Mike J. gets a perceptive no-prize for bringing us this comparatively even-handed look at all the other problems Iran is facing. The payoff for me (emphasis added):

To curb demand, which has been driven in part by subsidies that keep the domestic pump price at a mere 35 cents a gallon, the government plans to begin rationing gasoline in March, a measure so unpopular, and potentially explosive, that rationing plans have been put off several times in the past.

This single paragraph tells me volumes about what is going on in Iran, and consulting everyone's favorite on-line encyclopedia confirms it: Iran runs on a socialist-style command economy. As with all such social redistribution systems, the regime traded long-term growth and stability for short-term gains in "equality and fairness*," with the predictable result of an unresponsive, inefficient economy incapable of real long-term growth.

In other words, they made sure a peasant's lot was immediately improved by the revolution by taking shortcuts that would completely sabotage the pathways that would let that peasant's children progress and prosper. Like all progressive/liberal economic policy makers, they never thought past stage one and are now paying the price.

Unfortunately, history only provides one way out that actually works... implementation of broad and pervasive free-market reforms. I say unfortunately because, to date anyway, such implementations have always brought about chaos and instability in the short term. In all but one case (China, and only so far, and only because they were willing to crack some heads), this has ultimately resulted in the overthrow of the implementing regime. Not a nice thing to mull over if you're in charge of a population quite famous for its propensity to riot when things don't break their way.

So, will the imams do what needs to be done, with the understanding that history treats even the most egregious implementers quite well once they've gone? It's impossible to say. However, it does, to me, indicate that sanctions have a lot of traction left in them. Over time, economies based on state controls rot like a termite-infested house, and once they become sufficiently rotten it doesn't take a lot of knocking to bring them down.

Sanctions have historically proven to knock rather softly, but if the underlying wood is rotten enough, a tap may be all it takes.

~ If he hears, he'll knock all day ~

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* Take from the rich, give to the poor, soak whoever makes more than a hardscrabble farmer with taxes and make sure no business is allowed to function without massive government oversight. In short, "we pretend to work, they pretend to pay us."