Obama Offers Iran Bigger Carrots, but the Sticks Remain Puny

President Obama offered a "new day" in America's relationship with Iran via a videotaped message yesterday appealing directly to Iranians. Mr. Obama added a warning to Iran's leaders that this would not be achieved by "terror or arms, but rather though peaceful actions."

While many welcome this new strategy -- bigger carrots, we must set the record straight on the sticks of the old policy: They've always been puny; there has never been a tough sanctions policy toward Iran.

As far back as the US embassy hostage crisis of 1979-81, President Carter was unable to convince America's closest NATO allies and Japan to participate in economic sanctions against Iran. Not even England was willing to cut off trade with Iran during that crisis.

The US has had to go it alone on Iran for decades. But America's unilateral sanctions against Iran have been limited, never broad and far-reaching.

Though the State Department labeled Iran the world's "most active" sponsor of terrorism, the ayatollahs have not been forced to pay a significant price. Iran has armed and aided our enemies--including Al Qaeda--and threatened our allies, and has gotten away with it.

The two most recent administrations, Clinton and Bush II, didn't even bother to enforce our own sanctions against Iran, opting to issue waivers to every foreign oil company that ran afoul of the Iran Sanctions Act, legislation Congress passed without opposition in 1996. Moreover, America has allowed our own corporations to bypass US sanctions laws by using foreign cut-outs and subsidiaries to do business with the ayatollahs. In fact, during the Bush administration, US trade with Iran actually increased tenfold, from $8.3 million in 2001 to $146 million in 2007.

Companies like GE and Hewlett-Packard only ceased such activity after the news media scrutinized their "end around" operations with the Iranians. Unfortunately, other US companies, such as Halliburton and Foster Wheeler, continue to do business with Iran, and multinational firms such as Siemens, Alcatel-Lucent and Nokia even provide Iran with advanced communications technology.

Sanctions imposed by the UN Security Council have been limited only to certain aspects of nuclear technology and arms, with virtually no impact on the Iranian economy. Even these limited sanctions have no teeth, which is why Iran's largest arms suppliers, Russia and China, allowed them to pass.

These unilateral and multilateral sanctions have put scant economic pressure on Tehran. Iran is in trouble economically now, but that is due mostly to the recent collapse of oil prices.

Tough economic sanctions that are enforced offer a peaceful means of addressing Iran's nuclear program and its sponsorship of terrorism. This is what nearly everyone claims to want. So why have meaningful measures never been taken to pressure Iran?

It is especially critical that America and the West apply economic leverage on Iran right now, when Iran's economy is hurting, leaving its leaders vulnerable to an effective sanctions regime. Talk alone is unlikely to produce results; it must be accompanied by pressure that will convince Iran's leaders it is in their interest to halt their nuclear weapons program and support of terrorist groups.

Iran's economic desperation was recently illustrated in stark terms when its central bank approved the issue of interest-bearing debentures on the international markets. This action directly violates the Shariah law, a comprehensive body of laws governing all aspects of Islamic society, by which the ayatollahs rule.

Such an unprecedented move had to have come with the blessing of Ayatollah Ali Khamenei, the supreme leader of Iran and an authority on Shariah. Something forced his hand -- Iran's weak financial condition.

If truly comprehensive and tough economic sanctions were imposed on Iran now--for the very first time-- its leaders might very well be forced to negotiate with the West on issues such as its nuclear program and support for Jihadist terrorism.

Given that the ayatollahs are now willing to overlook Shariah in an effort to keep their economy afloat, they may be willing to deal with the West if it looks as if their economy - and their rule -- are about to be weakened by truly tough sanctions.