"Trump has lost everything" | Yanis Varoufakis | The Exchange

ELI5/TLDR

Varoufakis, a former Greek finance minister who tried to fight the EU’s austerity machine and lost, sits down at age 65 to argue that Trump just torched his own presidency by letting Netanyahu drag him into bombing Iran. The wider story: discontent after the 2008 crash never got channelled into a serious left project, so the right is filling the vacuum with the same playbook fascists used in the 1930s — copy the left’s critique of bankers, then govern for big business once in power. He also takes detours through Greek politics, the absurdity of UK electricity pricing, and why his mother’s ability to love and loathe the same person is the most useful political skill he learned.

The Full Story

A childhood under a NATO-backed dictatorship

Varoufakis opens with a memory from age nine. His mother takes him in a taxi to a boutique hotel in suburban Athens that the Greek Gestapo has commandeered as a torture site. They are visiting his uncle, a Siemens executive turned resistance bomber, who has just been sentenced to life. The uncle hands him a model Stuka airplane he made out of matchsticks and cigarette cartons, painted with a swastika so the guards would let it through. One guard hurls it at the wall — bait for his mother to react so he can hit her. She doesn’t. They take the broken plane home, where his parents dissect it and find a hidden message coordinating the uncle’s court-martial defence.

The detail he wants you to notice is that this dictatorship — the one that tortured his uncle — was a NATO member state. The “free world” had no problem with Greek fascists as long as they kept the communists out. He calls this the Roosevelt doctrine: “they’re bastards, but they’re our bastards.”

Loving and loathing the same person

The book he’s promoting, Raise Your Soul, started as therapy. After a bad run of years and electoral losses, he began writing about his mother. The thesis that emerged: she taught him to hold contradictions without flinching. She was sceptical of her brother’s bombs, proud of his courage, critical of his right-wing politics, devoted to him as a person. All at once.

She knew how to love and to loathe him without allowing the contradiction to destabilize her, to make her lose her moral poise.

Varoufakis treats this as a vanishing political skill. The George W. Bush “with us or against us” framing has eaten the modern left, he thinks — you either fully endorse a person or you cancel them. His test case is hanging out with Emir Kusturica, the Serb-nationalist filmmaker some of his comrades wanted him to shun. His position: extract the gold, fight the nationalism, don’t pretend the person is one thing.

Why Trump just lost everything

Three months ago, Varoufakis argued that Trump was actually winning — Xi had won the chip war, Putin was winning the narrative on Ukraine, and Trump had won the tariff war against a clueless Europe. The one thing keeping him politically intact, ironically, was the same restraint he had shown in his first term: he had refused to be coopted by Netanyahu into a Middle East war.

Now he’s done it.

It is only my considered opinion that Trump was winning everything up until he allowed himself to be dragged into this war by Netanyahu. And now he’s going to lose everything. I think his political project is finished. Kaput.

The mechanism is domestic, not foreign. The MAGA coalition has three legs — tech oligarchs, Christian nationalists, and the nationalist-populist isolationists who showed up because they were sick of forever wars. Trump has been quietly betraying his blue-collar base since day one (Varoufakis points to the “big beautiful bill” as class war), but patriotism papered over it. War in Iran breaks the spell. Doubled petrol prices, he argues, are something a 110-mile-commute MAGA voter can absorb for a week, not for months. Once you’re on the escalation escalator, you can’t get off without staging a Roman-emperor-style fake triumph — and even that won’t hold.

Europe as occupied territory

His view of European leaders is brutally simple: they don’t exist. Starmer can kick and scream that he opposes the war, but he hands over the British sovereign base at Akrotiri in Cyprus to launch the bombers. The official line is that the bases are only used for “defensive operations.”

So when bombers leave the British base of Akrotiri and they go over Iran and they kill children, that’s defensive. Okay. Then George Orwell is having a field day.

Greece, in his telling, has gone from sovereign nation to Israeli satellite. He dates the pivot to a 1999-2000 strategic doctrine — the enemy of my enemy is my friend, with Turkey as the enemy. The deal that locked it in was signed six hours after his resignation in July 2015 (he doesn’t think this was a coincidence): it gave the Israeli air force the right to use Greek airspace for war games without needing Greek government consent. A Greek frigate is currently parked off Cyprus, ostensibly to defend the island from one Iranian drone, actually to defend a British base being used by the US to bomb Iran on behalf of Israel — and it’s being sold domestically as a great victory against Turkey.

Why he’s stopped saying “proto-fascism”

Varoufakis has watched the language inflation in the fascism debate for years and resisted it. He used to say “proto-fascism.” He’s stopped.

His sequence for how fascism wins:

Banking collapse — 1929, 2008. Take your pick.
Socialism for the rich, austerity for the rest. Bailouts up top, pain everywhere else.
Discontent that the left fails to channel. Either the left doesn’t get into government, or it does and betrays the cause (he puts Syriza in this bucket — his own former party).
Smart right-wing populists plagiarise the left’s critique of banks and crony capitalism. He says the first page of any Goebbels speech reads like a left-wing critique of financialisation.
They simultaneously present themselves as more neoliberal than the neoliberals, defending the small shopkeeper against a state recast as communist.
They invoke a fictitious golden age and promise to triple minimum wages. Sometimes they actually deliver — Mussolini introduced Europe’s first pension system. The deal: material relief in exchange for no unions, no real elections, no voice.
They swap the old enemy for a new one. Instead of the Jew, the Muslim, the trans person, the migrant.
Big business climbs aboard — the missing ingredient that turned proto-fascism into the real thing in the 1920s and 30s. He thinks this just happened in the US. Tech oligarchs, large chunks of Wall Street.
Once in power, they betray the blue-collar base they promised to protect.

That’s why he’s upgraded his vocabulary. The big-business piece has clicked into place.

The electricity cartel masquerading as a market

The most concrete economics in the conversation is about UK electricity. Around 50% of British electricity now comes from wind — produced at zero marginal cost. You pay for it as if it were the most expensive fracked gas from Texas.

This isn’t an accident. It’s how the “market” was designed: the price for all electricity gets set by the cost of the most expensive marginal source. It’s not a market — there’s literally one wire coming into the building. It’s a state-simulated cartel.

His fix is unsubtle. Nationalise the grid, take the average cost of producing a kilowatt-hour, add 10%, sell it for that. The objection writes itself, but his point lands: even if the UK got to 98% renewables, you’d still be paying gas prices for all of it under the current rules.

Reopening North Sea oil licences, which is being floated as the answer, takes 15 years to come online — useless for a short-term shock, and it doubles down on the fossil dependency that just bit you.

Stagflation is back

Trump’s “Liberation Day” tariffs were supposed to wreck the economy and didn’t, partly because the tariffs were absorbed by oligopolistic vendors on goods with elastic demand, and partly because an AI capex boom papered over the recessionary effect. Varoufakis thinks the Iran war is a different beast. The AI splurge is already cooling because of energy costs. Interest rates have stopped falling. Central banks are now talking about hiking to fight inflation, which he calls “gross negligence” — when inflation comes from energy costs, raising rates can only crush demand. It can’t bring oil out of the ground.

What the Greens did right

Zack Polanski has rebranded the UK Greens as an eco-socialist party — wealth taxes, redistribution, not just environmental policy. Varoufakis thinks this is the first credible left vehicle in Britain since Corbyn’s leadership collapsed. He spent his 65th birthday getting Polanski and Corbyn on the same stage to applaud each other, which he describes as “conniving” — the word picked deliberately. His message to the left: stop being the People’s Front of Judea.

Personal coda

He has a court date in Greece on December 16th for “propagating drug use” — he told some teenagers that he tried ecstasy once in Sydney 37 years ago, danced a lot, got a migraine, never did it again. The right-wing party’s “Truth Commission” (his eyebrow raise is audible) clipped the part where he said it was fun, blasted it on social media, and within two hours the health and police ministers were on television demanding prosecution. He thinks the prime minister, a neoliberal, is laughing at the case but lets his coalition partners run with it because that’s how he keeps a Tommy-Robinson-style party from poaching his voters — give the cultural-war ministries to the ultra-right and let them perform.

He’s also been banned from Germany, then invited by the BMW Foundation to give a keynote in Berlin while the ban was active. He went, no one stopped him, and his court case challenging the ban keeps getting postponed every two months.

His closing line, asked why one should choose the path of most resistance: “Because it’s fun. Resisting is existing.”

Key Takeaways

Trump’s first-term win was restraint on the Middle East. Varoufakis’s whole “lost everything” thesis hinges on this: the one thing that protected Trump from being George W. Bush was that he didn’t get pulled into a war with Iran. He just did.
The MAGA isolationist plank is the load-bearing one. Tech bros and Christian nationalists are loyal regardless. The ex-Bernie / anti-forever-war voters who held their nose for Trump are the ones who walk when the bombs start.
Doubled petrol prices break MAGA in months, not weeks. Not from ideology — from the math of a 110-mile commute on a low wage.
Fascism’s playbook has nine steps and step 8 — big business climbs aboard — is the one that just changed in the US. That’s why Varoufakis dropped “proto-” from his vocabulary.
Goebbels’s opening pages read like left-wing critiques of finance. The right-wing populist always plagiarises the left’s economic diagnosis before pivoting to scapegoating the migrant.
The European political class has functionally no sovereignty. Starmer, Merz, the Greek PM — all could be replaced by White House envoys with no policy difference, in his telling.
The UK electricity “market” is a cartel. Wind power produced at zero marginal cost is sold at the price of the most expensive fracked gas. The pricing rule, not the technology, is the problem.
Raising rates against energy-cost inflation is a category error. Central banks can crush demand but they can’t manufacture more oil. Doing it anyway = recession plus continuing inflation.
Greece’s foreign policy doctrine pivoted in 1999-2000 to “enemy of my enemy is my friend” — using Israel against Turkey. The crystallising deal was signed six hours after Varoufakis resigned as finance minister in July 2015.
Akrotiri is British sovereign territory in Cyprus. When bombers fly out of it to hit Iran, the UK is materially participating in the war regardless of what Downing Street says.
The “with us or against us” framing kills political nuance. His mother could love and loathe his uncle simultaneously. Modern left politics has lost the muscle.
Mussolini introduced Europe’s first pension system. Material concessions to the working class are entirely compatible with abolishing political voice — that’s the whole fascist deal.
Reopening North Sea oil takes 15 years to produce a barrel. Useless as a response to a short-term shock and locks in fossil dependency.

Claude’s Take

This is Varoufakis doing what Varoufakis does — narrative-economic analysis with a strong prior, delivered with personal anecdote and a dramatist’s instinct for the quotable phrase. The “Trump has lost everything” call is the headline, and it’s a real prediction with a real time horizon, which is more than most pundits offer. He could be right. He could also be early — Trump has survived political deaths a dozen times.

The strongest material here is the fascism-by-numbers section. The nine-step sequence isn’t original to him, but he tells it cleanly, and the specific call — that big business backing the populist right is the threshold between proto-fascism and the real thing — is a sharp analytical claim with a clear test. Watch where Wall Street and the tech oligarchs sit at the next inflection. The weakest material is the Greek political detail, which assumes context Shantum probably doesn’t have, and the bit where he defends his electricity-market fix without engaging with why marginal-cost pricing exists in the first place (it’s how you signal to the market that more capacity needs building, which a flat-rate utility doesn’t). His critique of the cartel is fair. His proposed alternative is hand-waved.

The court case anecdote about ecstasy is a good reminder that the European right operates the same playbook as the American one — capture the cultural-war ministries, perform persecution, keep the actually-neoliberal economic policy untouched. Marco Rubio, Modi-era India, Mitsotakis. Same engine, different paint.

Score 7. Substantive, well-told, makes one specific falsifiable prediction (Trump’s coalition cracks within months of the Iran war), good signal-to-noise on the fascism analysis. Loses points for the standard Varoufakis tic of treating his own analytical framework as the only one available.