Joining me now is somebody I've known quite a long time and somebody that the more we get to know each other, the more we might actually describe each other as friends. It's Anthony Scaramucci. In the political world, he's known for his famous 11 days in the Trump administration, but in the finance world, I view him as somebody who's one of the few guys in finance who hasn't lost his mind and who's at least grounded. I think that it is a fascinating detour that the world's financial elite have taken, and there's so much to talk about these days. He's got a new book coming out, and at some point, we're going to talk about that—"All the Wrong Moves" it is called, coming out in September. But Anthony, the last time we saw each other was December 2025 in Abu Dhabi. It was an interview I was doing for Newsphere, and it was my first time to Abu Dhabi. I remember what you said about the UAE—you said it's not necessarily a country, it's like you're visiting somebody's house.
So I'm sure you're guessing. I always say that to people. This is MBZ's house whether you like it or not. If you remember, some people were filming drone strikes, and they got in trouble for that. That would be like throwing mud at somebody's painting in the living room. You know, that's how they view things over there.
First of all, it's always great to see you, and I do consider us friends. We've been through it, you and me. We've been through the ups and downs of life and politics and all the other things. But if we start in Abu Dhabi, literally 60 days after our talk, people have fled. When was the last time you were in the UAE?
So that was the last time. I'm scheduled to go back in November for Abu Dhabi Finance Week. My conference business, SALT—we used to do a conference in Abu Dhabi prior to COVID. Then after COVID, the government asked us if we could merge our event programming into the government's event programming, which we agreed to do. So we were running some programming for them inside of Abu Dhabi Finance Week. That's where I saw you, at that very beautiful Four Seasons. But at that time, you say to me, "What is one of the safest places in the world?" I say Abu Dhabi. You could leave your car keys on the dash, roll your windows down, unlock your doors, and that car will stay put forever. They have a very low crime rate. It's an amazing culture there. But they've been attacked because they're one of the Western allies and one of the allies of the United States. They're being attacked as part of the Iranian-Israeli war. I think it's hurt the economy, the retail sector of the economy, and the expat economy there. But I'll say this about the UAE: they'll be back. They'll be back in force and size and scale. They really have a great business model there, and it's a beautiful country. I intend to go back there in November, as I have done the last five or six years.
What kind of long-term damage do you think's been done between the relationship between the United States and the Gulf States? I ask it because the reason to have American military bases was for security. That was thought of as an extra aspect of security. General Barry McCaffrey, retired general, said on social media over the weekend—we're taping here in the last week of August—he said over the weekend that he feared those American bases are never going to be there again and that the American footprint in the Middle East, for better or worse, is going to shrink. I don't know whether that's good for global security, let alone American security, let alone Israeli security, which, of course, is arguably the primary reason we had done this.
Well, Chuck, I agree with him, but I would say it a little differently than him. I would say that America now has to face the reality of its military-industrial complex. I think this latest iteration of the Gulf War has proven that we're out of step with where warfare is right now. You probably read these things as I read them: the Ukrainians did some exercises with us in Texas; they demolished us. They figured out a way to use these drones. You've got anywhere from $1,500 to $2,000 drones that have been technologically upgraded by the Ukrainians; they've stopped a couple-million-man army, the Russian army in Ukraine. We are not where we need to be. What's happened to us is there's a circuit. Eisenhower was right: military-industrial complex won. There's a circuit between the lobbying community, the defense contractors, the Senate, the presidency, and the Pentagon. That circuit means we're making military materiel that's perhaps already obsolete, but we're doing it anyway. So we've exposed that seam. I predict we'll have a smaller footprint; it'll be a different footprint. And I predict that the Iranians are going to be closer to their Sunni neighbors. That's the irony of what happened because they said, "Hey, if you bomb us, we're going to close the Strait of Hormuz." The President didn't care; they bombed them, they closed the Strait of Hormuz.
I think the President was vexed by the Mosaic Defense Doctrine. If you don't mind—you know what it is, but I'm going to repeat it just quickly. I did not know what it was until I got to the White House in 2017. It was in the Presidential Daily Brief. It's public, so it's not like I'm sharing confidential information. But the Iranians basically looked at us over 20-plus years in the Middle East and said, "Okay, if the Americans come for us, it's going to be a decapitation strike." That's what the Israelis are famous for. "If the Americans team up with the Israelis, they're going to try to decapitate us. So how do we protect us from that?" The Iranians came up with the Mosaic Defense Doctrine, where they had 31 separately autonomous units. It's nine layers deep. If you looked at the depth chart, nine layers deep. So if you killed the first group of leaders, other guys stepped in. You killed those guys, no problem, another group stepped in, and they were operating semi-autonomously. Which is why in negotiations, the President was vexed, because certain people were willing to negotiate in Iran, and other people were not. And so the Iranians have done exactly what they said that they would do: implement the Mosaic Defense Doctrine, close the Strait of Hormuz, hit our allies, hit our military installations. Again, the American press doesn't report this as accurately as they should, but our naval supply depots in Kuwait and Bahrain have been decimated.
Well, that's why the Lincoln was in the desperate straits that it was. We had no ability with what should have been locally sourced ability to resupply.
No, they were resupplying from Diego Garcia, which is a British territory 2,200 miles away. So you had three-day resupply turn to 10-day and in some cases 12-day resupply. That caused an absolute catastrophe. Of course, the President's response to that and Hegseth's response was to fire the editor-in-chief and the reporters of the Stars and Stripes, because they know how to count and they're trying to tell you what's going on in the area as they have been licensed to. Imagine Eisenhower doing that, or somebody like even MacArthur doing that. They didn't even do that.
I can't get over the last 25 years of defense budgets, right? 9/11 happens, and we think, okay, we're dealing with an asymmetric enemy, stateless enemies now. So there was at least rhetorically a mindset of, hey, we've got to shift gears, right? We've got to get out of the Cold War mindset, we've got to get out of this. And yet, over 25 years, we never did. There's two ways you can look at American military might over the last 50 years. Essentially our entire lifetimes, Anthony, we've arguably only won one war, and that was the first Gulf War where we had a goal and we met it, right? Get Saddam out of Kuwait. We achieved the goal, we walked away. 50 years from now, the Iraq War, the second Iraq War, and this Iran War will probably get conflated to America's missteps in the Middle East; it'll be seen as an entire era. The irony of that is that Trump arguably took over the Republican Party by repudiating the Bush foreign policy, and he, of course, ends up doing a version of it very poorly. But let's talk about the defense industry. To me, the Pentagon—what you just described, that sort of loop of the military-industrial complex earlier—that is what's broken more than anything else. That is what's broken. And I, for the life of me, can't figure out how to get Washington to focus on that.
There's a big thing here, and I'll send you an op-ed that I put on Substack. It's basically an open letter to these guys. I'll take everybody back to January 17th, 1961, the farewell address of Dwight Eisenhower. He had gravitas. He was the five-star general that led us in Europe in the Normandy invasion, etc. He said, "Listen, eight years here in the presidency, there's a feedback loop between the lobbyists, the military defense contractors, and if we're not careful, they're going to take over and they're going to bleed us out." And so they've been doing that. I think you have to remember when we had a supposed peace dividend, the government allowed a consolidation of defense industry suppliers. We went from 51 separate and disparate defense industry suppliers to the big five.
I'm glad you bring that up. It's a nightmare. I think the reason why people are afraid to fly Boeing planes is because of this consolidation over time in all of these aspects. Look, that's not directly about the military, but Boeing cares more about its defense contracts than it does making good passenger airplanes these days.
There's definitely truth to that. When they started merging into other things like McDonnell Douglas, they let their safety standards lax, and there was tremendous layers of bureaucracy that they've had to clean up since the 737 incidents. But here's what I would say: you have five players that act like a monopoly cartel, so the prices are sky-high. The attempt to do multiple-bid contracts has been reduced, and they are taking advantage of Citizens United, something you and I know a lot about. The Supreme Court rendered in January of 2010 unlimited amounts of money can go into the political system. We are 9-to-1 from January of 2010. 16 and a half years later, Chuck, we're spending 9-to-1. And guess what's happening? Big business, big pharma, big defense—they're all getting what they want from the Congress. The big, beautiful spending bill is elemental of that: those guys got breaks in it, corporate welfare, tax cuts, and the little guy got screwed.
This is a very big problem. We are in desperate need of systemic reform, and you've just got a lot of contracts out there where people are like, "Okay, we're going to renew the contract because it's in my district. We're going to renew the contract because it's in my state." But wait a minute, that contract is obsolete. You're going to shoot a $2 million missile at a $50,000 drone? It doesn't make economic sense anymore. But we're doing it, and we're in this sort of feedback loop that we can't break. So it's a huge problem, Chuck. Remember, I was on the Business Executives for National Security before I joined President Trump's administration. He promised to do something about it. When we sat around in 2016, we had these discussions. He promised to do something about it; he's made it worse. He fired John Phelan. I don't know if you remember Phelan—he's a former Wall Street guy, but he was Navy Secretary. One of Phelan's private complaints was they wanted to build battleships, which are obsolete. We don't need those anymore. Trump thinks we're in the 1940s; he wants a battleship. They told Phelan, "Well, let's just go with a single-bid contract." Phelan said, "Wait a minute. That's actually illegal. I can't do that." And so Hegseth fired him. This is the sort of stuff that's going on inside the military. I've got to tell you, we've embarrassed ourselves, we've exposed ourselves, and we've embarrassed ourselves in this war. Said differently, we spent a trillion dollars, but we run out of munitions after five months.
That's sort of unconscionable.
Now our adversaries are looking and saying, "Okay, wait a minute, I'm a middle power. The US is a much bigger economy than me, bigger military, but they've got it so screwed up and it's got so many layers of pork-barrel spending in it that I could probably beat these guys if I'm a little swifter on my feet as it relates to my military technology."
Or go the other way. We're going to pivot to Canada here in a minute, but it's not just Canada, but the middle powers in general. The reason to do a deal with the United States is like, well, they're the military, they're going to have our back, they're our security agreement. They're not just a financial arrangement; they're a security arrangement. Well, if the United States can't protect its own, how are we going to protect our allies? To me, what's happened to the Gulf States has sent a message to everybody that has a security agreement with the United States: good luck.
I agree with that. Listen, I'm a realist, so those states will always have a relationship with the US. There'll be some arms purchases, and there'll be commercial activity, and they do need that economic relationship. I think the burden-sharing of these bases, though—I think those states will look around and say, "Wait a minute, it didn't work. It was a paper tiger for us. We thought it was going to be a little bit more of a shield for us; it turns out that it isn't." And I think you'll see those states frankly draw more lines across the Persian Gulf or the Arabian Gulf into Tehran, because their attitude is, look at what the Chinese did a few years ago with the Saudis and the Iranians. They were trying to bring them closer. If you remember, they bridged a peace deal and some level of understanding there prior to the war, and I think they're going to want more of that, not less of it. There has been discussion—I'm not saying this is going to come to pass—where the Saudis, the Turks, and the Iranians team up in a mutual defense contract. I'm not saying that's going to happen, but the notion that people are talking about that versus where we were even 6 or 12 months ago I think is actually unthinkable.
The world will change again. I guess my message to my fellow Americans that are listening in: we are so much better than this. We've got a bunch of stupid people, frankly, that are running these processes, and the country is not stupid. So we have to clean this up, and we have to get to people that are willing to embrace the reality of the situation and get some reform done. But by the way, the minute you say that, these lobbyists come at you and start shooting.
This is why I'm not convinced that either party is going to be able to do what we need.
Let's say Chuck Todd declares his candidacy for the presidency, which we would do way better with Chuck Todd than we would with these current clowns. But let's say you declared yourself for the presidency and looked like you were doing well with a reform message. These guys would come out and they would disembowel you. They would find every single thing about your life. They would try to disfigure you, turn you into a two-dimensional caricature of yourself, because they want this gravy train to exist. This is always what happens with parasitic activity: the parasite depletes the host to the point where the host dies, and then it hurts the parasite. So my message to these guys is, hey guys, why don't we knock it off at this point? This is not working. I know we're in a race for somebody to get to a trillion dollars, but I would just submit to you, your fellow neighbors are suffering. Are you really of that great wealth if you're living in a barbed-wire McMansion with security while your fellow neighbors are suffering? So I would ask these people to reconsider this.
