Why Rand Paul Associated Sanctions with War

America Should Rethink Its Approach to Iran


Rand Paul

Rand Paul helped cement his reputation as his father's son this week. The junior senator from Kentucky, son of libertarian-leaning GOP presidential candidate Ron Paul, won headlines for halting a new round of sanctions against Iran coming out of the Senate, by objecting to a call for unanimous consent. He insisted that the sanctions bill include a sentence saying that nothing in the bill should be construed as declaring war or authorizing the use of force against Iran (or Syria, also targeted by part of the bill).

Rand Paul won much love from the staunchly anti-interventionist wing of Ron Paul's liberty coalition for his boldness. Previously, Rand's record on Iran had seemed spotty to many noninterventionist libertarians. When running for Senate in 2010, he said he didn't think it wise to totally rule out the possibility of using nukes on Iran if they attacked us with chemical or biological weapons. He was part of the unanimous Senate vote for a previous sanctions program in 2011, which he argued was aimed mostly at Iran's central bank, not its people.

While Sen. Paul annoys some noninterventionists by even granting he believes Iran is trying to get a nuke (such noninterventionists think that plays into a bellicose narrative best avoided if you value peace), he's also said he doesn't see our own national security in such great danger even if said nuke-getting happened. He's uncomfortable taking the line his father takes, which recognizes Iran's rational interest in having a nuke. This summer, while researching my book Ron's Paul's Revolution, I witnessed Sen. Paul trying to finesse such a statement from Ron Paul at the Ames, Iowa, GOP debate in August. Rand had been sent into the pressroom as a campaign spokesman afterward. He tried to say that Paul mostly meant that an Iran with nukes could be contained as the Soviet Union was. The almost lefty-sounding sense of empathy Ron applies to international relations is just too hot for any other Republican (or Democrat, really) to handle.

But Rand did take a stand on this sanctions bill, stressing that rushing toward war with Iran is a terrible idea. As he said before the Senate:

Many in this body cannot get boots on ground fast enough in a variety of places, from Syria to Libya to Iran. We don't just send boots to war. We send our young Americans to war. Our young men and women, our soldiers, deserve thoughtful debate….

My amendment is one sentence long. It states that nothing in this act is to be construed as a declaration of war or as an authorization of the use of force in Iran or Syria. I urge that we not begin a new war without a full debate, without a vote, without careful consideration of the ramifications of a third or even a fourth war in this past decade. I, therefore, respectively [sic] object.

By objecting, he held up the bill, unless Senate leader Harry Reid (D-Nev.) can get 60 votes to override. It's unclear when or if that will happen.

The bill, S. 2101, would have merely been a few additions to an already generations-long tradition of Iran sanctions in American politics, dating back to the early days of the Khomeini regime and the hostage crisis (which had its roots in the U.S.'s own role in the 1953 overthrow of Iranian leader Mohammad Mossadegh). The additions include sanctioning any company or subsidiary of same even insuring vessels that the U.S. government says ship things Iran is using for wicked purposes; sanctioning international financial transaction companies that do business with Iranian banks; forcing U.S. companies to disclose to the Securities and Exchange Commission if they conduct certain types of business with Iran or Iranian companies, and barring any Iranian student from studying anything energy related at all in the U.S., not just nuclear related.

Whether Reid succeeds in eventually pushing this new sanctions bill through or not (a version has already passed the House), we are still hip-deep in a complicated regimen of sanctions on Iran and have been for decades. Currently, we don't do business with Iranian banks and pressure our allies to do the same. The Treasury Department is making its own choices about imposing new sanctions this week. Reuters reports that "any foreign financial institution that does business with [certain targeted Iranian shipping firms]" will "risk losing its correspondent account access to the United States."

And if foreign nations or companies don't go along with our desire that they not do business in or with Iran in areas ranging from energy to munitions to shipping to banking, they can face denial of any U.S. credit or credit guarantees for exports to the "sanctioned entity." We might deny export licenses or refuse to export our military tech to them. Other possible penalties include prohibiting the entity from dealing in U.S. bonds or receiving U.S. deposits, and restrictions on imports from the defying country. As Michael Lavi explains in an interesting New York University honors thesis:

Sanctions such as these have caused banking transactions to becoming extremely difficult for Iran, as fewer options are available to the country to finance its trade. As for exports, Tupras (Turkey's largest industrial enterprise) cancelled all of its gasoline export contracts in October 2010 following pressure from the U.S. Even other OPEC countries like the United Arab Emirates (UAE) have begun imposing sanctions, freezing bank accounts and blacklisting Iranian entities.

This year, Europe has also (mostly) vowed to stop buying Iranian oil by this summer, though we have had to face reality and give exemptions to some of our friends for their sin of buying Iranian oil. Turkey, China, India, and Japan, among others, have not vowed to quit Iranian oil, and given the fungibility of oil in the world market, Iran will certainly still be able to sell oil. Economist Gary Hufbauer estimates, though, that Iran might see its energy export earnings shrink by $24 billion, out of a $480 billion economy. An Iran that (unlike its foe the U.S.) was expected to have an actual budget surplus this year might rather end up with a deficit of 2 percent of its GDP. Iran's current debt is just 9 percent of its GDP—again, well ahead of the nations sanctioning it.

All this isolation has been bad for Iran, naturally, though not bad enough to break them to Western will. Iran was the only OPEC country whose oil production in 2009 was less than it was in 1979, and its foreign direct investment as a percentage of GDP is only 7 percent, as opposed to an OPEC average of 23 percent. Its oil and natural gas industry and refinery infrastructure is aging and requires a great deal of investment in order to stay modern and efficient.

Still, the Wall Street Journal guesses this week that the price hikes on the smaller amount of oil Iran will likely sell in the next year could net it as much money as it was making before more countries decided to halt or curtail buying oil from them. The high oil prices we currently suffer are likely one of the bitter fruits of our current sanction policy, and the uncertainty over possible conflict that could affect the Straits of Hormuz through which 20 percent of the world's oil flows.

The existing sanctions against Iran have been, as usual, harming the middle class and everyday citizens with high inflation and a lack of access to foreign goods and lack of ability to do overseas business. They're also hurting Western businesses who are or were trying to do business with Iranians. The Iranian government and Revolutionary Guard, meantime, manage to tough it out fine. As USA Today noted in November: "the Guards, with its network of shell companies, border outposts and foreign operations, is best positioned in Iran to dominate a sanctions economy, says Trita Parsi, president of the National Iranian American Council and author of…A Single Roll of the Dice: Obama's Diplomacy With Iran…'They are in control of most of the smuggling, and whoever is smuggling earns a profit,' Parsi says."

Meanwhile, as Declan McCullagh explains, Clinton-era Iran sanctions are still limiting Iranian citizens' ability to use modern software we in the West enjoy. That applies to Iranian dissidents as well as loyalists. 

Nothing in this new sanction bill, or any of its proposed tougher amendments from the likes of Iran superhawk Sen. Mark Kirk (R-Ill.), would be likely to change the fact that an obdurate Iran feeling pushed to the wall is not apt to crack and give us what we want—unless what we really want is either an end to the regime entirely by our action, or an excuse for war. Sanctions have a terrible record of achieving their policy goals, though a decent one of pushing all sides into such obdurate positions that war results.

Why even think of war? It is not a matter of national life and death whether Iran manages to get nukes—and there is still no solid evidence that it is trying to do so. Iran does, however, seem to enjoy tweaking the West about the possibility (and Western media seems intent on ginning up war fever reminiscent of the lead-up to the second Iraq war).

Israel more than outmatches Iran in nuclear weapons, missile capabilities, and even well-targeted and significant terror attacks (the most likely explanation for deaths of a handful of Iranian nuke scientists in the past few years). As Paul Pillar, a former national intelligence officer for the Near East and South Asia, explains at length in a recent Washington Monthly feature, "an Iran with a bomb would not be anywhere near as dangerous as most people assume, and a war to try to stop it from acquiring one would be less successful, and far more costly, than most people imagine." There is simply no good reason to assume they are suicidal madmen based on the regime's past behavior, and blowback to the West from Iran being attacked could be costly, lengthy, and murderous.

The respectable likes of Joe Lieberman want to codify that that the U.S. will not allow Iran to have nuclear weapons, that despite our decades of succeeding in keeping governments led by murderous madmen far worse than the Iranian mullahs—Stalin and Mao—from using them without war, a nuclear Iran cannot be merely contained. President Obama agrees with this absurd and dangerous proposition. As Robert Naiman put it at Huffington Post, "Lieberman et al want to lower the threshold for the United States to go to war, to a place indistinguishable from the status quo today."

Still, Reid insists, "There's nothing in the resolution that talks about war," explaining his objection to Paul's amendment

Except for the fact that trying to squeeze a nation's economy to death is a hostile act in and of itself. Any shooting war would be at best a short-term deterrent to what it is meant to accomplish (minus a complete regime overthrow and long term occupation), in pursuit of ending a threat that is likely less of a problem for the world than the war would be. The idea that even an Iran with nukes would become some regional menace is unlikely: The country's military spending is tiny and its equipment shoddy, compared to neighbors such as Israel and Saudi Arabia, and it is already fully surrounded by U.S. forces. What it could do with a nuke is ward off regime change forced from outside, likely the main reason Israel and the U.S. are so insistent that Iran not get one.

Rand Paul's move may have been an aggravating political game to Reid—who, in fighting off any amendments to the bill likely kept it from getting even worse and prevented various Republicans and Democrats from widening its reach. But it it would be a good thing for Congress to declare that it understands war with Iran (or Syria) is not something the U.S. has any good reason to pursue. Congress should also understand that the sanctions, like any eventual war, are themselves misguided, harmful, and unlikely to achieve a goal worth achieving.

For halting the new sanctions bill, at least for now, and for trying to force his colleagues (and through the media bullhorn a senator enjoys, all Americans) to think about war and sanctions, Rand Paul deserves our thanks. The American people, according to a new Reason/Rupe poll, are disturbingly ready for such a war: Forty-eight percent favor an attack to stop Iran from getting nukes, and 37 percent still support war even understanding it could lead to an Iraq-length conflict. And for making his stand in the face of a party, a government, and a nation unconcerned with halting the motion toward war, Rand Paul deserves not just thanks, but respect—a rare quality for a senator.

Senior Editor Brian Doherty is author of Radicals for Capitalism (PublicAffairs) and the forthcoming Ron Paul's Revolution (Broadside).