Ruled By Economic Illiterates

Steve Hanke looks at Iran's shattered economy:

Fiscal order, transparency and control are nowhere to be found in Iran. Government expenditures are estimated to have increased – in line with President Ahmadinejad's populist proclivities – by 55% during the fiscal 2007-08 through 2008-09 period. Price controls are widespread. These result in implicit subsidies equal to about 25% of GDP. Explicit subsidies are equal to another 5% of GDP, or about 16% of the central government's expenditures.

Banks are mandated to extend credit to certain favored sectors of the economy. The specific sectors and levels of credit are laid out in Iran's five year development plan. Even things like privatization are perverted in Iran. For example, when state-owned enterprises are privatized, the majority of the shares are often purchased by other state-owned entities, such as pension funds.

Iran's economic policies have put it in a death spiral whose speed is governed, in large part, by the price of oil.