Joe Weisenthal and Tracy Alloway host this March 12, 2026 episode discussing the economic and logistical dimensions of the ongoing Iran conflict, now in its second week. They're joined by Tom Karako, Senior Fellow and Director of the Missile Defense Project at the Center for Strategic and International Studies (CSIS), Washington D.C.'s primary defense think tank.

The conversation explores the critical supply chain constraints facing U.S. missile production and defense capabilities. Tracy references downloading War Is a Racket, the classic critique of military-industrial interests, while examining how wars fundamentally depend on logistics and arsenal replenishment capacity.

The discussion covers the asymmetric warfare dynamics between cheap offensive drones and expensive defensive systems, the physical and political constraints on ramping missile production, and the strategic implications of depleting U.S. stockpiles while maintaining global commitments from Korea to the Middle East.

The Missile Defense Arsenal Crisis

Tom Karako warns of 'going Winchester' - running out of defensive interceptors - after hundreds of missiles were expended in recent conflicts, with General Kaine stating 'we have enough for this conflict' but not for other global tasks like deterring China.

The U.S. is moving Patriot and THAAD systems from South Korea and Japan to the Middle East, weakening Pacific deterrence against Chinese or North Korean threats despite repeated promises to 'pivot to the Pacific' since the Obama administration.

Ukraine's currency features a Patriot launcher because missile defense 'has basically kept them sovereign' - without it, the country would have faced a 'very different situation' under sustained missile attacks.

Production Bottlenecks and Supply Chain Constraints

Critical production bottlenecks include single facilities like the lone Tomahawk factory in Tucson, Arizona, plus sole-source suppliers for specialized components and limited solid rocket motor production capacity.

The Biden administration invested $216 million in Aerojet's Camden, Arkansas facility, one of the few locations where 'we keep it away from polite society' due to explosion risks near populated areas.

Deputy Secretary Steve Feinberg is asking defense companies to invest 'double digit billions' of their own funds to ramp production, despite the Pentagon's historically unreliable procurement cycles creating investment uncertainty.

Eighteen countries operate Patriot systems globally, but the Biden administration suspended deliveries to allies to prioritize Ukraine, creating the contradiction of telling allies to 'buy more American' while being unable to fulfill existing orders.

The Economics of Asymmetric Missile Warfare

Iranian Shahed drones cost $50,000-80,000 each while traveling thousands of kilometers, compared to millions for defensive interceptors, though Karako notes this cost comparison ignores operational context and mission effectiveness.

A ship captain facing incoming missiles 'is not going to pull out his slide rule and say what's the cost' - they prioritize mission success over cost calculations, making defensive capability essential regardless of price.

Ukraine produces 'millions per year' of drones, 'darkening the sky' with affordable mass, though most are short-range and single-use compared to long-range precision missiles like Tomahawks with 500-pound warheads.

The transition to 'munitions transition' allows cheaper gravity bombs instead of expensive standoff missiles once air defenses are suppressed, as evidenced by recent transfers of gravity bombs to Israel.

Strategic Implications and Future Readiness

The Ukraine conflict revealed that U.S. estimates of wartime missile needs were 'dramatically too low,' prompting the Army to quadruple Patriot acquisition targets from roughly 3,000 to 13,000 missiles.

Lockheed announced plans to quadruple Patriot production from 600 to 2,000 annually, while Tomahawk production targets 1,000 per year versus just 57 requested in the previous year's budget.

Congress appropriated $28.8 billion less than the Pentagon's munitions request for FY26, creating a severe funding shortfall that existed before the Iran conflict began consuming additional inventory.

Karako worries about a 'self-fulfilling prophecy' where depleted U.S. missile stocks could encourage Chinese adventurism, particularly given the 'Davidson window' prediction of potential Chinese action by 2027.