Iran commits suicide

This post started as a response to a post by Sullivan, but became too lengthy. Sullivan brought our attention to a Counterpunch article by Soheil Asefi, an Iranian journalist in Berlin.

Mr. Asefi hates the Iranian regime, because it is imposing IMF-dictated austerity on the Iranian masses. The result has been the currency crisis, and a society that verges on collapse. At this rate, Iran will soon fall without a shot being fired, and the West will recapture of Iran’s oil and gas after 33 years. And since Iran has a well-developed industrial infrastructure, Iran will become a nation of sweatshops. 

Mr. Asefi agrees with Ahmadinejad’s critics (and so do I) that the Western blockade is only 20 percent the cause of Iran’s economic problems. At least 80 percent of the blame falls on government corruption and ineptitude.

By “government” we mean not only Ahmadinejad and his cronies, but all politicians and bureaucrats, including the so-called “opposition” in parliament. Almost all are in on the austerity scam (just like in the West) as will be explained below. Thus, the western blockade is simply a way to accelerate the austerity that has already been increasing for 2 ½ years.

Mr. Asefi is a poor writer (but only because English is not his first language). However he makes excellent points. So with apologies to him, I will quote some of his items and re-word them, adding my own comments. I will not change his meaning, since I agree with him.

AUSTERITY! WE MUST HAVE MORE!

When Western bankers and politicians impose austerity, their solution to the resulting problems is more austerity. They say that the way to end the depression is to make it permanent. Iranian politicians are the same. (The way to end the currency crisis is to make it permanent.)

Iran is a member of the IMF, which, judging by voting shares, is 40 percent controlled by the West. Judging by influence, however, the IMF is 100-percent Western controlled, since politicians around the world are imposing IMF-dictated austerity (i.e. poverty and famine) on the masses, for the politicians’ own personal gain. It’s a global craze. The New World Order.

Rule #1 of austerity is to cut subsidies to the masses, and grind them into the dirt. There is no economic need for this. It is strictly a political move to benefit bankers, politicians, and the rich. In Iran’s case, 80 percent of subsides went to food and energy. And since Iran is one of the largest gasoline consumers in the world, ranking second behind the United States in consumption per car, the cut in fuel subsidies crushed the public and the industry.

Ahmadinejad didn’t cut subsidies altogether. Instead, he doles out money according to his personal political needs. He calls this “targeted social assistance.”

He started ending socialism (i.e. imposing austerity) on 5 Jan 2010, calling it the "biggest economic surgery plan of the past 50 years.” This is what triggered the currency crisis, and it has continually worsened since then, as austerity has increased. He called his scam a “reform,” and he made it a centerpiece of his economic policy. Most of the Iranian parliament voted with him. (Politicians are politicians the world over.)

So Iran’s government pretends to oppose the West, but follows the West’s neo-liberal dictates. Iran’s Five Year Economic Development Plan seeks to adopt “free market” prices within a 5-year period. Thus, Iran will fall no matter what. The blockade is a way to hasten this.

Austerity has caused so much pain for the masses that Iran's parliament voted yesterday (Sunday 21 Oct) to consider suspending plans for further “reform.” The vote was 240-179 (75%) but it did not say when such a decision would be made. The politicians are so hated that they just wanted to seem like they are doing something. But like politicians everywhere else in the world, they will continue to impose austerity for their own gain.

Hence the riots in Iran, which are not so much about currency issues as about austerity. The people of Iran now hate their government as much as Westerners hate their own governments that are imposing austerity.

The Iranian government voluntarily chooses to impose austerity (i.e. cut subsidies). The Western blockade has nothing to do with it.

Ahmadinejad’s term as president ends in mid-2013, but some analysts think Supreme Leader Ayatollah Ali Khamenei could remove him before then if public discontent continues to worsen. If Khamenei does not remove him, and if the politicians do not end their greed and austerity, then Iran will fall to the globalists. Khamenei has kept quiet so far. Anyway he backs Ahmadinejad’s “reforms” in accordance with the IMF. So much for being a “pious Muslim.”

Ahmadinejad is a typical lying politician. In a speech on Saturday, he referred to the currency crisis, but did not offer to end IMF austerity. Instead, he blamed others for his own scams. “Messing up the market...and the efforts by some to undermine the morale of the people are devilish acts.”

As with all politicians who impose austerity, Ahmadinejad keeps saying it will eradicate unemployment and poverty in Iran. The truth, of course, is just the reverse.

During Friday prayers, imams throughout Iran spoke as if reading from the same script, saying the government could no longer blame others for its malfeasance, and that the people would not be fooled any more.

Austerity is pushing down living standards. There are not yet significant shortages of daily necessities, but imported goods, including food and some medicines, have rocketed in price, or become difficult to find. Some goods have doubled in price. For example, a 40 kg (88 lb) bag of imported Indian basmati rice cost around 800,000 rials in Iran three months ago, and now costs 1.7 million (roughly $45 at latest exchange rates). 

Financial authorities have tried to boost the rial by pressuring dealers to trade at certain rates, and by arresting money changers that speculate against the currency. But only some are arrested. And the dealers refuses to trade at government-set rates. Worse, the financial authorities issue vague and conflicting instructions, which has led to more instability in prices, and made currency trading almost impossible.

In other words, government austerity is driving people to trade currencies, while preventing them from doing so. Meanwhile austerity has sucked money out of the economy by cutting subsidies. This and the Western blockade has made everything more expensive. The result is monetary inflation, i.e. loss of faith in the currency. 

Tehran's prosecutor, Abbas Jafari Dowlatabadi, said 30 "main suspects" had been arrested for meddling in the currency market. They were found with large amounts of foreign exchange and gold coins bought illegally. He said more arrests were expected.

This is probably a lie, but even if it were true, it would be negligible. Even if all currency speculation is stopped, and even if the West lifts its blockade, Iran will still face problems because of Ahmadinejad’s “reforms” (austerity). He cut subsidies, not because it was necessary (it wasn’t necessary) but for his own political ends. He is deliberately sustaining a depression for his own advantage (just like Western politicians). It’s the IMF way.

There’s a quote in Mr. Asefi’s Counterpunch article that explains this, but I will re-word it. 

Ahmadinejad’s government has been very keen on making these neo-liberal changes. Militarised capitalism has its own needs and necessities, one of which is the elimination of subsidies. The goal of neo-liberal capitalism is to eliminate subsidies, in order to convert labour into a commodity that is subject to the financial markets, with no protection of wages, or the standard living of average people. The latter protections are considered barriers for the foreign investments, which the Iranian government is seeking with a staggering hunger.

The government’s Iran’s Five Year Economic Development Plan seeks to adopt “free market” prices within a 5-year period. That is, Iran’s government wants to become like Western governments with a permanent depression, and everything ruled by the “1%” and their puppet politicians.

So much for Iran being an “Islamic republic.” Iran has become one big lie. And the West is happy to help worsen the mess, with the goal of recapturing Iran’s oil and gas.

Furthermore, it seems that part of the ruling system will have the upper hand beyond all this current chatter over Iran’s nuclear program. Future power lies with a bunch of military people that monopolize capital and power and keep it in their hands, which is little surprise for those who realize the nature of this regime and of the so-called international community and its insatiable interests. 

One reason for the West’s continued threats to bomb Iran is that it legitimizes the greed and corruption of the Iranian military-industrial complex. Iranian generals and weapons makers suck the wealth, further weakening Iran overall. (Just like the West.) When they conduct missile tests, it is not to threaten Israel or the West, but to further legitimize the military-industrial complex. Of all weapons, missile systems suck the most wealth with the least performance. The USA has spent countless billions on defensive missile systems that do nothing except channel wealth to Boeing, Lockheed, etc. The defensive missiles do not work, and never have. They are useless. I’m talking about strategic missile defense, but even the smaller missiles (e.g. the “Patriot” model) don’t work well. Israel’s “Iron Dome” missile system is another useless fraud

The fate of the Iran negotiations with the 5 +1 group is still not clear. Talks go on behind the scenes, and the emerging doctrine of the United States could perform a big role in the upcoming negotiations with Iran, especially after the US election as Ahmadinejad pointed out on CNN’s “Fareed Zakaria GPS” program. “Following the U.S. election, certainly the atmosphere will be much more stable, and important decisions can be made and announced.”

Like all politicians, Ahmadinejad blames others for the austerity he imposes (for his own gain). He says everything will be fine after the U.S. election. He is trying to stay in office.

Nevertheless Machiavellism and greed of the Western side could lead to any kind of unpredictable excitement. It is the most important part of imperialist character. They just want it all.

Ahmadinejad and his cronies also want it all. They are playing the austerity game.

Iran under the mob rule regime and insatiable desire of the global capitalism is going to be crippled in the coming months, and the society is on the verge of collapse. Let’s now take a closer look at current conditions.

“Mob rule regime” means that Ahmadinejad and his cronies are grabbing everything for themselves, with no coherent policy for Iran as a whole, except for more austerity. Same with the military generals and the weapons makers. As a result, Iranian society is on the verge of collapse. The riots in Iran are only getting started. Same with Europe.

The Rial exchange rate against the dollar and other foreign currencies has suddenly taken an upward turn. 

This is the exchange rate inside Iran, which is based on currency trading and speculation. Outside Iran, the exchange rate is based on oil prices. Various countries exploit the Western blockade to get lower prices and better payment plans for Iran’s oil. Iran fights back by limiting its exports. So the exchange rate outside Iran is more stable, but inside Iran, people are losing faith in the currency. If they lose their faith altogether, then they will have no money system, and Iranian society will collapse. It’s called hyper-inflation. This is what the West is banking on (pun intended). If Iran collapses (as appears increasingly likely, because of austerity) the West will recapture the oil and gas.

Ahmadinejad claims that the sanctions are to blame. His opponents within the regime, plus supporters of capitalist restoration in the so-called opposition, all are all unable or unwilling to recognize signs of currency crises.

Like all politicians, they want more austerity, and they blame someone else for the nightmares it causes. Ahmadinejad blames the Western sanctions. MPs blame Ahmadinejad. Bureaucrats blame financial speculators. The speculators blame the central bank and the finance minister. The Iranian masses want them all replaced.

Mahmoud Ahmadinejad spent his first five years as president being opposed by the middle and upper classes, but supported by the poor, because of quasi-socialist subsidies. This reversed when Ahmadinejad began imposing austerity in Jan 2010. That is why the USA is not currently pushing for a “Green Revolution.” Iran’s government is destroying the country just fine.

Apart of the role of the merchants, the “Bazaaris,” and the money-changers in these growing protests against an unpopular government, the most important reason behind  the collapse of the Rial tie in with the advises of the IMF. By cutting subsidies, Iran follows IMF’s prescriptions religiously.

Yes, and the IMF helps destroy Iran by supporting Ahmadinejad’s lies, saying that all is well, and issuing figures that are bullshit. From the New York Times: 

“Iran sought to rebut assertions that Western sanctions had paralyzed the Iranian economy and severely weakened the currency, pointing to new data from the IMF forecasting an economic rebound and lower inflation in 2013. The IMF report projects that Iran’s gross domestic product will shrink 0.9 percent this year, but grow 0.8 percent next year. The data also project that Iran’s inflation rate will fall to 21.8 percent next year from 25.2 percent this year.”

Like I said, this is bullshit. Iran is edging toward doom.

“I don’t know what they’re looking at, but they’re not looking at the right things,” said Steve H. Hanke, an economics professor and currency expert at Johns Hopkins University. “Things were getting worse, worse, worse, and the I.M.F. should have known.”

Well of course the IMF knows. The IMF deals in lies, debt, and in increasing the gap between rich and poor.

Western governments likewise intentionally help Ahmadinejad by supporting his lies, saying the crisis is not caused by austerity, but by the Western blockade.

Victoria Nuland, the US state department’s spokeswoman, was quick to attribute the rial’s recent ill fate to “the unrelenting and increasingly successful international pressure” on Iran’s economy.

Some Jewish groups want the IMF to kick out Iran (suspend its membership). Blinded by hate, they think this will weaken Iran. In fact it would strengthen Iran. According to IMF records, Iran has had no direct monetary transactions with the IMF since Jan. 1, 1984. And yet, Ahmadinejad follows IMF dictates for his own gain.

Naturally the IMF and World Banks, as international organizations, are exempt from U.S. and EU sanctions on Iran’s central bank.

WIKIPEDIA  LIES

I just paused to take a look at Wikipedia’s explanation of the Iranian economy. There we read garbage like this:

“Distortions resulting from a combination of price controls and subsidies, particularly on food and energy, continue to burden the economy.”

We see then that not only is wikipedia full of crap regarding anything to do with Jews, Israel, or the “war on terror”; wikipedia also supports neo-liberal capitalism that is sustaining the current global depression. Furthermore, wikipedia never got the memo (issued 2 ½ years ago) that most of the subsidies have been cut.

Here’s another wikipedia statement:

“According to the government, approximately $100 billion per year is spent on subsidizing energy prices ($45 billion for the prices of fuel alone) and many consumable goods including bread, sugar, rice, cooking oil and medicine. However, some experts believe direct subsidies are about $30 billion, depending on oil prices.”

Since most people falsely think finances for a monetarily sovereign government (like Iran’s) are the same as finances for you and me as individuals, they think the subsidies are a waste. “Iran was spending $100 billion per year!”

That’s good! Iran (before austerity) was creating $100 billion and putting it into the economy. What happened when this so-called waste was ended? Riots, poverty, and currency crises.

Wikipedia:

“Iran was the largest provider of fuel subsidies in the world by 2009. Many Iranian experts agree that these unsustainable subsidies encourage waste among goods, including in the production sector, ranging from gasoline to bread that must be stopped and the only way to do that is to redirect subsidies.”

Why are they “unsustainable”? This is nonsense. For the Iranian government, money is limitless. It creates money out of nothing, and puts it into the economy via subsidies. Or it did until January 2010. Now Iran verges on collapse. And what is the problem with “waste” so long as the economy is strong? In Europe the elimination of “waste” means that people are literally eating out of garbage cans. Is this “efficiency”?

According to the IMF, until Iranian politicians started imposing austerity , a four-member Iranian household received an average of $4,000 a year in subsidies for oil and natural gas, and had a typical annual income of about $3,600 a year.

And everyone was happy. It’s called socialism, folks (or quasi-socialism.) But the impoverished Western masses think, “They were getting more money from the government than they were earning on their own! No fair! BOMB THEM!”

The Iranian government still hands out subsidies, but at an ever-decreasing rate. Combined with price inflation and with monetary inflation, the result is a crisis.

Here’s another wikipedia whopper:

“Between February 2011 and February 2012, the government earned 510 trillion rials (some $41.6 billion) by implementing the Subsidy Reform Plan.” (That is, by cutting subsidies.)

Excuse me, but monetarily sovereign governments “earn” nothing. They create money. Saying they "earn" is like saying the government “saves” money by cutting social programs. If you could create money with a printing press, and you decided to print less, in order to make people grovel for your money, then would you be “saving” money? No.

Actually the government doesn’t even use a printing press. It creates money by changing numbers in various accounts. (In most nations, only 3 percent or less of the money supply exists as bills and coins.) If the economy were a football scoreboard, and you could change the money supply by changing the numbers on the scoreboard, then would you be “saving” money by changing the points? No. Could the government “run out” of money? Can a scoreboard “run out” of points? Does the government have a “debt burden”? Does changing the points on a scoreboard create a debt burden? Would you need tax revenue? Does a scoreboard need more points? Would you have a “government deficit”? Does a scoreboard have a deficit of points?

You get the picture. Wikipedia lies are the same lies spouted by bankers, politicians, and the corporate media.

CONCLUSION

In a previous post I explained that Gaddafy and Assad invited a NATO attack by adopting Western neo-liberalism.

Iran is the same. The more it adopts neo-liberal austerity, the tighter the Western blockade becomes. It seems to me that the West will not have to bomb Iran, or even give it the Syria treatment. Instead, the West will just let the outside blockade work with the insuide austerity until Iran falls like a ripened fruit.

So, scratch Iran. Turn instead to Venezuela, where Hugo Chavez never drank the austerity kool-aid.