Courting Disaster

Source: Getty Images

Monday, March 16th, 2026

Bill Bonner, writing from Youghal, Ireland

The most remarkable thing about the bombing of Iran is the premise behind it. We’ll come back to that in a minute. First, the economic news, from the Washington Post:

The Commerce Department downwardly revised its estimate of economic growth in the fourth quarter of last year, saying that gross domestic product expanded at just 0.7 percent annual rate in the final three months of 2025, much smaller than the 1.4 percent pace the department had reported in an “advance” estimate last month.

The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures price index, rose 2.8 percent over the prior year, a slight decline from December but still well above the Fed’s 2 percent target. More concerning to some economists, so-called core PCE inflation — which strips out volatile food and energy prices and is closely watched as a measure of underlying price trends — ticked up to 3.1 percent in January from 3.0 percent in December.

Low growth? Higher prices? Sounds like stagflation.

Whatever it is, the attack on Iran makes it worse. The firepower industry gets richer. Everyone else gets poorer.

And now that Kristi Noem is gone, Pete Hegseth must be the most embarrassing member of America’s presidential cabinet. He thinks you win a war by blowing things up.

But what is the point of it? So far, the only explanation that makes sense comes from Mr. Hegseth, who suggests that the goal was to take out Iran’s defenses...so we could bomb it some more. The Wall Street Journal:

Hegseth Says U.S. and Israel Are Winning

“The United States is decimating the radical Iranian regime’s military, in a way the world has never seen before,” he said during a Pentagon news conference Friday.

“Never before has a modern, capable military, which Iran used to have, been so quickly destroyed and made combat ineffective, devastated. We said it would not be a fair fight, and it has not been.”

They are ‘bad people,’ says POTUS. Maybe bombing them will turn them into good people?

As near as we can tell, the underlying motive for both the attack on Iraq and the attack on Iran were the same — to make these countries more fetching to US eyes...and more compliant with its policies. That is, we aimed to turn these bad people into our friends and allies.

But the idea of bombing a country to make it a friend...is a little like assaulting a woman to win her affection. She won’t cooperate? Give her the ol’ bitchslap.

This is something both Hegseth and Trump are reputed to have personal experience with, so we will defer to their judgement. But we imagine that it only works on a very unique woman.

Iran may not be that gal. That Wall Street Journal:

Oil market’s new reality: The Gulf disruption isn’t going to end soon

When the U.S. and Israel first attacked Iran, some traders initially expected days of disorder. Now they are expecting the turmoil to last weeks or even months. On Thursday, Brent crude shot back above $100 a barrel amid growing concerns about a protracted period of disruption to the oil markets. Futures settled at $100.46, up more than 9% for the day.

Iraq turned out not to be that kind of woman either. Even after $5 trillion spent to impress her...she’s still not cooperating. In the Iraqi Parliament, members chant “Death to America.” And out on the streets, Americans may get more than just smiles. The Financial Times:

Shia militias targeted a US diplomatic and logistics facility inside Baghdad’s airport complex with several drones on Tuesday night, said people familiar with the situation. All but one were intercepted. The people said retaliatory strikes were then launched on militia positions on Wednesday. The armed groups have also attacked oil installations, an airport and several hotels housing US citizens in Erbil and have claimed attacks on Jordan and Kuwait. An Italian military base in Iraq’s Kurdistan region was also struck.

The New York Times adds:

U.S. Embassy in Baghdad Targeted as Iraq Gets Drawn Deeper Into Regional War

Apparently, we didn’t bomb them enough.

Regards,

Bill Bonner