U.S.-Iran Memorandum Trades Leverage for a Fragile Midterm Quiet

The draft U.S.-Iran memorandum was treated by Niall Ferguson, H.R. McMaster, and John Cochrane as, at best, a temporary instrument for reopening the Strait of Hormuz and suppressing conflict through the American midterms. They did not make identical arguments, but none defended the draft as a durable settlement. Niall Ferguson said the points he had seen appeared to have been agreed first and foremost to get the strait reopened. Herbert McMaster went further, calling the draft a disaster. John Cochrane tried to play his usual contrarian role, but said the most optimistic reading was that Washington was “papering over” unresolved conflict to keep the strait open, hold oil prices down, and postpone a serious confrontation until after the midterms.

The draft text sharpened their critique. Its first point, shown on screen, declared that Iran, the United States, and “their allies in the current war” would end the war “on all fronts, including Lebanon,” and refrain from hostile action against one another. Bill Whalen pointed out the complication immediately: Israel was not a party to the agreement, yet Lebanon was included. McMaster seized on the same omission. He asked why Iran should have any say over Lebanon at all, and why Israel was absent from a document that purported to manage fronts where Israel had been attacked by Iranian proxies and where Hezbollah remained central.

The nuclear provisions looked unresolved rather than settled. The draft’s third point gave the parties a maximum of 60 days, extendable by mutual consent, to reach a final agreement. Its eighth point had Iran reiterate that it would “never produce nuclear weapons,” while leaving “the fate of enriched material” and other nuclear-related issues to the final agreement. Ferguson read that as kicking the nuclear question into a process that would not conclude in 60 days. When Whalen asked what would happen on August 20, after the 60-day period expired, Ferguson answered that there would be “60 more days.” McMaster agreed. Cochrane expected “yakity yakity yak” and occasional missiles through the midterms.

The sanctions and money provisions were the largest substantive objection in Ferguson’s critique, but they came from Ferguson’s description of the versions he had seen rather than from the three visible excerpts shown on screen. He said four of the points offered Iran sanctions relief, waivers for oil exports, and the unfreezing of roughly $100 billion in frozen assets, with some relief “right upfront.” He argued that this was far from what the administration had set out to achieve in Operation Epic Fury, and suggested that if the memorandum was the outcome, the operation’s label would become “Operation Epic Fail.”

McMaster and Cochrane framed the same issue as a loss of leverage. Cochrane said the American blockade of Iran had been working and that lifting economic pressure, especially by giving money upfront, would undo it. McMaster compared the logic to 2015, arguing that the Iran nuclear deal had given the regime the cash it needed when it was vulnerable. Ferguson added that the comparison with the JCPOA would be difficult for President Trump politically: critics could line up the two documents and ask whether this was better or worse. A visible excerpt from the 2015 Joint Comprehensive Plan of Action showed its enrichment section, including “agreed limitations on all uranium enrichment and uranium enrichment-related activities” for the first eight years, followed by gradual evolution toward the next stage of enrichment activities for “exclusively peaceful purposes.”

McMaster also objected to what he described as the reported final provision: that a final agreement would be approved by the UN Security Council. That point was not among the visible excerpts, but McMaster treated it as strategically important. He said Russia and China were on the verge of losing influence in the Middle East because of the weakness of their Iranian partner, and that sending the matter back to the Security Council would invite them back into the region’s settlement.

Cochrane’s contrarian optimism was narrow and bleak. He did not defend the memorandum as a good agreement. He described it as a political holding pattern: spend large sums propping up sworn enemies, keep the Strait of Hormuz open, reduce the missile exchanges to something that can be called quiet, get through the midterms, and hope for a chance to do something more serious afterward. Otherwise, he said, the United States had thrown in the towel.

The criticism of the memorandum rested on a prior military judgment: Washington had leverage and chose not to use it. When Whalen posed the obvious alternative — if not peace, then more war — Niall Ferguson argued that the crucial military decision had already been missed. In his view, President Trump should have used force roughly nine weeks earlier to take control of the Strait of Hormuz. Ferguson said he was sure the option had been presented by the chairman of the Joint Chiefs and the commander of CENTCOM, and that Trump chose not to take the risk. Once the president decided against that second phase and relied instead on economic pressure, Ferguson said, the United States was on track toward a weak memorandum.

Ferguson’s point was that Iran had successfully asserted control over the strait despite the damage inflicted during the first phase of the war. That success changed the bargaining position. The United States was now signing what he called a “memorandum of incomprehension” because it had not followed through when it had the advantage.

Herbert McMaster agreed and tied the missed opportunity to the timing of the ceasefire. He said that just as the campaign was about to shift toward opening the strait, the ceasefire intervened. He suggested that Trump had become enamored of Pakistan’s Field Marshal Munir, who McMaster said was doing the bidding of the Chinese, who were “probably in a state of panic” and wanted the fighting stopped. McMaster’s larger criticism of Trump was not that he never takes risks. He cited Syria strikes in 2017 and the South Asia strategy as examples of risky decisions. His criticism was that Trump has difficulty sticking with decisions once people get in his ear and fears are raised.

Cochrane added an economic version of the same point. The blockade had been creating pressure; the memorandum appeared to release that pressure just as it mattered. McMaster answered by returning to the Iran deal precedent: cash infusions, in his telling, revive regimes that should be kept on the mat.

There was a partial qualification. Cochrane asked whether the nuclear program had in fact been set back badly enough that the regime’s near-term priority would be something other than a bomb. He suggested Iran would use the money first to keep its economy going, rebuild its security state, and deepen its magazines of conventional missiles and drones. A nuclear weapon, he said, was still years away and had been set back by destruction.

Ferguson pointed to a reported point nine — “Iran will maintain the status quo on its nuclear program” — and asked what that meant. That point was discussed by Ferguson but was not one of the visible provisions shown in the source. Cochrane took it to mean slow continued progress, but from a damaged base. McMaster agreed that if Iran were smart, it would focus on missiles and drones because those had worked. Cochrane added that Iran benefits from talking constantly about the nuclear issue because it keeps the United States focused there while support for Hezbollah, Lebanon operations, terrorism, and conventional threats continue.

The risk, in their account, is not only an immediate Iranian sprint to a bomb. It is that the United States gives up leverage, gives Iran money, and allows Tehran to redirect resources into the tools that had already made the region costly to police.

The sharpest caution against overconfidence came from Niall Ferguson himself. After condemning the memorandum, he warned that peace agreements and MOUs are not the whole story. Outcomes often come from the second- and third-order consequences of war rather than the signed text. Wilson’s 14 points, he argued, were not simply a failure: most of them happened, empires were broken up, and the League of Nations was created, though the treatment of Germany was fatally flawed. The lesson he drew was that unintended consequences matter.

That left open a possibility: a document that looks weak could still expose the Iranian regime under conditions of peace. Ferguson said some in the administration believe the regime in Tehran might survive under war conditions but face crisis once the shooting stops. If the regime is in crisis before year-end, he said, Trump and his team would look smart. He did not predict that outcome, but he warned against dismissing it.

Herbert McMaster accepted that follow-up would determine the result, but he returned to the danger of cash. McMaster argued that the region’s present crisis followed from earlier decisions that revived the Iranian regime financially. In his account, about $110 billion flowed into Iranian coffers after the Biden administration helped revive the regime following “very successful Trump One sanctions.” He said that money went to Hamas, Hezbollah, Palestinian Islamic Jihad, Assad, the Houthis, Hashd al-Shaabi militias, Iran’s nuclear program, and its missile and drone manufacturing. If the new agreement repeated that pattern, he said, it would be “crazy.”

McMaster then raised a speculative possibility rather than a settled claim. Could there be some kind of internal Iranian deal involving Mohammad Bagher Ghalibaf, the speaker of Iran’s parliament, aimed at marginalizing the IRGC or exploiting fissures within it? A photo shown on screen identified Ghalibaf as “Speaker of the Parliament of Iran.” McMaster described him as a corrupt actor with offshore accounts that the United States may have leverage over, and asked whether such pressures might be part of the logic.

Ferguson said that had likely been part of the thinking all along: exploit visible divisions in the regime by appealing to corrupt factions with money. He said numbers like $300 billion were being included in the document. That figure was Ferguson’s description of the document’s broader terms, not part of the visible excerpted text. He said the possible strategy was to use venality to undercut the fanaticism of the IRGC leadership. He did not endorse it as likely to work, but said it could not be ruled out with certainty.

John Cochrane was less persuaded. If such an outcome occurs, he said, it will be because the United States gets lucky. From his vantage point, the United States did not appear to be doing much to undermine the regime. He credited Israel with understanding that the central problem was the Iranian regime itself. By contrast, he said, the United States now looked as if it was supporting the regime, much as it was supporting the regime in Venezuela: sign a peace treaty, give the rulers money, and implicitly trade help staying in power for less shooting.

The question of Iranian public opposition was treated with the same caution. Whalen asked why a regime-change uprising had not materialized despite Trump’s signals to the Iranian people. Ferguson answered that there had been an uprising, and said it had been crushed with extraordinary brutality, claiming the lives of between 30,000 and 40,000 mostly young Iranians. A nighttime protest video shown on screen was labeled “Iranian protests in January 2026.” Under conditions of U.S. and Israeli aerial bombardment, Ferguson said, another uprising was not likely. But he also described the regime as hated, supported by perhaps one in 10 Iranians, and said Trump’s best hope was that once shooting stops, popular antipathy returns as a force.

Cochrane added the hard counterexample: North Korea and Cuba show that regimes willing to be ruthless enough can remain in power for a long time.

For Herbert McMaster, the reaction of Gulf states followed directly from perceived American irresolution. He said Saudi Arabia, Qatar, and perhaps others got cold feet when Iran threatened massive attacks on Gulf oil and gas infrastructure. When a nascent effort to escort ships out of the Gulf began, McMaster said those states urged the United States to stop because Iran had telegraphed that it would strike energy infrastructure and had already launched attacks as a signal.

The Emiratis, in McMaster’s telling, initially wanted the United States to “finish the job,” meaning continue weakening the Iranian regime toward possible collapse. But he said “the reports are” that the Emiratis were already “sliding money under the table” to Iran. That shift, he argued, reflected the apparent lack of U.S. resolve. If Gulf states no longer believe America has their back, they will cut their own deals.

Niall Ferguson placed this in a broader regional reconfiguration. He said the rift between the Emiratis and the Saudis, already a problem before the war, had worsened. Riyadh and Abu Dhabi were now pursuing different strategies. The implication, in Ferguson’s view, was that the United States was no longer as dominant as before in providing the region’s key public good: freedom of navigation. He said the United States failed to deliver that public good in the Strait of Hormuz, leaving the strait less certain than it had been.

Ferguson also warned against assuming that commerce simply resumes. The shutdown may have been quick, but normalization would be slower. The Carter Doctrine, as he summarized it, held that the United States should be supreme in the Persian Gulf. It had been until now.

McMaster resisted the idea that U.S. dominance was irretrievably gone. He said the United States still had the means and had simply chosen not to act. John Cochrane agreed: this was a lack of will, not a lack of means. But he added that once the lack of will had been shown, it changed how others read American power. Europeans who had initially been embarrassed by their reluctance to support the war, he said, may now feel vindicated.

McMaster predicted two more concrete consequences. First, the oil and gas supply chain from the Gulf would be adjusted: new pipelines, new ways to access energy, and slack capacity picked up elsewhere, including in the United States. Second, Gulf states would invest heavily in missile defense, drone defense, and long-range precision strike capabilities. In his view, contracts for those capabilities were likely already being signed.

Lebanon remained the likely flashpoint. McMaster said Israel would not hold back and would make its case directly to the American people and Congress: Israel was not even mentioned in the agreement except insofar as the agreement constrained its ability to defend itself against Hezbollah. He also said this was an issue on which Benjamin Netanyahu and Yair Lapid would be aligned inside Israel. Cochrane expected Iran to test the limits, perhaps by telling Hezbollah to launch rockets or drones to see what happens.

On Ukraine, Niall Ferguson argued that major developments had been obscured by attention to the Middle East. Russian forces had suffered reverses at the front. Since the beginning of the year, he said, Ukrainians had been killing Russian soldiers faster than Vladimir Putin could recruit them. Ukraine was also striking back in new ways, using drones and Flamingo cruise missiles against targets in and around Moscow and St. Petersburg. Ferguson said the war had shifted away from the stalemate of the prior two years. A video shown during this discussion was labeled “Protests against Putin's rule in Russia's eastern regions.”

The political implication was that Trump’s hoped-for Ukraine-Russia peace deal had become harder. Late last year, Ferguson said, a discussed settlement would have required Ukraine to give up more territory in Donbas. Ukrainians he speaks with now reject that: “We’re winning this thing.” Ferguson called that change “exciting” and said it was possible that by year-end people might be discussing the extraordinary crumbling of Putin’s position.

Herbert McMaster agreed and added that Russia faced severe gasoline and diesel shortages, with internal sales being restricted. He also noted a shift in leverage: the United States still had leverage over Ukraine, but less than before because Europeans had picked up much of the slack in support. Zelensky, McMaster said, was smart to push his advantage by saying he was ready to talk to Putin anytime and asking why Putin did not come to France for the G7.

McMaster then linked Ukraine to the Middle East: if the Iran memorandum reopened energy flows and oil prices fell back toward $60 a barrel or lower, Putin’s financial position could be devastated.

John Cochrane thought Ukraine’s position might be stronger still. He pointed to Ukrainian efforts to cut off Crimea, stronger domestic long-range strike capabilities, Russian inability to use Starlink, apparently weak Russian air defenses, a cratering domestic economy, and reports of surrenders that he acknowledged might be propaganda. One visual shown on screen described Ukrainian drones destroying a bridge linking Ukraine to Crimea. Cochrane compared the possibility, perhaps too hopefully, to summer 1918 on the Western Front.

But Cochrane’s optimism turned quickly to risk. If losing the war threatens Putin’s regime, he asked, what does Putin do? One possibility was damage in the Baltics, using the threat of wider conflict to force a halt. Cochrane also doubted the United States had much credibility as a broker after events in the Persian Gulf and after refusing even to sell some things to Ukraine. Ukraine, he said, may be hoping secretly to win, but that creates dangers for everyone else.

McMaster said Putin was already escalating horizontally through shadow war and gray-zone conflict. The examples McMaster gave included attempts to burn down Keir Starmer’s house, undersea cable cutting, warehouse bombings, bombs on DHL aircraft, drone incursions, and claims on Estonian territory. The purpose, in McMaster’s account, was to show NATO weakness, break confidence, and use the specter of broader European conflict to get U.S. support for ceasefire terms unacceptable to Ukrainians and Europeans. That, he said, would be the first step in breaking NATO apart and doing lasting damage to the transatlantic relationship.

When Whalen asked for the legacy of the Ukraine war, Herbert McMaster began with deterrence. The main lesson, he said, is that it is far cheaper to deter a war than to fight one. If Ukraine had earlier received the capabilities it now has, he argued, the war probably would not have happened.

The second lesson was that war remains about territory, populations, and resources. McMaster rejected what he called the “pipe dream of easy war.” Russia, he said, repeated an error analogous to Germany’s invasion of the Soviet Union: it looked at the map but forgot the scale. He invoked Clausewitz’s “culminating point of an attack,” the point at which offensive power is no longer sufficient to overcome the defense. A portrait of Carl von Clausewitz appeared on screen as McMaster developed the point. Defense, he said, is the stronger form of warfare, and Ukraine used it effectively, trading territory to impose casualties and then counterattacking.

The technological lesson, in McMaster’s view, is battlefield transparency. FPV drones have transformed the fight, while mass artillery remains familiar. Because sensors and unmanned systems make it difficult to sustain offensive operations at scale, he argued, the first phase of any next war will have to be blinding and deceiving the enemy. That means air defense against drones and aerial systems, but also immediate conflict in cyberspace and low Earth orbit, where the capabilities that make the battlefield transparent can be attacked.

John Cochrane accepted that as a lesson from the later war, but emphasized the first two months. The surprise, in his view, was not tactical but organizational: the rottenness of the Russian army. On paper, he said, U.S. analysts were right that Russia should have been able to walk into Ukraine. What they missed was corruption and the failure of military organization. Russian commanders grabbed people off the streets and sent them to die; a proper military, Cochrane said, is well organized, not corrupt, and front-line soldiers know commanders have their back.

McMaster strongly agreed and said that from day one of the invasion he believed Russia had already failed. On the Russian side there was rot. On the Ukrainian side, the army of 2022 was not the army of 2014. Javelins mattered, but the “human dimension” mattered more: leadership, cohesive teams, confidence in one another, and territorial defense forces taking initiative, including against the Russian paratrooper attack on the airfield.

War, McMaster said, is human. Citing John Keegan’s account of battle, he described combat as the struggle of men and women trying to reconcile self-preservation with achieving aims while others try to kill them. In Ukraine, he said, Russian units disintegrated while cohesive Ukrainian units fought courageously.

On Cuba, Whalen framed U.S. policy as an attempt to choke the island economically: former Cuban president Raúl Castro had been indicted, sanctions had been imposed on the current president and his family, and pressure was being applied against the regime. A CBS News screenshot shown in the source said Secretary of State Marco Rubio had spoken directly to Cubans in Spanish, criticized the country’s elite as corrupt, and offered a “new path,” including a proposed $100 million influx of food and medicine. The same visible headline said the U.S. had indicted Raúl Castro.

Niall Ferguson guessed that Cuba was going the way of Venezuela: the regime was on the way out and would be replaced, not necessarily by the liberal democratic government Cuban exiles in Florida would prefer, but by a compliant successor willing to deal with Washington. NBC News footage shown during the discussion was labeled “Growing crisis inside Cuba” and showed people pushing a broken-down taxi, garbage in the street, and people going through large sacks. Ferguson said it was hard to see how something did not give, because Cuba was “fresh out of just about everything.”

John Cochrane was less optimistic. In Venezuela, Iran, and Cuba, he said, the United States had moved a situation from midfield to the opponent’s five-yard line and then walked off. If Delcy Rodriguez were running Venezuela and the Iranian regime had actually been replaced, he argued, Cuba might already have had its revolution and new regime. Instead, he expected some change, perhaps a more compliant regime, but not necessarily a fundamental transformation.

Asked how he would help Cuba recover economically, Cochrane gave the simplest possible answer: get out of the way. Let people run businesses. Let them use real cash. That, he said, would be enough for tremendous growth.

Herbert McMaster added the political economy constraint. The transition would have to move away from Cuban army ownership of essentially everything without creating a new oligarchic class like the one that emerged in Russia’s transition. Otherwise, a new form of oppression could replace the old one. McMaster said there was good news in both Cuba and Venezuela: opposition movements had decided to unite. He cited Rosa María Payá, whom he had recently interviewed, as optimistic, and also mentioned Héctor Fuentes as optimistic about Venezuela’s transition.

Cochrane framed the Cuban state’s existing assets as mostly worthless. The important thing, he said, was not fighting over the crumbling remains of the Cuban economy but allowing different people to build new things they own. Whalen joked that Trump had identified Cuba as a great place for resorts. Cochrane answered by invoking Cuba in the 1950s and The Godfather: as a first step, that would be “a fine future.”

The soccer discussion was a coda, but it had a clear enough point about national temperament to keep in compressed form. Boston, 250 years after the Redcoats left, had been visited by Scottish fans — the “Tartan Army” — who marched to Fenway Park with bagpipes. An NBC Boston clip shown on screen said Boston bars had run out of beer as Scotland fans descended on the city for the World Cup. One fan said, “There was no beer. The Scots fans just drunk the place dry, and then all they had was like Bud Light.”

Niall Ferguson said Scotland’s fans are now the world’s most fun, a change from his youth, when they were among the most ferocious. Defeat, he said, had chastened them. In the 1970s, Scots genuinely thought they could win the World Cup; repeated disillusionment taught irony. Now, in a group with Brazil and Morocco, the reigning African champions, Ferguson said Scottish fans had come to enjoy themselves, see Boston, drink it dry, and remind the world that no nation is more passionate about football.

John Cochrane mostly sided with the Chicago Cubs and described himself as a typical American, but he granted soccer one virtue from childhood experience in Italy: it is easy to play. Children can go to a vacant lot and join a game. They do not need a baseball bat, tee ball, a coach, bases, football equipment, or parents. America, he said, tries to ruin even soccer through organized youth leagues, freezing parents, lattes, and coaches telling children what to do.

Ferguson’s deeper point was that football is an addiction that consists mostly of suffering. If a supporter really cares, most of the match is agony: nil-nil means nobody is winning, one-nil up is insecure, and one-nil down is misery. A Free Press article shown on screen carried Ferguson’s headline, “The World Cup Looks Like a Fiesta of Nationalism. Don’t Be Fooled,” and the visible subhead said that while U.S. sports fans pursue happiness, soccer is “entertainment as pain.” Americans, Ferguson said, may be wise to avoid it if they think life is the pursuit of happiness. Football, as he follows it, is not.