The half-life of conventional wisdom may be shrinking. In early 2026, Ukrainian defense against a Russian invasion showed tangible progress; Iran was withstanding US attacks and choking off global oil supplies; and Donald Trump and Benjamin Netanyahu were having their way with the world. Today, none of these are certainties.
Darkness Over Ukraine
Although Ukraine is holding the ground war for now, the drone war has shifted fundamentally. Ukraine cannot consistently intercept Russia’s new low-cost “Jet Shaheds” from the ground. Unlike classic Iranian loitering-munition drones cobbled together out of Styrofoam and lawn-mower engines, the new jet-powered Shahed drones function more like cheap cruise missiles. They fly much higher and faster and can outrun the anti-aircraft guns that Ukraine relied on to knock down over 90% of incoming propeller drones. Ukrainian interception rates have fallen to about half; Russia now regularly hits Ukrainian population centers, so the civilian exodus from the country is accelerating.
Ukraine’s drone and defense sector punches even further above its weight than Israel’s does. The Pentagon could kill three birds with one stone (reduce costs, help an ally, and retool the US military) by outsourcing huge swaths of US military procurement to Ukraine. Kyiv, meanwhile, is developing new ground turrets, advanced electronic countermeasures, and a small missile called Nika and will deploy them soon.
This isn’t over, but without foreign help, the Ukrainian economy may collapse. Russia is systematically targeting the country’s economic engines. They have destroyed more than 70% of steelmaking, shut down enough grain shipping ports to threaten global food supplies, and targeted data centers and energy infrastructure as winter approaches. Ukraine has retaliated by knocking out most of Russia’s oil refining.
Meanwhile, Ukraine’s feckless allies have restricted Ukraine from using Western weapons inside Russian territory. They discourage strikes on oil assets because they prefer stable retail fuel prices. This makes it tough to take out a sprawling Russian oil refinery that requires a drone flight of several hours deep into the Urals or Western Siberia. Russia has become much better at electronic jamming and protecting its most sensitive refineries.
The stakes are very high. Without a massive increase in financial aid and European boots on the ground, Ukraine could run out of the resources it needs to sustain the war another year. If Ukraine were to fall, a colonized Ukraine would hand Russia a military-industrial powerhouse. Many experts expect Russia to target Moldova, the Baltic states, and Denmark next. This would completely fracture the European collective security framework, since EU nations are failing to build defensive capabilities to match the reality of modern drone warfare (they did approve a 90 billion Euro loan to Ukraine in April, but money is not mobilization).
As Europe slowly realizes that Russia’s attack on Ukraine is an amuse-bouche for Putin’s planned banquet, they are badly divided on how to respond. The pro–Putin AfD is ascendant in Germany; pacifists prevail in Ireland and Switzerland; and France is shut down because (checks notes) um…why exactly is France shut down?
Iran Tests Its Pain Threshold
Just because it was idiotic for Donald Trump and Benjamin Netanyahu to start a war with Iran does not automatically mean they will lose. During the last 60 days, Iran’s economy has experienced serious inflation, a currency collapse, and new waves of international financial pressure.
The Iranian rial has hit historic lows. A year ago, a dollar bought a million Iranian rials. Now it buys 2.7 million, meaning the currency has lost more than half its value. Iran’s own data show consumer price inflation approaching 90% this year, with grocery prices even higher. Everyday goods are becoming unaffordable for many families.
The US Treasury has aggressively targeted foreign financial institutions, regional banks in Turkey and the UAE, and the networks of shadow banks used by Iran to launder oil revenues and gain access to US dollars. They have cracked down on foreign financial institutions linked to covert networks used by the Islamic Revolutionary Guard (IRGC). This has choked the inflow of US dollars and UAE dirhams to Tehran, helped depreciate the rial, and fueled domestic inflation (something Trump is proving good at).
Meanwhile, the IMF projects that Iran’s real economy shrank 5-6% this year because of shipping restrictions, a shrinking oil sector, and severe infrastructure damage. This has fueled a massive internal budget deficit and severe shortages of critical imports like medicine.
The Iranian regime is obviously both ruthless and resilient. The formal economy may collapse within a year, but this hardly means that the regime will. They have a proven ability to transfer resources, including aid from China, to the IRGC and transfer pain to everyday people. They can create hawala currency exchange houses and front companies outside the reach of formal banking regulations. They can sneak oil to China’s teapot refiners. But the economic pressure on Iran and the Iranian people is crushing and has become much worse.
Donald and Bibi: Going Down?
During the past six months, Donald Trump and Bibi Netanyahu have both encountered several high-profile policy reversals and mounting scrutiny of their personal ethics. Both face looming electoral defeats.
Trump’s war, tariffs, inflation, corruption, support for AI, and ICE raids have become incredibly unpopular. He has done an about-face on mail-in voting and now actively encourages Republican voters to make use of mail-in ballots. He may not like the results.
Trump now resembles Joe Biden: old, stumbling, and out of touch with American living costs. He has no off-ramp to the war he started, and Netanyahu has no interest in helping him to find one. Prediction markets foretell a very tough 3-4 weeks for both men. Many expect Bibi to lose (don’t count on it), and PredictIt gives 60% odds that Trump will lose control of the US Senate. (If Trump loses the Senate, expect Samuel Alito to resign the Supreme Court within days so that lame-duck Senators can confirm his replacement.)
We are well past peak Trump. His speaking events have taken on the tone of an oldies band’s farewell tour. At the start of Trump’s term, most polls showed that most voters viewed Trump favorably. Today, every poll shows large majorities disapproving of his performance by large margins. Presidents usually become less popular before a midterm election, but Trump’s ratings are in the territory of Presidents Truman and Bush, both of whom were neutered by midterm voters.
In both politics and warfare, momentum can be treacherous. Leaders work hard to build momentum, and it often leads them to overreach. Tailwinds suddenly become headwinds, testing leaders’ endurance and resolve. Zelensky, the IGRC, Trump, and Netanyahu are all facing setbacks. Count none of them out.
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