Awful economic report & more open criticism of "Lady F"


by FG

Remember how things were going for Khamenei as of January 1st, 2009? He still enjoyed reasonable popularity and almost no one criticized him openly, not even refomers. Things looked pretty nifty abroad as well. What happened? "Operation Ahmadinejad," a Khamenei project that lightly brushed off many potential obtacles. In that respect and in the hard consequences that follow, it recalls Hitler's decision to invade Russia (Operation Barbarossa) on June 22, 1941. Neither man had thought it out.

Frightened by pent-up demands for reform visible in the Majlis election of 2000 and the Khatami victory in 2001, the Supreme Leader had gotten away with increasingly rigged elections ever since 2004. Underestimating public reaction, he counted on doing it again. This was fatal decision #1. Finding he had poked a hornet's nest, a wise leader would have backed off. Instead Khamenei, reactionary by nature, decided to ignore the people and use police state measures to impose his will. Again Khamenei trusted in bad assumptions--that the police state would be tempory and the public would "get over it." So came fatal decision #2. Neither will ever be forgiven.

Nothing has gone well since. In certain respects regime insiders are even more miserable than the oppressed people. Those who make a Faustian bargain begin to squirm as the bill comes due. As happened to the Nazis by early 1945, every sumptious meal is tainted by a nagging "It's just a matter of time" sensation. Most potentates, having access to real news, do not trust the "everything is hunky dory" reassurances in state media (a nice Goebbels touch). Visualize optimistic Nazis after Stalingrad, Kursk, D-Day and the Bulge and you get the picture. Will Iran's insiders, like Germany's generals, decide to oust an unreasonable leader to save what they can? Foreseeing that, Khamenei has dispatched a new death squad, widely believed to be led by the sly Hossein Taeb, with generals as their main target.

If day-to-day news is bad for Iran's people, it must be extremely demoralizing toregime insiders who opted for a one-way trip in 2009. From what I can see in today's roundup at Enduring America (see link below), what stands out are two things: 1) more open criticism of the Supreme Leader's disasterous decisions by worried insiders and 2) more horrific economic news.

The central causes of Iran's economic morass are internal and not caused by sanctions which forced the only real reform--a limited removal of wasteful subsidies. Causes lie in how the economy is structured, who makes the economic decisions, the inevitability of massive corruption in a "closed" society and a built-in incapacity for reform. What amuses me is that the only competent economic minister Iran ever had was Moussavi, victim of the fatal coup who is now in jail. Economic reform requires public trust (gone for good). Economic reform requires taking on IRCG genrerals and their economic privileges. For a regime that depends solely on force adminstered by those generals to survive, how is it possible?



more from FG

The next step in Iran sanctions: cutting off the bank

by FG on

The White House is welcoming a potentially critical step in the international effort to squeeze Iran over its suspect nuclear program: A statement by the Belgium-based SWIFT network that it is ready to implement sanctions against Tehran. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) handles most international transactions between banks.

"We note SWIFT's intention to stop transactions involving EU-designated Iranian banks when new EU sanctions regulations are in place," National Security Council spokesman Tommy Vietor told Yahoo News in an email.  "We welcome this step and will be in contact with our European partners."

SWIFT processes the bulk of cross-border inter-bank transmissions—more than 15 million of them in more than 200 countries. Curbing Iran's access to the system would deepen the Islamic Republic's isolation from world finance and notably make it harder for Tehran to import or export goods.

"Sanctions on financial services have been particularly useful in interfering with illicit Iranian conduct," said Vietor.  "We are in conversations with allies and partners about additional ways to increase the cost of their behavior, including by targeting services such as that provided by SWIFT and similar entities."

Western powers led by the United States have charged that Iran hopes to use its nuclear program to develop the ability to make an atomic arsenal. Tehran has denied the allegation.

As Yahoo News reported Thursday, SWIFT's general counsel is due in Washington next week, and will meet Democratic Senator Robert Menendez, key author of a legislative proposal to drive Iranian banks, including its central bank, out of SWIFT.  (Source: Oliver Knox at

Maryam Hojjat

FG, Thanks for

by Maryam Hojjat on

Great blog as usual.