On May 31, 2006, Condoleezza Rice drew a red line in front of Tehran's nuclear enrichment program. "The Iranian government's choices are clear," she said. "The negative choice is for the regime to maintain its current course. . . . If the regime does so, it will incur only great costs." She also offered an olive branch: "As soon as Iran fully and verifiably suspends its enrichment and reprocessing activities, the United States will come to the table with our EU-3 colleagues and meet with Iran's representatives."
Two years later, Iranian officials have installed more than 3,000 centrifuges in a facility designed to hold 50,000. On July 9, the Islamic Revolutionary Guard Corps (IRGC) tested missiles which could reach Israel; the same day, Iranian Web sites carried President Mahmoud Ahmadinejad's pledge to launch a satellite, an event that would demonstrate a mastery of intercontinental ballistic missile technology. Nevertheless, just 10 days later, Undersecretary of State William Burns joined envoys from France, Britain, Russia, China and Germany in talks with Saeed Jalili -- Iran's nuclear negotiator and an Ahmadinejad confidant -- about incentives to give to Tehran.
The package already on offer is rich. The Bush administration has promised to support Iranian construction of a light-water reactor and provide it with nuclear fuel. In addition, the U.S. will help overhaul of Iran's energy infrastructure and cooperate in high-technology industries. At any point, Tehran can simply walk away, keeping its rewards.
European diplomats welcome the U.S. reversal. "The presence of an American is good news," French Foreign Minister Bernard Kouchner said. "France has always said that not only sanctions need to be imposed, dialogue is necessary." Iran is less kind. "America has no choice but to leave the Middle East beaten and humiliated," says Mohammad Jafar Assadi, chief of the IRGC ground forces.
Diplomacy is not wrong, but President Bush's reversal is diplomatic malpractice on a Carter-esque level that is breathing new life into a failing regime.
The Iranian government has spent billions of dollars -- money that might have been better spent on refineries and gas turbine power plants -- on a nuclear program that has failed to produce a single kilowatt of electricity.
Now, as the regime rations fuel and the city institutes roving blackouts, Iranians realize the price of the Islamic Republic's adventurism.
Even with record oil prices, mismanagement has driven the Iranian economy into the ground. On July 14, the Ministry of Housing reported an "historical" 125% rise in housing prices. The same day, Tabnak, a news Web site run by a former head of the IRGC, admitted foodstuff inflation had reached 50% annually. On July 8, 2008, a National Iranian Oil Company executive acknowledged in the Iranian press that, without significant investment in infrastructure, Iranian oil production would decline each year by 300,000 barrels a day. But those investments are not coming from abroad. Almost every headline-grabbing energy contract remains unfulfilled.
Nor is oil Iran's only flagging industry. According to the Iranian press, carpet exports have dropped 10% and pollution has decimated the caviar-producing sturgeon in the Caspian Sea. State-owned factories owe workers weeks of back wages. Bus driver Mansour Ossanlou, Iran's Lech Walesa, remains in prison after forming the republic's first independent trade union. In the past month alone, Iranian workers have struck for unpaid wages at the Khodro automotive plant (which assembles Peugeots), the Alburz Tire Company, and the Haft Tapeh Sugar Cane factory.
The State Department places its about-face in the context of multilateralism. This is nonsense. By agreeing to suspend its demand for a cessation of uranium enrichment, Washington is signaling to Tehran that it need not adhere to three current U.N. Security Council resolutions. Rather than reinforce diplomacy, the White House reveals that its red lines are illusionary.
While European diplomats hope regime pragmatists might reinject responsibility in the Iranian debate, Ms. Rice's State Department has bolstered Ahmadinejad and his fellow travelers. As Ahmadinejad begins his re-election campaign, he can say he has successfully brought Washington to its knees through blunt defiance, murder of U.S. troops in Iraq, and Holocaust denial. Should he win re-election in 2009, he will have Mr. Bush's whiplash diplomacy to thank for his greatest -- and, given the state of his economy, perhaps only -- victory.
Michael Rubin, a resident scholar at the American Enterprise Institute, is editor of the Middle East Quarterly.