regime for 47 years, or they have been at war with us for 47 years.”

How is the War in Iran Affecting America’s Geopolitical Competition with Russia and China?

Condoleezza Rice: “Think about the broadest strategic picture. It’s been a really bad couple of months, actually almost a year, if you’re Vladimir Putin. Your friend, Bashar Assad, is someplace in exile and your bases in Syria are gone. Your friend, [Nicolas] Maduro, is in an American jail and your Cuban henchmen are being sent back to Cuba, which oh, by the way, is itself in near collapse. And you’ve just watched the American military once again demonstrate how extraordinary it is. If you want to call that a win for Vladimir Putin, really? I have to say, if I’m Vladimir Putin, while I’ve been trying to take a rust belt called the Donbass, the Americans have taken out my friends in Venezuela have seriously damaged my friends in Iran. The Cubans are about to come apart and I’ve lost Syria. I’d call that a strategic defeat.“

Looking to China, Rice adds: “You will notice that the Chinese have been relatively quiet here. It’s because from their point of view, they really want this summit with Trump to go forward, and that’s the most important thing for them. I mean, [Chinese Foreign Minister] Wang Yi basically said, ‘Oh, this is unpleasant, but there are more important things to do.’ And I’m quite sure they don’t really want split screens of us bombing Iran while they’re meeting. So they’re probably, as much as anybody, hoping this is over pretty soon. And they probably also are saying to whatever friends they have left in Iran, playing around with oil prices actually hurts the United States less than it hurts us.“

Parting Wisdom

The GoodFellows close the show by celebrating the 250th anniversary of the publication of Scottish economist and philosopher Adam Smith’s The Wealth of Nations.

Niall Ferguson reflects: “I know we’ve [got] a lot to celebrate this year, but it’s not a coincidence that The Wealth of Nations was published in March of 1776 a little bit before the Declaration of Independence, July 4th, the same year. I went up to Edinburgh to hear my good friend Dambisa Moyo give a lecture about the significance of Smith’s great work. And I observed on the occasion that the connections between the Scottish Enlightenment and the American Republic are much, much more important than is generally realized. And Smith deserves credit because if you read The Wealth of Nations, you’ll see that he’s very sympathetic to the American colonists in their complaints about government from London. So everybody who’s celebrating the foundation of the Republic should also be celebrating Adam Smith’s foundation of economics as a serious discipline.“

John Cochrane adds: “[The Wealth of Nations is] really an ethical book. It’s a moral book saying that business and trying to make yourself better by serving your fellow [human beings] by providing products and maximizing your own profits is, in fact, socially beneficial. It’s the move from a zero-sum society, where I can only get richer by making you poorer, to a positive sum society. And we should celebrate, rather than tax to death, our billionaires, [since] they have provided so much wonderful stuff. Freedom works. And really, that’s the bottom line.”

That wraps up this GoodFellows conversation guide. If you like this companion to the show, or have any recommendations for future conversation guides, please let us know in the comments below.