Hormuz: The War Heats Up

Dear readers,

Defense Secretary Pete Hegseth and Joint Chiefs Chair Gen. Dan Caine will be on Capitol Hill this Tuesday, July 21, 2026, for a hearing with the Senate Appropriations Committee. The formal subject is the White House’s June 24 supplemental funding request, not simply the Pentagon’s regular fiscal 2027 budget.

The attached video outlines my opinion on defense funding and the recent U.S. strikes on Iran which reinforces that the conflict extends far beyond the Strait of Hormuz. The IRGC is an existential threat to the United States, its allies, and Iran’s neighbors, with a long history of attacks since 1979.

Damaging the IRGC and its affiliated groups is necessary for American security. Domestic political disputes should never delay defense funding needed to protect U.S. citizens, military personnel, veterans, and allies.

“Overnight strikes hit two bridges in Hormozgan province, the railway junction at Bandar Abbas, the airport at Iranshahr, and the maritime control tower at Chabahar, which has now been struck three times in seven days. Iranian state TV counts three dead and nine wounded at the bridges. All of it reported by Iran’s own media and carried by AFP.”

“Washington calls them strikes on the logistics that let the Revolutionary Guard attack shipping. Tehran calls it the civilian campaign begun ahead of schedule. A bridge that carries missiles also carries buses.”

“And this is the second run of the same play. In April, Trump set a Hormuz deadline and promised power plants and bridges. Israel publicly told Iranians to stay off every train in the country. Mashhad cancelled its rail service. The Kashan railway bridge fell, killing two. That ultimatum bought a ceasefire that later collapsed. The sequel is now running early. The tower is the tell. Three strikes on the same building in a week means Iran repairs and America returns. A war that repeats its targets is not running out of things to destroy. It has started destroying the act of repair. Iran’s energy ministry, through state media, is already asking the south to use less power as the heat climbs.”

“Chabahar is the port India built, more than 120 million dollars into its terminal, its road to Central Asia around Pakistan. Less than 200 kilometres east sits Gwadar, the port China built. One has been hit three times in seven days. The other has not been reported hit once.”

“A war between America and Iran is quietly scoring a rivalry between India and China.”

I continue to believe that the Hormuz War is a contest of existential risks. The IRGC in Iran and their Axis of Resistance proxies are, and have been, deadly threats to Americans and all parties in the western alliance. The deadly proxies are Hamas, Hezbollah, Houthi, Palestinian Islamic Jihad and others.

The calendar said next week. The craters did not wait.

The House Appropriations Committee advanced a $1 trillion fiscal 2027 defense bill along party lines, 34–27. The measure remains a committee bill, not final law, and must still pass the full House and be reconciled with Senate legislation. Details: https://breakingdefense.com/2026/06/house-appropriators-approve-1t-defense-bill-adopt-war-department-renaming/

Unstable and belligerent governments have often contributed to the conditions in which infectious diseases spread. Today, a warming climate, armed conflict, and attacks on regional water infrastructure are creating additional threats to public health across the Middle East, while making cooperation and climate adaptation more difficult.

I explore these historical patterns and their economic consequences with co-authors Michael R. Englund, Tristan J. Erwin, and Elizabeth J. Sweet in our 2025 book, The Fed and the Flu: Parsing Pandemic Economic Shocks.

For readers interested in learning more, the book and related materials are available here: https://www.thefedandtheflu.com/

and here: https://www.amazon.com/Fed-Flu-Parsing-Pandemic-Economic-ebook/dp/B0DCK1ZHJT/