Noah Smith
· Noahpinion
· June 16, 2026 at 22:29
· ⏱ 9 min read
| Read on Substack ↗
Summary
Noah Smith argues that Trump's Iran war is a decisive military defeat for the U.S., analogous to Hurricane Katrina for George W. Bush, marking a turning point in public perception of incompetence. The defeat, driven by Iran's effective use of drones and missiles to blockade the Strait of Hormuz, forced a humiliating deal that lifts sanctions, pays reparations, and cedes control of the strait—a geopolitical win for Iran that will likely boost oil prices and keep U.S. inflation elevated.
•Iran retained 75% of its ballistic missile mobile launchers and 70% of missile stockpiles despite weeks of U.S. and Israeli bombardment.
•Iran's naval blockade of the Strait of Hormuz raised global oil prices, pushing U.S. inflation back to ~4% and causing real wages to fall.
•The rumored deal includes full lifting of U.S. sanctions on Iran, a $300 billion reconstruction fund (equal to one year of Iran's GDP), and toll fees on Strait of Hormuz transit.
•Before the war, Iran had lost most proxy armies (Hezbollah, Assad, Hamas) and faced massive protests; now the regime is entrenched and economically revived.
•Smith contrasts Iran with Iraq: in Iraq, U.S. defeated all enemies and established a friendly government; in Iran, the regime is more powerful and the U.S. made major concessions.
•Trump's approval ratings were already low before Iran; the war may become a minor footnote but reveals stark incompetence even to his defenders.