Link (PDF to full report on page) to a study commissioned by the Air Force on ways to deal with Iran. (Spoiler: military action won’t work)
Mute U.S. Policy Statements on Regime Change. At this juncture, we do not see regime change through a violent domestic uprising as plausible. The current regime is fairly stable: demographic pressures have eased, and internal security forces appear capable of handling any incipient unrest. In this context, U.S. policy statements calling for regime change are more likely to serve the interests of Iranian government agencies interested in cracking down on those who advocate expanding civil liberties rather than to advance U.S. policy interests. U.S. policy statements would be more effective if they focused on expanding human rights and democracy in Iran rather than on replacing the existing regime.
A number of commentators have discussed or advocated bombing Iran’s nuclear facilities, especially the nuclear fuel enrichment plant. News accounts claim that if the United States does not bomb these facilities, Israel may. What might be the political ramifications in Iran of bombing these facilities?
As noted above, support for Iran’s nuclear program extends across the political spectrum. A large majority of Iranians strongly believe that Iran has the same right as other nations to develop nuclear energy, including the construction and operation of nuclear enrichment facilities. If Iran’s facilities were to be bombed, public support for retaliation would likely be widespread. If U.S. forces were to be involved, the current positive view in Iran of the United States would take a decided turn for the worse. Bombing installations or targets other than nuclear facilities would have an even more detrimental effect on popular opinion in Iran toward the United States. An Israeli action would also have a detrimental effect on popular Iranian opinion of the United States because Iranians would see the attack as having had the blessing of the United States, although the turnabout in public opinion might be less precipitous than in the event of a U.S. attack.
Bombing Iran’s nuclear facilities would have financial repercussions both for Iran and for the rest of the world. The Iranian government would be able to limit capital outflows over the short term. However, fairly quickly, richer Iranians, such as the bazaaris, would find the means to transfer more of their wealth outside the country. Poorer Iranians would shift more of their assets from dinars to euros, gold, or dollars. Private domestic investment would take a hit.
Outside Iran, oil prices would spike, and investor confidence in the Persian Gulf region, especially in the smaller states with close ties to the United States, would plummet. Iran might respond by blockading exports of Iraqi oil, further exacerbating economic problems in that country. At current oil prices, an attack would be unlikely to stop the Iranian program. The government would be able to finance the reconstruction of the facility and continue the current program without major budgetary consequences.
The political ramifications within Iran of an attack are less clear. Ahmadinejad has come under fire from other politicians for baiting the United States. An attack might be perceived as his comeuppance. In our view, a more likely response would be a strong push to retaliate against the United States (or Israel). Critics of such a policy would likely choose to keep silent.