withdrew his candidacy, they did not take into account the system reacting the way they did to a mir hossein mousavi presidency, particularly since he had made his commitment to the islamic republic very clear. he made clear efforts to bring in the forces to this campaign, talking about them as being the backbone of the revolution. the model that the reformists still operate on was the 1997 model, when close to 80% participation pressured authorities to ensure a fair election. in 1997, the sermon before the election was given, assuring the public that there would not be a fraud.

remember, he was the president of iran at that time. one day before the election, the ayatollah khomeini came out and ensure the public that there would not be fraught -- fraud. reformists' assumed that the same pressures would be at play. the genuine shock expressed by mir hossein mousavi along with the population was a direct result. on the conservative side, the miscalculation occurred in the opposite direction. what they underestimated was the ability of the reformist candidate, particularly the largely on charismatic mir hossein mousavi -- un- charismatic mir hossein mousavi at the time to what they perceive to be a relatively cynical electorate.

bacon said more iranians vote and in the united states -- they can say that more iranians vote then in the united states. with a bit of fiddling and manipulation, winning the elections with 60% participation. they knew that with a 60% participation rate, with ahmadinejad popular in the countryside and the rural area, a man of the people, it would not be difficult argument to sell, that he could get 60% of the vote. then he had in fact bought the vote did not matter to them. they thought it was important for everyone to agree when

people went to the voting station. that was one underestimation. second, they underestimated the ability of the debate in energizing the population having confidence in their men's aggressiveness and debating capability, they did not grasp the problem that ahmadinejad had with telling lies on national television and the impact of other candidates standing their ground. third, and this is the most contentious part of my argument, they did not see the necessity to adjust the model of ahmadinejad receiving more once everything threatened to become 80%.

somewhere in the process they were planning to cheat, but the ground underneath them shifted. rather than adjusting in making the situation more viable, say by reducing the amount by which ahmadinejad won, they maintain the this two-thirds scenario. -- they maintain the two-thirds scenario. many never entered the fray, and they chose to ignore this reality. probably because it was a fourth miscalculation, underestimating role of free-election in creating networks and links among people of different backgrounds that could be mobilized.

not only because you had people from all over every strata of the society, the reality is that this was the first time they were looking at each other and telling each other that they voted for him as well. there was a bonding that broke down the narrative created in iran. this was not about that, it was an election and people saw on the streets that they were on the same side, and they connected. at the end, like the reformist counterparts, conservatives also assumed similarities to the advancement in the 1990's, when

similar demonstrations prevented the spreading across the population, through the years of sporadic but effective violence. the indiscriminate use of plain clothes club wielders attacking a small piece of the population, like students in the dormitories. this was before the massive demonstrations. they went immediately into the dormitories, starting with students so they could cause fear. it was the failure of this system of crowd control to put a quick end to demonstrators that

work for the hand of the leaders, using the course that they had not been forced to use but should have to effectively take responsibility for the fraud and violence that took place. ultimately, effectively identifying himself with the part of the government that has always been in the shadows and willing to impose violence on the iranian population. it is important to understand what the ayatollah did. he not only threatened violence, but he made it clear that the ideological future of the country stood with ahmadinejad, and so did he.

not akbar hashemi rafsanjani. he made it clear that in the months and years to come it was his office standing against compromise in the political system, as well as being ready to compromise with the outside world. in one step he made ahmadinejad look very small and insignificant compared to the titans. we will probably never know what was said exactly in order to get support for this most politically polarizing figure. as i said, it is significant that in a friday prayer he went further than he needed to go.

not only did he threaten violence, but he revealed the deep ideological fissures in the republic. he also revealed that his office, as mandated by the constitution, has been fueling instead of dampening sphere is a list. -- schisms. do publicly align his office to highlight the security status of the country in the minds of many, they are responsible for the ahmadinejad presidency. it was a line that the leader had not tried to cross before. throughout the election, he tried to avoid crossing it.

a mir hossein mousavi presidency would have been fine with him. so, why the change? most likely the extensive mobilization of the electorate that must have frightened the hard line sector of the elite. the language of fear is used intentionally, because the only reason one can think of to understand these questions is the stance of extreme threats made even more strange when one considers the fact that this threat is reflected in the constant refrain of the british involvement in iran. this sense of threat occurs precisely at the moment when iran was at its strongest in the

upcoming negotiations. by giving support to a popular president, he could have made his name. that is not how his name will go down in history at this time, but more as a leader who pushed back aggressively to -- and u.s. policy. it has now become common in washington to say that what happened in iran was an effective takeover of the national guard. it's possible that this attempt was a attempt to take over the islamic state by the city

establishment. aside from the fact that the history of punditry on iran should warn against any kind of commonality, the reality of the politics seems at once much more complicated and simple. if this was an attempted tcoup, because of the way that it was conducted, it could bring people to accept a new arrangement, but it has also exposed problems that exist in iran and questions that cut across all institutions. today i have received, talking

about the revolution, information. none of us have any sense of the revolutionary guard. we are free to make commentary about this reality. what i suggest is that the deep rift that has been attacked -- exposed in iran over the last couple of years and couple of weeks, that if he cut across by the society and the institutions of the republic. different visions and the ability of those contending visions to fight it out in a peaceful way, win or lose, is a game that is not reagan and takes everyone seriously and it does not try to purge the other side, of the system.

-- other side out of the system. essentially having a say in the policy direction of the country. 30 years ago they came into the street to conduct a revolution based on the same point. let me finish by just saying that on june the 11th, i marveled at the fact that iran had come such a long way. and that the population was no longer wishing to reshape the structure of the state, but insisting still on its say in the policy direction of the country. they were making a choice between two candidates who, in the process of the election, had convinced the electorate,

rightly or wrongly, that they would leave the country in different domestic and foreign policy directions. today it is clear that the century old yearning for a set of agreed upon rules has not succeeded. yet their reaction to what has happened suggests to us that there is still a ways to go. still searching to find a compromise solution that cannot find the proper balance of accommodation. in the direction of the country

that cannot get along, as such it keeps itself open to periodic and unpredictable outbursts in rules that are accepted by both sides. >> thank you. excellent. our third comment is by fariborz ghadar, senior strategic advisement in washington, he holds the william h. meyer chair of global lan and -- global government. >> thank you, sam. can you hear me in the back? great. what i am going to look at this

afternoon are the economic conditions in iran and what brought about the dissatisfaction, if that is what it was. i am going to look at the economy in two ways. unity, vulnerability, because of the implications. i will try to tie that in there. mentioning the revolutionary guard, i think that there will definitely be instances on the economic front. what i will try to do headfirst is look at the general economy in total. we were running about 5 million to 6 million barrels per day,

prior to the revolution. the economic system is as followed, dropping to 3.3 in 79, 1.3 in 80. it has been brought back up to four, but at this stage it is running about 4 million barrels per day. the director of the international division was interviewed yesterday, he was under the impression that they would be running somewhere around there. overproduction is going down.

iran is the second-largest gas reserve holder in the world. yes, it is actually a gasoline importer. the line is very close, depending on where you look they can cross each other. in terms of dollar amounts, it is an exploding -- exploiting the imports and moving them back out at a higher price. this is a drain on the economy. gdp growth has been quite erratic. despite the fact that oil prices have been quite high, it has hung around 4%, 5%, 6%. despite the fact that oil revenues have gone through the roof.

the question becomes, what is going on. you will have to look at the fundamentals. we have a lot of experts in the room that are probably better experts than i am. looking at it right now, we have an economy where the government is around 3035%. add to that the role of the foundation's, you have a private sector that is maybe 35%. large projects that are supposedly given to the private sector seem to wind up being given to the senior members of the revolutionary guard. three huge projects in the past year were given out, one was $1.30 -- $1.3 million for gas to

be shipped from the southern gas fields to the border of pakistan. a contract has been given to a leader of a garden. an expansion of the metro in tehran was also given to the same person. the rest was given to the same group. if you follow the money, which is what we do in business school, you say look, you have got 35% directly controlled by the government. if you look at what he did when he became president, that is a huge number.

that is a substantial impact. the private sector is basically biased towards the revolution anyways. it includes transportation, railroads, you go through it. the economy is really a governmental economy. when i was in graduate school, i read a book given to me by one of my mentors about iran. i was always intrigued by that. about four years ago, we had a look at democracy. something interesting hit me.

democracy's came about because the central government tax people and people started to get upset. interesting, historically. the french revolution occurred when the king was taxing the french at 11%. the chinese emperor, 9%. it seems to be that 10% is about it. if you tax people more than 10%, off with the king's head. if you are going to tax them more than that, people need a say in how to do it. hospitals, security, education. that, by the way -- side note, my wife is lutheran and i made a presentation to them and they laughed.

even god expects them to pay 10%, i said. [laughter] but, the difficulty with oil exporters, gold exporters, diamond exporters, etc., is that the money goes into central government. that becomes a big hassle. the voice of the people is important, but i want the money under my control. the situation is really -- imports, i might come back to that. 40% of the gasoline is imported. what has happened is there is a

debate on who gets the money. if you look at the first debate, ahmadinejad debated with mir hossein mousavi. he said that he had these files, and i am not debating one person, i am debating everything. it means that i have got something on you. this is something that could take you to jail. that threw off the entire debate. suddenly we saw the unity breaking apart, as robin so eloquently described.

how is the money going to be separated? but this -- what is the role of the economy? housing? much much faster than the inflation rate. imports of food have gone through the roof. inflation has gone through the roof. the central government is giving money. salaries are not keeping up with inflation. in the presentation, everybody shows numbers. multiplied by 12, you can get

the year. in any case, this is the central bank of iran. if you add to unemployment -- sorry, thank you. if you look at unemployment, it is an interesting statistic. the government gives you all sorts of statistics. i have no way of judging that except to look at the aggregate of numbers, which are roughly around 7 million. 20 million are either too young or too old. the ministry of labor says that there are 25 million people on the work force. if you look at the 25 million

people that were employed, eight women -- women, and a woman cannot work. i did not say that. of the 25 million remaining, unemployment is running somewhere in the 20's. add that to the inflation, as you get older remember that we used to have a misery index.

the peak of the time when the economy was in terrible shape, we had interest rates at 17%, unemployment was at 78%. the ministry index in iran is in the 40% range. giving money all over the place, they could not have given that much, probably some of the billions to the government. not a lot of money these days, but that is basically what they did. the misery index is very high and something needs to be done about it.