NEC director on latest economic impact from Iran war and Spirit Airlines shutting down

(CBS, KYMA) - Kevin Hassett, Director of the National Economic Council (NEC), spoke with Margaret Brennan on Face the Nation Sunday about the latest economic impact from the war with Iran.

According to Brennan, President Donald Trump sent a letter to Congress Friday saying not only has the ceasefire been extended, but also the hostilities have been terminated.

Also in the letter, according to Brennan, President Trump said the threats posed by Iran remain significant, and said "the force posture will continue to be updated."

However, Trump said, "Iran has not yet paid a big enough price for what they've done to humanity," prompting Brennan to ask Hassett what exactly is the message to the market, to which he said:

"I think the market has been pretty consistent. The fact is that what the President is seeing is that the blockade is working. It's putting an enormous amount of pressure on Iran, and Iran's threats to put mines in the straits have even made it so that humanitarian aid that, of course, we would let through to Iran, that there are a lot of those ship captains that are wary of going to Iranian ports because they're worried about where the Iranians have put the mines. And so, you know, I go down to the sit room many times a week and get briefed on what's going on in Iran, and they're an economy that's really on the precipice of extreme calamity. They are having a hyper inflation. They're starting to have hunger. The bottom line is that the pressure on the great American people, because of these people who are like really intent on American and Israeli destruction with their nuclear weapons, are still in power. One last thing, I don't know if you noticed, but the U.N. Human Rights folks came out this week condemning Iran because they're killing people who are trying to stand up to this regime that's potentially, you know, causing starvation and even famine."

When asked if the U.S. is at war with Iran after he said the blockade is still on, which is considered an act of war, Hassett said:

"Iran shut down the straits. Iran shut down the straits, and the only ones they were letting through were Iranian ships, and President Trump didn't think that was acceptable...I don't know what the definition of war is when we're not shooting and we're negotiating and they're under a lot of pressure. There's no reason, I think, right now, to do anything other than what we're doing. The fact is that that regime has destroyed the country. Let me put it in perspective. In 1978 before the Ayatollah came in, then the per capita GDP in Iran was about the same as for Japan and Italy. Now it's about the same as for Honduras. So they've run that country into the ground, and that's before the straits were closed. So it's really, really a country that's on the rocks."

During the interview, Brennan and Hassett talked about Spirit Airlines ceasing operations after seeking a $500 million bailout from the White House, but the talks failed in the final hours.

This led Brennan to ask what happened, and if he had any sense of the broader economic impact, and Hassett said:

"Oh, sure. You know, it's something that I was very much involved in. We were aware that, because the merger between JetBlue and Spirit was canceled unwisely by the Biden administration, that Spirit, sadly, was on the ropes when we looked at their books, that basically, the creditors were going to liquidate them and try to sell their assets so that they could get some of the money back that they had lent them. And there were some authorities that were explored to see if we could help them get a lifeline. And in the end, the legal legal guys decided that those authorities wouldn't apply in this situation. Meanwhile, while that was being investigated, Secretary Duffy and I talked to the other airlines to make sure that they were helping people who were stranded by spirit get home and to get home basically at much lower prices than the normal fares that they would charge...In fact, American and United and Southwest have all said that they're going to help the passengers of Spirit get home."

Brennan followed up by asking if there are other industries, or other major companies, also at risk of collapse due to the energy shock, and Hassett said:

"Well, don't forget, the Spirit Airlines was Chapter 11 twice because they basically didn't have a business model that was working. That's right. And the other airlines are still operating. I just flew out here to discuss these matters at the Milken conference in LA, you know, on United Airlines and the you know, the other airlines are operating, what they've done because they have thought ahead way more than the management of Spirit is hedge their jet fuel purchases and so on. So that energy short term energy shocks don't have a big effect on their business. Certainly, it'll affect profits for the airlines for a quarter or so, but they're very, very healthy right now."

To watch more of Brennan's interview with Hassett, click here.