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Krugman's Verdict: Iran Holds, America Folds

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Krugman's Verdict: Iran Holds, America Folds
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Krugman's Verdict: Iran Holds, America Folds

2026-05-02 22:46 Last Updated At:22:46

In the classic wuxia novel The Heaven Sword and Dragon Saber, the Golden-Haired Lion King's signature move is the "Seven Injury Fist" – devastating in power, yet self-wounding by design: for every seven points of damage dealt to the enemy, the user suffers three.

Trump unleashes the "Seven Injury Fist" against Iran, blockading its ports. Iran strikes back decisively, tightening its grip on the Strait of Hormuz. The result: America harms itself, and the global economy bleeds from within.

Trump unleashes the "Seven Injury Fist" against Iran, blockading its ports. Iran strikes back decisively, tightening its grip on the Strait of Hormuz. The result: America harms itself, and the global economy bleeds from within.

Trump is now trapped in a three-way deadlock with no good options left. He is unleashing this very fist against Iran – wielding economic strangulation through blockade. But the consequences may well invert the ratio entirely, injuring himself seven points for every three inflicted on Tehran, while the global economy hemorrhages from within. This is a textbook case of mutually assured destruction.

Blinded by arrogance, Trump presses on to save face. Nobel Prize-winning economist Krugman has already named the likely outcome: Iran will emerge stronger than before the war, and America will be left weaker.

By 1 May, the US-Iran war will have lasted 60 days. Trump boasted at the outset that the conflict would be over in two to three weeks. Instead, he has sunk into a quagmire of "no fighting, no talking, no withdrawing." His cards are few, yet he cannot admit defeat.

His only move is the "blockade play" – squeezing Iran's economic lifeline in hopes of forcing submission. The Wall Street Journal reports that at recent meetings – including a Monday session in the White House Situation Room to assess the war's progress – Trump settled on one course of action from several options: maintaining the interdiction of oil tankers and cargo vessels entering and leaving Iranian ports, striking at the country's jugular. He believes Iran's economy is on the verge of collapse, and that this move can force its "surrender" at lower risk than either resuming bombing or withdrawing entirely.

Trump genuinely believes this gambit will work. A White House spokesperson, responding to the Wall Street Journal, stated: "Thanks to the successful blockade of Iranian ports, the United States has maximum leverage over the regime." The strategic logic is clear: sustain the blockade long enough, and Iran will crack under pressure and be compelled to accept all of Washington's demands.

Comparatively speaking, this is indeed Trump's best choice within an impossible trilemma. A unilateral withdrawal now would be tantamount to surrender – he would have no face left to show his own people, and the Republican Party would suffer even heavier losses in the midterm elections. Resuming military operations, on the other hand, would invite Iranian retaliation, dragging the conflict into an endless spiral. The blockade carries fewer immediate downsides.

The real question is whether Iran will buckle under the pressure – or hit back hard. Judging by the tone of Iranian officials in recent days, the latter seems far more likely.

Iran's fundamental position is non-negotiable: control over the Strait of Hormuz must be maintained at all costs. The Strait is Tehran's trump card against the United States – the decisive factor in this war. Supreme Leader Mojtaba has already issued his directive: the blockade of the Strait must continue. The harder America tightens its grip on Iranian ports, the more fiercely Iran clings to the Strait. With both sides dug in, the prospect of full navigation being restored grows ever more remote.

Trump's "Seven Injury Fist" has wounded more than just Iran – the global economy is hemorrhaging from within. Since the Strait was blockaded, roughly 20 million barrels of oil per day have been cut off from world markets. With no end to the closure in sight, oil prices have surged again in recent days. Brent crude rose 7% today to US$119.50 per barrel – its highest level since June 2022 – completely erasing the earlier declines that followed a temporary ceasefire.

Soaring oil prices are battering every sector of the economy, fueling inflation and driving up interest rates. The International Monetary Fund has already revised its global growth forecast down to 3.1%. Should oil prices remain elevated, that figure could fall further to 2.5%. The World Bank has also warned that energy prices could rise 24% this year, significantly heightening the risk of recession.

Nobel Prize-winning economist Krugman predicts that after Trump's assault, he will have no more cards left to play , and Iran will emerge stronger than before the war, while America is left weakened.

Nobel Prize-winning economist Krugman predicts that after Trump's assault, he will have no more cards left to play , and Iran will emerge stronger than before the war, while America is left weakened.

Trump's recklessness has cost the world dearly, and Nobel Prize-winning economist Krugman is growing increasingly furious. In an article titled "The Oil Crisis Deepens, the World Economy in Peril", Krugman argues that if Persian Gulf oil supplies continue to fall, sufficient "demand destruction" must occur to bring consumption in line with supply. That process, he warns, will inflict enormous economic damage. The outlook, he states, is genuinely alarming.

Krugman attributes this catastrophe squarely to Trump's overweening arrogance. "His fragile sense of self-worth depends on constantly believing that he’s a winner while others are losers," Krugman writes. "Now he’s faced with the reality that he, more or less single-handedly, led America to humiliating strategic defeat."

As for how things might unfold, Krugman poses a pointed question: "How long will it take before Trump accepts the reality that he doesn’t have the cards, that in the end his Iran venture will be resolved in a way that leaves Iran stronger and America weaker than before the war?" At this stage of the US-Iran war, many would argue that Krugman's prediction is no longer a question mark. It looks like an outcome all but certain to come true.

Lai Ting-yiu




What Say You?

** 博客文章文責自負,不代表本公司立場 **

Old habits die hard. Trump has never hidden his male supremacist streak, and he once boasted that "real men" can touch women however they please. Becoming president changed nothing. He has now dragged that same ugly habit into diplomacy.

On July 5th, he showed his true colors again, posting an image on social media implying Italian Prime Minister Giorgia Meloni is infatuated with him, and sneering that a "restraining order" is needed to keep her away. A deeply insulting insinuation, and it marks his second public jab at her in recent weeks. He earlier claimed she begged him for a photo at the G7 summit like an obsessive fan. Meloni denied it flatly and fired back hard, triggering a diplomatic spat.

Trump posts Meloni photo: "Restraining order needed." Blatant insult.

Trump posts Meloni photo: "Restraining order needed." Blatant insult.

Analysts see something more calculated at work here than a simple ego trip. Trump's insults are not just about satisfying a male supremacist mindset, they say. He appears to be using ridicule as a tool to assert dominance over female heads of state. Japan's Prime Minister Sanae Takaichi presents a striking contrast: she tolerates the same treatment, and even seems pleased with it.

Before departing for Turkey today for the NATO summit, Trump posted a photo on Truth Social showing Meloni looking up at him with what he framed as an adoring gaze. His caption read: "Restraining order needed." The image builds a false narrative, one where Meloni is portrayed as obsessively infatuated with him and needing legal intervention to stay away.

Crude by any diplomatic standard. A mix of suggestive language, condescension, and mockery. His team appears to have combed through countless photos of the two leaders, cropped and framed one fleeting moment, then dressed it up with provocative text to manufacture the illusion of Meloni's infatuation.

This is not the first time Trump has targeted her this way. After last month's G7 summit, he posted that Meloni "was probably happy I talked to her" and that "I wouldn’t have even done it, but I felt sorry for her." He went further, claiming she "begged me to take a picture with her". The remarks painted a head of government as an overzealous fan pestering him for attention.

Such flippant, degrading language is a serious affront when directed at the head of a sovereign government. Meloni rejected the claims immediately, calling them "completely fabricated." Her rebuke was sharp: "I do not know why the president of the United States behaves this way toward his allies — it is certainly not the first time this has happened. There is one thing he must remember: Neither I nor Italy ever beg."

Meloni's firm pushback won her applause both at home and abroad. Trump, rather than backing off, escalated instead. Analysts believe two specific grievances are fueling his renewed attacks on her, beyond his general appetite for belittling women.

First, Meloni opposed the U.S. strike on Iran and refused to let American warplanes use bases in Sicily. Second, when Pope Leo XIV publicly condemned the war, saying those who start wars have blood on their hands, Trump lashed out and accused the Pope of being "weak on crime." Meloni sided with the Pope on that occasion too, calling Trump's attack "unacceptable" and defending the Pope's condemnation of war as entirely justified. Those two stances reportedly angered Trump, and his renewed mockery looks like an attempt to settle the score.

Insults, ridicule, and verbal attacks are standard tools in Trump's diplomatic toolbox, used on friend and foe alike. He has deployed the same tactic against Japan's Prime Minister Sanae Takaichi, describing her as "she thinks I did a great job", carrying the tone of a fan idolizing a celebrity. Many Japanese citizens found the framing disrespectful toward their own leader.

Takaichi: Trump's "number one fan." She's thrilled, unlike furious Meloni.

Takaichi: Trump's "number one fan." She's thrilled, unlike furious Meloni.

Unlike Meloni, Takaichi has shown no anger in response. She appears receptive, even pleased, effectively accepting the role of a devoted fan. Some Japanese citizens have criticized her for this, calling her overly pro-American and lacking in dignity.

Lai Ting-yiu

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