health is righted to what we -- related to what we eat, our exercise and smoking. those three things we control a lot our health care destiny not everything, but a big portion of it. now we don't control alone. as you know, fast-food didn't just grow up and we go to mcdonald's. the whole social infrastructure related to that. the whole social network

infrastructure. we do have to take our responsibility. let's flip it around. how might that happen under a new system or the system i describe? again, think through what happens if you're an insurance company and you now got the same people year after year after year. suddenly you begin to think, you know, if i get too many kids who are obese, this is really going to be dangerous for me. let's think how we might counter that. i could have the pediatricians change or i could think through, maybe we could go to the schools, or to parents, and really change the way they're dealing with. we could change incentive structure. you know a lot of schools, got budget cut what is do they do? get rid of gym, get rid of after-school activities. very bad situation. so we have to, empower the health care system to think

innovatively about how to help us be healthier too. and i hope that, i mean part of the thinking that has gone into our program, our plan is to try to do that or create the enincident tiff structure again that will make that possible. thank you very much. >> [applause] >> please join me in thanking zeke emanuel chairman. bio ethics as clinical center of national institutes of health and out of, health care guaranteed. i want to thank our audience especially for your terrific questions, i wish could have goten to more and on the radio. this has been generously written by the call health care foundation. i'm john daz. this meeting of the health

come come wealth club of california, celebrating 100 years enlightened discussion, is adjourned. [applause] >> ezekiel emanuel is the chair of department of bioethics at clinical center of national institutes of health. dr. emanuel is the author or could author of several books, including, no margin, mission. the quest for medical excellence. he is the brother of rahm emanuel the barack obama's chief of staff. for more information on the author, visit bioethic bioethics..nih.governor. >> robert baer, author of "the devil we know" and two rand corporation authors, talk about the threat of iran. the international spy museum in washington hosted this event t lasted about an hour

25 minutes. >> i welcome, everyone to the international spy museum. i'm peter ernest, the executive director. delighted to see you all here. let me give you a sense of format. what we'll do, i will just make introductory remarks here, including remarks on our three speakers, and each of them will come up and do, perhaps 15 minutes, presentation. join the panel here. and then we will open it up i may have a question or two but we will open it up from questions from the floor. so having witnessed the presidential debates, and the difficulty of the moderator had, i can only hope for smooth sailing with three people who are authorities on the middle east. let me just preface my remarks by saying i'm delighted to see this turnout. this is a country about which there was a talk barely a year ago of possibly our invading or

doing some sort of aggressive action. it is a country whose president, ahmadinejad, has proved perplexing for many speakers although i notice all of the debaters, including the vice-presidential debaters had the name down cold. guess is that took a degree of practice for them to get that. so our first speaker this evening will robert baer, who joined the cia in 1976. was a graduate of georgetown. he was there for some 20 years in the clandestine service, which is the operations side. most of that spent in the middle east. seymour hirsch said of him, baer was considered perhaps the best on the ground field officer in the middle east. while he was there he gained a very thorough knowledge of the middle east, the arab world and former republics of soviet union. he speaks arab fluently. and, unfortunately from

personal knowledge i can tell you there are not many of those in cia. so, in one sense i'm sorry to see you out. they probably still need you. for the past two years, bob has worked closely with the channel 4 production company in the u.k. and produced four documentries. one was, the suicide bomber, one and sue sued bomber ii and suicide bomber ii. he did a documentary on, car bomb, which is the first film done perhaps the deadliest weapon of the 21st century. his books i think now, see no evil, his autobiography, and sleeping with the devil were the basis for 2005 academy award winning warner brothers system, siranna and george clooney got best supporting actor award. you can correct this, for the film cleaney gained

weight in order to play you. [laughter] you can correct this when you come up here. >> [inaudible]. >> you get a response, okay. when you heard this you immediately started a working out project to see if you could bring that back down. okay. thomas powers, who is one of the finest writers on intelligence matters, comment on bob's most recent book, which is the one which is on sale now, theville we know, dealing with the new iranian superpower. he said the most important and original book on the middle east to appear in many years. this is a book mccain and obama should ponder. this book, will be available for signing as well as a couple of other of bob's books in the back, after the, after the panel. bob, just stand up for a minute so i get a quick

recognition. welcome to this fine museum. [applause] let me make one request, by the way. as you can see, we have the press here, both print and by way of electronic media. so i would ask all of you if you would please turn off your cell phones, particularly blackberries, pdas and so forth. we have had instances where it does seem to interfere with the pick up by the electronic media. thank you. our second speaker will be keith crane, senior economist with the rand corporation, specializing in the middle east, energy, postconflict societies and transition mys. he was the lead author on the monograph, iran's political, demographic and economic vulnerabilitis. we have that as well. so that will be available for signing after the panel. and, the purpose of that book was to assess trends in

iran, to help address u.s. foreign policy issues dealing with iran. he's been interviewed by the international press and media, written articles for the print media, "christian science monitor" and the pittsburgh post gazette. please stand for a moment, keith, to get recognition. [applause] finally ali nader. iran and middle east analyst also at the rand corporation specializing in iranian security policy, military doctrine and domestic politics. he is particularly interested how government and military structures shape iranian policies regarding vis-a-vis iraq and persian gulf region. he has conducted extensive research on iranian factional politics and decision making currently focusing on the 2009 iranian presidential election and growing role of islamic revolutionary guard corps in

iranian politics. ali, just for a moment, welcome you [applause] so thank you, gentlemen for joining us this evening. so i will go ahead and relinquish the podium to bob baer. bob, we're delighted to have you. welcome. >> i'll need it too. first of all i wasn't the best case officer in the ci nor the best arabist but i did try. there are a lot of them out there that speak arabic better than i do and know the middle east better. but what i do have is certain din of experience and, i'd say my first real lesson in the middle east happened in 193, april, when a young man parked a truck, a gmc truck, at the end of the cornish. it was noon.

schools were let out at the time. traffic in beirut 1983. resumed the old beirut. beirut was absolutely city. april is the best month. restaurants are open. the united states had just replaced israelies in beirut. it was going to be a new era, new era of deepak, new economy. palestinians were out. lebanon was on verge of recognizing israel. it was, reagan administration couldn't have been happier. this kid waits for a signal, mercedes coming down corn niche, and, the mercedes come by, they wave at him. starts the gmc pickup truck, sort of listing to one side and heads down into traffic, more or less unnoticed except by a couple people. at last minute it turns left and drives through the portico of u.s. embassy, up

the steps, and explodes. as we all know the building pancakes. the marine on post one, they never found him. it was such a large explosion. they had taken a set lien tanks and used tptan. this was a professional operation. i had come into the cia being sort of a student of terrorism and no one had ever seen anything like this. not only that, the bomber was never announced. it was claimed by islamic jihadization. we were all of sudden faced with a new weapon. we were faced with a group without a face, without a return address. over the years we pieced together it was iran that was behind this bomb. it was iran as we know behind the marine bombing. second embassy bombing.

the kidnapping of americans. it was iran through, i can use the word, asymmetrical warfare/terrorism that drove us out lebanon. lebanon was the piece, the centerpiece of reagan's foreign policy in the middle east. it was lebanon and hostages almost brought the reagan administration down in 1986 with iran contra. i was in beirut at the time. i was, met ollie north there. but what was more important at that point, and we didn't realize what was going on, we were at the beginning of an 18-year war against the most formidable military in the middle east in a sense that, everybody speaks arabic. combat-trained, one won major victories the best equipped military in the middle east. over those 18 years, i take

this back to 198, because the first bombing against i will racely was in tooir, november 11th, same thing, car bomb -- tyre. israel managed to cover this up they said it was a political defeat rather than a military defeat. that, the israelis got tired of fighting and came home. now this changed in 2006 during the 34-day war. when the israelis were soundly beaten. i will take the commission report saying, israel had lost its deterrents capability. what is clear, this was not an intelligence failure, iran was fighting israel by proxy. i call it an empire by proxies but it was iranian officers on the ground, providing equipment, providing guidance, providing discipline to hezbollah, which beat the israelis. this is, we didn't notice

the war here because there were no victory parades. there were small battles, small skirmishes. when it was all over the israelis left quietly. what we missed here as well, profound effect this has had on the middle east, iran's victory in lebanon. it is in the middle east looked iran's victory. for the first time israel was beaten. for the first time, the arabs, took their vending, if you like, and it vaulted nasrallah into the new man in the middle east. no question nasrallah, iranian, i say general, if you like. he listens to his iran. gets his money from iran. gets his training from iran. the discipline comes from iran as well.

these are relationships acknowledged by hassan nasrallah. hassan nasrallah is extraordinarily honest. if he is corrupt, we don't know it. when beirut was rebuilt in 2006-2007, it was done quickly, much more quickly than we've been able to do in iraq. this whole status of hezbollah and iran has spread like a virus to hamas and the islamic jihad. which takes me to the point where i keep on getting asked questions, but hassan nasrallah, he is arab and semitic blood. iranians are persian, it will not work. it worked in lebanon. it is working in iraq as well. slow buttian crocker, ambassador said, was it three weeks ago, it iran that is blocking the agreements. iran alone, military has

said the same thing. they are training militias for the day they're going to take that country and confront the united states. i obviously don't know the outcome of that conflict. but it is on its way. again, let me go back to the 2006 war, to the surprise of the israelis with modified silkworm missile. they hit a corvette and killed four israeli sailors. came out of nowhere. those same missiles are along the persian gulf. and iran has looked at, looked at the balance of power in the middle east and, had looked at iraq in particular. i was in baghdad in april, 2003, there were iranians wandering around looking nice little holes in the saddam hussein's tanks. trust me. iranians are smart. they can't beat the united states in conventional a

war. they can't beat the united states in nuclear war of course either. but they can do it asymmetricly. they now have the deterrents israel lost. that is simply taking out four or five tankers in the middle east. coming out of the persian gulf, strait of hormuz. they could hit opcac with missiles. would the take as many days to take all the missiles out. meantime you drop a couple missiles into opcac. six million barrels off the market. hedge funds tell me, price of gas goes up to 10 to $12 a gallon. if that's, not that we can trust hedge funds these days but, the point is it's a deterrent any president that will hit iran think about. fine, we can go into tehran. when i sat down to write this book, i proposed to publisher that i write the best and brightest it came

to iran. how did we lose iran? not just how we lost iran how about did we miss it all these years? why did we ignore it? why is it a can we kicked down the road? it was a war we didn't want to fight. including reagan. you're not david halberstam, why don't you trust something else, your personal point of view. in all the years in cia i served on periphery. i was in tehran in 78 leading up to the revolution, the place was absolutely confusing. confusing to iranians as well and khomeni when he eventually came back. he didn't know what to do the country. i was a student of iran during the eight-year war, it was probably bloodiest, was bloodiest war after world war ii in the 20th century. iranians lost a million or more people. the fact we don't know how many people they lost tells

you how devastating in the cia we assumed iranians were irrational, beyond help and matter the place would simply collapse under its own belief or its own confidence god was on its side. the terrorism continued in those years, which was also for us, another side of its irrationality, and that the state would fail. the last iranian terrorist attack was in 1996, which was khobar barracks. you get into the efs, ieds, that is another issue. call that something else. then the amaze thing in the last 12 years they have abandoned terrorism against civilians in particular. in 2006 war, anybody who knows beirut, in a matter of minutes they could have hauled in 100 americans as hostages. their orders came down from tehran, don't touch the americans.

that was completely followed throughout hezbollah. which in a way, for me is a bit scarer because if iran has this kind of confidence it is not going to resort to terrorism and more of a rational power, they are able to calculate our moves, and our are a serious strategic threat to us in the middle east. and, what i find is this arc that i followed from 1978, in beirut, and syria and rest of the middle east, is they have become a rational power, and the good news that we can negotiate with a rational power. if indeed they are and remain this way and i think they are. there are points we can discuss. we can not discuss with bin laden. we can't find hill. we can't get to the wahhabies in saudi arabia. we can't go to those cities. we can't talk to these people. my last point is, that, in

these suicide bombing films i spent of all things, couple months in israeli jails. it most amazing thing. can you mention american person wandering unsupervised talking to prisoners. that is what happened in israel. quite remarkable. anyhow, i talked to bombers. we kept on noticing over and over again, shia islam, there's a discipline. they can turn this stuff off as they did in 2006 or they can turn it back on, suicide bombing. the sunni on the other hand, have a very, very vague idea what they want to do with sue bombings. it was do unto your enemy as they do unto you. which means nothing at all. if you think you're being oppressed slaughtered, then you just slaughter other people and it doesn't matter. so you see hamas and islamic jihadding civilians randomly. but if you at iran and its terrorism in a narrow point

of view it is mostly targeted against military targets. ty re was military building. they looked at our embassies as military. of course the exceptions in argentina. like everything in the middle east, news is always relative. i think if it ever came to the point we had to pick sides, this is a huge statement, it would be better off leaving our traditional allies, pakistan, saudi arabia, and gravitating towards iran. that is a tall order. it would have to involve iraq. we have common interest avoiding a civil war. and like most grand plans, they don't work. but i really do think this stands a better chance of working than it did 1984-86 during iran-contra. this is the case try to make. i'm sure, there is probably a lot of ex-s here but thank you very much. applause

[applause] >> okay, next is keith crane, senior economist at the rand corporation. >> hi. i'm going to talk about a study that we've recently completed at rand about iran's political demographic and economic vulnerabilitis. it's available back here but you can also download it for free off our web site, www.rand.org. if you don't mind printing your paper. a body of research at rand we conducted over last several years looking at iran and what we've tried to do here is that we've done quite a bit of work the nuclear issue. the purpose of this particular study was to put the nuclear issue aside and just ask questions about how can we influence this country? what are their vulnerabilities and what particular policies could the united states use in order to, in essence, exploit those vulnerabilities to come up with policies in iran that would be more

favorable to the united states, and in my view more favorable to both iran and the region as well? through the course of the study we first looked at population. one of the things i found quite interesting is iran now has lowest rated population growth of any country in the region, including lebanon and israel which tend to have lower rates of growth. what has happened in this country then we've seen a shift of what people aspire to in essence, very urbanized society. in a period in the 1980s where iran had an explosion in terms of population growth after khomeni came in, there was abrupt change in policy in 1989 by ayatollahs. those pragmatism there as well. to take a strong policy to control population growth and that has resulted both in terms of consequence of urbanization, some religious

rulings which actually promoted birth control, to a situation where today, populations growing very slowly but, it is also a population in which the numbers of young people that were born in the '80s and into the early '90s are now coming into the labor force. so you have no longer pressures for schools and, and, for schools for young people and new housing but what we are seeing a big push right now in iran due to this change in demographics, some population for young people looking for jobs. the other aspect of iran of course is that it is highly ethnically diverse. is the most ethnicly diverse nation in the region. putting aside afghanistan. roughly, just a little over half of the population are ethnically persian. you have a amalgum of arabs and kurds and zriys who are about a quarter of the population. what is often focus of u.s.

policy saying how can we use this ethnic diversity to advance our own policy goals? here, the news is not, is one of cautionary, and what has happened in iran is that although it is highly ethnically diverse, the most important minority outside persians are very closely integrated into the politic. you can actually see this whenever you see international soccer games. entire country goes out. they don't care if you're arab or kurd or. at that point in time everybody is an iranian. what has happened is, is the ayatollahs used this combination of nationalism, which was really, really ingrained into iran during the iraqi-iranian war which was talked about before but also shia, the shiaism has created a, dual identity for

both iranians. they both look at their ethnicity. they speak arab at home or kurdish at home but at the same time, they also feel that they're very much iranian. we then looked at questions of what could you do in, what's going on with, with the economy. first there has been some thought that iran might run out of oil. this is not the case. we've seen a situation where, where the iranian national oil company has been able to kind of keep production up although production has declined in recent years. and it is one of the major of course oil, has largest oil reserves in the world, coming in number three or number four. that said, there are some problems here. the iranian government has counterproductive economic policies when it comes to oil. number one, they subsidize gasoline. gasoline goes for 8 cents a

gallon. as you can imagine people use it when it is 8 cents a fwal. so we've seen a huge increase in terms of domestic consumption of gasoline and very large of amount amount of oil exports are going to pay for domestic gasoline consumption. the other thing that happened, iranians are very difficult to work with. so time and time again they have written contracts with foreign oil companies, be those chinese or total, a french company at times japanese and there have been so difficult to work with these have fallen apart. so on the one hand you have a country with very large oil reserves. on the other hand you see a government very, very reliant on oil revenues to fund its operations including that of the military, nuclear program and, a government that is difficult to work with, so it is difficult to expand oil out put because whenever they try to come close to an agreement with a foreign company who has better expertise, usually the

foreign company gives up in disgust and backs away. oil, however is not the most important part of the iranian economy. i think there is a misperception here. it only accounts for roughlyly 25% of gdp. iran with over 70 million people has probably the most diverse economy in the middle east. and since oil prices have risen, that has kind of fed into the rest of the economy. you're seeing pretty rapid rates of economic growth since the low point in '98 with growth in construction and retail and trade manufacturing. the problem of course for iranians has been that on one hand, talked before about demographically all these young people coming onto the laborket, and they are really restricted in terms of the opportunities that they have for their lives. most of them actually, in the united states, in fact is the most popular, iran is the country where we have

the highest popularity rating in the middle east outside of israel. most people would like to go to california or new york or someplace else and make their way what has happened is, although you can get a job working for your uncle or your father in a store or running taxi or small businesses, otherwise, most people gravitate into these large enterprises which are controlled by the government, or controlled by the bonans which is a foundation controlled by the religious establishment. the way you get ahead over time is either through, either through patronage, that is, your uncle, brother or neighbor, people who run the operation and they give you the job. or if you're a running a small business you have to provide kickbacks. so there is a lot of frustration among young people in iran because they don't really have opportunities to set up their own business and let it grows. if it grows too rapidly they have to pay off powers that be. if they want a job they will

have to kowtow to somebody and become part of patronage network. that said, it has been a period of fairly rapid economic growth. you talk about iran being a middle income, still a lower middle income, but middle income-developing country. a country however that has really been constrained in recent years by very counterproductive economic policies. and, part of the problem as we've seen in the coming presidential campaign that is in june of next year is that during this period of high oil prices, a period when most iranians expected to see kind of a big payoff from oil exports, what has happened instead we've seen a rapid increase in inflation, and all economic growth has been pretty high, it has been unevenly distributed. people go look at northern parts of tehran, there are some beautiful homes up there. at the same time, where they're living is paying some of the highest rents in the world relative to income. so there's quite a bit of

frustration in iran, even in this period of high oil prices. so, kind of bottom line, what are the key vulnerabilities to iran? in terms of the economy, oil is very important both for export earnings and budget revenues. 4/5 of their export earnings come from oil. over 60% of the budget comes from oil. so as a consequence, if oil prices continue to go down, this government is going to face some real severe budgetary constraints. the other vulnerability for iran tends to be most oil exports are located at single port. this is karg island which is in the persian gulf. all of that oil has to go through straits of hormuz. there are very key vulnerabilities in terms of oil. the second point is that although the demographics situation, population growth has slowed, you're looking at a period where you have a number of unhappy people,

highly educated much more highly educated young people, who have higher aspirations how they want to live their lives. a really a changering at least to become part of the west. internet access is ubiquitous. there are blogs in farsi and all languages used in iran. people are quite aware through the blogs and internet what is going on in the rest of the world. you have this situation where you have gericratic religious leadership permits shuns to a safety valve to let people express, express their political interests and actually results in elections of, some individuals who oppose their leadership but at the same time, you have a situation where young people really want to become part of the modern. so, what can the united states do about these vulnerabilitis? in some ways,

if push come to shove, it is considered act of war we do have opportunity to put a blockade in iranian oil exports. this would have a severe damage to the iranian economy. it would also be considered an act of war. we also have opportunities in terms of providing embargos on particular technologies. one of those has been quite effective and iran has a lot of natural gas, even second or third largest reserves in the world. they are unable to lick which this gas and in place, in context of the current embargo on that technology. that has been quite useful. and, but, so finally what can u.s. do in terms of iran? the important thing we need it think about iran is we need to think of this as a long term game. current conditions in iran, we have a presidential election coming over the next six months. there is some opportunity

that we would come up with a better president, although the president is not of course the leader of country. the supreme leader is, but nonetheless the president has an important role in iran. the idea here is we should be taking our policies and really focusing how do we really use these vulnerabilities to hopefully create an iran and use social and political changes that would lead to an iran more of interest in terms of our, would take actions, more of our interests and also argue iranian interests. right now if you look at iran, none of it is labor -- not a single country in the area with a partial exception of irreally sees iran as a friend or a count trithey can -- country they can count on. at the same time, iran seems divorced from rest of the world. our european allies don't see it as reliable partner. there are a lot of social areas which are social and economic areas in which changes can be made.

what are some of those? one, we really need to set up a special intersection within tehran to have more indians come to the united states and travel back and forth. we have extraordinary iranian community in the united states. people always laugh reason why iranians don't want u.s. intersection to open up there would be three miles of, three-mile long lines out there, people asking for visas to go and visit. but nonetheless, this is very important. we need to expand opportunities for iranians to come here. we need to get u.s., people like yourselves but also u.s. policymakers out there in the iranian media. the media is controlled but at the same time it is going to be open. the internet is open but also, i spoke on a talk show on a arainian television a few months ago even though as i spoke in english, nonetheless it has some, fairly wide viewership

there. the other thing we need to do at least in my view in terms of economy, kind of push for both the world bank and i.m.f. to be very active in iran and also, open up opportunities for iran to join the world trade organization. right now the government is really a kleptocatic. opportunities for young people or businessmen to operate outside that political economic nexus is virtually nil. opening things up you can open up opportunities for people outside the government to expand their economic opportunities and create alternative sources of political and economic power. at the same time, we should be working closely. i would also say, we have to take a more realistic policy view towards iran. it makes no sense to try to stir up these ethnic groups, to try to overthrow the government. they're just not strong enough.

75% of the population is either persian or azari. there is no evidence that those types of groups are in a position to overthrow this government. instead of trying to take a view trying to do regime overthrow, i would call it undermining regime by helping iranians to pursue their own goals to have a more freer, more democratic, more liberal economy. and then finally, however, i think it is important to really target our sanctions on key iranian figures. we've done this in terms of encouraging our european allies to deny is as to certain individuals. we blockaided bank accounts and we should continue with this policy not providing technologies for gas liquification for iran. those are some of the suggestions we had in the volume. thank you. [applause] >> okay, thank you, keith.

next is ali nade. are. iran and middle east analyst at the rand corporation. >> good evening. while there's no doubt that iran presents the most serious challenge to u.s. interests in the middle east, it is arguably the most influential player in iraq, syria, lebanon, palestinian territories and persian gulf region. it supports terrorist groups like hezbollah, hamas and conceivably even the taliban. it has a weak conventional military. its military equipment equipment is largely outdated. it has a museum quality air force but it has the most active missile program in the middle east, and a very secretive nuclear program and it has threatened to disrupt shipping in the persian gulf in the event of a u.s.-iranian conflict. however, iran is not as radical or big of a as its

president mahmoud ahmadinejad would like us to believe. there are social and political forces in iran that compel the country to act moderately. also iran is vulnerable in many ways like keith described. it's a contradictary country. in some ways it's powerful but also very fragile state and has been for the last 200 years. in ways iran is a maturing revolutionary state but it is not fully matured. it is not there yet. we have to remember the islamic revolution took place 30 years ago and considering the 2500 years of iranian history, that's not a large amount of time. and during the last 30 years, iran's foreign policies and behavior have really fluctuated between radicalism and pragmatism. it is neither a radical state or pragmatic state but in many ways both. if you want to different those, the stages of iranian

foreign policy, you can divide them into three. there is the radical phase the revolution, 179-80, to 198. there is the pragmatic stage from 189 to 1995. there seems to be a return to radicalism under ahmadinejad who was elected in 2005 in order to understand iran's behavior during these three phases you have to look at various factors. one is iran's history from the shim of the shah to islamic revolution and beyond. structure of islamic government and repeated factions within the iranian government. the i l iranian government is not unitary actor. in many ways it is a divided political entity. the third factor forces shaping current iranian behavior and policies. well, looking at the radicalist period you have to really understand what iranians were feeling during

the revolution. there was a lot of pen pent-resentment and anger, especially towards the united states. the iranian population saw the shah as authoritarian figure and believed the united states was propping up the shah if you recall the u.s. organized in 1953 the coup that returned to shah to power. their foreign policy wasn't fully rational but based on emotional and ideology and extremism. as a result iran things not only did hurt itself but surrounding countries by ultimately did things that hurt its own interest. for example, it tried to export its revolution to arab countries and no, no one really wanted its revolution. iran tried to sponsor shia coup in bahrain. it set up lebanese hezbollah. and, it adopted a policy of undermining the arab states

for the gulf corporation council. iranian calls for arab mon narcs to be overthrown united those count behind saddam hussein. so it was detrimental to iranian interests. but among the fundamentalist factions in the revolution, and there are many different groupings. you had nationalist, markists liberals but among the fundamentalist factions there was a widespread belief that iran could export its revolution. it was applicable to the arab world and islamic world at large. also, that some of the radical events in iran at that time, the u.s. hostage crisis for example, had a very domestic dimension that is not often looked at. the fundamentalist factions in iran that supported ayatollah khomeni, the founder of the revolution, really used that crisis to consolidate their own power and beat the other factions. so you have to consider that fax alism has been a large part of iranian behavior in

the last 30 years. after the end of iran-iraq war and of comain my in 1989 iran entered a period of pragmatism. the main goal was economic construction. iran had suffered tremendous damage, human and material. the new supreme leader, ayatollah khomeni, still supreme leader and after san january any wanted to rebuild iran and iran couldn't support the revolution and needed know how. lots of iranians left iran scientists technocrats, doctors, et cetera. most of them are living in los angeles instead of rain right now. so rafsanjani reach you had out to gulf cooperation council. tried to improve relations to europe. u.s.-iranian relations stayed pretty tense throughout. iran stated support for radical groups. of. after after san january any.

khatami came to power. he want the to do more than liberalize iran economically. he wanted to change the system. he didn't think the republic could last as it was. he believed iran had to reformlyally and socially. during his reign, ran pursued moderate policies. iran helped united states over throw the taliban and established a afghan government in kabul in 2001. but it wasn't just because of khatami's moderate policies that iran acted like that. the price of oil was really low. in 1998 it ad low of 10 to $12. irwas facing immense economic pressure to open up. it didn't really have a choice at that time. as i mentioned there invasion of iraq in 2003 really scared the iranian regime. there was talking of going

to tehran. iranians thought they were next. so that showed policies of moderation and cooperation didn't really work. and then you have president ahmadinejad come to power. and brought a whole new radical clique with him. ahmadinejad believes iran should return to its revolutionary purity. it should return to its islamist roots, whatever they are. so he doesn't favor cooperation or pragmatism. that much anyways. and then, youed the high price of oil which hit 147 in july of 2008. so that allowed iran a lot of wiggling room. it allowed it to w stand u.s. sanctions, pursue more radical policies by funding hamas and hezbollah and its proxies in iraq. and, it also allowed iran to pursue very assertive nuclear policy. khatami and rafsanjani all

the nuclear program took off on them. were in favor of cooperation and dialogue. ahmadinejad said the nuke program is train without brakes. there is no stopping it. he is not the most powerful person in iran. the most powerful person is the assume reed leader. iran has two systems of government. there is appointed government composed of supreme leader but also the guardian council which vets candidates for elections. then there is elected government which is made up of the presidency and parliament. that doesn't mean ahmadinejad doesn't have any power because gets to appoint cabinet ministers. he sets up economic policy. but the supreme leader's constitutionally the most powerful person in iran. he controls the armed forces and he appoints senior figures in the guardian council and other government agencies. but even khomeni can't make

choice by himself. he has to preside over factions within iran. practicing maists moderates under khatami. the radicalists under ahmadinejad. so important decisions in iran are made by a form of consensus. so ahmadinejad does not represent iranian policies. he has been supported by khomeni who likes him more man rafsanjain and khatami. because they challenged him to a certain extent. so he has thrown his support behind ahmadinejad last couple years and he has been explicit about it. looking at iran policies and nuclear policy it is not just radical. iran has shown restraint in iraq. it helped reduce violence in iraq to talk to. iraqi government force a

muqtada al-sadr in march of this year. and iran may be doing that because it is calculating its interests. it feels if the united states is about to strike its nuclear facilities then, it can restrain some of its proxies in iraq and make things more comfortable for us there. also, there's no agreement, absolute agreement on the nuclear issue in iran. the ruling elite is divided how it should pursue it. i think there is wide con send that's iran should have some sort of nuclear capability but pragmatists like rafsanjani and khatami are worried about the u.s. military threat and sanctions. they don't want iran to return what it was 20 years ago. they don't want to lose what they have created in last 20 years no matter how small it may seem to us. so how can iran become more moderate? you have the june 2009 presidential election. if ahmadinejad doesn't win

and relative moderate figure wins that election iran could pure more moderate policies. khatami is thinking about running for president. knows if he will. if the iranian elite doesn't feel a direct, and immediate threat from the u.s., then it might be convinced to pursue more moderate policies and cooperate with the u.s. in the region of the also we have to consider the intense economic pressure iran is facing. inflation is 30% right now. the price of oil is going down. ahmadinejad when he became president, promised to put oil money on the people's table. he has done exactly the opposite. and, there was a recent survey conducted by the iranian parliament this week showed 70% of iranians would not vote for him. so he is not a pop figure. that doesn't mean he won't become president because elections in iran are so structured and guardian council controls them and khomeni has a say of course. iran also faces other

limitations in region. it is shia state, not sunni. it is per shun, not arab. i have a very hard time seeing arab countries following a hegemonic persian power. it is very different culture. system of government has no counterpart, none, in the sunni or shia world. the only arab party that has adopted iranian model to a certain degree is hezbollah. that is about it. like i said it has a very weak military. although it is improving but it is light years behind the united states in military capability and it faces many internal challenges. it face as lot of significance from women's rights groups, ethnic minorities and bazaris, traditional merchant class in iran. basically rioted in protest the value added tax the government was imposing on them. the government is trying to get more money out of the

population because of iran's tax system. as the price of oil is going down it has to resort to other means to make up for the shortfall. they didn't really like it. i think for the long term there are signs of hope. excuse me, signs hope for iran. in the grand scheme of things i think iranian population is relatively cosmopolitan. it is well-educated and quite fond of the u.s.. there's real hunker in iran for achieving change. and every iranian i talk to wants change iran. they don't want to do it through violent means. it has to be non-violent. and the u.s. should encourage this slow transform of iran by adopting long-term policies. it should think about engaging iran rather than isolating. i don't think isolating it has produced any result, if anything, it is empowered iranian government. as long as iranian government has access to oil

money it is okay. but instead of having a grand bargain with iran, instead of abandoning allies, we should take small steps. i think, the establishment of the intrasection is a good step if the iranian government allows it to happen. the reason for that is, anti-americanism is a big pillar of the islamic republic. it is one of its foundations, if you take that away the regime could once again be in trouble. i think the united states in trying to engage iran will be pursuing a correct policy. thank you. [applause] >> if i could just pose a question to each of you open it up to the floor. bob, let me start with you, if i may. you made a very powerful statement about the for the united states to, in effect, turn a friendly face or at least a positive face

towards iran. possibly, at expense of its traditional allies. in your presentation you did not mention israel, and that of course is the conundrum for the middle east inevitably. but i wonder where you come out on that in your at the same time. >> well, there's two things that have happened that struck me. one is olmert two weeks ago, 10 days ago, said, israel needs to implement resolution 242, west bank, part of ease jerusalem and gaza and let's get on with it. now last time i heard that was from somebody on the other side, that was hezbollah, who said, we don't care what the palestinians, you know, whatever they want, we'll accept, heard this, iranians as well. ahmadinejad in a small, minority in iran believe in wiping israel off the map and so do some arabs but the

point is when you hear this dialogue from a conservative israeli and hezbollah tells me it is helping you will have to tell this. why should they tell an ex-cia guy the truth at all but this is what they're saying. i think there is enormous amount of room if everybody wants to take that step. otherwise, if israel continues to confront iran, we all, there is always, what they're calling it, we're running out of time but the october surprise, or the israelis are saying, iran is too big. it's too powerful especially if we were to leave iraq and we need to hit the iranians. that will always be a threat hanging over this town. that is the negative side. i think we've got room to talk. >> okay. ali nader, spoke of the situation in iran and quoted ahmadinejad as saying that their nuclear program was like a train without brakes. as we recall earlier this year there was a national intelligence estimate which

was not welcomed by the administration here but was certainly welcomed by the iranians. do you tert that as, one sign of iranian restraint, number one, do you accept that that they have stopped their progress on the weaponization, nuclear weaponization program? and two would you accept that as a sign of what you described as restraint? >> well, there was some controversy regarding the wording of the nie. it implied that the weaponization part of the nuclear program had stopped. and if you look at the nuclear program, it's, it started during the shah's time in the '60s and it is not clear as to, you know, how clear it's a weapons program or a civilian program. i think it's probably both. and with iran, and i think iranian, former iranian national security advisor admitted this. he was the national security

advisor under khatami. he said when we negotiated with the iaea and halted uranium enrichment, that allowed us to work on other aspects of the nuclear program. he hinted that, that helped iran achieve some of its goals. when you say iran stopped weaponization its nuclear program, it is possible it stopped certain aspects of it, but in terms of uranium enrichment and building a infrastructure ultimately a nuclear weapon, i don't think that's the case, and with a nuclear program, if iran has shown restraint it is part of a diplomatic strategy to buy it time, rather than forgo nuclear weapons, completely. with iran, and the nuclear program is not just about israel. it is about deterrents. i lived in tehran during the

iran-iraq war. it was terrifying. scud missiles and iraqi jets. they really pummeled the population. and it really left a psychological imprint on iran and iranians. i think the nuclear program is to insure not just survival of the islamic republic but to defend iran especially that its military is pretty weak. >> okay. keith, last question, you described an iranian going through a state of change, certainly demographically. people, seeking jobs, seeking a different iran. going back to bob baer's statement about the need for to us turn a friendlier face towards iran, do you also touched on that but do you see a need a greater urgency, given the weaponization program that's possible in iran? you described several features that could be done. blockades and so forth. but do you see a greater need for the friendly face,

let me put it that way? >> i'm pretty pessimistic on the nuclear program. i think what will happen, the debate in iran, ali, can correct me, seems to those who want to go all the way to weaponization or you go to almost, to that level. and, there's a number of, a number of states have actually, in the world have a situation where they have enrichment facilities, they have enriched-uranium. it would very easy to go all the way to a bomb. but i think that most people in the policy-making community kind of convinced that iran will be in a position to either have a weapon or have, enough fissile materiel they can make weapons so i don't really see our policies, so the question, what do you do about it? we've done other work at rand. we looked at it. one of the problem is bombing the stuff, if you go in and bomb enrichment facilities then what do you do? because there's been an effort in order to put them

underground. and the real problem with these types of facilities what really people have in their minds. it is not so much the centrifuges. you can take all the centrifuges out that would be fine but it is very difficult to do something like that so you postpone it. so i think the argument we have here is, you know, putting aside the nuclear issues, what you want to do is have a government come about, come to power in iran will do what the south africans have done, argentina, brazil, had nuclear weapons programs in the '60s and '70s and fortunately, they said well, why are we doing this? this crazy. and you would be hopeful that they back down. i think, idea here is you need to work with the populace and hopefully get a saner government. . .

>> of like to thank the speakers for their insights and and in particular iran provide notice of you spoke about the importance of oil as a focus of the power and its

policy and wealth. and bob in particular spoke not only as a nation but it has the missile capacity two help destroy the oil capacity of its neighbors. there for my question concerns pulling the rug out from underneath them with alternative energy in particular might produce zero produced from genetically engineered bacteria which has been demonstrated in the lab from eco- lybrel it is feasible much faster and much faster timeframe been doing for oil. what would be iran's response, i ask this of each of you if we put a serious national effort to produce a alternate methods such as my produce o which would be will and cheaper than oil right

now? >> it is alternative energy not just like a diesel. what we have learned from iraq is if humpty dumpty cannot be put back together. having served in the middle east and failed utterly to change the direction of any country have served we cannot fix it. if you can fix it we can either fight 30 years to contain iran and come home or find alternative energy whether record the sole or solar or clean energy. the middle east in my opinion, i have a certain bias that we cannot fix it. they will fix it themselves in terms of democracy and ethnic reconciliation or it will not be effects. we will not do it. i agree. >> to use a tax word, taxes on

carbon fuels is a good thing to do but will american voters go ahead and put hot and heavy taxes on carbon based fuels? maybe if we all got rebates that would work. but then an awful lot of four condi nobles and other things. we have looked at the disaster of ethanol subsidies in the united states, food prices skyrocketing around the world, we were using 20 million barrels per day. we don't produce that much sewage two make 20 million barrels per day out of e coli. i think to put 300 billion into energy research over the last 30 years when i was in grade school they said 20 years around the corner now of my grandchildren say fusion

energy is in 20 years idle the taxpayers' money should be used for research i think the private sector should do that and if it makes sense that is fine by think it is great if we would tax car been very heavily in three to do that to cut other taxes. >> a great question the issue of middle east oil is only a very small portion from the middle east maybe 11% to five am correct? no iranian oil at all the rest of the world gets the oil the japanese, the chinese, the indians and so it is not just us adopting certain policies to reduce dependence on oil. iran has been a strategic because it is selling oil to the united states but strategic because it has enormous reserves and can interrupt shipping in the

persian gulf. if it would affect iran but say the entire world switch to alternative fuel, i think that in a lot of ways it has been a curse. it does not have by a diversified economy. a great natural resource has allowed other countries to invaded and interfere in its affairs. in the long run could iran be better off? perhaps. given how dysfunctional and how the economy is, i think any fluctuation of oil prices or switching to alternative energy could really affect not just the political situation in the region but politics in iran. >> i would like to ask with three gathered to presidential candidates east and west, have

you been pleased, appalled, indifferent with regard to the ones with the ones in the united states regarding i ran? rather prospects for people running in the iranian election? i know khatami is a likely prospect. is the president of iran eager to have another go at it? >> anyone want to take that question? >> in terms of iranian politics, and nobody can tell who will become president or nobody can predict no one would even fathom ahmadinejad would become president in 2005. he was only the mayor of to rod.

it was a shock to the system. with iranian politics it is very different than what we have in the united states they are structured so candidates can be disqualified and ballots can be stuffed so there's no point* in discussing who will become president at this point*. the ultimate decision is made by the supreme leader and islamic revolutionary guard corps and various states institutions. if you have somebody like khatami coming to power and he did not do very much for iran broke large portion of the population would be disappointed but in terms of rhetoric and the style and substance, he is moderate. he dresses well, he behaves well, does not make a fool of himself in front of the camera and those are qualities that can help iran diplomatically.

but i am not very optimistic about the ultimate iranian in the u.s.. it would take a lot, talking about israel before, it that is a major major sticking point*. i cannot see the supreme leader of iran excepting israel he is adamantly against its existence and which is deeply ideological. >> the tighter the question the more we can ask our speakers. >> i don't have an opinion. >> i look at it if you could bring mccain two reason wb the candidate to convince the american people we need to do this. from a republican standpoint

it would be hard for obama in the middle of a recession to make a huge foreign policy gestures to iran and not be accused of capitulation with the way i see it. >> i would like to ask the panel what they feel about the possibility of the israeli attack upon iran? sometime fairly soon? >> anybody want to take it or all three take a crack? >> it is a great probability. basically iran is pushing israel into a corner especially with the rhetoric of the president. i think it is a possibility. perhaps israelis are waiting for the right time, perhaps right now is not the right time. but when you are a country of

fiber 6 million people and a country 10 times your size with 10 times the population threatens to destroy you, you have to take defensive measures by am not sure if it will take out iran's entire nuclear program i am not sure what type of intelligence they have for a lot of the facilities and iran are known to the un security council and i ata but to knows if iran has a parallel program? there are a lot of unknowns i think in the security establishment we use deterrence for decades in the soviet union we have a deterrence policy with china whether that is inadequate response you do have a major problem. what of my colleagues talks about bombing north korean facilities in 93 or 94 but

then what happens? i think there has spent a lot of concern that you take up part of the facilities are some of the facilities but the problem doesn't go away. >> if we were to precipitously leave baghdad to follow under i ram's shadow, israelis will start feeling surrounded. if a domino effect did not work in east asia it is much more applicable in the middle east in terms of the hegemon to which iran would become with the palestinians. if israelis hit by hamas or hezbollah how can they not react? a government cannot withstand being surrounded. they can turn the tables on them. >> some questions over here?

>> this is mainly for mr. robert baer would you comment on the relationship between the iranian government and hezbollah? how much power does tehran have and with the use it as a retaliation against in response to an attack on iran? >> to answer the last part first i think we can almost count has what responding to an attack on iran and i think the israelis are counting on it. hezbollah says they have tripled the size of the missile force and they are hidden, better ranges, the tandem charges come three iran and iran is funding the troops

which is extremely effective so you see the weaponry ratcheting up and there is no direct relation that we know between russia and hezbollah so it comes through iran. so if it answers to iran you need the money to build up the southern suburbs. he was created by iran in 1982 and he has been a loyal officer in the ranks. and i think he really believes in the great iranian empire buy proxy. this is the iranians managing to cross the ethnic divide which is so scary to the jordanians and the israelis. veba if this every day we fall back on the opinion that the iraqis will reassert themselves as the iraqis. they did not fight during the 88 war by think the iranians

understand how to reverse this the least temporarily in iraq. i think the israelis are worried about things getting worse record depends what we do. if we get into iraq and the government about malachi allies with iran, the israelis will really be scared. >> i am curious to know the panel's thoughts on the movement to privatize industry in iran and with the overpopulation getting to the age to gain momentum will lose momentum or have any lasting social or political e facts? >> there is a lot of progress made under khatami. what has happened unfortunately over the last three years the privatization program has gone awry. ahmadinejad said it up

hough -- so the foundation by the irg sea are really taking over the companies procure not seen the type of privatization you saw until about 2002 or 2003 and a lot of ways iran has gone backwards over the last three years. you saw liberalization in the banking system, a private banks taking off that could lend to companies on the basis of the credit. i would hope if you have a new president you may see some revitalization program but right now it is a nest. >> n/a a possibility behind-the-scenes rapprochement between iran and israel they have connections

that have never been made by reaching an accommodation? >> that is exactly my view the way things are approached it will be the israelis go privately there's a lot of a radius of visit israel and a lot of israeli ministers and there's a lot of good connections and the whole idea surrounding the arabs and persians and israelis and if there is a breakthrough, it will not be mccain it will be the israelis coming to washington. so here is what we need from you. we would be delighted if that happened. of love to see the israelis pull a rabbit out of their hat. >> a couple months ago the iranian minister for tourism made a comment we are friends

with all people we're even friends with americans and israeli people. for the past two months he has been pressured to resign. khatami it made s speech that said we are not friends there is no difference between civilians or military personnel in israel, they're all the same, they are occupiers prepared to what extent that is a functionary in politics is hard to tell but if you have been telling your population for nearly 30 years that israel is a great evil, if there is to be a rapprochement i am not to say cannot act there was the iran contra affair they probably have contacts but who knows? to be the grand rapprochement then you seriously have to change your rhetoric.

when it khatami was president he said we're willing to except what the people except. it is a possibility. but given the nature of power in iran, if this khatami there is a good possibility. if it is how many are the irgc that could be in question. >> he painted a picture of a nation that is very young, a very unified more so than i expected one that is largely educated by western standards and broadly educated with amazingly open access to communication with the the wider world. given that how sustainable is the iranian political system

theocratic, autocratic and bills on patronage? what are the prospects there will be some sort of break with the political system? >> one issue it doesn't have very deep roots. the whole system in some ways is arbor jury. you have the shah that was replaced by the islamic republic and institutions that have never existed in iran like the guardian council. so the clergy not only does it not have roots and it does too certain extent but not among the entire population and also does not have a lot of widespread support. i can tell you that although lybrand is united in some ways it is very secular and nationalistic iranians look at

the clergy and a lot of them think they are from another world. there is that division within iran provide can tell you how sustainable it is because there are tools the iranian government has that have kept it in power, controls on the armed forces with a pretty good security system, it a controlled economy, a diversified politically sonat one person is making decisions it is not a matter of getting redder -- getting rid of ahmadinejad or khomeini there are a lot of players. what is happening right now is the clergy's power is being reduced and being challenged by me people like ahmadinejad but also the irg see. we look at this there is also the possibility of the following years a government that is less clear call but more military and that has happened in the last few years

especially since ahmadinejad came to power the irgc has taken a lot of power in iran and it is conceivable if the supreme leader died tomorrow, if that happens, there could be a shift in power. another group could come to the forefront and that we politics in iran could slow the change. i also think one thing a lot of people don't understand about iran is it is isolated from the world but the population is actually pretty aware of what is going on with access to information. lot of iranians see things from america it is not just the iranian media. there is no knee-jerk reaction

to what a certain ayatollah has said. like i said in the beginning, people really supported the islamic republic and support the revolution, i think that is mostly gone. there are groups of people who feel very passionately about the islamic republic but the majority of the population i would argue, it does not if that is where we should look for changes. >> this question is primarily directed at mr. robert baer. given the considerable network iran has built up in the region with the conspiratorial mindset of people in the middle east news seeing a resurgence of soviet active measures like operations being conducted by the iranians? >> i think the iranians are

bringing rockets into gaza they are certainly trying to control its remotely. they cannot put people in gaza. they are trying to spread the hamas organization to the west bank. they're holding the rockets as a deterrent and attempting to get the palestinian camps in jordan in particular. they are casting the jordanian regime as capitulating in the united states. this is the islamic revolutionary guard corps out there than a faction of military security which is also reaching out to people but mainly it is focusing on iraq at this point*. earlier this year there was inside the of frustration a look at the possibility of what to do about iran. you can wait for the price of oil to fall and see what

sheiks out which we may see pretty soon but it does not always guarantee a regime change in the pre-revolutionary state but there was a look of supporting the jindal of a group of that is a very violent group. a look of a ministrations for a city extremists in lebanon that should be deterrent to hezbollah then you have the kurds. the problem is that is the iranians worst fear they become mushy of power against the sunni and they are outnumbered. if we were taking the same machiavellian approach to the world we would take a wedge between the city and the shia but then you get a civil war that looks like the mad max approach to the middle east and could really backfire.

>> hello. i am curious if we were to achieve a rapprochement with iran what affect would that have on prospects for a more democratic reform and change within the country itself? would strengthen or we seen as a credibility of foreign policy victory for the ruling regime of the past few years for conservatives? >> the cliche way of looking at that is as a rapprochement we see iraq and afghanistan will of the paranoia and iran would go down but the rapprochement with china did not make it more progressive democratic government prepare you cannot predict these

political things. >> i would agree actually. if the rapprochement basically, what the iranian government wants is acknowledgment of its system of government from the united states prevalence some sort of security guarantee into play a major role in the region especially the persian gulf. if there is a resumption of relations and we give those things to iran they have to give something speck of course, but if that is not followed up with iran's economic and social opening and if iranians are not allowed to travel outside, if political change doesn't take place, and a lot of ways to approach mccann strength in the iranian government. it depends what policies we pursue with iran i think we have to be very careful when we talk about negotiating and what we are negotiating

exactly. fair to give up the nuclear program what are we willing to give them in return? the nuclear program is not the issue it is the islamic republic in the relationship with the u.s.. that relationship fast to fundamentally change and the republic cast allow reforms within the country. >> thank you so much for joining us this evening [applause] bob and keith will be available in the back for signing their books. thank you for joining us.