What makes you think that a call for raising interest rates and diminishing government spending for working people is "quite excellent"?
In any case, here's what we'll never see in the Left Business Observer:
<http://montages.blogspot.com/2007/09/inflation-iran-and-venezuela.html>
. . . . . . . . . . . . . . . . . . . .
Neither is the current level of inflation -- which Tait exaggerates, citing no sources -- new in Iran, which has seen much worse. According to none other than the International Monetary Fund:
Iran has a history of relatively high inflation, with CPI inflation
averaging more than 17 percent since the 1979 revolution. . . .
The 1979 revolution clearly represents a breaking point in the
money-inflation relationship. Inflation increased significantly
following the revolution (from 6.6 percent to 17.4 percent on
average), but the acceleration in money growth was almost
negligible (from 23.8 percent to 24.6 percent on average).
After the dramatic increase experienced in the mid-1990s,
when it reached a peak of 50 percent, inflation declined up
until the first quarter of 2006/07, though the annual average
remained in the double digits. (Leo Bonato, "Money and
Inflation in the Islamic Republic of Iran," IMF Working Paper,
May 2007, p. 3-5)
See, also, "Figure 1. Money Growth and Inflation, 1958/59-2005/06" on page 4 of the same paper.
Inflation in Iran
Iran's Central Bank calculates that inflation stands at 17.1% now ("Summary Results of the Consumer Price Index in Urban Areas in Iran," 22 June - 22 July 2007), which is just about the post-revolution average. The IMF estimates it to be 17.8% in 2007, projected to decline to 15.8% in 2008.
It's basically the same domestic policy of low interest rates as Venezuela's, and the same global economic trends, that are adding to the price pressures in Iran, and the same policy of large subsidies as Venezuela's also cushions inflation's impacts on the poor in Iran, despite economists, technocrats, and journalists speaking in the name of the poor but actually rooting for neoliberal solutions -- namely raising interest rates and cutting subsidies for the poor.
Mark Weisbrot and Luis Sandoval write in "The Venezuelan Economy in the Chávez Years" (July 2007) that "[r]eal interest rates have been negative throughout the recovery as measured by the 90-day deposit rate or most of the recovery, as measured by the lending rate" (p. 17). Pushed also by expansive fiscal policy, Venezuela's inflation, currently running at 19.4 percent, exceeds the government's target. But they also note that "it should be emphasized that double-digit inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon occurring in the United States or Europe," pointing out that Venezuela experienced far worse inflation in the 1990s (p. 2).
Inflation in Venezuela
The same can be said about Iran.
Why have Weisbrot and Sandoval made efforts to clarify the economic history of Venezuela? Because they know that journalism heightening economic anxieties, which in turn will have negative impacts on real economy, is part of the ruling class propaganda that needs to be countered.2
Leftists ought to be doing the same about Iran's economy, but they don't. Rather, most of them do the opposite, apparently having convinced themselves that any economic propaganda against the "Iranian regime" is in the interest of Iran's working class, which isn't true. All that propaganda against populism does is to help Iran's ruling class push for neoliberal economics and help Washington in its campaign to economically isolate Iran.
1 One learns that Tait has an agenda promoting Rafsanjani, which in part explains how he reports on Iran's economy and domestic faction fights: Hossein Derakhshan, "Robert Tait Markets Rafsanjani to Americans," Editor: Myself, 21 August 2007.
2 They know their history: "Predictions of economic collapse under Allende were replayed in CIA-generated articles in European and Latin American newspapers" (Church Report, "Covert Action in Chile 1963-1973," 18 December 1975). But nowadays the hegemony of neoliberal economics is such that the CIA doesn't even need to plant a story. The media do it all on their own. -- Yoshie