Photo by Stéphan Valentin

The New York Times gave us an analysis piece on Iran by Roger Cohen, a longtime reporter who covered Iran for the paper more than a decade ago. The gist of the piece, which is headlined “An Islamic Republic with Its Back Against the Wall,” is that the Iranian government is hugely unpopular and that its economy is collapsing.

I am not going to claim any particular expertise on Iranian politics, although I do suspect that much of the country actually supports the current government, but I will say that Cohen has hugely misrepresented the country’s economy.

He told readers:

Iran’s gross domestic product, or total output, has fallen 45 percent since 2012, and many people are desperate. Crippling international sanctions over the nuclear program contributed to this downward spiral, but so did corruption, a bungled privatization program and bloated state companies.

While I’m sure Cohen is right that Iran’s economy suffers from government corruption and incompetence, the claim its GDP shrank by 45 percent since 2012 is beyond absurd. The data in the I.M.F.’s World Economic Outlook shows that its GDP, measured in its own currency and adjusted for inflation, rose by 32.3 percent from 2012 to 2024. That would come to an average annual growth rate of 2.4 percent. That’s not great for a developing country, but very far from the economic collapse Cohen describes.

The I.M.F. has another GDP measure which uses purchasing power parity prices. This is a GDP measure which applies the same set of prices to all goods and services regardless of what country they are produced in. This measure shows Iran’s GDP rose 61.8 percent over this 12-year period. That would come to a 4.1 percent annual rate, although after adjusting for inflation it would be very similar to the constant dollar measure in Iran’s own currency.

There is one way that Cohen could have gotten the sort of decline he reports in his piece. If Iran’s GDP is measured in dollars, it fell by 4.9 percent from 2012 to 2024. That’s far smaller than his 45 percent decline, but at least in the right direction. Actually, if we take this route and use 2011 as the starting point we do get the 45 percent decline reported by Cohen, so perhaps that’s what he did.

Most economists would laugh at Cohen’s use of the dollar value of Iran’s GDP as a meaningful indicator of the state of its economy. It is primarily a measure of the value of Iran’s currency. The value of Iran’s currency has dropped against the dollar, but this matters little to the vast majority of Iranians since they are not traveling internationally. Also, since the country is subject to extensive sanctions, imports account for a relatively small portion of what it consumes domestically. The measure of GDP in the real value of its own currency or in purchasing power parity gives a far more realistic picture of its economy.

This is a big deal in the current situation. With Donald Trump contemplating going to war, the fact that Iran’s economy is at least moderately functioning, as opposed to completely collapsing, might be a relevant factor in the calculation.

The New York Times has hugely misled its readers on an extremely important fact that could matter a great deal in the decision to go to war. If the paper wants to claim any integrity, it will quickly correct this mistake.

This first appeared on Dean Baker’s Beat the Press blog.

The post The New York Times Lies Bigly About Iran appeared first on CounterPunch.org.

This post was originally published on CounterPunch.org.