Iran's Power

Conventional wisdom is that the war in Iraq and the neglect of the Israeli-Palestinian peace process have conferred new power on Iran. But I have some questions:

First, will Iraq be a puppet of Iran? There is certainly Iranian influence in Iraq that didn't exist in Saddam's day. But it seems as if the most blatantly pro-Iran militias have lost power over the past two years. Furthermore, the Iraqi government has finally managed to achieve some sort of balance between the Sunni and Shia groups, making it that much harder for Iran to achieve any workable political dominance. Do improved ties between Iraq and Iran really provide much political power to Iran?

One way that Iran benefits is that it no longer needs a standing army to defend itself from Iraq. But Iran has chosen to fund insurgent operations in Iraq, which probably cost as much if not more than garrisoning troops on the border. Furthermore, because it is conducting hostile operations in Iraq, it can't really release many border resources.

The same calculus applies to Israel. Iran has definitely accumulated power through Hezbollah and Hamas, but it's spending a hell of a lot of money and resources to do it and its neighbors are much more likely to take covert countermeasures against it. As a result of its higher profile, Israel regularly prunes back these groups' military power, forcing Iran to spend even more to resupply them. How long can they do this?

Finally, even as Iran's nuclear program continues, Iran's military adventures make that program less and less acceptable to the international community. An insular Iran with nukes might have been ignored. An aggressive, expansionist Iran can't be ignored, even by those countries that wouldn't ordinarily care much about proliferation.

In short, Iran is burning through a lot of resources for its new-found power. With the oil crash, it no longer has the windfall that allows it to be quite so profligate. Now that it's out on the limb, can it achieve its objectives before its financial position saws it off?