In the context of the Cold War we supported totalitarian regimes that were on our side in that War. Since the whole Cold War was a war for the western ideals of freedom, tactical alliances with some unsavory characters were justified. The only way to have an active foreign policy in the Third World is to pick one S.O.B. over the other, since wise freedom-loving statesmen just don't exist out there. The proper question to ask is, why the Muslim culture so consistently produces dictatorial thugs as leaders.
That is simply a silly assertion. Khomeini was not a factor until the late 70's after the Shah had been in power for 30 years.
We installed the Shah shortly after WWII. We had taken control of Iran in order to keep supply lines open to the Soviets. We kicked his father, who was the leader of Iran at the time out into exile.
Our help in ousting the Shah's potential poltical opponents included stirring up dissent and encouraging violence. Our CIA did that. And rather than promote the seeds of liberty, we were promoting a totalitarian regime which supplied us cheap oil.
But you keep saying that we've been displaying "American values."
The only way that you can continue that position is to put on blinders. George Washington warned of what can happen when we entangle ourselves politically. That's American values. There was no reason for us to stay involved in Iran after WWII. None. Yet we did and the backlash from the Iranian people came from that intervention.
Similarly, during Iran-Iraq war Iraq looked like a better one to support, given the Iran's sponsorship of Hezbollah and the hostage crisis.
We supported Iraq as punishment for Iran's rejection of American intervention. American values?