Top Economist: What Trump Doesn’t Want You to Know About the U.S-Iran War

0:00 Donald Trump's campaign against Iran is the biggest gamble of his presidency.

0:04 I'm not going to start a war.

0:04 I'm going to stop wars.

0:05 We're not going to let them have nuclear weapons because if they had them,

0:08 they'd use them and we're not going to let that happen.

0:10 Many people were fooled by the confidence

0:12 that Trump appeared to have and now you're

0:14 paying for the price to realize he didn't know what the hell he was doing.

0:17 And you really have to get yourself out of that situation.

0:19 What if the system is already breaking and we just don't see it yet?

0:22 Steve Keane says the combination of war, debt,

0:26 and power could change the global economy forever.

0:29 And given the chaos that Trump is creating on a daily basis,

0:33 I'm not going to gamble that you actually

0:34 make it to November and actually have the midterms.

0:37 So the days of the dominance of the American dollar are over.

0:40 But the damage that's been done over

0:41 the last 40 years can't be reversed overnight.

0:44 A lot of people voted for Trump in America in the belief that Trump would

0:47 be the peace president and he'd be

0:49 somebody who stopped wars rather than creating them.

0:51 He'd be somebody who got away from the incessant

0:54 habit that America has had ever since the end

0:56 of World War II of invading other countries and trying

0:59 to impose its approach to politics on those countries.

1:03 And people thought, I'll vote for Trump.

1:04 He says he's a peace president.

1:06 He's not going to start wars.

1:07 He's going to end them.

1:08 And then literally within 3 days of the start of this year,

1:11 he invades Venezuela and kidnaps the president.

1:13 And then less than 3 months after the beginning of this year,

1:17 he starts a war on Iran.

1:19 The best argument that any of Trump's team have come up with is to say,

1:23 well, we thought Iran was going to attack us.

1:25 Israel thought it was going to attack them, so we attacked them first.

1:28 So, we had a preemptive strike before they attacked us when there

1:32 was absolutely no justification in terms of any imminent threat to America.

1:36 There was nothing imminent.

1:37 November last year, they allegedly knocked out the nuclear facilities

1:40 that they argued Iran was using to create a nuclear weapon.

1:43 They've already got rid of that threat.

1:45 So, what on earth is the threat?

1:46 This is something which people who were accused of suffering

1:49 from Trump derangement syndrome by saying he's a madman.

1:52 He's going to do crazy stuff like this.

1:54 So the people who are suffering from Trump

1:55 derangement syndrome now are people who are Trump supporters.

1:58 Leave the realm of economics and talk about psychology.

2:01 Now obviously I'm not an expert on psychology.

2:03 Psychologists would tell you all the time you shouldn't try

2:05 to diagnose somebody's behavior by observing them just on television or YouTube.

2:10 You have to sit down and do detailed psychiatric tests and so on.

2:14 Somebody who has narcissistic personality disorder almost completely lacks

2:19 empathy and always wants to be the center of attention.

2:22 And it doesn't really matter how they get to be the center of attention.

2:25 They just want people to be talking about them.

2:27 Now, it might seem crazy to think

2:28 that Donald Trump thinks people aren't speaking sufficiently

2:31 about it that virtually every other human being

2:33 on the planet has discussed at some point.

2:35 It's Donald Trump.

2:36 The thing about a narcissist,

2:38 somebody who has narcissistic personality disorder,

2:41 is that externally they're incredibly confident.

2:43 And that's partly what is the appeal they have.

2:46 They seem so confident, so self- assured.

2:49 There's something seductive about that level of self-confidence.

2:52 And that's what gets you sucked in initially to accepting somebody like that.

2:56 The surface confidence they have is absolutely just on the surface.

3:01 There is inside them there's this enormous

3:03 desire to be seen as correct, being right.

3:07 But at the same time,

3:08 they lack the knowledge to be as correct as they pretend to be.

3:11 So there's an incredible fragility inside them

3:14 and if anything comes up to challenge them,

3:16 they fight in a very hostile fashion and they attack the people closest to them.

3:20 The rage with which Trump was talking to Hezg

3:24 and how intimidated he was in this diet tribe, he was coping for Trump,

3:30 that's typical of dealing with somebody with narcissistic personality disorder.

3:35 They they want attention.

3:36 And if you try to make sense of this in any rational way, you're going to fail.

3:39 Uh because you're dealing with somebody whose behavior is not rational.

3:43 And they're not trying to actually tell you what they think is happening.

3:46 They're trying to tell themselves a story

3:48 that makes themselves correct all the way through.

3:51 So Trump comes in and says he's the peace president.

3:54 Then he tries to justify why he's starting wars.

3:56 I'm starting wars so I can bring about peace.

3:58 And you that doesn't make sense.

4:00 But nothing that a person who has this disorder makes sense at all.

4:05 They're not trying to give an explanation that is realistic.

4:08 They're trying to give an explanation of a mistake

4:10 they've made to show that they haven't made a mistake.

4:13 And this is what Trump is doing now.

4:15 So he went into Iran on the under the claim initially that he

4:19 was trying to stop a war by invading another country when they

4:23 killed the leader of the country and his much of his family

4:27 and huge number of his advisers with a attack on the the leader compound.

4:31 They thought the war would finish.

4:32 Well, it hasn't.

4:33 reality is different to what Trump thinks reality is.

4:36 And now he's coming up with excuse after excuse, alternative reasons,

4:40 which anybody who's been following the history

4:42 of the conflict knows is just completely crazy.

4:45 And say, why is Trump saying that?

4:46 He's not because he's trying to convince you.

4:48 He's trying to convince himself.

4:50 And once he's got an explanation that makes his behavior appear sensible,

4:54 that's the explanation he's going to use.

4:56 And when that falls over, he'll find another explanation.

4:58 He doesn't know what he's doing,

5:00 but every time he comes up with some explanation for what's happened,

5:03 it always has to be to make that he's never made a mistake.

5:06 And that's what we're going through right now.

5:08 Many people were fooled by the confidence that Trump appeared to have.

5:12 And now you're paying for the price to realize

5:13 he didn't know what the hell he was doing.

5:15 And you really have to get yourself out of that situation because

5:18 that type of personality leads to social breakdown for the entire country.

5:22 When you give a a person that amount of power,

5:25 when they have that syndrome, they're going to end up destroying your culture.

5:28 Over the last 15 or 20 years,

5:30 America has developed fracking as an alternative way to getting oil.

5:34 So, they are now an oil exporter,

5:36 whereas in the past, they were a net oil importer.

5:39 And Trump actually said himself recently that whenever the oil price goes up,

5:43 we make a lot of money.

5:44 So, America might well get uh some increase

5:48 in the revenue for its oil companies out of this.

5:50 But of course that revenue is going to come from the pockets of the working

5:53 class and the middle class who have to drive to their jobs everywhere.

5:57 They're going to be paying more.

5:58 So the income for the middle class and the poor is going

6:01 to fall courtesy of the impact of the closure of the Straits of Hormos.

6:06 But the oil companies are going to get an increase in profit.

6:08 And this again comes back to the extent to which

6:11 American democracy is controlled by the financially powerful in that society.

6:17 The financial sector itself, the military, and now the fossil fuel companies.

6:22 They're the ones who are driving the agenda.

6:23 Virtually everything else that has happened in America in the last 50

6:27 years is going to make the wealthy wealthier and the poor poorer.

6:30 American society, I think, is fragmenting on that basis.

6:33 He does have a good gut feeling for what is motivating other people's behavior.

6:37 So many many people who voted for Trump used to vote for the Democrats.

6:40 The reason they don't vote for the Democrats is the Democrats made the decision

6:44 30 or 40 years ago when they adopted neoliberal economic policies that they were

6:48 going to side with the financial sector

6:50 because a the financial sector was funding

6:52 their electoral campaigns and b they believed

6:55 the argument that manufacturing was going to decline,

6:58 the rising system would be services.

7:00 If the Democrats align themselves with the financial sector,

7:03 then they ride that rising tide of the importance of the services sector

7:08 over manufacturing and that will be able to uh develop America in the future.

7:12 In fact, this is a conj job.

7:14 That growth in the services sector which was caused by a growth

7:17 in the level of private debt actually led to the hollowing

7:20 out of America's manufacturing sector and that's what created unemployed people

7:24 or people working in gig economy jobs or lowgrade lowskilled jobs when they

7:29 used their parents had jobs as as skilled workers and all

7:32 this stuff is is the sthing resentment that the working class

7:36 and the lower middle class in America feel towards Washington and that's

7:40 why they fell for Trump saying he's going to clean out the swamp.

7:44 etc., etc.

7:44 So, he picked up on that sentiment

7:46 that the Democrats had to ignore because they actually

7:49 rode the wave of the increasing level

7:51 of private debt by siding with the financial sector.

7:54 So, Trump picked up on that discontent

7:57 and that's where he got his electoral success.

7:59 There is no way out of this for America easily because the only way you have

8:03 of of getting rid of a president is by invoking

8:06 section 25 of the constitution and having him removed.

8:10 that itself involves decisions by people that Trump himself has appointed.

8:14 It it is incredibly hard to see how

8:16 America gets out of this unless Congress turns

8:19 against Trump and that is relying upon what's

8:22 going to happen in November with the midterms.

8:25 But that is all of 8 months away and given

8:27 the chaos that Trump is creating on a daily basis.

8:30 I'm not going to gamble that you actually

8:32 make it to November and actually have the midterms.

8:35 One of the issues for electorates all around the world is that whichever

8:39 party you vote for, you get one in charge that believes in neoliberal economics.

8:42 So both the Democrats and the Republicans in America end

8:45 up supporting neocclassical ideas of how the economy should be run,

8:49 which is what we call neoliberalism.

8:51 The same thing applies in England.

8:53 There's really no choice for most people.

8:56 It comes down to the electoral systems themselves.

8:58 Will they make it possible for political parties

9:01 that completely break with neoliberalism to become dominant?

9:04 England looks like it's done that because

9:05 England's first passed the post voting system

9:08 and the fact that anybody can stand as a candidate in the UK system.

9:13 The major political parties in the UK,

9:15 the Tories and Labor are both going to lose dramatically at the next election.

9:20 And given the first pass the post system they've got,

9:23 I've seen estimates that say that the Labour Party is going to hold

9:26 to three seats and the Conservatives virtually none and you're going to have

9:30 the whole 600 roughly seats in the UK economy flip to alternative parties

9:35 whether that's reform on the right wing or Greens on the left wing.

9:39 So that's an incredible political inversion.

9:41 It will happen almost without doubt in the UK.

9:45 But in the American system, again,

9:46 you only have two parties can get registered in most electorates,

9:50 Republicans or Democrats.

9:52 It's incredibly hard to get onto the ballot if you're not one of those parties.

9:55 And if you do vote for them,

9:57 then you take away votes that would otherwise go to the Democrats.

10:00 You take them out, the Republicans are more likely to win.

10:03 America, I think, is stuck in a political quagmire of its own making.

10:06 And the irony is that America's

10:07 talked about promoting democracy around the world.

10:10 Believe they're defending democracies when they invade other countries.

10:13 That's the argument they even use for Iran.

10:15 You've got the craziest political system on the planet.

10:17 No other country has this idea of primaries.

10:20 When you vote for a candidate, you don't actually vote for that candidate.

10:23 You vote for somebody else who will go to an assembly

10:26 where they may or may not vote for that candidate.

10:28 And this was all set up in back in the original formation of the American

10:32 Constitution because there was a skepticism about

10:36 the popular vote at the time it was built.

10:38 So you have a system which prevents

10:40 that popular vote coming through and in that sense

10:43 it's anti-democratic and it this is something

10:45 which applies to to many many countries.

10:48 The voting system makes it extremely hard

10:51 for the demos the people to actually have a role

10:54 in how democracy functions and this shows us

10:57 that there's something wrong in how we've defined democracy.

11:00 Now what we've done really is take the mo the post French revolution when you

11:05 had the left and the right sides of the French assembly that's where we get

11:09 the terms left and right from the rear for the right the go for the left

11:13 in France and we've replicated a personal

11:16 popularity contest elections all around the world.

11:19 So you vote for an individual and they try

11:21 to say I'm going to solve all your problems for you.

11:24 Now this almost is like a it's

11:26 a clarion called to narcissists in the first place.

11:29 So people who are going to respond to that are

11:31 people who believe they are the chosen person.

11:33 So you get the wrong type of person being selected for this in the first

11:37 case and you've got the wrongest of the wrong

11:39 people right now with Trump being president.

11:42 So is there an alternative way to select people

11:45 from the demos to give you actual democracy and if

11:49 you take a look at what the Athenians actually had

11:51 that's where the idea of deemos and democracy came from.

11:54 Of course, democracy in Athens didn't apply

11:56 to the slaves and it didn't apply to the women.

11:58 Anybody who was a freeman in Athens could

12:00 take part in the assemblies that they ran.

12:03 But the interesting thing is how they selected the officials

12:06 to carry out functions inside the Athenian political system.

12:10 And they did not have votes.

12:12 They had a system was called sort.

12:14 And the idea of sort was you would ask

12:17 the leading families in Athens who would you nominate?

12:20 Now, rather than getting those people, if if you actually had the leading

12:23 families nominating who they wanted in major positions,

12:26 then of course they'd nominate somebody that benefits them.

12:29 But the Athenian system said,

12:30 "You nominate who you want." So that's the first round.

12:33 And then the second round, the people you've nominated,

12:36 we ask them to nominate somebody.

12:38 And then a fourth round, then a fifth round.

12:40 If the person they selected was not going

12:42 to be the person who had that position, then it biased them in favor of saying,

12:46 who do I think would be a good person to fall for this role?

12:50 Who is likely to make a good decision to choose the next person?

12:53 And that worked all the way through.

12:55 So you ultimately had in effect it was a a random number system in many

12:59 ways a bit like the jury system is now that its result was to choose

13:03 somebody that everybody on this whole chain

13:06 of selection thought would be a good person

13:09 to be making these decisions rather than

13:11 getting people who were in it for themselves.

13:13 They had a sense of empathy.

13:14 So the decisions are made in the Athenian system were

13:17 for the interest of the the freemen of of Athens.

13:21 It was in their interests overall.

13:23 they did have a way that their demos ran the society.

13:27 So that's the sort of system we should have.

13:29 We should never have gone into elections and votes

13:32 and all the the narcissistic type of personality that that attracts.

13:37 We should have developed something which is a bit like what the jury

13:39 system is a random choice of people who then get to make the decisions.

13:44 But you do it in such a way that you get people who

13:46 are not just randomly selected intelligent empathic

13:49 people to make the decisions for you.

13:52 We have to get some sort of system like the Athenians

13:54 used to have to choose people who do not make irresponsible decisions.

13:58 There's a wonderful expression from the English politician George Galloway.

14:02 Whatever you might think about George Galloway,

14:04 you can't deny he's got a wonderful gift of the gab.

14:06 And in describing the Tories versus Labor in the UK,

14:10 he said they are two cheeks with the same boom.

14:14 You get one ass or another ass, you get an ass.

14:16 You don't get somebody you actually want to make those decisions for you.

14:20 So we need a system.

14:21 It means you don't end up with the ass of the system.

14:24 You want people with brains and heart.

14:26 And at the moment we don't have a political system

14:28 anywhere in the world that selects our leaders that way.

14:31 It doesn't help to get the economics right.

14:33 If you give advice to politicians who will

14:36 use that for their own advantage or what they

14:38 think is their own advantage rather than doing

14:40 what the sensible economics would tell them to do.

14:42 I uh was warning of the financial crisis before it happened.

14:46 I became quite prominent in Australian media

14:49 because of that and I was interviewed

14:51 on the leading current affairs program for Australia

14:54 about the consequences of the global financial crisis.

14:58 The prime minister was interviewed on the same show

15:00 and the host I called Kerry O'Brien savaged the prime minister

15:04 Kevin Rudd over my views and saying what the crisis

15:08 could mean 7 days after I was interviewed on the show.

15:10 Kevin Rudd made a set of policy decisions to try

15:13 to avoid the crisis that I was talking about,

15:16 but his policies were to restart the housing bubble.

15:19 So, as just as much as America had a housing bubble in the subprimes,

15:23 Australia had one as well at the same time.

15:25 Rather than seeing that's that is the problem, Rod thought that's the solution.

15:30 So, he doubled the amount of money they gave

15:32 to first home buyers to buy an existing home.

15:34 It went from $7,000 Australian dollars to 14,000.

15:38 They trebled it for buying a new home, $21,000,

15:41 and one of the state governments added another $14,000 to that purchase price.

15:47 So the government gave you $35,000, which was well far more than 10%

15:51 of the purchase price of a house and basically said,

15:54 "Here's the money to take it to a bank as a deposit, get a loan from the bank,

15:58 and buy a house." And that meant the demand from housing stimulated the economy.

16:02 So Australia did not experience the negative credit experience.

16:06 And I then got attacked for saying I got it wrong about the housing bubble.

16:10 I said the house prices are going to fall.

16:12 What happens?

16:12 The politician hears my advice and six days later restarts the housing bubble.

16:17 So you give good advice to a politician

16:19 who's venal and you end up with bad policy.

16:22 So it isn't we can't just make the economy

16:24 work better by understanding how the economy operates.

16:27 The the dollar has been the international currency ever

16:30 since the end end of World War II because

16:32 of the conference called Breton Woods at which the allied

16:36 powers got together to talk about the postw war financial situation.

16:40 Canes put forward a proposal at that conference to use

16:43 a newly created unit of account for for international trade rather than

16:48 using a national currency as was the case before World War

16:51 II when the pound was the dominant currency for international trade.

16:55 That got overruled by the Americans.

16:57 They put the American dollar in place instead and that set up a process which

17:02 I think inevitably led to the decline

17:04 of American manufacturing because the American dollar was overvalued.

17:08 It also massively empowered the financial sector because financial

17:12 transactions all around the world now needed the American dollar.

17:15 So that system biased the American economy and society

17:19 in favor of the financial sector and undermined the manufacturing sector.

17:24 And now this was inevitably going to break down because you can't be

17:28 a major power on the planet unless you're also a major manufacturing power.

17:32 Now America is finding that it can't continue to fight these wars components

17:36 that are necessary to make the weapons

17:38 they need to enforce their their power globally.

17:41 The fact that America has abused the power of being

17:44 the international currency for the duration of the post-war period

17:49 had set up lots of pressure to see if we

17:51 can find an alternative system to get around the dollar.

17:54 But because it's so complicated to do

17:56 that, most of those measures were fairly half-hearted.

17:59 there was no real solid attempt to get an alternative to the American dollar.

18:03 With Trump in charge, now we're seeing the the chaos that can be uh implemented

18:08 by that international payment system combined

18:11 with the military chaos of America.

18:13 I think this is going to pretty much say

18:15 that we're now seeing the end of the the Bretonwood

18:18 system as it was put together with the American

18:20 dollar as the necessary currency for international trade.

18:23 We won't necessarily see a proposal as sensible as canes is being put forward.

18:27 But it's obvious many many countries are going to find ways

18:30 to take part in international trade without using the American dollar.

18:34 So the days of the dominance of the American dollar are over.

18:37 But the damage that's been done over

18:38 the last 40 years can't be reversed overnight.

18:40 Recession is almost guaranteed now.

18:42 There are so many factors that are likely to cause a recession in America.

18:46 The increasing oil price coming out of the closure

18:48 of the straight of Hormos and the impact of the war.

18:51 That's yet another factor on top of the AI bubble which

18:55 is bound to burst sometime in the next couple of years.

18:58 And so there's been such a level

18:59 of overinvestment in AI that many of the companies

19:01 that have done that are going to have to fold or to pull out of the industry.

19:05 So there's going to be a slump courtesy of that particular factor

19:08 and the government becomes another factor there

19:11 building up the military capability of America.

19:13 he is going to cause an enormous amount of government

19:16 money to be created to rebuild the supply chain

19:19 of the the military-industrial complex and that spending will

19:22 actually stimulate the economy and go in the opposite direction.

19:25 Ironically, even though again people elected Trump

19:28 because he said he's going to empty

19:30 the swamp and stop the government spending more than it takes back in taxation.

19:34 That is actually a bad idea because spending more than you

19:37 get back in taxation is how you actually create fiat back money.

19:42 But Trump is going to do the exact opposite.

19:44 He's going to give a huge fiat stimulus to the economy.

19:46 So you have two private sector factors

19:49 which are likely to bring the economy down.

19:51 The increase in the oil price and the uh decline in AI,

19:56 but the government spending that Trump is now going

19:58 to authorize to enable the military-industrial complex to rebuild itself.

20:02 That will be a stimulus in the opposite direction.

20:05 Overall, I do expect a recession.

20:06 I'm trying to find more rebel economists.

20:08 And rebel economists are people who

20:10 challenge mainstream economics and want to understand

20:13 how the economy really works rather than

20:15 learning the mythical concepts inside neocclassical textbooks.

20:19 So if you're a rebel economist,

20:20 apply to the rebel economist challenge at steveken.com or scan the QR code.

20:25 And there's a bonus now.

20:27 Anybody who applies gets a free bunk book bundle, including three of my books,

20:31 two cartoon books to make it an easy introduction,

20:34 a detailed book that I wrote originally for Elon Musk.

20:37 He won't read it.

20:38 So maybe you should instead.