End of Empire
Week of April 3-April 10, 2026
Welcome to TRACKING THE CRISIS, a weekly round-up from The Democracy Collaborative tracking the administrative, legislative, and other actions of the Trump Administration as well as the many forms of legal and movement response from across a broad range of social, political, and economic actors. TDC is providing this service for collective informational purposes, as a tool for understanding the times during a period of disorientingly rapid flux and change in the U.S. political economy. This round-up is produced by humans, not by Artificial Intelligence. TDC should not be understood as endorsing or otherwise any of the specific content of the information round-up.
TRUMP TRACKER: Administration actions
TACO Supreme: Trump capitulates to Iran’s terms for a ceasefire after days of intense escalation and a genocidal threat. After a dizzying week of strategic and military failures and erratic behavior on Truth Social escalating to explicit threats of civilizational erasure and genocide, Trump and Netanyahu’s war on Iran culminated in what many would have deemed unthinkable just four weeks earlier: a leader of the world’s hegemonic military superpower capitulating to its middle-power regional nemesis, as Trump agreed to a ceasefire on Iran’s terms. As the chain of events unfolded, one blunder after another appears to have pierced the veil of assumed U.S. invincibility and exposed the limits of American capacity to maintain hegemony and stable conditions of accumulation for itself and its allies. Amid an increasing barrage of air strikes on Iran from U.S. and Israeli forces this week, killing more regime officials and hitting infrastructure, Iranian Foreign Minister Araghchi made an X post on Saturday, April 4 expressing alarm that the Bushehr nuclear plant had been struck for a fourth time. The blast killed one staff member and damaged a building less than 350 yards from the plant’s nuclear reactor. Araghchi warned that if the reactor were compromised, radioactive fallout from the ensuing nuclear incident “will end life in GCC capitals, not Tehran.” His statement reflected a simple fact of geography: Bushehr sits on the Persian Gulf coast from which Tehran, 750 miles northeast, is shielded by the Zagros mountains, and prevailing winds would carry the fallout west across the Gulf to the GCC states and contaminate the main source of drinking water for approximately 60 million people who live in the Gulf region. IAEA President Rafael Grossi expressed deep concern over the strike and reiterated his call for “maximum military restraint” regarding strikes on Iran’s nuclear power infrastructure to avoid a nuclear incident. Even if the reactor itself were not struck by a missile, damage to the power lines supplying electricity to the plant’s cooling system could trigger a catastrophic meltdown of the reactor core.Tensions also ratcheted up over the weekend over ‘search and rescue’ efforts for a U.S. Air Force colonel missing after his F-15 fighter jet was downed last week over Iran. The weapons system officer had ejected over the Zagros mountains in the southwest region, and a tense race between Iranian militias and U.S. Special Forces to locate the missing crewmember ensued over the weekend. Just past midnight on Sunday, April 5, Trump announced that the officer had been found in “one of the most daring Search and Rescue Operations in U.S. History.” He added that over 155 military aircraft and “hundreds” of troops were involved in the mission, including four bombers, 64 fighters, 48 refueling tankers, 13 rescue aircraft and more. At an estimated cost of over $400 million, journalists noted it was the “costliest American search-and-rescue effort in living memory… for a single airman.” Iran released photographs of the charred wreckage of at least two MC-130J personnel carriers and two Black Hawk helicopters on an abandoned airstrip just south of Isfahan – nearly 400 km from the crash site – which Iran claimed they had destroyed in a “foiled” operation against an Iranian nuclear site. Analysts began to speculate that the operation was more than just a rescue, but was likely an attempted raid by U.S. Special Forces to extract Iran’s enriched uranium stockpile which is stored at Isfahan. Sources in the Pentagon told the Wall Street Journal that the United States destroyed its own aircraft – each costing over $100 million – after they became “bogged down” in sand; an explanation observers found dubious after reviewing the video evidence. Iranian Foreign Ministry spokesperson Esmail Bagahei said the “possibility cannot be ruled out” that the operation was an attempt to steal Iran’s uranium, which was a “blatant violation of Iran’s sovereignty.” He added, pointedly, that “American forces failed miserably” in the highly sophisticated and expensive mission, which would constitute a “catastrophic scandal” for Washington if it acknowledged that the forces involved – which included Delta Force, Army Rangers, and Navy SEAL Team 6, some of the U.S. military’s most highly trained and specialized units – had suffered a battleground defeat at the hands of IRGC militias and local tribesmen. Parliamentary speaker Ghalibaf mocked Trump’s triumphant account of the rescue, saying that “if the United States gets three more victories like this, it will be utterly ruined.”
Shortly after, Trump posted an expletive-laden threat on Truth Social: "Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!! Open the Fuckin' Strait, you crazy bastards, or you’ll be living in Hell - JUST WATCH! Praise be to Allah. President DONALD J. TRUMP.” He later posted a deadline of “Tuesday, 8:00 PM, Eastern Time” for his ultimatum, apparently extending his original deadline of Monday, April 6th. Strikes from the U.S. and Israel on Iranian energy infrastructure, including renewed strikes on the Bushehr nuclear plant and its heavy water facilities, followed the ultimatum as a global chorus of voices denounced Trump’s threats of actions that amount to war crimes. Trump responded to the criticisms on Monday by saying he’s “not at all concerned” about war crimes; in an exclusive interview with Wall Street Journal, he explicitly stated “if they don’t do something by Tuesday evening, they won’t have any power plants and they won’t have any bridges standing,” which legal experts have said are clear violations of the Geneva Convention. Iran hit Tel Aviv and Haifa with a barrage of strikes early Monday as well as a U.S. satellite and munitions base in Kuwait, touching off an escalated round of attacks back and forth as Israel began targeting civilian centers in Iran, including Mehrabad International Airport, Iran’s most prominent petrochemical plant in Asaluyeh, and Sharif University of Technology, otherwise known as the “MIT of Iran,” which drew condemnation from the regime as well as figures in the Iranian opposition. Yemen’s Houthi rebels announced that a joint strike with Iran and Hezbollah was launched on IDF facilities in the southern Israel city of Eliat. Iran also rejected the United States’ 15-point ceasefire proposal 24 hours before the deadline, seeking a permanent end to the war rather than a ceasefire, and conveyed its own 10-point proposal, which included the lifting of all sanctions, continued Iranian control over the Strait of Hormuz, a cessation of attacks on Iran and allies, particularly Lebanon, and a UN Security Council resolution that made the deal legally binding.
Early on Tuesday, April 7, Trump raised alarms throughout the world by posting what appeared to be an explicit threat of genocide on Truth Social: “A whole civilization will die tonight, never to be brought back again,” Trump threatened if Iran were to miss the deadline later that evening, adding: “I don’t want that to happen, but it probably will.” The remark was roundly condemned from across the political spectrum, from Tucker Carlson and Marjorie Taylor Greene to UN Secretary-general Antonio Guterres and Pope Leo XIV. Democrats expressed outrage, saying Trump sounded like an “unhinged madman” and an “extremely sick person” as fears arose that Trump’s words meant that he – or Netanyahu – intended to use nuclear weapons on Iran. Military lawyers warned that any orders along those lines would put U.S. servicemembers in a position to be potentially obligated to refuse illegal orders, suddenly bringing back the relevance of the video produced by six Democratic Senators last year for which Trump called for their prosecution and possibly the death penalty. Tehran distributed 180,000 iodine tablets to residents living near the Bushehr nuclear plant as the United States and Israel continued to bombard Iran, striking at least 17 civilian targets including hospitals and an Iranian synagogue that was destroyed by an Israeli missile, as well as key petrochemical facilities at Shiraz and military facilities on Kharg Island. The IRGC responded to Trump’s existential threat by warning: "Self-restraint is over. Our response will now be carried out without any consideration, depriving the U.S. and it's allies of oil and gas for years… If the U.S. Army crosses red lines, our response will exceed the region’s boundaries." Iran posted its intention to target Saudi Arabia’s ARAMCO pipeline and the UAE’s east-west pipeline, and multiple U.S. Federal agencies issued a joint warning to municipalities advising them of an active cyberattack from Iran-affiliated groups as the IRGC threatened to cut off an optical data pipe running along the bottom of the Strait of Hormuz that forms a critical backbone of global Internet service. The Iranian embassy in South Africa tweeted a simple mention of the 25th amendment as more than 70 Democratic lawmakers called for Trump’s impeachment on social media and Capitol Hill. As the deadline approached, Qatar’s Foreign Ministry spokesman warned that the war on Iran and its consequences were “close to becoming uncontrollable” as Pakistani diplomats worked furiously behind the scenes to mediate indirect talks between the United States and Iran in search of a way to avoid disaster. Oil surged to nearly $150 a barrel as the UN Security Council met in emergency session to consider Bahrain’s request to open the Strait of Hormuz by force, which failed as Russia and China flexed their power in a rare double veto of the measure. Hours before the deadline, Israel began bombing railway infrastructure and bridges in Iran, claiming that the IRGC used them to transport military equipment; a little-reported fact is that the bombed sections of railway formed part of China’s unfinished Xinjiang-Iran rail corridor, a key piece of the Chinese-backed Belt and Road Initiative that would form an overland alternative to the Strait of Hormuz for transporting oil to Asia – which may or may not have prompted China, which has remained aloof from the war, to make an “11th hour” intervention urging both sides toward a settlement.
Ninety minutes before the deadline, Trump surprised the world again by announcing that “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.” Still casting it as a victory by saying “we have already met and exceeded all Military objectives” and that Iran “has had enough,” Trump’s next words changed geopolitics as we know it in the Middle East and beyond: “We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate.” Oil prices eased and stocks surged as Foreign Minister Araghchi issued a statement confirming the agreement from the Iranian side, saying that “for a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordinating with Iran’s Armed Forces.” As mainstream analysts struggled to comprehend how Trump could make the abrupt turn-around from threats of total annihilation to total capitulation to Iran’s maximalist demands, the reality, according to “realpolitik” scholar John Mearsheimer, was that Trump simply had no other options, and was “desperate” to end the war before “even greater damage was done to the presidency, the U.S., and the world economy.” Iranians celebrated the ceasefire as a victory in the streets while Explosive Media, the pro-Iran propagandists behind the viral ‘Lego’ AI videos that have become an Internet sensation during the war, mocked Trump mercilessly with a new hit music video titled “TACO Tuesday.”
Empire Falls: Tectonic shift in geopolitical balance of power as Iran conflict exposes the limits of U.S. military and economic capacity. If the last five weeks have eroded the United States’ soft power and international trust in U.S. hegemony, the events of this week marked a distinct turning point in that process. Over the last 40 days, the United States appears to have crossed a critical line from ‘superpower’ to ‘liability’ in the eyes of many of its allies; enough, at least, for several governments to take decisive steps away from the U.S. sphere of influence and towards articulating new political and economic relations on the world stage, where Iran has now emerged as a formidable world power due to its continued control of the Strait of Hormuz. Alignments formed in an era of ‘superpowers’ are now shifting towards multipolarity and regional foci as formerly solid U.S. allies are compelled to look elsewhere for help in protecting national interests and meeting security needs. Former State Department chief of staff Col. Lawrence Wilkerson says one of the major casualties of the Iran war is confidence in the system established and enforced by the U.S. after WWII and throughout the Cold War. In an extended interview with Glenn Diesen, Wilkerson lays out the trends and contours of the new, multipolar world order emerging in the aftermath of the war and collapse of U.S. hegemony:
U.S. military dominance over oil resources in the Middle East has definitively been broken as Iran emerges from the rubble and decades of sanctions with a great deal more power and leverage in the region to advance its national interests, including deterrence against future aggressions from Israel and the West. Many analysts now say that Iran has become the fourth ‘major’ global power due to its ‘asymmetric leverage’ over the world economy via the Strait of Hormuz chokepoint. All thirteen U.S. bases in the Gulf now lie in ruins, as Gulf states found out the hard way that the over $2 trillion they had invested into the U.S. economy bought very little in terms of security guarantees when, under attack from Iran, U.S. military assets prioritized Israel. Qatar announced this week that it will permanently shut down its foreign bases. Bahrain has called in anti-riot police from Jordan in an effort to suppress massive popular demonstrations against U.S, presence and the ruling class’s relationship with the Trump regime in the country’s largest cycle of civil unrest since the Arab Spring. At this point, only the UAE continues to stand uncritically behind the United States as even ‘stalwart ally’ Saudi Arabia is quietly moving its money out of U.S. investments as it seeks other security partners, tentatively forming a four-nation bloc with Egypt, Turkiye, and Pakistan as it steps up to mediate the peace process in Islamabad, assuming the role of the ‘adults in the room’ in the first real test of their independent political weight as a force that could curb U.S./Israeli influence in the region. The war has also strained the U.S.-Israeli relationship itself, exposing its limits and contradictions that formal diplomatic talks with Iran may also put to the test. Turkish foreign minister Ibrahim Kalin lays out the stakes: “If America is going to reach an agreement on negotiations with Iran, it needs to be prepared to exert very serious influence on Israel.” As talks proceed, Netanyahu’s proclivities may prove to be a political millstone around Trump’s neck as Trump desperately looks for a way to declare victory in this crisis; if Trump decides to ditch Netanyahu, Wilkerson says Israel may find itself isolated and encircled unless it can transform politically toward a more democratic and inclusive society, especially with regards to the Palestinian question.
NATO is ‘effectively dead,’ even if it formally survives as an institution, says Wilkerson, as Europe attempts to decouple from Cold War-era relations of dependence on the United States and struggles with internal unity. The UK appears to have stepped back from its ‘special relationship’ with the United States and is turning back towards Europe as Starmer’s transatlantic ties become a political liability at home. Spain’s left-leaning government, which has opposed the war on anti-imperialist grounds from the start, is now developing closer bilateral relations with China amid Trump’s threats to cut off its trade and tourism industries, Spain continues to make principled stands, courting bilateral deals with other countries such as Turkey where interests align. France appears to have taken Carney’s ‘middle powers’ argument to heart, and has been making the case to nations of similar status – such as Japan, South Korea, Australia, and Vietnam – to form a “coalition of independents” as a hedge against ‘great power’ moves from China, Russia, or the United States. NATO’s sycophantic Secretary General, Mark Rutte, was summoned to an in-person meeting in Washington on Wednesday, for little else than to have Trump yell at him behind closed doors for hours over the refusal of several EU countries, primarily France and Spain, to open bases and airspace to U.S. military aircraft during the war. The Wall Street Journal reports that Trump is considering punishing dissenting NATO members by moving U.S. troops out of countries deemed ‘unhelpful’ to the war effort.
In East Asia and the Indian Ocean, U.S. maritime power is eroding and will eventually be sidelined as the Belt and Road Initiative progresses and U.S. capacity to maintain deterrence against China has become heavily eroded by the war on Iran. The U.S. has diverted a significant portion of its weaponry and assets from East Asia – including stockpiles essential to maintaining readiness for any potential hot conflict with China – to Iran as U.S./Israeli forces ran low on THAADs and Patriot missiles. As a result, regional allies, such as Taiwan, South Korea, Japan, and the Philippines, have been left hanging with few answers and no solutions for their security concerns. Given the acute shortages in much-needed petrochemical supplies, three of those nations have made deals directly with Iran for passage through the Strait of Hormuz. China’s arms-length yet tacitly supportive relationship with Iran also hinges on a fact of geography: Iran’s centrality to its effort to revive the great Silk Road overland trade route through the Belt and Road Initiative, which provides one explanation behind the impetus for China’s last minute intervention on Tuesday after Israel began to bomb parts of the key corridor connecting East to West in the first known direct strike against Chinese interests in this war. China’s development of overland energy infrastructure in partnership with Russia as well as other Central Asian states has bolstered the resilience of both major powers against the worst impacts from the conflict, with both poised to gain indirect political and economic clout as a result. Wilkerson notes that Israel has been hitting parts of the China railway corridor nearly every day during the conflict, perhaps in an attempt to stave off the inevitable shift to a new energy-driven ‘ecosystem of distributed sovereignty’ networking the diverse territories of the vast Central Asian expanse between China, Iran and Russia; geographies that would render the Strait of Hormuz, U.S. naval power, and the existence of Israel itself as an outpost of Western power as far less politically salient in the context of a multipolar world order.
Black Wednesday: U.S.-Iran ‘ceasefire’ lasts just ten hours, immediately comes under threat as Israel blitzes Beirut, killing hundreds of civilians; Israel forced into talks with Lebanon as JD Vance heads to Islamabad. Iran’s skepticism regarding the U.S. and Israel’s ability to negotiate in good faith seemed borne out by immediate backsliding, and it was only through the heroic efforts of Pakistani diplomats that both sides came to the table in Islamabad this weekend for historic face-to-face diplomatic negotiations. On Wednesday, just ten hours after Trump and Iranian officials confirmed their mutual agreement to a two-week ceasefire based on Iran’s ten-point framework, Israel launched a massive wave of strikes across southern Lebanon and Beirut in a flagrant violation of the terms of the ceasefire as stated by Pakistani PM Shebaz Sharif on Tuesday night. Spanish officials, including Foreign Minister Jose Manuel Albares and Prime Minister Pedro Sanchez, denounced the Israeli strike, while Netanyahu insisted that the current ceasefire framework did not include Lebanon. Hezbollah cautioned residents of South Lebanon not to attempt returning to their homes as Israeli forces were still operating in the area, continuing the Israeli effort at ethnic cleansing of the regions south of the Litani river. Early on Wednesday, the IDF sent text messages advising residents of Southern Beirut to flee their homes ahead of renewed bombing, while Lebanese president Joseph Aoun expressed hope that Lebanon would be included in a ‘regional peace.’
‘War Secretary’ Pete Hegseth and Chairman of the Joint Chiefs Dan Caine held a press conference Wednesday morning to deliver a bellicose account of the current state of forces, claiming that Iran’s missile programme has been “functionally destroyed,” Iran’s navy “is at the bottom of the sea,” and that “we [the United States] own their skies”. Caine added that all of Trump’s military objectives were achieved and welcomed the two-week ceasefire, a statement that was systematically dissected by Sky News. Hegseth also struck a tough note as he called for Iran to ‘hand over’ their stockpile of enriched uranium or, he warned, “we will take it out.” Pro-Iran propagandists Explosive Media released a viral “diss track” Lego movie featuring Hegseth in response, highlighting Hegseth’s spotty record of affairs, sexual assaults, and drunkenness on the job at Fox News, calling him a “drunk infidel in a fake-ass uniform.” Trump mentioned Wednesday that he and Iran were “thinking about” going in on a “joint venture” to manage traffic in the Strait of Hormuz, noting excitedly that there would be “big money” to be made. The United States, Trump claimed on Truth Social, would be “loading up with supplies of all kinds, and just ‘hangin’ around’ in order to make sure that everything goes well,” ostensibly in return for a share of the profits. CNN pointed out that when Trump ordered Iran to reopen the Strait of Hormuz, he didn’t “demand that it relinquish that position” but rather “amplified a letter from Iran’s foreign minister affirming Tehran’s authority over the waterway.
As ships began passing through the Strait of Hormuz Wednesday, the IDF launched over 100 strikes in just 10 minutes across Beirut, the Bekaa Valley and Southern Lebanon in the largest bombing wave on that front since the war started, and “one of the worst mass killings in Lebanon since the end of the civil war in 1990.” Lebanese PM Nawaf Salam took to X to spread an urgent message from the besieged capital: “Israel continues to escalate its attacks, which have targeted densely populated residential neighbourhoods and claimed the lives of unarmed civilians across Lebanon, particularly in the capital, Beirut, showing no regard for regional and international efforts to end the war, let alone the principles of international law and international humanitarian law, which it has never respected in the first place.” Harrowing reports emerged as survivors described how they saw young relatives and elderly neighbors go up in flames as they were struck in the course of their daily routines. Lebanon’s Health Minister described the aftermath of Israeli attacks as a “massacre,” saying that hundreds of people had been killed or injured after Israeli missiles struck the heart of the city. The barrage took many residents by total surprise, as central Beirut is a predominantly Sunni and Christian area that had not previously been targeted by Israel and was considered ‘safe’ from the fighting. The IDF claimed that the neighborhood had been “infiltrated by Hezbollah fighters,” a claim vehemently denied by residents as the IDF, echoing similar justifications used in Gaza, blamed Hezbollah for putting residents in danger. A surgeon who worked at a local hospital’s emergency room treating hundreds of patients in the ensuing mass-casualty event said that the compressed timing of the strikes appeared to be ‘intentional’ in order to “flood the health care system,” mirroring scenes he experienced while working in Gaza. Israeli drones also targeted and killed Al Jazeera correspondent Mohammed Wishah as he sat in his car in Gaza City, making him the 262nd journalist to be killed in Gaza and the 7th to be killed by Israeli strikes since the Gaza ceasefire began.The incidents drew strong condemnations from the international community as ministers from Australia, Syria, Spain, France, Italy, Oman, Iraq, Qatar, Bahrain and more said that Lebanon must be included in the ceasefire agreement. UN Secretary General Guterres warned that the continued bombing “poses a grave risk to the ceasefire and the efforts toward a lasting and comprehensive peace in the region.” Many observers familiar with the ‘peace processes’ in Gaza opined that, given Netanyahu’s pattern, destabilizing peace efforts likely was precisely the point. Shortly afterward, Saudi Arabia announced that their ARAMCO east-west pipeline had been hit in a drone attack, which reduced their daily output by 600,000 barrels a day into the near future and exacerbated the oil supply crisis.
As if on cue, Trump posted another threat on Truth Social warning Iran to remain in compliance with the “real” ceasefire agreement, warning that “If for any reason it is not, which is highly unlikely, then the “Shootin’ Starts,” bigger, and better, and stronger than anyone has ever seen before.” A defiant Netanyahu held a live press conference shortly thereafter, reiterating his insistence that Lebanon was not included in the ceasefire as well as his intent to keep attacking Hezbollah. Iranian deputy foreign minister Saeed Khatibzadeh accused Israel of committing a “grave violation” of the ceasefire, noting that “It is a type of practice that the Israeli regime has always done: accepting ceasefire, then surprise attack, massacring.” He added that the United States “must choose between war and ceasefire”, saying: “If president Trump… is interested in peace for the whole Middle East, and since Iran is committed to that, we ask everybody in the Middle East to be abided by this agreement and this ceasefire that we reached with Americans, and we expect Americans do the same with its ally, the Israeli regime.” Iran moved to restrict the number of ships passing through the Strait of Hormuz to no more than 15 per day, as President Pezeshkian blasted the Lebanon attacks as “a blatant violation” of the ceasefire agreement and a “dangerous sign of deception and lack of commitment to potential agreements.” He added: “The continuation of these actions will render negotiations meaningless. Our fingers remain on the trigger. Iran will never abandon its Lebanese sisters and brothers.” Iran’s atomic energy chief Mohammad Eslami added to the chorus, saying that in light of the attacks, “The claims and demands of our enemies to restrict Iran’s enrichment programme are merely wishes that will be buried,” and that he will not give up enriching uranium.
White House press secretary Karoline Leavitt held a press conference on Wednesday afternoon to clarify the Administration’s narrative that it was really Iran who had ‘backed down’ to Trump, and that Trump’s ‘tough rhetoric and negotiating style’ led Iran to cave, ‘begging on their knees’ for a ceasefire. When asked by reporters, who quoted Trump’s tweet agreeing to Iran’s 10-point ceasefire plan, about certain details of the agreement, including the lifting of sanctions and continued control of the Strait of Hormuz, Leavitt became agitated as she insisted that the 10-point agreement the Iranian government had released to the public was not the same as the one that Trump had received. She then said they had received a proposal that was so ‘fundamentally unserious’ that it was “literally thrown into the garbage by Trump and his negotiating team.” She said they had then received a revised proposal – the contents of which are unclear – that Trump found as a “workable basis from which to negotiate.” When asked by Fox News to state who is currently in control of the Strait of Hormuz, Leavitt avoided the topic and called on a different reporter for another question. JD Vance spoke to reporters in Hungary before boarding his plane to Islamabad, where he repeated the two-proposal narrative advanced by Leavitt and said there might be a “legitimate misunderstanding” on Lebanon, where “the Iranians maybe thought that the ceasefire included Lebanon but it just didn’t. We never made that promise.” He offered, however, the possibility that Israel might “check themselves a bit… on Lebanon because they want to make sure our negotiation is successful.” He projected confidence that Lebanon should not be too sticky of a negotiating point, but “if Iran wants to let this negotiation fall apart” over Lebanon, “that’s their choice. We think it would be dumb. But that’s their choice.” Late on Wednesday, Hezbollah fired rockets at a settlement in northern Israel in retaliation for Wednesday’s attack on civilians in Beirut, as the IDF began raids on several towns in southern Lebanon. The IRGC reported that air defenses in Tehran, Isfahan and Kerman were activated overnight as drones of unknown origin were detected in Iranian airspace. Shortly thereafter, Gulf nations reported incoming missile and drone attacks that were headed for oil facilities but intercepted. The official death toll from Wednesday’s attack climbed to 254 as Netanyahu, facing anger and scorn at home over the failure to achieve the war’s objectives and the sidelining of Israel in the ceasefire agreement, reiterated that there was “no ceasefire in Lebanon” and that Israel would continue striking Hezbollah “wherever necessary.” Al Jazeera reported that according to Israeli sources, the plans for this operation – named ‘Eternal Darkness’ – had been drawn up some time ago as military leaders waited for an opportunity to make a big move against Hezbollah; and in light of the strategic defeat in Iran, the decision was apparently made to activate it now before a potential ceasefire agreement could impose curbs or limits on Israel’s ability to act with impunity. Some within Israel say that they want Lebanon to be ‘their’ war, because Israel did not get a say in regards to Iran. Analyst Ori Goldberg believes that since Netanyahu has been “exposed as a liability” for Washington, he is “desperately trying to show” the Israeli political establishment that it “controls at least some of the game,” casting the operation as a kind of “pyrotechnics show meant to demonstrate Israel’s effectiveness while ultimately demonstrating its despair”. He said that “the only entity that can stop it is the international community that will defend Lebanon’s sovereign rights, which have been violated for decades but are now almost nonexistent.”
Foreign Minister Araghchi held a press conference on Thursday to articulate the official position of the Iranian government on the situation in Lebanon. He declared that Iran considered the Israeli attacks on Lebanon to be a breach of the ceasefire agreement, and requested that the UN Security Council convene to discuss the “unprecedentedly alarming” situation. He stressed the fact that Israel’s genocidal campaign against Gaza was now being replicated in Lebanon, and “if unchecked… the world will face catastrophic consequences unlike anything before.” He took the United States to task for enabling Israel’s atrocities, and the Security Council for its inaction, which has “pushed the region to our disaster.” Israel has “crossed all red lines,” he said, charging that its “sinister intention is to set the whole region on fire.” As a condition of the ceasefire, he said therefore, Israel “must immediately stop all attacks on Gaza and Lebanon”; and called on the Security Council to actively enforce the ceasefire and save innocent lives. Iran, he cautioned, “has shown tremendous peace and restraint for the sake of regional peace and stability,” but will “not remain indifferent in case of a full-scale war in Lebanon.” Later that day, he noted on X that Netanyahu’s trial was set to restart on Sunday, and hinted that it was a reason Netanyahu would want to continue the war, as a ceasefire would “hasten his jailing.” The United States, he said, must choose between ceasefire and war via Israel; throwing Vance’s words back at him, he concluded: “If the U S. wishes to crater its economy by letting Netanyahu kill diplomacy, that would ultimately be its choice. We think that would be dumb, but are prepared for it.”
On Thursday, Trump made a phone call to Netanyahu, after which Netanyahu agreed to send a delegation to engage in high-level diplomatic talks with Lebanon, which are scheduled for next Wednesday, April 15 in Washington. On Friday, a U.S. delegation led by JD Vance and an Iranian team led by Parliament Speaker Ghalibaf met in Islamabad for historic face-to-face negotiations, the highest-level contact between officials from the two governments since the Iranian Revolution in 1979. After a marathon twenty-one hours, extending into Saturday, Vance announced that he and the U.S. delegation would be leaving; talks remained open, he said, but they had failed to reach an agreement as Iran “chose not to accept our terms.” Neither side divulged many details.
Petrodollar regime in rapid decline as countries dump U.S. Treasuries, bonds no longer considered a ‘safe haven’; repo fails in Treasury markets skyrocket to unprecedented levels, signaling onset of a dollar shock. ‘Petrodollar’ is a moniker for a special type of global reserve currency regime that traces its origins to a political pact made between nations in 1973 – a story recounted in several articles in the financial press this week. Amid the oil shock of the first OPEC embargo, Henry Kissinger made a covert pact with Saudi Arabia to sell its oil in U.S. dollars, and only U.S. dollars. In return, the United States would utilize its vast military-industrial complex to provide security for the region – in other words, guaranteeing the stable flow of commerce and reliable delivery of vital energy commodities from the point of production – and give producing nations access to a continent’s worth of industry and retail markets. With this pact, Nixon, who had just taken the U.S. dollar off the gold standard, could guarantee that the dollar would always have a reliable basis of value since buyers would have to obtain dollars to buy oil, and oil is required for nearly everything in the modern world. This guarantee would go on to underwrite the expansion of the U.S. economy, allowing the government to run deficits at will and providing Wall Street investors with a solid ‘safe haven’ in which to park capital when things took a downturn – thus cementing the U.S. status as global hegemon, and netting Gulf nations riches beyond compare.
Fast forward to April 2026 and Iran has seized the Strait of Hormuz, embargoing 20% of the world’s oil at the point of production and effecting an energy supply shock of historically unprecedented proportions to the global economy. As the war on Iran unfolded, panic buying of oil exploded in areas directly affected by the oil shock, sending the dollar soaring as buyers sought dollars in which to purchase oil on the global market. The origin story, it should be noted, is a reminder that the petrodollar is not simply a monetary tool, but in fact is primarily a political and military arrangement; its basis for value representing a normative degree of trust in U.S. hegemony and the security guarantees underwritten by oil-producing sovereign states who, in turn, reinvest the profits from the sale of this essential commodity back into the U.S. economy and the dollar, to which other major currencies are indexed. The United States under Trump 2.0 has clearly fallen short on its end of the bargain, each blunder degrading the cycle even further: Trump’s erratic tariff policies introduced in April 2025 induced heightened volatility in the bond market that upended trade relations and made Treasuries no longer a ‘safe space’ for investors. One year later, Trump’s ill-fated ‘excursion’ against Iran has now exposed cracks and vulnerabilities in U.S. military capacity, confirming the skepticism of governments beginning to doubt that the United States is a reliable partner, through its shocking inability to continue guaranteeing security and stability for vital energy commerce in the Middle East. When Iran offered safe passage through the Strait of Hormuz for ships carrying oil paid for in Chinese yuan, they articulated an alternative direction toward which many nations had already been looking; where ironically, oil-producing nations under U.S. sanctions – such as Iran, Russia, and Venezuela – had already become early adopters. Even Saudi Arabia, the United States’s original petrodollar co-conspirator, has quietly been selling oil to China in yuan through a digital currency-swap mechanism since 2023.
Central banks, which had already been quietly diversifying their reserves into alternative currency assets such as gold and Swiss francs during the tariff wars, have begun accelerating the dumping of U.S. Treasury holdings since the start of the Iran war. Russia has not had a substantial share of Treasuries in its reserve since 2018 as a result of sanctions. China and other BRICS nations began shedding Treasury holdings in November 2025, and a directive was issued to Chinese banks to halt buying U.S. T-bills in February. Denmark and Sweden, which had also quietly begun diversifying their holdings over the past year since Trump came into office, were joined by other European investors in a sell-off wave in January after Trump menaced Greenland. Foreign central banks have dumped over $85 billion in Treasuries since the start of the Iran war as yields spiked and investors opted for gold or other commodities and assets closer to home. This week, France pulled all of its U.S. gold holdings – around $15 billion – and swapped them for newer bullion in Paris, making 13 billion euro profit in the process in a lucrative divestment model that other EU nations may follow (and which echoes previous seismic shifts in the global system such as the end of Bretton Woods and the convertibility of the dollar into gold). At the same time, demand for U.S. Treasuries has slowed to a crawl since the war began, as the MOVE volatility index for U.S. bonds soared past 100 and long-term yields spiked over 4%. Last month, Scott Bessent completed a record $14.7 billion buyback of Treasuries to maintain adequate liquidity in the market, and the United States has reportedly settled part of its debt with China in gold over 3 of the last 4 months. This week marked a milestone in this trend as the share of gold in foreign central bank holdings exceeded U.S. Treasuries for the first time since 1996. A survey of nearly 100 central banks conducted by Global Banking & Finance Review this week found that almost 70% ranked ‘geopolitical risk’ as their top concern, and while a supermajority still consider Treasuries to be a ‘safe haven’ currency, the U.S. Dollar dropped 12% in preferability among a basket of other top currencies from last year. One anonymous banker for an Asia-Pacific country offered this response to the poll: “Over the next five years, global FX reserves managers will rigorously assess whether the U.S. dollar’s role as the dominant global reserve currency continues, amid rising global fragmentation.”The particular role that the Gulf states play in the maintenance of the petrodollar regime has become very much uncertain since retaliatory strikes from Iran against U.S. bases and oil facilities in their territories threw at least two essential mechanisms of the ‘petrodollar loop’ into question: 1) U.S. military assets were evacuated from Gulf bases rather than activated to protect Gulf states, allowing Iran to 2) damage substantial portions of their oil & gas production infrastructure, reducing their absolute overall output to the point of having to declare force majeure on major energy contracts. According to a Bloomberg article released this week, this may have effectively ‘broken’ the petrodollar loop – with implications for the overall dollar system in terms of liquidity shock and systemic risk to the global economy as bond yields continue to rise. Data from the New York Fed shows that repo fails surged to an unprecedented $415 billion in late March and early April, reflecting two aspects of the liquidity crunch that are turning the screws on the dollar system: on the one hand, the higher price of oil and the strengthening dollar means that oil-importing countries such as Thailand and Indonesia are having to dig deeper and liquidate more of their foreign currency reserves not just to obtain enough dollars to buy oil, but also to stabilize their own weakening currencies; even oil-exporting countries such as Nigeria have not been immune to this problem. A parallel phenomenon has also been affecting institutional investors who have had to liquidate gold and silver holdings on a ‘massive’ scale to meet margin calls and shore up their solvency. Any recovery of the loop would depend on the oil-producing Gulf states collecting their profits in dollars and reinvesting them into the U.S. economy – which, given that they just saw in practice how paltry their return on investment has been, seems less likely the longer the war drags on.What does this mean for U.S. workers and their households? Mainstream economists have emphasized the national debt, which has now ballooned to over $39 trillion; in their account, more and more federal revenue (in taxes) will be put towards debt service and the Fed may or may not print money to keep federal programs like Social Security alive, which may lead to an increase in inflation. Heterodox economist Michael Hudson says that if a hyperinflation scenario such as that imagined by mainstream economists develops, it would be a result of political choices, not economic inevitability; an outcome of IMF orthodoxy that imposes austerity policies on working people in response to crisis. In contrast, Hudson and fellow economist Steve Keen argue that private and household debt, not national debt, is the linchpin that will steer the outcome of the coming global crisis. In their scenario, inflation may be an initial effect of rising oil prices, but is only a temporary phase before the crisis matures into a deflationary spiral as the real economy contracts. Workers will – as they are already – be made to bear the brunt of debt service as industries shut down and mass unemployment ensues, resulting in a collapse of aggregate demand reminiscent of the Great Depression. They also point out that each of these nightmare scenarios hang on the question of debt, which is connected to the power of the financial class; and that alternative political choices, such as debt cancellation or prioritizing the people’s needs, could produce different outcomes (but are politically unlikely).
Perfect Storm hits the Markets: March economic data shows that the U.S. real economy has run aground as stagflation sets in, setting the stage for a convergence of macroeconomic, financial, and monetary crises. The Bureau of Labor Statistics released its March 2026 jobs report last Friday, which touted improvement in job growth but revealed a much darker picture in the aggregate. On the surface, 178,000 jobs were added in March, with unemployment holding steady at 4.3%; with slight drops in the unemployment rate for Black and young workers. About 30,000 of the jobs added were healthcare workers returning from strike, and like previous months, healthcare made up the largest share of new jobs. Decent gains were also made in manufacturing and retail. However, looking deeper reveals that the index of aggregate hours worked per week dropped by 0.2%; while not seemingly significant, a story emerges when looking at the data over time. While in 2023 and 2024 the number rose by around 0.9% (which correlates to about 100,000 jobs added per month in the aggregate), the number has either flatlined or gone negative over the last 11 months, suggesting an imperceptible net gain in terms of jobs or, overall, effective stagnation. The pattern repeats across all sectors, except for professional and business services and manufacturing, where the number has declined steadily over the last 3 years. Economist Dean Baker says the numbers tell three things: first, the demand for labor is weaker than the ‘jobs added’ number suggests, and when plotted out over 12 months, shows a flat or near-flat net job gain over the same period. Data on economic growth from the Bureau of Economic Analysis shows that real GDP growth has basically stalled, with an annual average rate of just 0.5% in the fourth quarter of 2025, down from a rate of 4.4% in the third quarter 2025. Both labor market and economic output suggest a state of stagnation in the real economy since at least September of 2025.
CPI data showed a spike in inflation, increasing 3.3% over the last 12 months and the highest reading in almost two years, with a 0.9% increase month over month; reflecting secondary/indirect influence from the oil price spike that ensued after the war on Iran began on February 28. The energy indexes reflect that condition more directly, with a jump of 10.9% for energy in March and a 21.2% increase in the price of gasoline; these two items alone accounted for nearly three-quarters of the monthly average increase of all consumer items. With the exception of food and energy, inflation only increased 0.2% month-over-month. Personal consumption expenditures rose 2.8% in February; however, real average hourly earnings for all employees decreased by 0.6% in March, which indicates that working people continue to be squeezed by stagflation as income declines but the price of living continues to go up.
Escalating private credit meltdown threatens pension funds as Fed attempts to ascertain potential scale of commercial bank exposure. Private credit’s ‘slow motion bank run’ picked up some pace this week as a wave of redemptions hit the accounts of some of the largest private equity funds on Wall Street as investors ran for the exits and demanded their money back. Investors sought to pull a combined $20 billion of their money out of private credit funds in the first quarter of 2006: Blackstone was hit with 8 percent of its fund’s total value in redemption requests, Apollo Capital Management with 11.2% and Ares Capital with 11.6%, the Carlyle Group got hit with 15%, and at the beleaguered Blue Owl, whose share price has plummeted 68.2% over the last 3 months, 21.9% of investors wanted to take their money and run. In order to remain solvent, most funds have capped their fulfillment of requests at 5%, which means that hundreds of retail investors, holding a combined total of $5 billion, are locked into highly illiquid investments with no choice but to accept losses in the event of a shakeout. Fund managers say that the mass investor exodus is just a kind of hysteria after media coverage of a few ‘cockroach’ funds whose managers were charged with fraud last year. However, major overvaluation of funds’ assets and collateral were also found in an audit by JP Morgan in January, which many believe to be common throughout the sector. Given the nature and mission of private credit, to provide lending services to companies who would not otherwise qualify at regulated commercial banks – in other words, ‘subprime’ borrowers – the risks are very real that a wave of defaults could trigger a cascading, 2008-style meltdown throughout the $1.8 trillion industry. Because these are deregulated private funds with little to no transparency requirements, it is impossible to know the true scale of the problem and the potential for contagion until a correction happens. The bigger problem, according to the Bank of England’s Andrew Bailey, is that there are also many other sources of volatility in the markets such that the global economy could be hit with a ‘double whammy’. The Federal Reserve estimates that around 31 percent of private credit fund assets are held by pension funds, which had been protected from these risky investments by a regulatory firewall until it was repealed by Trump through an executive order in August. Several public employee pension funds – such as CalSTRS, Arizona Public Safety, San Francisco ERS, and Maryland PERS & Teachers – are heavily invested in these funds. Despite the evidence of overvaluation, withdrawal caps, and other issues plaguing the sector, many articles still circulate in the financial press encouraging pension fund managers to invest. The Canadian private credit sector is currently experiencing a contraction, and pension funds are feeling the heat, having lost approximately 5% and locked in to the fund. This week, the Federal Reserve launched an inquiry into U.S. banks, seeking details about their potential exposure to private credit.
MOVEMENT TRACKER
Anti-war movement within Israel grows exponentially amid authoritarian crackdowns on public gatherings and dissent, as public support for the war plummets. Despite a nearly 80% initial approval rating for the Israeli wars on Iran and Lebanon, a small but relentless and growing movement of young Israelis are speaking out against the war. Interviews with 10 activists conducted by Ha’aretz found that they come from all walks of life, and identify with far-right as well as liberal and left political orientations. What they have in common is a need to speak out amid the fog of war, as well as the awareness that they are putting themselves at great risk in speaking out given authoritarian laws against dissent and public gatherings, as well as police and organized right-wing groups who act with impunity to physically assault protestors and/or arrest people on suspicion of being spies for Iran. One activist said he has met dissenters who are from “deep in the right-wing bloc and the heart of the ruling party,” but once they speak out, it doesn’t matter; you “risk being branded” and “attacks are made against people who don’t toe the line.”
Polls show that support for the war has dropped precipitously, from 74 percent at the start of the war to just 50 percent by March 29; and the share of Israeli Jews who say they “somewhat” or “strongly” oppose the war has more than doubled, from 4 percent at the beginning of the month to 11.5 percent by the end of March. Two-thirds of Israeli Arabs “somewhat” or “strongly” oppose the war, a number that has risen slightly over the same time period. Activist Alon-Lee Green told Democracy Now! that “people understand… it’s not like what the government was trying to sell us. They told us it’s going to be a quick war; we will achieve… democracy or, I don’t know, the government of Iran falling down. And we see this is not the truth… if you claim you fight for the Iranian people, why did you attack their oil? Why did you attack their infrastructure, the economy? Why did you kill so many people… make 4 million Iranians refugees? I think those lies are being slowly stripped away.” Green recounted his experience on Saturday, April 4 – as the clock counted down to Trump’s deadline to destroy Iran’s civilian infrastructure – where at least 17 people were arrested in Tel Aviv as Israeli police violently cracked down on an antiwar protest. The protestors had received permission from Israel’s top court to demonstrate during wartime, when regulations usually limit outdoor public gatherings, and nearly a thousand Israelis took to the streets in Tel Aviv, Haifa, and Jerusalem. At some point, using the threat of incoming Iranian missiles as an excuse, police moved to break up the protest, loading the arrestees onto a bus. Later, when alarms sounded of an incoming Houthi missile, the police refused to allow them access to the bomb shelter and left them on the open street. Green also recounted how organized right-wing groups have been harassing activists, showing up in mobs at activists’ homes and attacking them on the street. “It’s a tough atmosphere to be an Israeli that is resisting the war,” he said, “but we’re trying to create the atmosphere of making it possible, making it normal, making it mainstream.” One week later, on April 11, despite only having a permit for 1,000 people, several thousand Israelis gathered at Habima Square in Tel Aviv for a demonstration organized jointly by dozens of civil society and human rights organizations, one of many demonstrations that took place across the country. Organizers called on the public to protest “against a government of neglect and against an eternal war,” saying “there is no military solution – not in Iran, not in Lebanon and not in Palestine.”
AI-generated ‘Lego’ videos from pro-Iranian agitprop studio Explosive Media become viral Internet phenomenon, trolling Trump and bringing anti-imperialist messages to a mainstream global audience. At a time when broadcast media is being subject to penalties and prosecution for airing news and views critical of the Trump Administration, a series of Lego cartoons is entertaining millions of Americans, bringing an Iranian perspective of the war to a mainstream audience and making anti-imperialist common cause with oppressed people within the United States. While many assume they are affiliated with the Iranian government, they insist that they are “totally independent… no government.” Explosive Media began as a group of young internet-savvy activists who had begun a YouTube channel last year for political commentary, but had hardly any viewers until they found their new Lego style. The clips have gained millions of views and have been shared by fans from the Iranian government to No Kings protestors. Their frequent (and hilarious) references to Trump’s relationship with Epstein have won many fans among liberal audiences, while helping to keep the ongoing scandal over the Epstein files in the forefront, just in case Trump started this war as a distraction. A powerful video titled “One Vengeance for All” depicted Native Americans, enslaved African-Americans, Malcolm X, Japanese and Vietnam war victims, Epstein survivors, the schoolchildren of Minab, and slain pro-Palestinian activist Rachel Corrie launching missiles against icons of U.S. empire, drawing a throughline from Jamestown 1619 to the present in Iran and making common cause with oppressed peoples in the United States and the Middle East. Fluent in the idioms of American pop culture and trolling, they have effectively mobilized ‘meme’ culture to cut through U.S. propaganda and capitalize on the absurdity of Trump’s war bluster. When asked about using Lego aesthetics to spread their message, they acknowledge it has been a key part of building a global audience. “Lego is a universal language,” the Explosive Media member said. “It conveys messages easily, it’s playful, it doesn’t require extreme realism, yet it can include astonishing detail.” One team member told WIRED, “We’ve committed ourselves to learning more every day about American people and culture… In this process, Americans themselves have been helping us – and that support and guidance continues. They share impactful tips and ideas with us.” YouTube banned their original account and has attempted to censor the videos several times, but fans have reposted them and podcasters have embedded their videos to get around the censors. As Trump racked up more and more strategic and military failures in recent weeks, a series of “diss tracks” made in the style of rap videos skewer Trump as a desperate, bratty old man who, importantly, can be beaten. As Trump’s apocalyptic deadline approached, they told WIRED they were “prepared for any scenario and had content ready in advance.” The video, “TACO Tuesday,” ends with Trump sobbing next to a white flag, eating a taco. Another video exploring the ‘rescue’ of the downed fighter pilot (‘Jet Down’) had fans clamoring to “Give them the Oscars!”
