Oily Path

Last month, Iranian President Mahmoud Ahmadinejad told the Los Angeles Times that recent American military actions have plunged the world into financial meltdown. There’s no real logic here, so just hang on and go with it:

The U.S. government has made a series of mistakes in the past few decades … The imposition on the U.S. economy of the years of heavy military engagement and involvement around the world … the war in Iraq, for example. These are heavy costs imposed on the U.S. economy … The world economy can no longer tolerate the budgetary deficit and the financial pressures occurring from markets here in the United States, and by the U.S. government.

And the Swedes gave it to Krugman! Anyway, in a bit of delightful news, it turns out that plummeting crude oil prices have thrown Iran’s already dismal economy into a serious tailspin. To combat the 50% price drop, Tehran implemented a 3% sales tax in September. Last week, Iranian market traders, or bazaaris, went on strike in protest:

The strikes began last week in the provincial cities of Isfahan, Tabriz and Mashad.

The bazaaris are an influential constituency in Iran, and they actually got the tax suspended. But what’s exciting is that they’re still protesting. Traders who were ordered back to work by police are pulling stocks from their windows and covering up displays.

Though, it’s still hard to get too excited about economic pressure as a possible diplomatic facilitator for change in Iran. There are too many improbably massive “ifs”: If a genuine sanctions regime could be organized (including China and Russia), if all countries involved stuck to the plan, if Iran tried imposing more taxes, and if civil unrest were so violent as to defy the Iranian police state, we may have something to talk about. But as it stands, such Iranian dissatisfaction is little more than an embarrassment for the half-wit dictator/puppet who came over here to lecture us on global economics.