Targeting Banks

Juan Cole notices an underemphasized detail from yesterday's protests:

The report of attacks on banks makes me think that there is an economic dimension to this uprising. President Mahmoud Ahmadinejad's profligate spending had provoked very high inflation last year, up to nearly 30%. Although the government maintains that inflation is now running 15%, that is still a hit that average families are taking, on top of the high prices of last year. And, many economists suspect that the true rate is higher than the government admits.

Inflation hurts people on fixed incomes or people who cannot easily raise the price for the services they offer. Since much of the economy is locked up in government-owned companies or semi-public 'foundations' (bonyads), some controlled by the Iranian Revolutionary Guards and others by elite pro-regime clerics, there may be a monopoly effect operating from the huge public sector that limits private merchants' and entrepreneurs ability to raise prices. Being 15-20 percent poorer every year would make a person angry.

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