Power at the Edge of Failure

[Music] Welcome to the New York City Traffic Report for Finding Hotels. You're listening to American Power. I'm Nat Towson. Your hosts, stand-up comedian, writer, all sorts of writer, speech writer, article writer, and most importantly, and likely to outlast me podcast host. I am here with my panel of experts as always, our expert on both the military policy and so many other things. Chad Scott, Chad, how you doing? I'm doing well, Nat. Glad to be here. Good to see you guys. Good to see you, two men, and joining us as always, of course, our expert on oil, renewable energy, the energy sector as a whole, Mr. Global, Matt Randolph, Matt, how you doing? Great. How are you? I am full of energy, excited to talk about our rapidly declining world. I was hoping on that note that Matt, we could start with you. We are recording this a little early. It's the afternoon of Monday, April 27th as we're speaking right now, and the global energy markets are unsurprisingly in flux. Once again, and Mr. Global, I was hoping you could give us a big picture look at what's going on in the world of energy right now. Well, I think most importantly here at home, wholesale fuel prices have risen to their highest levels since June of 2022. If you remember, 2022 fuel was really high. Now we haven't reached those levels, but it's the highest since then. So a lot of this is due to the huge increase in exports out of the United States. Everyone's celebrating the tankers coming. We're going to have a parade. Those tankers are leaving with our gas and our diesel, and that makes it significantly more expensive for us. So even though oil prices are about $25 a barrel cheaper than they were a month ago, gas prices are going to surpass where they were a month ago easily. Average price of gas today was 4.11. Diesel is somewhere like 5.45. Those are going to start increasing more and more. They're up about 15 cents from a week ago. It takes a few days for these wholesale prices to sort of bleed into the retail market. Another thing that Opus is reporting and Opus is a paid subscription service that oil companies use to track oil and gas. Is that an acronym? Oil production information services. Yes. Gentlemen named Tom Closa is the founder. They are reporting that margins at the convenience store or wherever you buy your gas are about a third of what they typically are. And that's a bad sign. What that means is that gas stations themselves are pushing down gas prices by taking less profit. A lot of people think that they're gouging. They're actually not. Nationwide on average, they're making about 11 cents a gallon right now is what a typical gas station is making on a gallon of gas. That's normally somewhere between 30-35 cents. And why are they reducing those prices in this specific moment? To keep traffic mostly to keep traffic from coming into their stores or to keep traffic coming into their stores. That's where they really make their money. They don't make a ton of money on gas. And they're afraid of demand destruction. They're afraid of people buying less gas and that means less people coming in the store. And so you're talking about specific point of sale with gas stations like consumer facing gas. And what I'm understanding is that these run on something of the comedy club model where the comedy is not actually what makes money. It's the booze and bad hamburgers that you sell that are actually the profit driver. So similarly, I'm learning now for the first time that sit-go is making a profit off slim gyms and old hot dogs. Just enough monster energy drink to kill a toddler versus the oil itself, which is what gets people in the door. Yeah, that's where they make all their money in the store. Slightly more related, one might be the popcorn in a movie theater, but I've spent a lot of time in comedy clubs. So yeah, interesting factoid. If you go to a convenience store and you fill up your gas tank and you buy a snickers bar, they make more money on that snickers bar than that entire $70 worth of gas you bought. Wow. Yeah. Because they just don't make that much on gas. But this reduction and profit margin at the station at the point of sale like you're talking about, that almost always drops in times like this where you see big oil price jumps, but they always recover. And the amount to which they bounce back and recover is usually relative to how far they drop. And so they're concerned because they dropped farther than they normally do. So what they're saying is we could see a 30 or 40 cent increase in gas prices, even if oil prices don't move anymore. And then when you stack on top of that, declining inventories, when they say by July, our commercial inventories in the United States will be below the operational minimums, which is really bad. So not looking good. Wait, what explains what that means to me below the operational minimum as in like we will have two little surplus to function as usual. So basically, you know, the EIA says, based on how much fuel you use in a day, every country needs to have an operational minimum amount of fuel in storage to run their country. Right. And once you get to that, you should probably stop exporting. Right. But we're not going to do that. Logically, to me, a non oil expert. Yeah. So for the United States, it's 200 million barrels. Mm-hmm. Is our operational minimum. If we get below that, I don't think we'll stop exporting, but we will reduce the additional exports that are currently because our exports have increased by one and a half million barrels a day. Mm-hmm. I think that'll get reduced. And because we will have to maintain operational minimums or the prices will just go parabolic from wherever they are then. So that's a really bad spot to be in when the industry is talking about hitting operational minimums for commercial, you know, diesel and gasoline inventories. That's a really bad thing. But you don't ever want to hear that. You don't want to get close. No, you don't want to get close. So fun processing this correctly. The closing of the straight of the Hormuz has made oil scarce in such a way that's driven up the cost per barrel. So US stores of oil are being sold more, they're being exported more now because there's a higher profit margin thus depleting local reserves of oil and driving up prices domestically causing gas stations to make less profit as well. Is that correct? Or am I getting the cause of that there? Pretty much sums it up. And there's not a lot we can do about it because we're refining at maximum capacity. So we can't, you know, there are like, like within the US, we were refining at max. Okay. Yeah. So when I talk about increasing oil production or selling oil out of the strategic reserve, it doesn't matter because we are refining. We cannot make any more gas and diesel and jet fuel than we're making no matter how much oil we have. And when inventory levels get as low as we literally can't get it out of the ground faster than we're currently. We can. Why is that we can produce it. We just can't find it. Oh, we're sorry. I shouldn't get it out of the ground. We can't prepare the crude fast enough. Exactly. So what we're going to see, I predicted this last week, you might see crude love crude inventory is actually rise while inventories of distillates. So distillates are diesel for the people that don't know. That's your diesel and your home heating oil and your inventories for gasoline and jet fuel are all going to be dropping as crude levels rise because we can't refine any more than we currently are. We're maxed out. And if we lose a refinery, holy shit. How would that be the worst time to find a refinery? Sorry. What's that? How could that happen? Well, they blow up all the time. You know, anything can happen. Yeah. So you're saying the fall or some gain season comes along. Oh, yeah. Hurricanes. Oh, my God. So if any of the regularly occurring reasons that a refinery could fail were to happen right now, we would be in a particularly vulnerable moment. Yeah, we're walking a tight road basically not to give any good ideas, but we can't really afford for anything to fail. You know, we usually have some redundant seat built into the system where it's okay. We've kind of wiped that out. So are we seeing a so I guess I have a question. Are we seeing a closure of the futures versus the spot price? Or is that still kind of a wide gap that's kind of unprecedented? Because I keep trying to explain to people, they're like, well, they go Google that price and they're like, why is my gas prices? So I want, I'm like, the spot price is still really high versus the futures. But I'm also hearing that that's starting to normalize again. Is that what you're seeing? So they normalized for the wrong reason. And now there's a gap again. So the reason they normalized was the big lie that came out last week about the ceasefire and the peace talks were oil crashed by like $20 or whatever. That caused physical prices to come down to the closest point to futures prices than they had been in about a month. But now that prices are rising again, they're starting to gap a little bit more. So there's a little bit more separation there. But everyone is saying that that gap won't get as big as it was a few weeks ago when physical oil was 150 and the futures market was at 110. they said that's not going to come back. Like the market has kind of figured out what's happening. So we'll see what happens. Matt, there's so much going on right now. I want to make sure I know what you're talking about. Which big lie last week for the listener, especially because it's going to be a little while since they've heard of it. Which of Trump's lies that affected the oil markets temporarily? Are you referring to? Well, it wasn't just Trump's lie. It was a wrong lie to it. But when they said the straight-of-formers was open, it was never open. And that caused oil prices to fall by more than $20 barrel. But it never actually opened. And by the time they came out and said, yeah, it's not really open anymore. Like the oil had already fallen. Right? So that's the big lie. I'm talking. That's this particular big lie. Yeah. So on that note, where are we at with negotiations with Iran right now? It feels like we've gone back and forth. It feels like they have effectively flailed a number of times. I don't understand where things are breaking down. I'm hoping Chad, you could talk to us a little bit about what the current status of that is. Well, I mean, obviously the big kind of upfront news is it seems that the negotiations are at a complete standstill. Trump has pulled Whitcalf and Kushner. I'm glad he has. They are awful negotiators. I don't think they've ever negotiated anything worth talking about in their careers, whether it was Russia or Iran, doesn't matter. But the primary problem is that both the United States and Iran think they have the upper hand. And both sides are actually wrong. The United States obviously has the upper hand militarily. And that's really not something that's very debatable. I see people talk about how the the Iranians have held off the US Navy, the US military. But the fact is, is we're not truly forcing open the straight of hormones. We're not fully shutting down Carl Gailan. We're not actually doing the things that we have the capability to do. But we just don't have the political will. It's about choices for the United States and not about capability. I can jump in here. One of the things that we've talked about in the past is like, we could do a full-scale ground invasion of Iran that Iran's massive and we'd be pulling troops from elsewhere in the world. And we'd be exposing ourselves in other vulnerable territories where we be pulling those people from or also even just sort of depicting what the actual scale of our military might is, rather than making it hypothetical. It would be a massive endeavor. US casualties would be huge regional chaos. It'd be a long-term war with costing hundreds of billions dollars. It's not something we want to do. And Iran understands that. They know that that's not where we want to go. So they believe though that they have the upper hand in these negotiations because the United States is unwilling to go all the way. And so they say, well, we're holding this key choke point at risk, which is the straight of hormones and kind of the red sea through Bob Elman Deb. And they're exploiting the political toxicity of what Trump has already done. And that's what you see it in their propaganda, the videos they send out and things like that. So they believe they could survive the storm. The problem is, is that both sides are mistaken because it's never going to allow for them to come to a true negotiating table. The mistake Iran makes is there may come a point where if they keep saying no, Washington is going to have to do something with their overwhelming military power. And that would be a disaster, stay for Iran. We know that Trump has this willingness to use force. But on the American side, there's the mistake is having us bounce between all these negotiating positions. I counted over seven weeks the administration moving through five different phases of negotiations. And they're different where their position is going to stand. And I'll go over, and I can tell you all five of them. Basically, the first one is there was a military punishment, large amounts of force. It was generally successful from a tactical level that seemed kind of a mixed bag on the strategic level, kind of leaning towards strategic failure. Obviously, we're dealing with this right now. So because of the tactical strength that the military showed, Trump came out, beating his chest, maximal demands, we want full dismantle of nuclear program and your support of your proxies has below the hoothies, dismantle all the missiles and drones. And at one point, he even hinted at complete regime change. That obviously didn't happen. It's closed to say that straight-up or moves leverage shifted and a reactionary ceasefire bargaining deal over the straight-up form who started. That was the third item. Now, fourth, we're still reacting. Everything is reactionary now, which is always problematic. Try to counter blockade. Didn't pursue the desired results from produced. And then fifth, now we're to our fifth phase in this whole thing where everything's come off the table. We're not talking about nuclear issues. We're not talking about the missile and drone program. It's just we are dealing with the straight-up or moves. And Iran has watched as this position continuously changes. And so they just sit back and go, we have no reason to believe Trump is serious, has the discipline or the commitment to stick to something. And that's an advantage to Iran. So this is why we're probably not going to get a deal that is very good. And certainly not going to be as good as the Obama joint comprehensive plan of action. And so from a standpoint of the negotiations, we're essentially at an impasse because both sides think they're winning, but both sides have a huge amount to lose and are completely ignoring that fact. And I just don't see us getting by that in the near term. Trump keeps telling the American people were winning. But then he says things like Iran is begging to negotiate. But the visible reality, everything we all see is he is backpedaling consistently. It's like he talks about our performative strength, but then backpedals, beat Hegseth, backpedals. And I'll kind of close out this point here with I think Pete Hegseth, the Secretary of Defense, if you're not aware of it, is feeding Trump a steady diet of tactical updates without the diplomatic context. He's talking about all the cool things the military is doing, the targets they hit, the ships that they've stopped. But the tactical success is not the same thing as strategic success. We have historically dominated every military and every war throughout history, but rarely got any kind of a good strategic outcome, whether it was Vietnam, the Afghanistan, obviously that was that that went back to the Taliban. Every every war eventually ends through diplomacy. I just do not think the leadership we have in place have the diplomatic chops to close this Iran chapter out. I think we're facing down a problem where we have to go to a diplomatic move because the military has kind of run out of it. It's capability to inflict damage on Iran without doing some really atrocious things. And because of that, the diplomatic effort is just not there. And it's going to cause us to continue to fail and kick the can down the road. And we're just going to hear Trump talk about how awesome everything is when we all know it's none. And I want to talk a little bit more about how we could possibly move forward for this. But I'm curious because there has been a lot of reporting. If you're watching mainstream news and you're looking at what's going on in Iran, it does sound like there's a lot of diplomatic back and forth. Where is that information coming from? And is Trump really in there negotiating or are we just sort of getting PR? Well, so it's very interesting you ask that, Matt, because a large portion of the reporting about negotiations and peace happened to come from one person that works for Axios, who happens to be a huge Trump supporter. And you might read a story on a Reuters or see it on CNN or Fox News. But you know how the media works. If one person puts out a story, it's picked up and shared by every major media outlet. And we have figured out that this one person with Axios keeps reporting on all of these peace negotiations. And we've also figured out that most of them are completely false. They regurgitate old news and re-rap it as new news. So it's really hard to put a finger on what is actually happening concerning negotiations. All we know is every time Donald Trump says there's negotiations happening, Iran says there aren't, and then nothing happens. Like we know that. But we also know that 12 different stories released by this same reporter with Axios that were all released within three to five minutes of the market opening were all false. And we know that that reporter is a huge supporter of Donald Trump. So you know, that leads to a lot of confusion and what appears to be contributing to potential market manipulation and other things like that. Some of the stories also dropped a few minutes before markets closed. So the timing and inaccuracy of these reports are very have been picked up like people are noticing. So just if you were asked me, does this indicate coordination or does this indicate a person who you need not coordinate with the president to serve his interests. But I'm curious as to, does this feel like just a PR wing of the White House or is this more, do you, would you suspect more of an independent arm of support? What am I? Essentially, it is real. I mean, I, the reporter is Israeli, but I can't say there's coordination. All I can say is reports keep coming from the same reporter that are shared by the larger media moments before markets open about peace deals and they keep happening. Yeah, I'm going to ask him because it doesn't suspect. I mean, I'm not suggesting conspiracy. If conspiracy need not exist to be mutually beneficial, I'm just curious. Sure. And we're in a, as you were sort of suggesting, a media environment in which a fast breaking story people run with, you know, maybe with a little less fact checking and a a little less independent reporting than, you know, if. lower media environment used to allow for. So if someone has a buzzy story about this sort of thing, it can often get repeated into fact because it's been now reported by a series of different interconnecting web of sources. Whereas you're saying, ultimately, there's one source for a lot of this information that sounds a little regurgitated or repackaged or completely false in certain cases. Yeah. And the thing is, Axios is considered to be one of those very trusted, respected news organizations. So when Axios reports something, people pay attention. Yeah. I would, you know, I don't, maybe up there with Reuters, maybe not, but the point is they're not known to be fake news or hyperbolic. No, they're generally considered more of a newswire. Like, yeah, there's not quite a few Reuters level, level objectivity there, considered to be international newswire that's like trustable for basic facts. Yeah, but all of these reports have come from this one person, right? And it's not from the organization as a whole. It's one person within Axios that keeps putting out these reports about peace and negotiations that not one of these stories has turned out to be true in any way. Interesting. So that's something to look. I tell people, you know, always get a second opinion. It's just like anything else. But it's tough for people when all of the news media is sharing the same original story that can be false. And so someone goes to get a second opinion and say they see it on Fox News or they see it on CNN. They're like, well, I got a second opinion and they're saying the same thing. No, they're just sharing the same story that was originally false to begin with. Right. Exactly. You got to be careful with that. Just to put a finer point on it, what does that do to the markets? Like if there is cheerful or optimistic news, but oh, negotiations are actually going really well. And that's the currently believed status of Iran. At the moment, the markets open. What does that do? It moves the market, you know, if-- Just spelling it out. I'm just being very clear. What are we implicating here? Yeah. We've had many days where we were expecting to see big jumps in oil prices, which lead to big jumps and gas prices. And then five minutes before the market opens, it's, hey, peace, oil falls, $10, $15 a barrel. And the real bad-- So the belief that this will be dealt with and that the prices-- that oil will be less scarce as a result of these imaginary negotiations drive oil prices down versus-- or prevents them from climbing up a little further due to the fake optimistic news. And the dangerous thing with this is that it makes-- when the real oil prices come, right? When the market figures out, it makes it a lot worse when you've suppressed it for so long. It's-- you know what I mean? It's like putting a bandaid on a broken leg and thinking, ah, it'd be OK. So while it's sitting there festering and rotting or whatever, it's going to be worse because you didn't-- A lot of people-- and I agree-- a lot of people believe that we need to allow oil and gas prices to just go, however, how they're going to go, because that will naturally cause demand destruction, which lowers the demand and can correct the market. But by continually artificially manipulating it, you're just making the problem worse. You're not treating the disease. You have to treat the disease to fix it. And by giving it Tylenol when it needs antibiotics, you're just making it worse. I do, but-- You have to leave it alone, like this is how free markets work. You have to-- you know, and it's going to be scary, and it's going to be bad. But you're only making the future worse by prolonging that from happening, because people look at oil prices and go, ah, that's not that bad. It was worse in '22. All you're doing is what is going to happen in three months from now, six months from now, with inflation and food prices, and all of the other things that are going to be impacted by this. You're making the future significantly worse by basically not taking your medicine now. You're also prolonging a war, which I believe would end much quicker. If oil hit $150, I believe that would end pretty quick. Like if it got there and stayed there for a couple of weeks, the piece negotiations would happen, and they would figure it out. But-- >> You think because the average person would feel the impact of it, do you think-- >> Well, just politically, it would be so bad politically for Washington, D.C. that they would have to end it. They're like, we have to end this. Like, this is the worst. >> Right, but specifically, I'm asking is that because citizens are experiencing the pain point that they've been protected from until now? Because I think that's-- you know, I want to ask you this, because you're also a renewable energy expert. And I think one of the-- I sort of heard this bandied about it. I think it's an interesting point, which is that, like, I've heard people explain that most Americans don't actually understand what oil or gasoline costs, partially because-- I mean, I remember going to the UK when I was younger and said, oh my god, why is the gas twice as expensive here? And I had it explained to me that, oh, some of this is-- these are subsidies in the US. There's tax breaks. And I quite frankly, until going to the UK in my late teens or 20s was not aware of how manipulated just at the pump our gas prices are. At what point-- I mean, because I've heard a lot of people in the renewable energy sector say, oh, part of the problem is that Americans don't know how expensive gas is. They don't understand how expensive oil is. Because I mean, not quite-- I'm talking prior to the current conflict in Iran, but that even before this rapidly fluctuating oil market, that Americans are generally politicians desperately want to keep the price at the pump down, and we'll do what it takes to do that. And as a result, we don't actually realize what the cost of our energy is. Honestly, I think Americans are going to have to kind of own that themselves. I don't feel like this price shock would induce more investments in renewable energy, commercially. But it would induce a lot more investment in renewable energy personally with people, more EVs, more at-home solar, which is really-- I mean, if we're being honest about it, that's probably the biggest pie of how renewable energy is going to grow in the future is just people doing it themselves. Instead of waiting for billion-dollar corporations to save them, they're going to-- Where do you get libertarian approach? Yeah. They're going to go get solar. They're going to figure it out. I mean, you're seeing happen a lot of plug-in solar. Is Arizona's got a bill. Utah's got a bill. Colorado's New York has the sunny act. Looks like it's going to pass. I mean, it's blowing up in other countries right now. I mean, Germany has got a huge balcony solar movement going on right now. Yeah, and I saw this before. I don't know how I'm supposed to tan my sexy ankles, but otherwise I do support. I mean, it's blocking the front of my balcony. And I think about all the peeping Tom's out there who watch me every day. I mean, is that really worth the cost of our environment? I guess I'm willing to sacrifice it for them. Just say there is an emotional cost. However, it does-- OK, it does bother me a little bit. Where we're like, all right, well, we all know wind and solar's cheaper. But now Trump is giving carve outs to the oil industry. And I live in New York state where we then passed three years ago. We passed a bill to get on 70% clean energy by 2030. And now they're telling us it's not possible to even start until then. And it just feels like it's getting smaller and smaller. OK, so if the state-- well, we can do it federally. We'll do it at the state. OK, our Democrat governor hired a Republican fossil fuel lawyer to run the power authority. All right, we'll do it within the city. OK, am I allowed to have a potato clock on my desk? That how-- or is the price of produce due to shipping oil going to get so expensive that I can't have a little penny-- a penny plugged into my potato clock is going to be too costly for me. A Casio watch with a little solar panel. I support balcony and rooftop solar as much as we can do it. But it does drive me insane where it's like, oh, the solution is going to be, all right, final, do it myself. Well, it's a broader problem, I think, with-- it was a fascinating book called "Lionations Fail." And this energy problem correlates to some of the other problems that come up in that book where there may be a necessity for it, there may be a need for it, there may be even a market driver for it. But if you have a leadership, if you have a regime or an administration or whatever you want to call it in place that is actively blocking it, it'll never take off. But people, unfortunately, even in the United States, even though we have a bit more power than other countries, but have this-- have a problem where even if there's an overwhelming majority of people that want to have cleaner energy, cheaper energy, if the powers that be, whether it's the Trump administration or even Democrats or whoever, aren't playing ball or actively going against it, it won't happen all the way to the destruction of that country. It'll historically happen over and over again. Obviously that was-- energy wasn't the reason back then. It was usually things like an unpopular war or they've made policies that cause massive amounts of famine, things like that. But I see a correlation there where we can have all the political will within the populace we want. And yeah, I'll get my own personal solar, but if we want to have it at scale in huge amounts, if there's a hostile government towards it, major companies aren't going to fight that hostile government, I don't think. I think that's a great lead-in to a question I want to ask Chad talking about things being at critical or chaos levels to keep them more profitable because we're hearing-- and I don't know if it's true at all. So, Chad, is that true in the defense contractor world? Because we've been hearing lately that maybe we don't have the missiles, and I don't know if any of that's true, like if we're short on ammunition, missiles, things like that. [BLANK_AUDIO] something that occurs in that world and is there any truth or do you know like do we have stockpile issues maybe with stuff we've sent to Ukraine and now fighting this war can you talk about that? I guess it depends on what the the outcome of the fight you're looking at like if we're trying to find another like regional skirmish like we are in Iran we largely are going to be fine the problem comes when we're trying to look at things like the potential peer fight against something like a China or something like that a lot of it has to do with not necessarily the the current stockpiles we have in the near term it's the industrial base to continue replenishment that is something that China outpaces us on a pretty significant scale the our ability to build not just missiles munitions but things like ships like they one singular Chinese shipmaker has made more ships in the last five years than the entirety of the u.s shipbuilding capacity since world war two so it's a pretty significant problem that we would run into in an earpirt fight that being said we do have the stockpiles currently that could sustain us long enough to probably get to what I would say the negotiating table we could put enough pain on a country that they don't want to continue fighting us but if we go into a protracted war like what I would call the world war three scenario or the scenario where we have the fight two foes at the same time that used to be the kind of the primary effort of the United States was the simultaneous what they called it the ability to fight two wars or 2.5 wars at the same time we just don't have that capacity anymore to do so largely because we overestend ourselves within things like Iran and can't get to an negotiated settlement and it leads us down a path where we previously when it came to Iraq 2003 or whatever we had the ability to kind of eat away at our munitions because there wasn't really a pure foe out there that was challenging us now there are and so we do have a problem with with munitions on a on a grander scale from a manufacturing standpoint the ability for us to build them in real time kind of like how we did in World War II where we turn a forward plant into building like aircraft and things like that so yeah there is a problem there for sure and I think they were being more specific to interceptor missiles yeah well Patriots what they call the exquisite weaponry is like those types of weapons are it's the weapons we would use like we have huge amounts of dumb bombs but those weapons were never meant to destroy in Iran they were meant to counter and it's what we would call a near-peer adversary and I did air quotes there so it's like this adversary that is kind of fights the same way we do and really the only near-peer adversary we have is China people could say Russia but I disagree in that near-peer adversary with China that's where that exquisite weaponry the very expensive Patriot missiles the the jasms which are like kind of the the air to surface missiles that are extraordinarily expensive but they're effective in the type of fight we'd need for Iran using that type of weaponry on our excuse me with China using that type of weaponry on Iran has depleted our our stockpiles and unfortunately that we are to a place now where if Iran were to start the fight up again because negotiations fail we would have to prioritize do we want to fight Iran still while I'm looking across the globe at potential adversaries in China and we'd have to make those decisions so and it's a lot of to do with misunderstandings with culture in Iran the culture in China Russia etc in our negotiating positions and how we understand that so if these negotiations fail that's the situation that we find ourselves in but what's going on with these negotiations obviously things aren't quite working but why are they breaking down? Well there's there's a fundamental misunderstanding of how these countries think and it's not just Iran the Trump administration views Iran, Russia, North Korea through a western lens and you see the rhetoric here you see from Trump Hegseth even his supporters that there's this almost rabid instincts to ramp up pressure keep hurting Iran keep intensifying the pain forced them to the table make them capitulate but that misses cultural context they just aren't built to to respond to that way Iran has endured almost 50 years of economic pain brutal wars sanctions isolation etc and you have to separate obviously the Iranian people from the Islamic Republic because I'm not trying to say we should apply more pain to the Iranian people but things like the Islamic Revolutionary Guard Corps the Itolla they have a massive capacity to absorb a huge amount of pain so when you see Trump and his administration look at it through a lens of well what would hurt me as an American what would I not want to happen and then try to apply that logic to Iran it doesn't work it leads to failure and Western countries are we talking casualties are we talking economic uh economic realities are going to make effects or what all of the above it's all of the above any kind of just sanctions pain isolation pain military pain they're built to to weather it in a capacity that is is greater than what we have in the west and we we really react almost emotionally to small economic shocks global instability political pain Iran Russia North Korea they live inside of a world that is painful for them because of the way they operate and it goes back to the teachings of the Itolla when he came to power some 50 years ago he argued that the Islamic Republic should never compromise on their core principles and they should never capitulate to an enemy without exact exhausting any every option to fight and this value is is is ancient it's a deeply held Persian value where the the word for compromise which is say say yes as a s h i might be saying that wrong because I don't speak Persian or farcy or whatever they speak on that but they they take it as a slur to them instead of it meaning compromise where we see it as compromise is oh yeah we're working together they see it as selling out different word different cultural yep and so they feel that to compromise is cowardice and strength is showing that you can take punishment keep moving forward and that connects the how the Iranian hardliners are seeing these negotiations and it goes back to the Soviet Union they watched his Gorbachev compromised he compromised the Soviet principles because he thought the west would save the Soviet Union and the Soviet Union collapsing and the Itolla watched that and it it shaped his view and so Iran it walks into these negotiations believing that if they compromise it would be capitulation they would acquiesce the US and that's existential for them it's not really a really important distinction between obviously the Islamic Republic it the Islamic Republic and the people of Iran but I'm curious because Matt and I were talking we were all talking earlier about essentially the American consumer is protected from sticker shock at all costs right like we are we are the most important thing is that we don't think that our economy is failing like we will do anything to manipulate to the point where the American consumer doesn't have to think that they are financially unstable that's a massive cultural value right like that's a massive way of doing things here is that different in Iran are are you saying like obviously like the civilians and the government are different but are in Iranian culture are people more directly connected to the impacts of what their government is doing in the way that you know western societies have been a little protected from unfortunately for the Iranian people the negative effects amplify for them but the positive effects are minimized so whenever something positive happens to Iran it's generally similar with Russia a small group of powerful people often obviously men nearly all men obviously benefit from it but when painful actions take place like sanctions or say a war namely like the Iran or rock war it is hugely disproportionately the people that are impacted the problem is is those people have very little means to to react to it we saw the protests we thought oh protests those are happening a great they failed because the Iranian regime the the Islamic Republic killed anywhere between 15 to 40,000 of them machine gunned them down and so they they unfortunately do not have that outlet to find a way to to overthrow the regime and it makes that regime incredibly resilient and so any pain we apply to the Islamic Republic they're gonna just by the nature of their design are gonna be able to weather it more so than we are as Americans because the Islamic Republic will say kill thousands of people we aren't willing to do that and they're completely willing to pass that yeah yeah and so we're not inflicting any damage on the Islamic Republic themselves with these sanctions necessarily as somewhat as on the civilian population but they're not responding to the civilian population in the way that I mean obviously America's catapulting towards authoritarianism but we have elections and people are still worried about winning them yeah we're I mean to be clear we're nowhere near gunning our people down in the streets like the Islamic Republic I get concerned about what we have where we're headed We've gone some people down on the street this year. Let's not let's not like we haven't set it. That is true. Unlabeled federal troops to murder civilians. You are. In the cabinet, Minnesota earlier this year, it happened several times over the last few years. So we are not not at that point. We are just not doing it as regularly and on mass. Yeah. We've crossed a very significant line there in recent years. Yeah. And we have in the past, I mean, obviously, you have Kent State back in the 60s and things like that. But Kent State was such a huge deal because it once. And, you know, of course, it happened to white people too. That's the other way. Yeah. I will say that it's just because of this, because the Trump administration looks at the Islamic Republic and thinks, if I do what hurts, what would hurt us to them, they think that's a negotiating tactic. And it's not going to work. This tactic, he's learning in real time why it took the Obama administration, John Kerry, Jake Sullivan, all of them well over 18 months, some say up to five years of secret negotiations to reach just a singular negotiation on the joint comprehensive plan of action. It took that long just to talk about only the nuclear program. And now Trump is trying to say, do this or you're going to get hurt. And the Iranians are like, that's our life. Our life is pain. You can't hurt us more than we already are. And if you're going to hurt us, we're just going to transfer that pain to our people. And they know that we are more humanitarian focused, more-- that has more of a-- that plays more at the heartstrings of Americans. We will watch the news and be upset that this is happening, whereas they don't care. And what ends up happening is they leverage that as a negotiating tactic. And so when Trump says, I'm going to hurt the Islamic Republic, they're he's playing right into their wheelhouse, what they want. Yeah, sure. Apply the pain. Go ahead. We can take it. It's the same thing Russia did. It's the same thing North Korea. These are countries built on pain. And unfortunately, if we want to overcome that, we would have to do extraordinarily atrocious things, which I hope to God we don't. But yeah, so-- And his only negotiating tactic seems to be bullying. But it can only really double down on that, but doesn't seem to understand or accept, at least, that it's not. It just isn't going to work with people who are seemingly immune to that. Yeah, it's definitely a-- what we would-- the nice word is a pressure campaign, but it's not-- a pressure campaign gives the arrow of its strategy. It's not a strategy for him. I'm upset, I'm pissed, and I want to hurt them. And that's where we hear the mega-base come in and say, hurt them more until they capitulate. And that's not the way out of this. But the way out of this is a whole nother podcast discussion. But yeah-- And perhaps we'll talk about it next week, or the following week, or the one itself in between now and then. Probably not. On that note, I'd like to go to a segment that we call the least worst part of my week. Let's look at a little bit of optimism, if not optimism, a story that's turning up is less horrible than everything else in the world of the military, energy, or American culture and power in general. Matt, what's the least worst part of your week? I fell in love with a monkey. I don't know if you guys have heard of UG, but UG is a 1.4 pound pothas monkey in Mexico, whose mother has rejected her. So she wakes up every morning, cuddling a little teddy bear dog thing. And they're trying to figure out how to re-introduce UG to her family, species, whatever, however you say that. And this little bitty tiny-- so I have it like this little toys now is her name's Tilly. And she weighs 2 pounds. And this dog isn't any bigger than my foot. So this little monkey's like this little bitty tiny. And I implore you to read about UG, the Mexican baby pothas monkey. It's a really cool story. She has swept the hearts and minds of people in Mexico. Oh, man, that's a small monkey. I'm 0.4 pounds. I want to say I love when there's a celebrity animal. I love when an animal could not possibly understand its level of celebrity becomes famous. Let's let them-- every celebrity disappoints you. You're never like, oh, grumpy cat was racist. Like, no, it's fine. He lived a good life. Remember that hot gorilla? There was a gorilla that a lot of people were attracted to. You're talking about Harambe? No, Harambe was a gorilla that was unjustly murdered. The hot gorilla lived a long full life. It was a phenomenon in Japan a few years ago that there was a gorilla in a zoo that people thought was incredibly handsome. And I mean, I got to say, the guy's got to go on. If you Google handsome gorilla, you'll look at it. I mean, he's distinguished. But again, I just love it. Handsome gorilla is never going to have problematic tweets. We can root for-- I'm not for celebrity culture, but I like sure. So what's funny-- A famous lion or whatever? I can get behind that. So I do have a question on this monkey, because I have been watching the story. It's been really heart-warming. But you start to wonder, why is this monkey keeping rejected by its people? Are they looking at this monkey? And it's like-- Oh, no, maybe it has raised us. Maybe it's like, this guy really sucks. In the monkey realm, yeah. And the humans are intervening. I hope not. I'm derailing the good news story with my cynical views. But no, I just wonder, why does this monkey-- why does everyone hate this monkey? And the monkey I know is that hours after giving birth-- It smells like us. --Yuji's mother, Kamaria, began exhibiting irregular behavior and struggled to hold this monkey correctly, leaving the infant unable to secure a grip on its mother. And ever since then, the people have taken over. So for whatever reason, maybe it's because-- That's probably what it was. --that's only 1.4 pounds. I don't know. I don't know a lot about monkeys, honestly. Our producer just said he has bad energy. Yeah, he has bad energy. Yeah, he just has bad vibes. Or is it a bad vibe? --Basic. --around, perhaps. You know, I've got at least a worse story that's similar. Matt, you're speaking my language, because I love a very small animal. I love several various-- sorry. I love every very small animal. If I'm being-- Oh, like some. But I thought a bee was cute the other day. It's all happening for me at this point. I can look at a lizard and be like, oh, look so cutly. But Nepal, discovered in Nepal in the past week, past month, I believe, the first sighting of a long thought extinct otter, the world's smallest species of otter, the Oriental Otter, was sighted in Nepal for the first time for 185 years, not actually extinct, just very small. My wife will love you for that one. I can find, I assume. That's her favorite animal. She'll love that news. The elusive otter that she thought long thought extinct. No, just otters in general, that would make a lot more sense. Yes. It's a mental small, clawed otter. So old that we were still calling things Oriental at the time. That otter, due for an update. You know how I say celebrity animals will never disappoint you? That is a problematic otter title. And we need to update that otter. It's not his fault. He's been hiding 185 years. Chad, do you have a story? I can go seek world champion right there. I don't-- yeah, there you go. I don't have an animal. No, that's not really the focus. We've just skewed that way. My minor never is fun. But this is-- I think this is some good news. And it kind of ties back into what y'all were talking about earlier with the clean energy. We've reached a huge milestone where all the clean out, the clean power, all new global electric demand is in clean power now and not in fossil fuels. So kind of rephrase that because I was stumbling over that. But basically, the new clean energy being built is outpacing new demand for energy. Which was almost going to be my story until Matt had a cute one and I wanted to do a cute one. So you had the same phone on my phone. Yeah, so I thought that was very cool because it's-- and honestly, it was by found this before the whole conversation on clean energy and whatnot. But yeah, the only thing is the reason it's a least-worst story and not-- because I usually say, well, this is the best story-- because it's driven largely by the Chinese, which is a good thing, because the Chinese really are the biggest polluter still in the world as a country. But it means that the United States is not doing what it needs to do. Oh, of course not. I'm China's clean energy production in the past 15 years is very stressful. I mean, it's a big problem. It's enormous growth. And it's actually going to help them geopolitically in the future. They still are the largest polluter as a country, mainly because of the industry and stuff like that. And the number of people they have. But also, they-- all of this new solar power, like 50% of all new solar energy was in China. And that's a good thing. It means it's a good thing for humanity in the globe. But it also means that we need to step our game up here in the United States so that we can get going on the clean energy to be better with it. But that being said, we have reached that milestone of all new energy requirements are now covered by clean energy. So that's good news. Yeah, and for all our old Cold War enthusiasts, you can say, you know what China to be, that's a clean energy, do you? I'm not saying we should be a nationalist. But I say, does people exist already? tap into whatever. It's like the Olympics. I mean, no matter how globalist you are, when the Olympics happen, my country's going to be chairs. I don't know. I was I was written for that Turkish sharpshooter who wasn't wearing pretentious glasses personally. Yeah. I learned I learned very quickly that my country loyalty is immediately overrun by someone who looks a little cool. Oh, absolutely. I mean, don't give me wrong. I'm I'm rooting for our curling team, but that's mostly mustache baves. I just like their vibe. Yeah. Next week, we'll talk a little bit more about the negotiations in Iran and how we could actually in the long term get out of this current situation. That'll be our discussion for next week. Thanks so much for listening for Chad Scott and Mr. Global Matt Randolph. I'm Nat Towson. This has been American Power from Find Out Media. Remember, power corrupts but American power corrupts. American League.