U.S.–Israel Divorce as the American Economy Teeters on Collapse: Richard Wolff Explains

The frame is set at the top: economist Richard Wolff spends 31 minutes on UK Community Advisor linking global turbulence to American daily life. The headline pairs a U.S.–Israel divorce with an economy on the brink not as separate headlines but as two sides of the same debt and energy loop. With the Iran war six months old, Washington's effort to keep oil cheap and Yemen's Red Sea move become the entry point to a wider unraveling.

Oil is the calendar story. Wolff says Washington kept prices down during the Iran war for a while, but once the war spread to Yemen and the Bab el-Mandeb tightened, the picture changed. The strait is only 20 kilometers wide yet carries about 10% of world oil ; tracking data shows daily transits falling from 30 to 15 in a week and Hormuz flows dropping from over 20 million barrels per day to around 10 million . In a week that saw Brent at $105.4 and WTI at $100.2 , Saudi Arabia halted loadings at Yanbu and rerouted cargoes around Suez and Africa ; damage to the East-West pipeline amplified the squeeze.

Wolff pushes back on the folk theory that links pump prices to ballots in a straight line. He is skeptical of the mechanical story that people upset about a few extra dollars at the pump automatically vote against the incumbent , yet he does not deny that what you feel at the pump shapes politics . The increase is not abstract; it is felt like a tax on every fill-up, which is why the debate quickly connects to Trump and the midterms .

Why is everyone stuck with a car? The suburb and the rails

America's car dependence is by design. Wolff stresses the U.S. invests very little in public transport , leaving rail and bus thin or stigmatized as a poor people's service . Between the 1930s and 1950s , giants like Ford, General Motors and Chrysler helped dismantle streetcar lines ; today Boston and San Francisco keeping rails is the exception, not the rule . Wolff makes it concrete with a New York suburb sketch where every trip —shopping, work, dinner, cinema—required a private car and a license at 16 was the rite of passage; in the electric shift auto and oil lobbies kept incentives low and even Musk's leverage over Trump is dwarfed by capital flowing the other way toward space, so gasoline and especially diesel become the fixed cost of suburban life .

Diesel bites through three channels. First farming : U.S. agriculture is highly mechanized and tractors run on diesel . Second fertilizer : oil is feedstock for fertilizer , so a price jump lifts fertilizer costs directly. Third market power : large grocery chains press farmers not to raise prices while farmers face higher costs. Compressed margins combined with political geography magnify the weight; farm states are small in population but pivotal in the Electoral College and have long been a dominant bloc in Congress .

On inflation, promise and reality diverge. The pledge to undo 2021–2022 inflation was not kept; prices slowed but never returned to prior levels, and the slower rise continues on a high plateau . For ordinary people it feels like an endless food price climb , in Wolff's words. Add diesel plus fertilizer plus buyer pressure and the agricultural squeeze deepens, and when that joins the housing and debt chain, household budgets are hit from multiple directions at once.

Housing turns that squeeze structural. The Harvard Joint Center for Housing Studies 2026 reports 22.7 million renter households (49%) cost-burdened , 12.1 million severely so, while the low-rent stock under $1,000 fell 30% , losing over 7 million units after inflation adjustment. New supply has a median asking rent of $1,900 and median new home price around $417,400 , unaffordable even to median incomes. LSE's 2026 simulation argues the problem is not just supply but inequality ; even large construction would need about 20 years in superstar metros to restore broad affordability.

From Red Sea to Gulf: how the Saudi route clogged

The geopolitical line runs through Gulf allies closely tied to Washington . Wolff says Saudi Arabia asked the U.S. for help against Yemen and Washington chose restraint , a burden shift akin to Europe carrying more of the Ukraine war . Even when officials claim 98% normal Red Sea navigation , Saudi vessels are excluded , loadings at Yanbu are suspended and Perim and Mokha under Houthi control make the chokepoint governable. At macro level Wolff frames it as imperial retreat : the U.S. can no longer do what it once did but refuses to face it , projecting power it does not possess ; behind it a fiscal pattern of raising defense spending without raising revenue and deficits above $1 trillion for years, with joint responsibility for Biden and Trump and borrowing for taxing as a political choice.

Debt brings the sharpest numbers. U.S. debt recently topped $40 trillion , passing 100% of GDP , with $1 trillion a year going just to interest . In Wolff's phrasing, taxes go not to roads, schools or clinics but to interest paid to wealthy lenders, corporations and foreign creditors . China is the number-two creditor and the three rating agencies have cut the sovereign rating from AAA to AA . In funding markets the state competes with household mortgages for long money; banks prefer the safer government borrower , tightening mortgage access and making home buying harder .

How is the quiet divorce with Israel narrated?

The Israel thread runs through 40,000-dollar, 2,000-pound bombs mooted for Lebanon and Gaza's destruction sustained with American weapons and money . The Trump administration is moving toward accepting an Israeli defeat but will cast it as Netanyahu being insufficiently grateful and refusing requested steps , implying a quiet dialing down for a partner not playing by the rules . Numbers back the divorce thesis: Pew 2026 finds 60% unfavorable (42% in 2022, 53% in 2025), Gallup for first time since 2001 shows no clear sympathy for Israelis over Palestinians ( 41% Palestinians vs 30% Israelis among independents), Senate support for Sanders' arms-condition effort rose 27→40 , Britain, Canada, Australia, France and Spain moved on Palestinian recognition and embargoes , the ICJ case proceeds and ICC warrants for Netanyahu and Gallant stand, with talk of phasing out $3.8 billion in annual U.S. aid within a decade already in debate.

The closing act ties a nuclear edge to a knife-edge economy . Wolff relays an Israeli official's take-the-world-with-us notion and argues that any use of nuclear weapons would be the one act that unites the world against Israel , leaving no impunity after Gaza . On the economy, higher interest rates would price out mortgages and car loans and tip toward recession , while the tanker battles in Hormuz and the Red Sea have stored up an inflation wave not yet felt at checkout . In his view Washington broke the open-Hormuz order itself , so it bears the cost of the fallout.