March 6, 2026 – Below are some of my preliminary thoughts on the situation in the Middle East. We will be hosting a mid-quarter Live Market Update on Friday, March 13th. While this is a regularly scheduled discussion, we will focus on the war, its impact on the markets, and the prospects for the Middle East given these events.
The sources for my information are a combination of sources, many of which I use to corroborate certain facts before I use them in these discussions.
- Domestic news sources:
- The Wall Street Journal – they seem to have the most in-depth stories and best access to the Pentagon
- The New York Times – They carry a strong anti-Israel bias, which I find helpful in understanding the slant I read in other domestic news sources
- The foreign press:
- The Times of Israel – they are a centrist paper and are fairly current. They lack in-depth reporting, however.
- The London Telegraph – fairly conservative in their bias and European-centric. But they consistently strip out the anti-Israel bias and have more reporters dedicated to global conflict.
- Podcasters
- Dan Senor, through “Call Me Back,” – his work is extraordinary and often hosts guests who have access that is unparalleled. They are good at finding stories that are not being reported in the U.S.
- Walter Russell Mead – he appears in a range of podcasts and is one of the best historians alive today on the topics of the Middle East and global affairs. He has a more conservative bias, but his views and analysis are rather non-political.
- The Washington Institute for Near East Studies, where I am a Trustee. They have the most current information and the best analysts covering the region, including the recently-retired head of CENTCOM, a former ambassador to Israel, and a former head of Mossad’s Intelligence Directorate
There are obviously more sources to use at the moment, but these are the ones I trust. To that point, I discourage the use of Facebook or other social media as a news source. In my opinion, they are rife with false accounts and narratives designed to sway you for specific state purposes.
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The U.S.-Israeli-Iranian Conflict is decades in coming and could be a first step in bringing lasting peace and economic prosperity to the region. It will be a very long road, and it isn’t clear that they will get there, but as I have been saying for several years, the region has the potential to be the next global economic powerhouse, one that succeeds their oil riches and provides a grounding to the global economy when regions like the U.S. and China are facing long-term structural limitations (excessive government debt and spending in the U.S. and China’s generational demographic challenges).
Getting from here to there, however, is never going to be a straight line. Domestically, it presents a myriad of problems for the Trump administration. Trump’s declaration of war is likely unconstitutional for starters. While Congress has effectively usurped all of its responsibilities to this administration, there is a process, and there are laws that need to be upheld. This is, however, not the focus of my discussion and will be better handled by scholars and academics in the field.
The political realities are going to be Trump’s biggest nightmare. His MAGA base is the core of his power, and they are generally opposed to foreign wars. All of Trump’s rhetoric, both before and during the election, opposed foreign engagement. He has now done a complete reversal on his team and those folks. It is best seen in the sidelining of Vice President JD Vance, who adamantly opposes foreign wars, but has been nowhere to be seen or heard. Thinking forward to the next presidential election, this might become a defining issue in the Republican primary. It will be especially acute in the midterms, which are just a few months away. Any debacle in the region will be devastating for the Republicans, and even if all goes well, it will still be highly politicized in the race.
Globally, the Iranian Theocratic Regime is a pariah. They have been the leading sponsor of terror for decades, entirely justified through a radical version of Islam that is a minority voice in their world. The IRGC, the military that was fully committed to its Supreme Leader, is the prime beneficiary of Iran’s oil riches. The IRGC, their families, and immediate community represent less than 20% of the population but nearly half of the economy. The rest of the economy goes towards missiles and terrorist proxies in the region. The people of Iran were left with nothing.
The most recent set of riots in Iran began at the end of December and didn’t end until the IRGC shot and murdered tens of thousands of Iranians. While the final number of dead is heavily debated, they died protesting for the basics of life: affordable food, access to water, regular electricity. It wasn’t a grand debate on the merits of theocracy versus democracy or ideas of how to run a country. They need the basics of life, and the regime is not delivering.
How the government got to this point, failing to provide for a majority of the 92 million citizens, is the use of oil and gas revenues to fund war. I heard one statistic that nearly half a trillion dollars was invested into Iran’s military efforts over the past decades, namely their nuclear program, ballistic missile program, and propping up the three main proxies in the Middle East: Hezbollah, Hamas, and the Houthis, plus support for Syrian dictator Bashar al-Assad. For a country that produces only $4,500 per person per year, this is a massive redirection of resources.
With the start of the Israeli-Hamas war, these Iranian investments started to unravel. Hamas and Hezbollah were decimated, Syria collapsed, and the nuclear program was set back years in the June bombings. All that money spent and now gone is the core of the social issues in Iran. Layer on top of it a radical interpretation of Islam that brutalizes the mostly secular population, and you have a tinder box waiting to blow.
With that backdrop, the joint U.S.-Israeli action will have several unintended consequences while potentially resetting this part of the region, which has one of the richest histories in the Western world.
Here are some salient points from the current situation:
- The current kinetic conflict should last weeks, not months. The global appetite for armed conflict is very low, and the energy disruptions are serious. That said, if we do send in large numbers of troops, that would dramatically change, although I doubt that scenario would happen.
- International condemnation is a token appeasement of special interest groups with a strong tinge of anti-semitism. In reality, there is a strong sigh of relief in the international diplomatic community.
- The U.S.-Israeli attacks have largely incapacitated the IRGC. Their missile launches are down by 90% from the start of the war, and through a series of strategic mistakes, Iran is unable to use most of their remaining arsenal.
- The most likely “regime change” candidate is a regime shift. I don’t think it would be practical or possible to replace the IRGC given their size and access to core resources across the country. That said, the IRGC is a population who have been enriched by the regime’s practices and are likely to want to keep their position in Iranian society, and stay alive. Movement toward a non-theocratic authoritarian government may be aligned with their best interests.
These are only a few ways that the conflict might unfold in the Middle East. What happens to us here in the U.S., economically and politically, is a very different set of issues, which we will fully address on Friday in the webinar.
In the interim, please write or call with questions and concerns. This is a pivotal time in the world, one with far-reaching consequences for global stability and regional prosperity. Let’s hope for a quick resolution that preserves life and paves a path for regional peace.