Daily Archives: June 15, 2009
The Iranian government has started making moves to quell the protests that have arisen in the wake of the contested Iranian presidential election.
Move one was for Iran’s supreme leader, Ayatollah Ali Khamenei, to meet with Mir Hussein Moussavi and agree to investigate his allegations of election irregularities. This will again provide the veneer of legitimacy when the “investigation” returns its verdict of minor irregularities but none serious enough to invalidate the election within 10 days.
In the meantime, Khamenei apparently got Moussavi to help stop the protests:
The protesters gathered in Tehran despite a government ban on further demonstrations, and at one point Mr. Moussavi apparently called off the rally. As originally planned, the rally was to begin at Tehran University and reach Azadi Square several miles away.
But it apparently never got under way.
The other reason has to do with what we talked about on the podcast last night. Most of the protests are coming from university student groups. Those groups have been thoroughly infiltrated by police informers. Last night, police moved on the information gathered:
Opposition Web sites reported that security forces raided a dormitory at Tehran University and 15 people were injured. Between 150 and 200 students were arrested overnight, by these accounts, but there was no immediate confirmation of the incident from the authorities. There were also reports of official action against students in the cities of Esfahan, Shiraz and Tabriz.
In addition, leaders of the opposition were rounded up:
The opposition members arrested late Saturday and Sunday were from all the major factions opposed to Mr. Ahmadinejad and included the brother of a former president, Mohammad Khatami, opposition Web sites reported. Some were released after several hours.
Meanwhile Ahmadinejhad wrote off the opposition protests as “unimportant” and likened them to disappointed soccer fans. He also invoked the external threat:
He suggested the accusations of fraud were the work of foreign agitators and journalists.
Classic police-state tactics, with a twist. For whatever reason the Iranian mullocracy finds it desirable to have at least the veneer of democratic legitimacy associated with their authoritarian rule. So they will go through this charade of an investigation in an attempt to maintain it. But if anyone thinks that the outcome will be any different than that announced previously by the Interior Ministry, there’s a well-known bridge in Brooklyn you may be interested in buying.
After a lot of partisan “happy talk” about how the Obama administration is handling the economic crisis here, Paul Krugman goes on record saying the world is doomed to suffer Japan’s lost economic decade on a global scale.
The thing about Japan, as with all of these cases, is how much people claim to know what happened, without having any evidence. What we do know is that recessions normally end everywhere because the monetary authority cuts interest rates a lot, and that gets things moving. And what we know in Japan was that eventually they cut their interest rates to zero and that wasn’t enough. And, so far, although we made the cuts faster than they did and cut them all the way to zero, it isn’t enough. We’ve hit that lower bound the same as they did. Now, everything after that is more or less speculation.
For example, were the problems with the Japanese banks the core problem? There are some stories about credit rationing, but they are not overwhelming. Certainly, when we look at the Japanese recovery, there was not a great surge of business investment. There was primarily a surge of exports. But was fixing the banks central to export growth?
In their case, the problems had a lot to do with demography. That made them a natural capital exporter, from older savers, and also made it harder for them to have enough demand. They also had one hell of a bubble in the 1980s and the wreckage left behind by that bubble – in their case a highly leveraged corporate sector – was and is a drag on the economy.
The size of the shock to our systems is going to be much bigger than what happened to Japan in the 1990s. They never had a freefall in their economy – a period when GDP declined by 3%, 4%. It is by no means clear that the underlying differences in the structure of the situation are significant. What we do know is that the zero bound is real. We know that there are situations in which ordinary monetary policy loses all traction. And we know that we’re in one now.
Shorter Krugman, “we’re in new territory in terms of the size of the problem, but it is all eerily similar to what happened to Japan”. Unfortunately our reaction has been eerily similar to what Japan did as well.
Krugman’s bottom line:
WH: So, one way to think about it is that self-reinforcing financial crises rooted in overstretched, overborrowed companies and governments in less developed countries – like those in Argentina and Indonesia, which were amazingly destructive in the 1990s and 2000s, but localised – are now playing out in the developed world?
PK: There are really two stories. One is the Japan-type story where you run out of room to cut interest rates. And the other is the Indonesia- and Argentina-type story where everything falls apart because of balance-sheet problems.
WH: So in a nutshell your story is …
PK: The “Nipponisation” of the world economy with a bunch of “Argentinafications” playing a role in the acute crisis. But even after those are over, we have the Nipponisation of the world economy. And that’s really something.
And of course, implicit in the “Nipponisation” of the world economy is the “Nipponisation” of the US economy – something we’ve been talking about for some time. Now, add “cap and trade” and “health care reform” into the mix.
What will we be wishing we were suffering when that all kicks in, should it pass? Nipponisation, of course. As bad as lost decade or two might be, it would be heaven compared to the economic carnage those big tax and spend programs will inflict on a very weak economy here in the US. And that, of course, will ensure the “Nipponisation” of the world economy.
Seriously, if George Bush hadn’t existed, the left would have had to invent him in order to have someone to blame the world’s ills on. CBS has republished a piece by Laura Secor that ran in the New Republic and calls Ahmadenijhad Iran’s “George Bush”. (This on the heels of the Bonnie Erbe piece calling for right-wingers to be rounded up before they can hurt anyone.)
Secor’s comparisons are strained at best, and are a rather simple attempt to fit a very round peg in an extremely square hole (no mention of the mullah’s control, which, of course, completely kills the comparison). Apparently Secor pins her premise on this line:
Ahmadinejad has made a mess of the economy, clamped down on political dissent and social freedoms, militarized the state, and earned the enmity of much of the world.
And in Secor’s world, that essentially makes Ahmadinejhad and Bush twins.
Of course, not to be outdone, “conservative” Andrew Sullivan manages to find even more parallels to the Bush years. If you think Secor’s attempt is strained, you’ll howl when you read Sullivan’s:
Ahmadinejad’s bag of tricks is eerily like that of Karl Rove – the constant use of fear, the exploitation of religion, the demonization of liberals, the deployment of Potemkin symbolism like Sarah Palin.
As an interesting aside, an article mostly ignored by the left has a fairly interesting take on the Bush era in the middle east. And by none other than Thomas Friedman. Even though he can’t bring himself to describe what has happened in complimentary terms, he finds he must give some credit where credit is due:
There are a million things to hate about President Bush’s costly and wrenching wars. But the fact is, in ousting Saddam in Iraq in 2003 and mobilizing the U.N. to push Syria out of Lebanon in 2005, he opened space for real democratic politics that had not existed in Iraq or Lebanon for decades. “Bush had a simple idea, that the Arabs could be democratic, and at that particular moment simple ideas were what was needed, even if he was disingenuous,” said Michael Young, the opinion editor of The Beirut Daily Star. “It was bolstered by the presence of a U.S. Army in the center of the Middle East. It created a sense that change was possible, that things did not always have to be as they were.”
In Benen’s piece today, he ends up calling Ari Fleisher a “shameless hack” (as if Benen has any room to call anyone else a “hack”) for essentially saying the very same thing Friedman said. Apparently, Benen and the left are content to believe in the fantasy that it was more likely the “Cairo speech” that determined the results in Lebanon and spurred the protest vote in Iran – because we all know that movements such as those are easily developed within a week of someone like Obama speaking.