Backing Ahmadinejad into a corner

We've spilled a fair amount of virtual ink here in recent days over the possibility of a U.S. attack on Iran, focusing on the machinations of the movers and shakers in Washington, D.C.  But what about the movers and shakers in Tehran?  An important question, because President Mahmoud Ahmadinejad, whose position holds only a limited amount of power in the first place, finds his wings getting clipped a little more:

Opponents of hardline President Mahmoud Ahmadinejad have assumed leadership of two of Iran's top institutions, a shakeup that reflects Western economic pressure on Iran and could lead to a less confrontational foreign policy, particularly on the nuclear issue.

On Tuesday, Akhbar Hashemi Rafsanjani, a pragmatic former president who lost to Ahmadinejad in 2005 presidential elections, was elected head of the Assembly of Experts. Under Iran's political system, the 86-member body of Shiite Muslim clerics appoints Iran's supreme leader — a religious figure who outranks the president.

On Saturday, Iran's supreme leader Ayatollah Ali Khamenei replaced the commander of Iran's Revolutionary Guards, the most powerful military organization in the country.

Taken together, the steps are a setback for Ahmadinejad, said William Samii, an Iran analyst at the Center for Naval Analyses, a think tank for the U.S. Navy.

"The supreme leader has taken actions to sideline Ahmadinejad and the people associated with him," Samii said. "People are fed up with Ahmadinejad and his belligerence. The regime will try to pursue a less confrontational foreign policy."

Still, the changes only go so far:

Rents are soaring, inflation hovers around 17 percent, and 10 million Iranians live below the poverty line. The police shut 20 barbershops for men in Tehran last week because they offered inappropriate hairstyles, and women have been banned from riding bicycles in many places, as a crackdown on social freedoms presses on.

For months now, average Iranians have endured economic hardships, political repression and international isolation as the nation's top officials remain defiant over Iran's nuclear program. But in a country whose leaders see national security, government stability and Islamic values as inextricably entwined, problems that usually would constitute threats to the leadership are instead viewed as an opportunity to secure its rule.

Paradoxically, President Mahmoud Ahmadinejad's economic missteps and the animosity generated in the West by his aggressive posture on the nuclear issue help Iran's leaders hold back what they see as corrupting foreign influences by increasing the country's economic and political isolation, say economists, diplomats, political analysts, businessmen and clerics interviewed over the past two weeks.

This brings us to something of a nightmare scenario.  For it's worth remembering that Bush and Cheney aren't the only ones who might well resort to war (another one) to distract their people from how badly they've screwed up their country.  If Ahmadinejad knows he's not an especially popular leader (in addition to what's noted above, let's not forget his disastrous gasoline rationing)… and if he sees the real power centers in the country moving to curb what power he does have… does that not give him tremendous incentive to gin up a war himself?  What better way to unite the fractious Iranian people behind him?

These are perilous times.  We'll stay on top of it.

The Daily Reckoning