mahmoud ahmadinejad

Iran, Stable but Miserable

Since Hassan Rouhani assumed the presidency of the Islamic Republic of Iran in August of last year, the economic outlook for Iran has improved. When Rouhani took office, he promised three things: to curb the inflation which had become rampant under Mahmoud Ahmadinejad, to stabilize Iran’s currency (the Rial), and to start talks to potentially end the sanctions which have battered Iran since 2010. Rouhani has delivered on each of these promises. From this, one might assume that the Iranian economy, and the Iranian people, are headed towards better times.

Unfortunately, the Misery Index paints a different picture. The Misery Index is the sum of the inflation, interest, and unemployment rates, minus the annual percentage change in per capita GDP. It provides a clear picture of the economic conditions facing Iranians.

Iran’s Search for a “Master of the Economy”

Iran’s Guardian Council announced yesterday that former president Ali Akbar Hashemi Rafsanjani has been barred from Iran’s presidency poll—reportedly due to his old age and debilitating health. In recent weeks, speculation over a Rafsanjani comeback bid had spurred some optimism among Iranians who recognize that their broken economy desperately needed a jolt. Some Iranian voters have described him as a “master of the economy” and the solution to their economic woes. However, a closer look at Iran’s misery index shows just how fatally flawed this perception is.

There is little doubt that the economic policies of current president Mahmoud Ahmadenijad have been a disaster. Even before the United States and European Union imposed economic sanctions over Iran’s nuclear program, Iran’s economy was hardly in good shape.

For decades, the Iranian economy has been cobbled together by a coalition of conservative clerics and Revolutionary Guard commanders. The resulting bureaucratic monstrosity has employed mandates, regulations, price controls, subsidies, a great deal of red tape, and a wide variety of other interventionist devices. Not surprisingly, Iran ranks near the bottom—145th out of 183 countries—in the World Bank’s Doing Business 2013 Ranking, which measures the vitality of free markets and the ease of doing business.

You might wonder, with all this sand in the gears, how has the Iranian economy been able to sustain itself and grow (until recently)?  The answer is—you guessed it—oil.

Iran’s Stalinesque Show Trials

Stalinism was dropped even by the Soviet Union when the murderous Joseph Stalin died, but it has never disappeared completely.  North Korea, for instance, mimics the bizarre personality cult promoted by the Soviet dictator.

Now Iran appears to be adopting the Stalinesque tactic of staging show trials, with “confessions” from the obviously brutalized accused.  Reports the Wall Street Journal:

Continuing Erosion of the Iranian Regime’s Legitimacy

The gravest threat to the survival of the repressive regime in Tehran may be the continuing attacks on its perceived legitimacy.  Part of the factional infighting undoubtedly reflects a simple power struggle.  However, religious principles also appear to be at stake.  A number of Muslim clerics are denouncing the authorities for their misbehavior.

Why Obama Should Stay Silent on Iran

President Obama should keep quiet on the subject of Iran’s elections. At least two pernicious tendencies are on display in the Beltway discussion on the topic. First is the common Washington impulse to “do something!” without laying out clear objectives and tactics. What, after all, is President Obama or his administration supposed to do to “support protesters” in Iran in the first place? What would be the ultimate goal of such support? Most importantly, what is the mechanism by which the support is supposed to produce the desired outcome?

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