Odd Lots - War in Iran is Chewing Through American Missile Stockpiles

Episode Date: March 16, 2026

The war in Iran has been fought almost entirely in the skies, with both offensive missiles, as well as anti-missile defense systems. But the math is brutal. The war in Ukraine has already put a dent in American stockpiles, and now it is proving costly to protect American bases and their allies in the region against Iranian drones. On this episode, we speak with Tom Karako, a senior fellow and director of the Missile Defense Project at the Center for Strategic and International Studies, a top defense think tank in Washington DC. We discuss the size and scale of the American arsenal, the supply chain constraints for building more missiles, and the Pentagon's general attempts to ramp up production. Subscribe to the Odd Lots Newsletter Join the conversation: discord.gg/oddlotsSee omnystudio.com/listener for privacy information.

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Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthold. And I'm Tracy Allaway. Tracy, you know, I think we're roughly maybe a little bit less than two weeks into the war in Iran. We are recording this March 12th, 2026. And there are, of course, extraordinary number of questions about the timing and the duration of the war. We know already that the economic impact has been quite significant, particularly if you just look at commodity markets. But one of the questions that sort of may help determine timing or outcome, I guess, you know, when we talked about this after the war, in Ukraine started, wars are about supply chains in large sense. And quite obviously, wars are about size and scale of the arsenals and how fast they can be replenished. Right. Two things I know, war is logistics. Yes. And also war is a racket. And the only reason I know that is because I just literally downloaded the book. So I'll know more about that in a second. But you're absolutely right. I do not like talking about war or conflict or military stuff in general. But I do enjoy talking about supply chains. And there's one crucial supply chain that we haven't really discussed in detail

ever before. But it keeps coming up more and more in this conflict. Yeah, that's right. So obviously, you know, you see these numbers. And I don't know how real they are, but they're extraordinary, you know, that's like Iran can launch an attack against a military base and innate nearby country, etc. I saw this talk about the extraordinary efficacy of cheap drones and so forth. And then you hear about the extraordinary cost of missile defense. Right. So putting on our old international relations hats. Yeah.

A lot of what we used to study was this idea of asymmetric warfare, right? And the classic examples that would come up would be guerrilla warfare, where, you know, you have a less well-equipped army that is engaging in exhausting skirmishes against, like, a better equipped larger army. Yeah. And it's a way of, like, offsetting their own weaknesses against the strengths of another force. Nowadays we don't really have that kind of ground conflict, knock on wood, but you're seeing it, some people say, play out in this arena of missiles, which is really where all this conflict

is playing out is in the missile space. So you hear these stories about like Iran is launching these drones that cost, I think, $25,000 a pop for some of them, or putting mines in the Strait of Hormuz, which are also very cheap relative to some other tactics. And meanwhile, you hear things like, well, the UAE's missile defense system costs like millions of dollars per pop, literally per pop against a drone. And meanwhile, the U.S. is firing, you know, interceptor missiles or whatever that cost, again, millions and millions of dollars. Yeah. And you hear and, you know, again, the math, the sort of missile math seems very lopsided. And then, of course, the question is just the pure numbers. And how many do you have and what is the capacity to ramp up production, et cetera? All huge questions that are. Where do missiles actually come from? Where are they made? That's right.

Anyway, we have a ton of questions and we don't have the answers. But we're going to learn a lot. We have the perfect guest, someone who knows about this intimately, someone who focuses on this entirely. We're going to be speaking with Tom Carrico, senior fellow and director of the missile defense project at CSIS. And he's going to walk us through all of this and how to think about the supply chain of these armaments. So, Tom, thank you so much for coming on outlaws. Hey, great to be with y'all. Thank you so much.

What do you tell us, just to begin, what do you do? What is the focus of your work? CSIS, Center for Strategic International Studies, I would say, is the main defense think tank in Washington, D.C. It's been around since, you know, I think the 60s in the Cold War. And within CSIS, there's sort of the department that focuses on hard power to focus on defense department-centric things. And within that, I run the missile defense project. And so basically, think mud to space, UABs, cruise missiles. ballistic missiles, space sensors, you know, everything in that window, both offense and defense, is what my team kind of studies, writes about, comments upon, and hosts just a lot of events

and commentary. Actually, before we even get into missiles, this is a question I wanted to ask, but why do we have defense think tanks anyway? Like, why do these exist? Because if you think about military conflict in the U.S., presumably there should just be one actor engaged in military conflict with other states at any one moment of time, and that's the actual U.S. government, the Department of Defense slash Department of War. Why do we need private actors opining on military tactics, strategy, supply chains at all? Yeah, that's a good question.

That's a fair question. And I think I would answer it with what folks coming out of DOD always say, which is it's the world's largest bureaucracy and quite literally they don't have time to think. That is what senior officials say all the time. And when you go in, you also tend not to have new ideas. And so it's kind of an opportunity for idea generation. And this is not my formulation. This is what you frequently hear from people who go in and out of government, that they need those idea generation in a way to be contracted out by those people who have time.

And so, now, having said that, a lot of people who go into government come from the think tank world, come from the policy world, I think I would put it, rather. And they go out, they think, they write some things, they reflect on things and study things. And then they kind of perhaps go back in to govern. Let's talk about from the outside perspective, you know, you try to estimate the size of the arsenal of various different weapons that the U.S. has. How transparent is the government about the size of stockpiles and how much is one's job from the think tank world from the outside, an exercise and triangulation, inference and so forth to be able to understand these things? And then just like besides the sort of approach you take to measuring these things, what are some of the numbers that we're talking about right now? Yeah, so look, it's got a very case-to-case. But I would say in many respects, although it's the government's job to keep a number of things secret, so that the bad guys don't know exactly what we have, or how many we have, rather. I would nevertheless say that to a very large extent, we are a democracy,

and a lot of detail is available in the budget books that go over to Congress every year when the budget request, the annual budget request, comes out. And so there is a pretty good amount of tracking. If you want to understand what kind of defense departments you have, look at the money. And so there's a decent amount of information out there about, you might say, the garden variety missiles or the garden variety capabilities that have to be, you know, deliberated, appropriated by Congress and then also built by industry. And so while exact numbers are kept sensitive, you can get pretty close. in terms of these dollars and this number of rounds, you can get pretty close. For those who haven't been following this as intensely as you have, can you paint a schematic

of the kind of missiles we're talking about when we talk about the situation in Iran right now? And what exactly are the different missile types being used for? I know guys love talking about missile names, right? And being like armchair military strategists. So some people might know this already. But for the benefit of those of us who have it, you know, we just see a missile and it's a missile. What are the different types that are currently being deployed? Basically, there's platforms and there's projectiles, you know, aircraft, ground vehicles,

ships and this sort of thing. But basically since the 1960s, there's been a high degree of emphasis on essentially guided missiles, a precision guided munitions of various kinds, and also a standoff capability. And so, you know, indirect fire, cannons, guns, this kind of thing, began to be replaced by much more over-the-horizon capabilities that could fly out of good ways, come back down, and especially in terms of terminal guidance, could then find a ship on the ocean or find using terrain mapping or what have you. So basically, since the kind of the precision guidance revolution in the 70s especially, just been an enormous amount of progress. And so, and frankly, this technological progress is no longer that a monopoly of the United States, as it perhaps once was. It's ubiquitous. Even folks like Iran, North Korea, and that kind of thing have it. And so that's the baseline. And so there's, look, there's different kinds of missalry.

And a missile, emologically speaking, is simply that which is sent. There's ballistic missiles that fly gravity's rainbow, mostly unpowered for most of their flight. cruise missiles that are essentially aerodynamic and use lift and drag to travel some kind of jet engine or what have you. And then there's these new classes of things that are kind of blending. You know, people talk about hypersonic gliders that may start off with a ballistic push, but then have the maneuver, the speed of a ballistic missile, but the maneuverability of a cruise missile or aircraft, you might say. And so it's a rich and diverse spectrum that has emerged over the years. and as a former Biden administration official said, and I like to repeat, missiles truly have become

weapons of choice. It's the thing for which we reach early and often in a conflict, and largely because of the combination of that precision guidance and that standoff capability. And so when the first Trump administration wanted to go hit Syria, you know, they sent 59 Tomahawks. That's a cruise missile to go get them. And in this conflict, there has been enormous, and I would say a scary amount of missiles expended, on the part of the United States, hundreds and hundreds on the part of Iran lashing out basically all of their neighbors with a combination of ballistics. And a lot of these drones are essentially cruise missiles. When you're over a thousand kilometers in range, you know, it's essentially a cruise missile,

these she heads, for instance. And so then you have the missile defense world. And, you know, it wasn't that long ago when polite society, it was conventional wisdom that it was impossible to hit a bullet with a bullet. Over the past, especially five years, that has been completely and utterly refuted. And in conflict after conflict, in Ukraine, in the Red Sea operations, in the defense of Israel a couple of times now, we've seen an extraordinary degree of missiles being defeated by a combination of effects, not just missile on missile, but a combination of effects. And now, you know, we're kind of surprised when we miss.

at some of these things. And what was once an American idiosyncrasy, the pursuit of this missile defense capability is now very much a global phenomenon. After the Ukraine conflict, especially in Europe, the European Skyshield Initiative, Germany buying an Israeli air O3 system for ballistic missile defense, it has been a sea change. The demand signals, the supply and demand signal of long-range standoff and the means to contend with it is very much a global phenomenon. I'll say that the top two priorities for aid for Ukraine over the past four years were what? Long-range fires, missiles, and air and missile defense. They went so far as to put the Patriot launcher on their currency because it has basically kept them sovereign. And these are the top...

I didn't know that. It's fun. I've got one in my office. Oh, right? The currency and not the missile, right? I'm still trying to buy a Patriot for the top. They won't get it. I'm working on it. Today's show is brought to you by Vanguard. financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and

traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio. That's vanguard.com slash audio. All investing in subject to risk Vanguard Marketing Corporation distributor. Eating well shouldn't be complicated, but somehow it turns into recipes, prep, cleanup, and half your Sunday gone. Factors solves all that. These are fresh, ready-to-eat meals designed by dietitians, delivered to your door, and ready in just minutes. No prep, no cleanup, no excuses. And it's not just about convenience. You're getting real food, balanced nutrition, and zero artificial stuff. Meals that help you stay on track for all of your goals without the grind of doing it all yourself.

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And so I said a moment ago that Ukraine, the missile defense has helped keep Ukraine sovereign, right? If not for being able to thwart these incoming air and missile attacks, it would have been a very different situation. Let me go back for the last summer. In the hundreds of missiles, 650 projectiles from multiple parts of the Middle East coming at Israel all at once during the 12-day war. If those hundreds and hundreds of objects had arrived all at once as they were intended to do in a place the size of New Jersey, it would have been catastrophic. Surprisingly enough, almost everything was defeated. And so it is, missile defense buys time to end the threat by other means.

It does not end the threat itself. Now, what I said last summer, after that conflict ended, the Trump administration, basically through the Iranians a lifeline and said, hey, we're going to stop. I said that's going to be a mistake because what's going to happen is the Iranians are going to rebuild, and then we're going to come and we're going to do this again in a year or so. And I was wrong because it didn't take a year. It's only nine months. And why that matters and why it's scary is because it's that capacity. Capacity of defensive interceptors buys time.

But it takes a heck of a lot of time to produce that capacity. And so this gets to the specter. I've got an op-ed coming out on this. The specter of going Winchester, of running. out of defensive interceptors, and that would be a very bad day. And so when you talk, you hundreds and hundreds of missiles are going to require hundreds of interceptors. That was last year, again, this year. And so that's the scary part, is the massive expenditure of these things. And I want to quote General Kane, the chairman of the Joint Chiefs who said, who's asked,

do we have enough? And he said, we have enough for this conflict. That is not the same as saying that we have enough for the other tasks that we have around the world. Most significantly, deterring a conflict with China. And so we have now cut in very substantially to our total inventory of missile defense interceptors. The numbers, the complete numbers are not been released. We've done a study on this from what it was last year and it was a lot. And so why that matters, right now we're moving patriots and perhaps some fad, those missile defense systems from South Korea and Japan to the Middle East, that's significant because their job is to be in the Pacific and to deter, to provide a defensive deterrent to Chinese adventurism or to North Korean adventurism or what have you.

And so, you know, we've been saying, different administrations have been saying that we're going to pivot to the Pacific since the Obama administration. We're still kind of waiting for that to happen. We keep lurching back to Europe and to the Middle East. In fact, a lot of the administration and officials in this Pentagon have been among those who said, hey, we've got to focus on China. We've got to focus on the Pacific. And what they're doing right now is presiding over an extraordinary vaporization of our inventory in a very short window of time. And so what I worry about, you've heard of the Davidson window, the former head of Indo-Paycom who said, hey, he worries that China would be ready to move against some of their neighbors by 2027. What I worry about most is that this

extraordinary expenditure of stuff is not going to be replaced in a year. Absolutely not. And that, in fact, this may kind of be a self-fulfilling prophecy of encouraging, of tempting trying to do something very bad. Joe, I haven't heard the term going Winchester or I'm Winchester for years and years and years. Do you remember that? No. It's running out of ammunition. Yeah. The only reason I know this is because my dad made me watch like an inordinate amount of military movies growing up. But anyway, I'm very curious about something you said, which is that you can't win a war with missiles. And it seems like with missile. Oh, I'm sorry, with missile defense, but with offense, presumably you can, which seems to be the strategy right now. Well, and so let me

speak to that. The joint force of the United States and working with Israel hit, you know, I think it's up to 5,000 targets within the first several days of the war. Well, they, were doing so from afar. They were doing so from standoff. And so while they're not releasing the numbers of the Tomahawk missiles, of the jasm, of the elrasms, and such, they're not releasing those. One may easily surmise that a significant number of those targets were serviced by these long-range things, of which we have finite quantities. And so the offensive strike capabilities is also even more important as a deterrent, and we are chewing those up by, at least least the many hundreds, and it may, I suspect, turn out to be thousands. And that's also part of

the scary part. Can you give a little bit more detail on, I guess, the procurement process for different types of missiles? Because I'm very curious about the thinking that goes behind, you know, someone saying that we want to have this many long-range offensive missiles versus this many, you know, maybe shorter range defensive missiles. How do those decisions actually get made? That's a good question. You know, fundamentally comes down to an ideal. an idea of the order of battle of how a conflict may play out. And so, you know, this is the job of the military planners and the joint staff to kind of think that through. And I hypothesize this is how many how many missiles we would need to have in theater, how many aircraft, how many ships, and this is

how we might be able to marshal a force. And conversely, how we think the other side might be able to marshal their forces. I will say that the Ukraine conflict especially, made folks realize that our estimates of what we would likely need were dramatically too low. And so I'm just going to give one example, but I think you're going to see this. And in fact, there are news developments over the past year that gratify this in different ways, that in April of last year, the U.S. Army quadrupled its objective acquisition number of how many Patriot Pack 3 missiles it needed to buy over the next coming years, quadrupled that number from like 3,000 something to 13,000 and something. And I think, kind of behind the scenes, you're seeing a recognition that as we've seen the Ukrainians and the

Russians use enormous numbers of projectiles or missiles of different kinds, kind of a sinking in that, oh, in an actual conflict, this would ramp up dramatically. And so even before the 12-day war last summer between Israel and Iran and are being involved, even before that, the Pentagon began to do a few things, some really important things. The Biden administration had been ramping up a number of missiles of offensive and defensive of various stripes. You probably remember the discussion about A-Tacombs and whether we could spare any A-Tacombs to give to Ukraine. The Biden administration didn't at first, and then they eventually did. That was true with a lot of munitions over the past four years. Flash forward to last spring, incoming

Deputy Secretary Steve Feinberg, who comes out of the private capital world, which you listeners, no doubt, no, came in and began to call in the CEOs of a number of defense companies. And I will say metaphorically, grabbed them by the lapels and shook them to say, we need to maximize production. You know, I respect his respect for hard power. And over the next six months, from a basically memorial day of last year, over the next six months, you began to see a lot of drills and a lot of figuring out of just how many tomahawks and all these offensive and defensive missiles and how much solid rocket motor production we could do on and on. And so over the past two months, since in January and February of this year, all that work was basically publicized and at least in press releases. It said that Rathion would ramp up

five munitions. There's more to come, by the way. Lockheed announced that and Pack Three Patriot that they were going to quadruple fad and go on the Patriot side from 600 a year to 2,000 a year in production. And we're going to go, by the way, from Tomahawks cruise missiles, from 57 requested last year, which is a pittance, to their goal is a thousand a year of Tomahawks. And what I would say is that those are all very sensible moves, very belated, by the way, that are properly allowing the lessons of the past. a couple years to be applied. Break, that was all before we went to war with Iran. And so now the ramp, it's called the munitions ramp, hasn't yet begun. And the other kind of scary thing is it hasn't begun because the money wasn't there.

And the appropriations bill that came out in January, I guess, became law in early February last month. The report language said, oh, by the way, we know, we Congress, the appropriators know that this appropriation is 28.8 billion with a B short of what the Pentagon requested just for munitions. And so there's a couple of things going on here. One, we already had that 28 billion and change shortfall for FY26. And then, and because of that, we can't put things on contract adequately to start this seven-year process that is a good plan, very good plan. And now we have just gone and vaporized many billions of dollars in hundreds of,

and probably thousands of missiles over the past two weeks. And so you put that together, and it's not a very good picture. And so at the very minimum, Congress is going to have to step up, I believe, for ammunition supplemental in the very near charge. So let's talk about the binding constraints to really ramping up production, because there's clearly the political constraint, and by political, I mean appropriations. Votes have to happen to say, we're going to allocate these dollars to defense. Okay, we understand that part. There's politics, that's difficult. Let's talk about the binding physical constraints. So when you say, okay, you want to go from 57 to a thousand. What are we talking about in terms of the facilities that we

have, the natural resources? I imagine rare earth metals and certain key commodities may be choke choke points or bottlenecks in this process. We all would love, I presume, to have an infinite number of missile defense capabilities, et cetera. We would like to not have to choose between Korea and the Middle East or the Gulf allies and so forth. But what are the physical constraints as you see them to ramping up production? Yeah. Well, you mentioned their unlimited supply. If I'm not mistaken, there was a presidential tweet the other day saying that we had a virtually unlimited supply. And I would just say that is a statement that is problematic. To save a least. Relative to reality. So, so look, you just listed off.

facilities, long lead items for production. I know you all like supply chain issues. There's also people. There's also the workforce. You know, there's basically one facility in Tucson, Arizona, that cranks out Tomahawks, for instance. There's a small number of things. So actually, when you start looking at the supply chain,

it is in surprising degree, and there's been a number of papers written on this, although there's a lot more to ascertain, is there's a lot of bottlenecks, So there's a lot of sole source for some widget. And to the Pentagon's credit, over the past several years, there's been a lot of, I would say, naval gazing is a bad term, but a lot of introspection, trying to figure out and understand, to at least truly intellectually understand what is the supply chain.

And there's still some opacity to that. But nevertheless, the Primes, the defense prime companies and the department have been looking into this, and I think has been illuminating in terms of the bottlenecks and sole source issues. And so you've seen, for instance, a, I would say a series of experiments trying to, A, get private capital involved, the Office of Strategic Capital. When that was first being stood up, I asked the guy in charge of it, I said, I really want to know one thing. Are you going to be big enough to matter? You know, America's asymmetric advantage, to use that phrase, America's asymmetric advantages were a wealthy country, but we have to leverage that

private wealth. And I think there's a number of initiatives on that front that will direct, and are helping to direct private capitals to the supply chains for things that matter to defense. The other thing, a couple of experiments going on here are investment in, for instance, new solid rocket motor producers. Everybody knows SpaceX and Space Launch side of the things. There's also a lot of kind of new startup companies for solid rocket motors. I think this is good. I think this is necessary. And if they are big enough to matter, then we should absolutely be doing all that. At the same time, there is the risk that we're kind of, I like to say, fiddling with the base and the treble knobs and not turning up the volume. And that essentially means there's two big companies that do SRM, solar rocket motors. And one of them just got a billion dollar equity stake investment by the Pentagon.

that is L3 Harris that had Aerojet as a subsidiary. The other big one, of course, is Northrop Grumman, which owns an assumed overall ATK in the past. And so on the solid rocket motor front, there's these experiments going on and these investments. The Biden administration put $216 million into Aerojet in Canada, Arkansas, which is actually one of the handful of places where we kind of keep it away from polite society. You don't want big things blowing up. up near cities, which is one of the challenges of production as well. A third type of experiment, and this is coming out of Steen Feinberg in particular, is that in this plan, in this initiative to get this munitions ramp, he's doing something very different, which is he's asking the primes

to lean in on their own dime. And when I say lean on their own dimes, I mean a lot of dimes. Because we're talking about double-digit billions. He's basically asking the companies to pony up out of their internal funds, publicly traded companies again, to on-spec begin to invest in these facilities. Now, if you're a publicly traded company, that's sticking your neck out. And there has been the customer here, the DoD is a monopsony in terms of buying things that blow up. The customer has not been very reliable over the years. And of all the things DOD buys, munitions, has been a sine wave up and down, lots of, very cyclical. And so that hurts the certainty of industry to be able to invest and hire and buy long

legal items, et cetera. And that's why you need multi-year procurement. That's why you need a seven-year window. And that's why this whole munitions plan makes sense if we can get it off the ground. Eating well shouldn't be complicated, but somehow it turns into recipes, prep, cleanup, and half your Sunday gone. Factors solves all that. These are fresh, ready-to-eat meals designed by dietitians, delivered to your door, and ready in just minutes. No prep, no cleanup, no excuses. And it's not just about convenience.

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Yeah. I don't think we want any loud noises on a podcast about missiles. Tom, what about if we can't ramp up production? really quickly. There are existing missiles out there, although to your point, there's a dwindling stockpile. But are missiles like, I don't know, shoes or a jacket, can you just like tap your allies and say, well, we loaned you a missile? Can we have it back and use it now? And then if so, what does that actually mean for some of our allies who are still engaged in conflict, like Ukraine? I see there's a headline out there right now saying that in recent weeks, Ukraine's F-16 jets have been

starved of U.S.-made missiles. And now we have other allies like the Gulf states who need some of their missiles more than ever. So you raise a really good point. And I'll tell you, if I had a nickel for every time the Trump administration, 1.0 or 2.0, said to our allies, hey, you need to spend more on defense. You need to be buying more American. There was just an executive order a couple weeks ago saying, you know, we shall use the sale of American weapons to our allies as an instrument of foreign policy. We've always kind of done that basically since forever. But it was, you know, a little bit of chest beating and saying, hey, you are friends need to buy more American made products. And there's good reason for that. America makes the best of the kind

of exquisite crown jewels capabilities for seekers and things that hit bullets with bullets, to be sure. But there is also a problem. There are. 18 countries. There used to be 19, now 18 countries that operate the Patriot missile defense system globally. And the Biden administration had to suspend the deliveries of Patriot missiles to basically everybody a couple years back because they had to send more to Ukraine. Right. So in terms of our allies, it's actually that on the one hand, we're telling them buy more of American stuff. And then the second thing is, oh, but we might not be able to fulfill your orders of the things you already bought. Like, that's the problem. That's one of the big reasons why this ramp needs to happen. It's not

merely for U.S. needs, but also to provide the deliveries that we want our friends and allies to be equipped with. And we want them to buy it not just because we have some commercial interest. A lot of times U.S. taxpayer ends up footing the bill for some of these things, but because we want interoperability. We want Australia and Japan to be. be operating Tomahawk and Aegis destroyers. So that our Aegis destroyers and our Tomahawk weapon system, they can all work together and the whole be more than the more than the sum of its parts. So there has been a lot of leaning on the Europeans to send stuff to the Ukrainians. And look, it is their backyards. It kind of makes sense for them to be ponying up for their security.

You know, the Poles, Poland remembers the Soviet boot quite well. And they and a handful of other countries have been especially at the tip of the forefront to help the Ukrainians. So this is very much a global phenomenon. And there are, to your point, a lot of entangling relationships in terms of the deliveries of systems, the acquisition of systems. Denmark, for instance, just decided they were going to buy a French Sampete air defense system rather than Patriot. Not because Patriot was better, and frankly it wasn't because of the whole Greenland thing. It was because of schedule because there's a long queue of partners that want that stuff. And sometimes you need stuff sooner as opposed to the best.

Can you talk about, you know, in the very beginning we talked about the asymmetry of these very ostensibly very cheap drones and very expensive missile defense. And you just think if they're really, if the drones are as cheap as advertised, there could just be quite a lot of them. you can chew through that missile defense. How do you talk to us about that math? How real are these numbers that you see like $20,000 drone versus $4 million defense missile? Because that seems pretty brutal. But how do you see that equation?

I have to say that has to be the most repeated cliche that's put out the most repeated headline. You know, I think the Iranians' heads are a little bit more than 20,000. Of course, there's lots of really super small, short-range stuff. But when they're talking about going a couple of thousand kilometers, I think the number is quoted, some 50 and 80,000. There's some poetic justice that we capture some of those sheds in an American company, reverse engineered them.

They're called Lucas, Lucas drones, and we sent some of them back at Ukraine. And the quoted cost for that, I think was $30,000. So that's good. You need affordable mass. You need a tritable mass. And so that phenomenon, look, Ukraine is producing millions, millions per year of, now many of them are very, very small, but millions of drones. I mean, it's darkening the sky, as it were. Most of them don't last very long. Most of them may only fly once, for instance. And so that is certainly a phenomenon, a major trend. But going back to the cost per round, people like to count the cost of a missile,

because it's kind of easy to count. The things that are harder to count that are frankly bigger is often the massive quantities of jet fuel that are used to drop much cheaper gravity bombs. And so I think it is actually rather misleading to just look at the cost of the Patriot or the cost of the standard missile or what have you. If you had to throw a thousand drones

to have the same effect as one 1,200-kilometer range tomahawk missile, You might not even be able to get there. Tomahawk missiles are the longest-range missile and it's got 500-pound warhead. These drones don't have that kind of warhead, so therefore they don't have the kind of effect. So it really comes down to what is it you're trying to do? And oh, by the way, it's the platforms and it's the whole operational cost that matters, including, by the way, the cost of operational failure.

You know, I'd like to say, I've had plenty of admiral to say this on stage with me at CSIS over the years because I always ask this point, a ship captain, when he sees a cruise missile coming into his ship, is not going to pull out his slide rule or his pocket calculator and say, what's the cost of that hoothy drone and what is the cost of the missile we're going to do that? No, they're going to protect the ship. They are going to go for mission success. And so you say, well, that's value versus cost, and that's true. but the cost, the real cost of the Iran operation is not going to be the munitions. It's going to be the enormous steaming of the USS forward from Venezuela to the Middle East. It's going to be the people and the jet fuel and all of these other things.

And by the way, the facility repair, those things are going to eclipse the cost of the munitions. So nevertheless, defense is hard. It is hard to hit an incoming screaming ranchry vehicle from, 1,200 kilometers away, for instance. And so defensive interceptors are going to be more expensive than offensive ones. That's just a fact. And that's, again, why missile defenses won't win a war. They can only buy you time to end the threat by other means. And that's why you have all these other things as well. As I like to say, you could throw a thousand cheap UAVs into the sky and it won't do the job of a single patriot interceptor. Capability matters too.

So you mentioned ending the threat. just then. And this is the other big question that I and I imagine a lot of other people have at the moment. With a ground conflict, you can kind of envision an endpoint where, you know, an army comes marching into a state capital and that's pretty much the end of the conflict. With missile warfare, it seems like it can go on for a very long time. And I'm not quite sure what the defining point is at which two sides basically say, okay, we're done now. Someone's won and someone's lost. Yeah, well, and that was the case in the 1980s between Iran and Iraq, for instance, lots of, lots of missiles going back and forth. So you've had on a couple important points there. One, as is often observed,

it's really hard to do everything with air power. It's hard to know if you have destroyed things on the ground without being there. And that's why I've said, you know, there, there is a is at least going to be the need, whether that need is met or not, there's going to be the need to have some forces on the ground. Could be special forces, could be partners from other countries, but there's going to be that felt need to figure out did we hit that underground missile city, for instance. Point two, you know, everybody, myself, other folks were getting nervous when day by day would go on and the Iranians kept launching. So the good news is that the current curve is flattening.

You have a phrase from the COVID years. You've got to flatten the curve of the rate of fire. And so you take a look at the press conferences. That's a very good development. They've gone from hundreds a day to smaller numbers. That reflects that we are somehow doing something, hitting the launchers, hitting the missiles, hitting the commandant control, or at least the commanders, perhaps decentralized commanders.

That is a good sign. And add to that that we've now going to, This is the two most important words from one of the recent press releases from Chairman General Kane is he said the words munitions transition, which is to say we don't have to keep using 1,000-kilovar range tomahawks because the Iranians don't have air defenses anymore. We can use gravity bombs, of which they are plentiful. Still had to fly them back and forth, and that's not cheap, but you can fly back your J-Dams, your small dammer bombs.

And there was a press release, I think, over the weekend that we were transferring a bunch of of munitions to Israel. And when you look at it and you look at what's in that list, it was grabbing bombs. And the reason that we've gotten there is we no longer have to do the standoff stuff. That's good. We can now do the stand in, you know, flying over top and dropping things. But to your point, it's still hard to do all that from the air. And there is going to be that uncertainty, which is why, frankly, you're not going to have perfect military certainty from the air. To really end this, you're going to have to have, I would say, a political change. Tom Carrico, thank you so much for coming on, odd lots.

I learned a lot from this. Really appreciate you taking your time. Thanks all. Really enjoyed it. I never heard that, Tray, going Winchester. That comes up in movies. You know, my dad's, he flew B-52 bombers in Vietnam. So, yeah, I have very mixed feelings about all of this.

Defense procurement strikes me as an extremely difficult, I don't know, game theory equilibrium problem to get right. And, you know, you, because you have the monopsony buyer. It's a monopsy buyer, but it's also political and the political wins are going to change. You have, you know, companies that are naturally profit seeking and profit maximizing. And many of them, and he alluded to this, we didn't talk about it that much, are monopoly sellers. Right. Right. Like, if there's one component, if they're in, we know all about how with advanced supply chains of complicated things. You might have million or thousands of parts that go into it. And some of these parts may be produced by one company. Maybe there's like a shiny mirror or something somewhere.

There's only produced by one optical factory somewhere in the United States. Then you have the Buy American requirements. So then further narrows supply chains, et cetera. So you have monopolies and monopsonies facing off. And then, you know, how do you get sustained spending, sustained procurement through the ebbs and tides of a war, extremely difficult challenge. It's such a weird ecosystem of players in military procurement. And the other thing is, like, most of the time, what you're planning for is a hypothetical conflict, right? If an actual conflict emerges, then I guess you have some more certainty to a degree

about what you need to actually fight it. But, you know, if just a few years ago, if you're sat there and you're going, like, should we be buying stuff for war with a ranch? Should we be buying stuff for China doing something with Taiwan? Like these are very different theaters of war. And I imagine that if you're a procurement officer, like the temptation must be to, you always want to have the best, like, newest, shiniest stuff. And so I'm just fascinated by how people actually make those decisions in the face of both

monetary limits and physical reality and political reality as well, which we kind of We glided past, but for obvious reasons. Have you seen the photos? I mean, there are photos of the U.S. packing up THAAD missile defense systems from South Korea. I have not seen that. Yeah, if you just search for it. It's kind of, it feels very, when you see the photos, you do not feel like,

oh, we are a major superpower. It's like, oh, here are these missiles. Sorry, we're taking, we have to move them elsewhere because we don't have enough right now. It's pretty, it's pretty shocking. But, you know, like, it's hard, it's hard to argue against the fact that we seem to be spread very thin these days. The war in Ukraine continues to go on. Obviously, there's this new war in Iran. And then, as you mentioned, you know, at least since the Obama administration, they've been talking about the pivot to Asia and so forth. And that keeps not happening. But there are obligations on the ground there. The whole thing seems to spread very thin. War is logistics and a racket. Yeah.

Shall we leave it there? Let's leave it there. All right. This has been another episode of the Odd Lots podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Jill Wisenthal. You can follow me at the stalwart.

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