Alea iacta est

Don’t ignore irreversibility in the Iran war

Second intermission

For the second time, I need to interrupt my Debasement series as President Trump yet again shreds the narrative script, this time with war against Iran. The “fog of war” is real, even – perhaps more so – in an age of information overload and attention spans shortened by personal devices. President Trump’s constant barrage of misinformation dressed in bravado thickens the fog. Still, another factor is the myopia created by situational helplessness among a generation of Type-A personalities brought up in an age of “overquantification.” I am both amazed and amused by how Uncertainty plunges even those charged with strategic oversight into short-sighted focus on detailed damage assessments of each drone strike, which Iranian leader has just been assassinated, or the mine survivability of a VLCC tanker.

Step back, observe the battlespace

It is always a good idea to pause for reflection when confronted by the unexpected. Fight-or-flight responses appropriate in situations of immediate danger are a handicap when you are merely startled or confused. One of the hallmarks of my research is to start with first principles from theory and logic on a structured view of the political economy to form testable hypotheses. In situations like the present, I would argue it is the only approach that will yield useful insights for decision making. I will return with economic and market implications later, but in this piece I analyze how this war’s origin and, critically, its irreversible implications, map to key players short- and long-term incentives to determine how long this war will last and the damage it may inflict.