Iran On The Brink, Nuclear Proliferation, And The End Of Pax Americana | Jacob Shapiro & Marko Papic

Episode Overview

• A Realistic Look at Global Conflict: The episode dismantles the effectiveness of international bureaucratic bodies in solving modern wars, contrasting them with the raw mechanics of "punitive" warfare and economic deterrence used by nations like Iran and the US.
• Decoding Trump's Foreign Policy: A specific framework (the "TACO" method) is introduced to help investors and observers predict Donald Trump's negotiation cycles, moving from terrifying threats to eventual deal-making.
• The End of Non-Proliferation: The hosts argue we are entering a "Dune Universe"—a multipolar world where US security retreats, forcing allies and rivals alike to acquire nuclear weapons for survival.
• Europe's Unlikely Resurgence: Contrary to popular belief, the discussion posits that fear of Russia and US abandonment will force Europe to unite and re-arm, potentially making it a more serious geopolitical power than it has been in decades.

Key Concepts

• Asymmetric vs. Conventional Power The US maintains conventional military dominance (air force, navy), but Iran has mastered asymmetric warfare. By utilizing cheap, hard-to-detect drones to threaten the Strait of Hormuz, Iran can endanger 30% of the world's oil supply. This teaches that a weaker nation doesn't need to win a war; they only need to inflict enough global economic pain to deter a superpower from attacking.

• "Punitive Pain" Warfare (The Serbia Parallel) When "surgical" military strikes fail to change a regime's behavior, strategies often shift to escalation dominance. The hosts use the 1999 NATO bombing of Serbia as a case study: the goal shifts from destroying military targets to degrading civilian infrastructure (bridges, power grids, factories) to break the population's will and the economy's viability without a ground invasion.

• The "TACO" Negotiation Framework This acronym stands for "Trump Always Chickens Out." It is a heuristic for understanding Trump's foreign policy not as erratic chaos, but as a predictable 7-step cycle:

  1. Start with extreme threats (creating leverage).
  2. Execute a limited strike or tariff (bloody the nose).
  3. Use the resulting panic to force a negotiation.
  4. Sign a deal and claim victory. This helps observers distinguish between "political theater" designed for leverage and actual intent for total war.

• Domestic Politics Drives Foreign Policy Foreign policy is often analyzed through the lens of "strategic rationality," but the hosts argue it is actually driven by domestic necessity. Leaders prioritize re-election, gas prices, and voter sentiment over long-term geopolitical coherence. Understanding this explains why the US might engage in performative strikes that seem strategically illogical but politically advantageous.

• The "Dune Universe" and Nuclear Proliferation The world is shifting from a US-enforced non-proliferation era to a multipolar nuclear reality. As the US security umbrella retracts, rational allies (like Poland, South Korea, or Saudi Arabia) may feel forced to acquire nuclear weapons for survival. While this might prevent state-on-state invasions (Mutually Assured Destruction), it increases the statistical risk of weapons falling to non-state actors who prioritize ideology over survival.

• Unity Through Fear, Not Idealism The "Bull Case" for Europe suggests that the continent will not unite through shared values or bureaucracy, but through existential fear. Historically, European entities solidify when threatened. With a revanchist Russia and an indifferent US, Europe is likely to bypass its slow consensus mechanisms and form a "coalition of the willing" (led by powers like Germany and Poland) to ensure its own defense.

Quotes

• At 0:05:45 - "History repeats itself first as farce and then as tragedy... this is farce. It's like, okay, we had the League of Nations, we had the United Nations... both organizations that ultimately failed... but no, the Board of Peace... that's the one that's really going to lead to global peace? Give me a break." - Jacob Shapiro outlining the skepticism surrounding international bureaucratic solutions to deep-seated conflicts.
• At 0:11:25 - "The US can turn Iran into a parking lot and Iran won't even realize what's happening... [But] their ability to wreak havoc in the region is underestimated because of their inability to defend themselves." - Marko Papic highlighting the paradox where a defenseless nation can still be offensively dangerous to the global economy.
• At 0:15:05 - "You are attacking their bridges. You're attacking their factories. You're attacking their energy facilities. You're attacking their schools... Let me just tell you, this is exactly what happened to my home country of Serbia in 1999." - Marko Papic illustrating what total war looks like when "surgical" military strikes fail to achieve political goals.
• At 0:22:05 - "The time to do this would have been early January... when you had real pressure on the Iranian regime. This Iranian regime is not under pressure. They killed the protesters. They crushed them. They're gone." - Jacob Shapiro explaining that regime change windows are fleeting; acting after a regime consolidates power yields diminishing returns.
• At 0:25:40 - "I've long argued that there's this seven steps of maximum pressure... which is basically a fancy way of saying 'Taco.' ...The Taco trade stands for: Trump Always Chickens Out." - Marko Papic defining the core investor heuristic for Trump, suggesting aggression is usually a precursor to a deal.
• At 0:26:08 - "He starts off by asking for the moon... Step two is he says really mean stuff... Step three is he actually punches you in the face... That's when the missiles start flying... And at that point everybody sells, everybody panics. Step four is he sits down and starts to negotiate." - Marko Papic breaking down the negotiation cycle where kinetic action is a bargaining chip.
• At 0:31:20 - "Americans don't care about foreign policy. They're not French people, they're Americans... He does everything based on what happens inside the house. He doesn't really care about long-term relationships with friends." - Marko Papic emphasizing that foreign policy is primarily a tool to manage domestic voter perceptions.
• At 0:46:12 - "Ukrainians would argue that [proliferation] is a great future. Because if they hadn't given up their nukes, they would still probably have a country that's whole." - Marko Papic challenging the assumption that fewer nuclear weapons always equals a safer world.
• At 0:47:35 - "The issue with nuclear proliferation is the more countries that have them... the more the opportunity for a non-rational actor or for a non-state actor to get their hands on them." - Jacob Shapiro outlining the statistical danger of proliferation regardless of state rationality.
• At 0:53:00 - "I think it's going to be like the Dune Universe where every major House has its nuclear weapons... I think over the next 10 years, it's likely we're going to add 10 to 15 countries [with nuclear weapons]." - Marko Papic predicting the end of the US-enforced non-proliferation era.
• At 0:57:56 - "Armies do not fight for abstractions. They fight for a people, a nation, and a way of life." - Jacob Shapiro quoting Marco Rubio’s speech to highlight the shift toward nationalism and away from abstract global policing.
• At 1:09:31 - "Countries don't unite out of love. They unite out of fear. And Europe and Europeans have never had as much geopolitical fear imposed upon them as they do in 2026." - Marko Papic predicting that external pressure will force Europe to overcome its bureaucratic paralysis.

Takeaways

• Ignore the noise, watch the troops: When assessing if a conflict is "World War III" or just negotiation theater, look at the military deployment. If there are air strikes but no ground troops, it is likely a punitive measure for leverage, not a regime-change invasion.
• Apply the "TACO" filter to market panic: When Trump (or similar leaders) escalates rhetoric or initiates small skirmishes, recognize this as "Step 3" of a negotiation tactic. This is often a buying opportunity in markets, not a signal to sell everything.
• Re-evaluate "Irrational" Actors: Do not assume a leader is "crazy" just because their foreign policy harms their country's long-term standing. Check if their actions help their domestic political survival. If yes, they are acting rationally within their own context.
• Prepare for a Proliferated World: Expect medium-sized powers (Poland, Saudi Arabia, South Korea) to seek nuclear capabilities in the next decade. This will likely decrease the chance of large-scale invasions but increase the risk of nuclear terrorism or accidental use.
• Watch for the "Two-Speed" Europe: Do not judge Europe's strength by the consensus of the entire EU. Look for a smaller core of nations (Germany, France, Poland) bypassing bureaucracy to coordinate defense; this is where the real power will shift.
• Recognize the "Window of Opportunity": In geopolitical strategy, timing is everything. Supporting a revolution requires acting when a regime is fragile (during protests), not after they have consolidated power. Late intervention often strengthens the incumbent.
• Look past the "Politeness" of Politicians: In diplomatic relations, do not confuse tone with policy. A "polite" politician (like Rubio) and a "rude" one (like Vance/Trump) may carry the exact same message of US withdrawal; allies must prepare for the policy, not the personality.