Is America Waging Economic War On Iran?

Washington's efforts to pressure Iran have created a new influence industry in the nation's capital.


The shooting hasn't started but the United States, fueled by an expanding industry in Washington, already is attacking Iran. As another batch of stiff economic sanctions on Monday formally descend upon Iran, some see Washington and its allies creeping toward economic warfare with Iran.

Prussian military theorist Carl Philipp Gottfried von Clausewitz's complex definitions of war offer insights into the simmering Iran situation. One part states an aim to disarm one's enemy. Another aspect is the desire of one side to compel the other into submission. Yet another says war's "application knows no bounds."

The Obama administration's approach to defusing Iran's nuclear arms program meets some of Clausewitz's standards. For sseveral years, the United States has been tightening the economic vice on Iran through sanctions. And many national security experts believe American and Israeli intelligence agencies collaborated on a cyber attack that allegedly did damage to Tehran's atomic weapons program. U.S. officials, though anomously, have boasted about the alleged cyber strike.

The U.S. and EU sanctions are designed to hit Iran's leaders financially, and to sow the seeds of domestic ill will. President Barack Obama is banking that the sanctions will convince Iranian leaders to suspend their atomic arms program.

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And like any other movement or issue that pops up on Washington's radar, a new industry has been born.

As the Obama administration resisted a military strike and sought other ways to press Iran, "more and more practitioners [in Washington] have honed their craft on sanctions," says Mark Dubowitz, executive director of the Foundation for Defense of Democracies. He says there are now hundreds of people inside government agencies, law firms and think tanks who are sanctions experts.

Many think tanks like his have stepped up their work to produce proposals to craft and to gain the approval of Congress and allied powers. What's more, "many of the major law firms have growing and very lucrative sanctions practices," Dubowitz says.

For Washington law firms, the sanctions business is a lucrative game.

Cari Stinebower of Crowell & Moring, a global law firm, says "sanctions issues pop up under any number of circumstances."

Many of the firm's corporate clients seek its help in ensuring they are complying with enacted sanctions, Stinebower says. Her firm works closely with financial firms and U.S. companies that export goods around the world, as well as foreign entities that do business in America.

Also becoming bigger players in the sanctions game: financial firms and energy consultant groups.

On Capitol Hill, "eager young staffers" have been a central force, working with experts to hone proposals for their bosses--many of whom have been frustrated the Obama administration wasn't doing enough to disarm Iran.

Dubowitz says the evolution of economic sanctions, coupled with the brainpower now devoted to crafting and implementing them, could create a new domain of conflict: "economic warfare," as he calls it.

"The notion that sanctions might be a silver bullet solution has only taken off in the last several years," says one Senate aide who worked on the Iran sanctions plan Congress approved last December.

The growth of this sanctions industry largely has been fueled by Congress.

"There was a preference for incremental sanctions...that don't use a hammer, but use a scalpel to nudge Iranian leaders," says the Senate aide. "The administration would tell us harder sanctions would be an economic war on the Iranian people.

"But as we have gotten closer and closer to the red lines for Iran's nuclear program, and the incremental approach wasn't working, Congress has pushed harder for a hammer," the aide says.

"There was a huge explosion on sanctions after Sept. 11," says Stinebower. "Ten years ago, most sanctions targeted terrorism. But in the last two or three years, there have been multilateral sanctions on Libya, Syria, and of course, Iran."

The uptick in the use of sanctions to reach strategic goals is here to say, sources say.

"That certainly seems to be the trend," Stinebower says. "People really like the concept of sanctions and cutting off access to the international financial system. ... And in the case of Iran: They seem to be working.

Experts see signs of hyperinflation inside Iran. What's more, "the Iranian government appears to be having a very hard time getting access to credit," Stinebower says. "That is all the result of sanctions."

This sense the economic tools are hitting their intended mark might be changing some minds.

The Senate aide says individuals inside the Obama administration and on Capitol Hill believe that sanctions "could be enough," with the idea of "letting the country disintegrate from within, like what happened with the Soviet Union."

Even hawkish Israeli Prime Minister Benjamin Netanyahu, who worries Iran will target his country for a nuclear strike,, "says he sees Iranian knees buckling for the first time," says the Senate aide. "The right sanctions can make a big impact."

But few around Washington believe the current sanctions packages will be enough, and feel additional might be needed to change Tehran's mind.

"Sanctions are at a six right now. We need to get to a 10 or a spinal-tap 11," Dubowitz says. "We do that by really thinking of sanctions not as incremental measures, but as economic war."

The Senate aide agrees: "The sanctions are working. But this is like a boxing match. We've knocked down the Iranians a couple of times. But they keep getting back up. This thing needs to end with a solid knock-out blow or a TKO."

John T. Bennett covers national security and foreign policy for U.S. News & World Report. You can contact him at or follow him on Twitter.

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