Since last summer, when demonstrators took to the streets to protest what they viewed as the fraudulent re-election of hardline President Mahmoud Ahmadinejad, Iran has faced its worst upheavals since the Islamic revolution of 1979. For weeks, until a bloody crackdown by the regime in large part quelled the disturbances, proponents of the so-called Green Revolution united in a show of defiance against the ayatollahs. The response—thousands were detained and dozens killed in clashes with police—brought harsh criticism from the West, as has the government’s recent announcement that it is ramping up its nuclear program, viewed by many as a means of gaining nuclear arms. Now, with Tehran facing the threat of new sanctions that could further hurt the country’s faltering economy, the regime is bracing for more unrest. But that may come at its own initiative: with his government facing insolvency, Ahmadinejad has proposed a radical overhaul of the system of massive state subsidies that have kept life tolerable for Iran’s citizens.

