For years now, ever since the fall of the Shah, chants of "Death to America" have become a staple of Iranian political rallies. In "Mullah's Gone Wild" John Mauldin explains how the Iranian government is committing "economic suicide" by ignoring the kinds of management principles of which the Great Satan is the world's leading exponent. Quoting a report by Roger Stern of New York University:

Despite mismanagement, the Islamic Republic's real oil revenues are nearly their highest ever as rising price compensates for stagnant energy production and declining oil exports. Despite high price, however, population growth has resulted in a 44% decline of real oil revenue per capita since the 1980 price peak. Moreover, virtually all revenue growth has been applied to pet projects, loss-making industries, etc.

If price were to decline, political power sustained by the quadrupling of government spending since 1999 may not be sustainable. Yet we found no evidence that Iran plans fiscal retrenchment or any scheme to sustain oil investment.

"Rather, the government promises 'to put oil revenues on every table,' as if monopoly rents were not already the entree. Backing this promise is a welfare state built on the Soviet model widely understood as a formula for long-run economic suicide.

This includes the five-year plans, misallocation of resources, loss-making state enterprises, subsidized consumption, corruption and oil export dependence that doomed the Soviet experiment. Therefore, the regime's ability to contend with the export decline we project seems limited."

Commentary

The Iranians are within their right to say anything they want about America. They can and should feel free to call it Great Satan and to wish death upon it at every available opportunity. They are also within their rights to manage their prodigious natural resources in whatever way that seems best. That having been said, the Iranians may want to consider giving the Devil his due. One of the reasons the Great Satan is doing so great, at least economically, is because his minions follow with near religious passion the law of Supply and Demand. They also know that allocating resources with an eye toward maximizing profits and shareholder wealth is a better organizing principle than the industry-as-personal-slush-fund approach. And I have a feeling that when called to account for their apparent mishandling of the country's major source of foreign earnings, laying blame and saying "the devil made do it" isn't going to suffice.