This is heartening:
Steve Hanke estimates that inflation is running at 70% a month. This is, as Alex Tabarrok points out, nowhere near a record. Still, it's a Big Deal. Hyperinflation has brought down governments--Iran is experiencing protests over the collapsing rial. And it's not hard to see why. At the current rate of inflation the value of a savings account (or a mattress stash) is now barely 40% of what it was one month ago. In a few more months, even a healthy balance will be about enough to buy a pack of gum. ...
In fact, it's so destabilizing that Iran's government just might be willing to give up its nuclear program. The source of this sudden, disastrous hyperinflation, you see, seems to be the sanctions we've imposed on Iran. This is good news for two reasons: maybe we get fewer nuclear weapons in the world, and also, if we can make sanctions work well, then they are a very good alternative to killing people.
I've long wanted to avoid military action to stop Iran's nuclear program by supporting a revolt, but I've given up on that route since nobody seemed serious about really pressuring Iran or working with the real anger inside Iran against their government. So I've backed strikes on Iran.
But this development means that strikes could be unnecessary.
Yet even as the Obama administration could get some probationary credit (credit comes only if it works), we haven't broken Iran's regime yet.
How long will this take to break Iran? Will Iran get nuclear weapons before they reach the breaking point?
If these sanctions break Iran's economy and send people into the streets, with perhaps elements of the armed forces so shaken that they turn on the government, do we have any contingency plans to take advantage of the unrest? If sanctions aren't just an exercise in doing something for the sake of looking like we are doing something, they are a means to an objective. What is the objective and what else will we do to reach that objective?
More important, does the Obama administration even want Iran to break?
Seriously, is the Obama administration prepared to win the sanctions war and deal with a broken Iran?
Or would the Obama administration rather cash in its few chips this month to show a foreign policy victory before facing the voters here? Would we save Iran from the real effects of sanctions by suspending them in exchange for Iranian pledges to cooperate on nuclear issues--a pledge that nobody could judge until after our election?
Because that's what our Secretary of State seems to be offering, quoting a story I link to here:
Secretary of State Hillary Clinton held out the possibility on Wednesday that sanctions on Iran could be eased quickly if Tehran worked with major powers to address questions about its nuclear program.
We shall see. If the president sees sanctions as a way to protect America, he'll let them play out to really break the Iranian government.
If our president sees a fake deal with Iran as a way to get a few points in the polls before the election, he'll declare mission accomplished over Iran and pretend to have won.
Then we'll lose.
UPDATE: You have to totally know that what Iran denies is exactly what is happening:
Iran denied on Saturday a U.S. media report that it had offered a "nine-step plan" aimed at solving its stand-off with the West over its disputed nuclear program.
The New York Times reported on Thursday that Iran had proposed a plan to European officials that required the West to lift harsh oil and economic sanctions in return for the eventual suspension of uranium enrichment by Tehran.
Iran had best act fast. More than a couple weeks and there will be no need for our president to pretend to believe their pretend surrender.
UPDATE: The possibility that the Obama administration may save Iran from the sanctions in exchange for the illusion of a victory over Iran will actually undermine another Obama foreign policy goal--keeping Israel from striking Iran. Because the Israelis actually see the sanctions as reducing the urgency of striking:
Antigovernment protests in Iran linked to the country's weakening currency have raised hopes in Israel that international sanctions are working to undermine Tehran, lowering the likelihood of an Israeli strike against Iranian nuclear targets in the coming months.
How's that for a nuanced foreign policy?
