Market-driven idiocy

So, I came across this interesting article from Al Jazeera, which goes into some detail about "peak oil" possibilities and the suspicion that most OPEC members have been drastically overstating their reserves in order to expand their sale quotas. Cue Capt. Louis Renault...

I posted it on the board because someone had earlier asked about the current jump in oil prices. The usual cavalcade of responses followed: some grim agreement, some questions, and the usual market-driven refutations about the limited knowledge of so-called "scientists" to understand how a "profit-making" venture really works.

To wit:

If it was more profitable to hold resources than sell them, oil companies would not hesitate to do that. So really, this article asserts that it understands the oil business better than the oil companies. I'll believe that when I see it.

 No. That's not what it's saying. It's saying that oil, the very cornerstone of modern civilization, the substance that is used (or the byproducts of which are used) for everything from energy (oil, gasoline, kerosene, jet fuel) to lubricants to asphalt to plastics to resins to artificial fibers (nylon) to solvents will soon become harder to obtain and, thus, more expensive... which makes everything produced from it more expensive and/or more difficult to obtain. Understanding the oil business has little relevance to anything if there's less (or no) oil to be had.

If it was clear that supply really will be restricted, people would be acting accordingly. If you really believe what you say, you should research the oil companies with the highest proven reserves and buy their stock, because you believe those reserves are undervalued at current prices.

 OK. See, first off, I'm not saying anything. I'm passing along what Al Jazeera and geologists, government agencies, and the US Department of Defense(!) have all been saying for some time now: there's a problem a'comin' and it has enormous implications for society as a whole, the preparation for which has exactly zero to do with sticking one's head in the sand and suggesting that short-term profit anticipation would have reacted by now to a long-term problem (which is ridiculous even from a market-based approach.) I loved the suggestion that I should invest for the long-term, though. Forethought! Or maybe...

The market's not perfect. But least it's informed. They have engineers working the fields. They have an exploration and planning process. They are thinking about replacing supplies as they are used. If the market had a reasonable basis for believing that supply will fall substantially, the market would react in anticipation, just as it has reacted to the threat of war in the Middle East.

This makes me wonder about the breezy conclusion in the article that we know supply is going to plummet. At a minimum, that conclusion is not self-evident to market participants, no matter the degree to which it is an article of faith in much of the environmentalist community.

 Hm. How to put this simply...? Ah. Got it. Market no matter if oil no there no more. I realize there were two polysyllabic words in there but one has to make allowances when dealing with a complex topic.

To the market devotee (especially the "free" market devotee), everything is defined by short-term profits. To expect traders and their true believers to think beyond, say, tomorrow is folly. Their self-assured position that the unfettered market will react perfectly and rationally to all available information and, furthermore, convey that information in a perfect and rational way to all of society is absolute. This is Adam Smith's oft-misinterpreted "invisible hand" phrase pushed to the Nth degree. This is economics as science putting all lesser sciences (like, say, geology) to shame.  Except that economics isn't a science. It's a loosely understood set of supposed rules that depends largely on external factors that often can't be controlled. Like humans, most of whom are idiots and subject to whim and lack of information or the wisdom to know how to use it if they had it. Or, even more important in this case, greed.

Even better is the assertion that the market would react appropriately to an anticipation of lack of supply when the article is based on the idea that the producers of said supply are lying about that very issue and making profits based on that lie. If the market can only function perfectly with perfect information (something the aforementioned Smith mentions repeatedly and which is studiously ignored by most of his presumed disciples), then it can't react to the problem.

But that's OK because "They are thinking about replacing supplies as they are used." See, despite the fact that oil is a finite resource, the smart engineers and geologists that work for the oil companies are already thinking about ways to make it sustainable. The market clearly hasn't reacted, so it must be so. Paraffin candles for everyone!

Look! Over there! Someone's been shot!

On Monday, the latest government-targeted assassination took place. It will doubtlessly remain the lead story on every media outlet available, including the so-called "progressive" ones, for some time, as the old aphorism "if it bleeds, it leads" has never been more true than it is today. When it's most exciting is when the corpse is someone that a healthy chunk of the American public had a reason to hate; not necessarily a good reason, but a reason. Osama bin Laden is one of those corpses. Almost a decade ago, he was the reputed mastermind behind the deaths of some 3000 people in New York City, at the Pentagon, and in a field somewhere in Pennsylvania. Since then, he's been hiding from the omnipresent reach of US foreign policy and military power and been a shining example of the bogeyman that MacArthur railed against so many years ago:

Our government has kept us in a perpetual state of fear — kept us in a continuous stampede of patriotic fervor — with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it.

Many things have changed in the space of the past decade, but many other things have remained the same. Among the latter are this: the truly rich still remains a small percentage of the US (and world) population but still own the majority of the wealth and property of the US (and the world.) Until that particular problem is addressed, it doesn't really matter how many so-called terrorist leaders are gunned down, alleged or actual, in a firefight or cowering in a corner, dark skinned or fair skinned, religious or secular. None of them will matter and neither did Osama bin Laden. But the media will encourage you and everyone else to think of nothing else for as long as it takes them to get to the next distraction, be it a wedding of some archaic European noble house or another Hollywood scandal. None of that matters, but it will all claim center stage while you go on being robbed.

How many Bank of America executives were brought up on fraud charges by the bullet that killed Osama bin Laden?
How many teachers' jobs were saved by that bullet?
How many new people were given health care?
How many new jobs or opportunities were created (other than new leader of al-Qaeda)?

None. Zero. Nada. Zilch. And yet people were willing to pour out into the streets to celebrate not the jailing of someone like Lloyd Blankfein, but the killing of a nearly irrelevant terrorist group leader whose last notable action took place before much of the current generation of Americans even knew what the World Trade Center was and have no idea whom Osama bin Laden is (or was) now. I mean, seriously, didn't the Penn State women's volleyball team just win a championship or something? The kids there don't have a better reason to get out in the streets and party other than hearing about the killing of some wacko who lives 3 doors down from a Pakistani strip mall?

We have genuine problems. Societal problems. Structural problems. Our problems are connected to this man only in that he is a symptom of them; an outgrowth. Not a cause. Representing his death as some kind of accomplishment in the current state of affairs is akin to treating pneumonia with Purple Drank. Osama bin Laden is the pristine example of the phenomenon known as "blowback" to US foreign policy. He's a result, not a source of origin. The fact that his plans led to the murder of so many people and his murder is now a cause for celebration by many of the fellow citizens of those people is one of those little historical hypocrisies that I'll leave alone (if only because it makes me gag to think about the herd impulse so prevalent in our society. Nation of sheep...)

So, go on. Keep reading and watching and listening. Someone, after all, has been shot. Your tax dollars paid for the bullets and the helicopters and the training of Team Six and the two wars created as a response to that person's actions. That means he must have been important... right?

Otter was right

In that last post (which became a bit disjointed), I spent a fair amount of time detailing my own experience and perspective in a couple situations which sounded an awful lot like I was tooting my own horn, as it were. As anyone who knows me will tell you, that's not something I'm especially prone to do. As confident as I am in my own abilities, an earlier post here will give you the general conception of how well I think I've been employing them over these 40 years.

I don't even like it when other people try to compliment me or what I've done. It makes me anywhere from cynical to horribly uncomfortable when people do so. So, in that respect, my presentation of those two scenarios was not so much to remonstrate about how I could do something and others could not, but more to elaborate upon how I feel like everyone should be able to do these things.

Contrarily, of course, I get extremely defensive whenever anyone tries to disparage or dismiss things that I've done or contributed to, as well. I spent almost 5 years chairing the Green Party of Michigan and I thought that we accomplished some solid things while I was there. My ex-wife was with me that whole time and, while I came away frustrated that we couldn't do more and pointedly critical of certain people and tendencies within the state and national parties, she later rather vocally dismissed that entire period as somewhere between a complete waste of time and an utter disaster whenever anyone mentioned it.

That, of course, would almost instantly raise my hackles. I was fairly proud of the fact that we were able to get the Greens mentioned in the same breath with the Dems and the GOP for a couple years. I was proud of the fact that I was able to be on radio or TV or in print every few days, spreading the message and getting enthusiastic feedback from people that didn't know that there was a like-minded group out there looking for their votes. I even mentioned this as my "proudest professional moment" on the board the other day and was almost immediately heckled with: "Do you mean [breath] The GOP candidate would like to thank the Green candidate for helping him defeat the Democrat?[/breath]" If you're stupid enough to believe that, run better candidates whom I and people like me would actually like to vote for, schmucks.

But every time someone would react to my experience with some degree of approbation or awe, I'd immediately backpedal; waving it off as "nothing special." It took my friend, Rodger, a couple years after I was out of the party, to finally get me to accept it somewhat. We were at dinner with many students from our dojo and he mentioned that I had chaired the party for a while and two people were expressing how great that was and I was giving my usual "sounds better than it was" response before Rodger finally interrupted me and said: "It is pretty cool, you know?" Yeah. I guess it was. For a while.

But, of course, I didn't do it alone. There were many people involved to get us even the modest achievements that we accomplished. What ties this thought to my previous post is that, again, I often feel that there's almost nothing that I can do that other people can't also do, provided that they're willing to put their minds to it. The challenge is to get them to do so (or open their minds in the first place and then do so.) Granted, this is akin to my usual assertion that if everyone would just shut up and listen to me, the world would be a much better place. But this time it's true.

I guess the one thing that I'd suggest is that the next time anyone has the opportunity to listen to actually do so. Don't think about what your next response will be. Don't even think about making a response. Just listen. It can be frustrating as hell and I'm certainly not a universal practitioner (especially when it's a discussion I've had a few hundred times...) but every once in a while you learn about the roots of someone else's thought process or you find something completely new. After that, you can proceed to blow holes in their logic and try to convert them to your way of thinking.