Wednesday, February 25, 2009

Picking Apart the Policy Journal

I read the Economic Policy Journal regularly, and certainly am no fan of Obama. But something I read today really struck a nerve.

Check out this quote from Picking Apart The President

The economic crisis was not caused by energy (energy prices have collapsed), it wasn't caused by healthcare or education defects. This a slippery attempt to bring in pet projects that have nothing to do with the crisis.


The economic crisis was not caused by energy? Oh really. Tell me something genius, what do you expect to happen when gas costs $3 or $4 a gallon, and every household is required to pay $300-$600 a month MORE on energy than what they had budgeted when they first bought their home?

You can have your opinions, but the FACT remains that global crude oil production was 74 mbpd in 2005, and the average daily production for 2006-2008 has shown no measurable increase, despite an exponential increase in capital investment. This is just the cold hard data. Global crude oil production has peaked, and THAT is what has popped all the bubbles. The sheer amount of investment in the oil sector during 2005-2008 proves that the nascent credit crunch had nothing to do with the failure to increase oil production. I've covered this in detail in a previous post.

Credit was created predicated upon growth rates that were not sustainable. The reason this happened is because people like you DENIED the geological facts time and time and time again and again and again to the point where the ENTIRE financial system was deluged in misinformation as to the extent of our resource base. If oil production had kept increasing, then all these new homes and cars would not have constrained supplies, prices for energy would not have spiked, and the bubble would not have popped. Sure, the bubble would have popped eventually, as all bubbles do, but the fallout would have been much less severe. Indeed, the bubble would never have occured if so many people did not take an active interest in denying basic geological reality. I've written about this specific subject in more detail as well.

I find it amusing that a google search for

"robert wenzel" "peak oil"

yielded only 10 results, none of them meaningful. I find it incredibly amusing that people in "your circle" simply did not discuss peak oil, denied it outright or through omission, while at the same time you pretend like you know what caused this mess. Buddy, you dont have the first clue. Want to know what caused this mess? Go look in the mirror. If you denied peak oil, then perhaps its time you accept a little personal responsibility for what has happened. I wont hold my breath waiting for that...

I have been writing about the impending catastrophe for years precisely due to the fact that so many people have been so wrong about everything. We've always had fraud in the financial system. We've always had wall street parasites sucking off the broader economy. None of that has changed in the past 5 years, or in the past 50. The multiple layers of ignorance, arrogance, and pure stupidity is what always leads to collapse.

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