Nothing better sums up the disastrous Obama administration’s Iran policy than the Davos invitation extended to Iranian President Hassan Rouhani. Once President Obama bragged that Iran was “isolated.” Now the United States is, while, as two sanctions gurus from the Foundation for Defense of Democracies (FDD) put it, Rouhani is “yucking it up at Davos this week, munching canapés, shaking hands and cutting deals with the global business elite.” In stiffing the Green Revolution, treating Iran’s regime as legitimate and its human rights policy as not germane to any talks and easing sanctions on the regime, Obama has given Iran a new economic and political lease on life.

Iran's President Hassan Rouhani, Foreign Minister Mohammad Javad Zarif (L) and Mohammad Nahavandian the Head of Iran Presidential Office (R) arrive for a meeting during the annual meeting of the World Economic Forum (WEF) in Davos January 22, 2014. REUTERS/Denis Balibouse (SWITZERLAND - Tags: POLITICS BUSINESS TPX IMAGES OF THE DAY) Iran’s President Hassan Rouhani (center) and Foreign Minister Mohammad Javad Zarif (left) at the annual meeting of the World Economic Forum  in Davos Wednesday. (Denis Balibous/Reuters)

What impetus is there for Iran to capitulate — finally meet our demands for destruction of its illegal nuclear weapons program — when sanctions are lifting and businessmen are eagerly eying their Tehran prospects? FDD’s Mark Dubowitz and Emanuele Ottolenghi explain that the sanctions relief is much bigger and more significant than the administration let on:

A cash infusion of $7 billion into Iran’s troubled economy might not sound like a lot in today’s world. But it represents roughly 35 percent of Iran’s fully accessible overseas cash reserves, which are estimated at $20 billion. And the sanctions relief figure might be much higher and more difficult to reverse.

For one, the $7 billion figure does not factor in the psychological impact the Geneva deal has had on markets, businesses, and investors.

Before Nov. 24, when the framework agreement was signed in Geneva, even those who could conduct legitimate business with Iranian counterparts were hesitant to do so. Driven by fear of economic loss and legal sanctions, they were risk averse. The world had built an economic minefield around Iran that most businesses were loath to risk exploding.

The tide may now be turning. Though many legal restrictions remain in place, sanctions are as much about psychology as legalities. Greed is starting to overcome fear.

No wonder Obama has sent representatives to “global capitals to convey the message to policymakers and the business community that nobody should rush to Tehran just yet.” However, the way to prevent a rush to Tehran is to keep the sanctions in place and/or pass sanctions that would go into effect if no final deal embodying the United Nations’ requirements is in place in six months. It is helpful when representatives’ words match the administration’s actions.

The president of the world’s biggest state sponsor of terrorism, some of whose leaders have threatened the eradication of the Jewish state and which is in violation of numerous U. N. resolutions, is now a Davos celebrity. It doesn’t look like “isolation” from our vantage point; it looks like complete victory.