Category Archives: politics

It’s official, we’re now being taxed to pay back Peter Thiel

I posted a while ago about how the Biden administration was bailing out SVB without calling it a bailout. Basically Silicon Valley billionaire and hedge fund managers (like Peter Thiel) put all their money in a bank well in excess of the 250,000$ FDIC insurance limit. That limit is a known risk. If the bank you use goes bankrupt, and if you exceed that limit, the FDIC is only obligated to give you back 250,000$. Doesn’t matter if you had 250,001$ or 999,999,999,999$, FDIC is only obligated to give you 250,000$.

But that would be unfair to the billionaires. After all, why should they ever suffer the consequences of their actions? So instead the administration promised that every single depositor would be made fully whole. This was spun as them protecting the little guy, but the little guy was already covered by the 250,000$ insurance. I don’t have more than that in the bank, neither does anyone else I know. If my bank goes bankrupt, I will be fully paid back because my deposit is far less than 250,000$. If you have more than that amount, then you are solidly rich and do not need a government bailout.

But the bailout came anyway. The FDIC handed out money to cover the billionaires and hedge funds. Now that money has to come from somewhere. Biden promised it wouldn’t come from the taxpayers of course, but it still is coming from the little guy. It’s coming from our bank accounts.

Every person who owns a bank account is paying a small amount of tax into the FDIC insurance program. It won’t show up as a line item in your bank statement, but it’s there all the same. But for every bank account held by a bank, they have to pay a little bit into the FDIC. That cost naturally gets passed on to the holder of the bank account, just like every other tax. When the tax on cigarettes rises, the price of cigarettes rises. So too is it with bank accounts. You won’t see the tax as money rushing out of your account, but you will see it as less money going in. The bank will pay you less interest on your deposits because they have to take some off the top to pay for the FDIC insurance. And if there was no FDIC insurance, you’d get more interest.

You can see this exact same scenario if you look at big bank accounts. There are some banks with accounts which hold millions, even billions of dollars. The FDIC is only obligated to pay back 250,000$ in the case of bankruptcy, but a responsible billionaire who does not need a government bailout will pay for deposit insurance which covers more than the 250,000$ FDIC limit. That deposit insurance will decrease the amount of interest paid on the deposit, or even remove the interest entirely to pay the insurance. If you have to pay for insurance, you get less interest.

Everyone with a bank account has to pay for FDIC insurance, we don’t even get a choice. And now we need to pay for even more insurance to refill the FDIC’s account since they emptied it to bail out Peter Thiel

The FDIC plans to hit big banks with a tax to refill its account. This is being spun as a progressive redistribution from the rich to the poor. It’s the opposite. If a tax is levied on Walmart, Walmart just raises its prices, and the Walmart customers pay that tax themselves. The vast majority of Americans have their money in a big bank like Bank of America. So the big banks are going to pass this new tax onto their depositors, just as they pass the FDIC insurance tax onto us. You and I will be receiving less interest on our deposits now, because the FDIC spent all their money on Peter Thiel and co. Take from the poor to give to the rich, socialize loses and privatize profits. It’s 2008 all over again.

I know the amount is small. It’s probably going to be no more than a few dollars in lost interest in my account. But a few dollars times the 100 million or so Americans who bank with big banks makes the few billion dollars needed to bail out Peter Thiel and co. And it shouldn’t be this way, we should not be paying for their mistake.

And I know I keep harping on Peter Thiel, but it’s because a bunch of so-called “progressives” are refusing to even contemplate that this is a bailout taking money from the poor. By ignoring the context you can see SVB and its depositors as “the little guys” and Bank of America as “the rich” so taking money from Bank of America to give to SVB depositors is re-distributive. But it isn’t so. SVB was the bank of billionaires and hedge funds, Bank of America is the overwhelming bank of America’s poor and middle class. Taking from Bank of America to pay back SVB’s depositors is taking from the poor and middle class to pay back the billionaires. And reminding those “progressives” of exactly who is being paid back is just something I feel I should do.

Not feeling good, but hope to have a post tomorrow

As the title says. Work is stressful when you’re not sure if you’re looking in the right direction. We have a lot of seemingly contradictory data coming in from our experiments, but those contradictions are hopefully pushing us in the direction of new science. Just how the shape of proteins relates to their disease states is still new ground, and I’m proud to be working in it. But it’s a difficult field to get data in.

I sometimes look back and wish I could have worked in an earlier time. You look at say Gregor Mendel’s pea plants and you think that that would have been a scientific endeavor you could do easily. Or discovering new elements in the 19th century when all you needed was an atomic mass and the mass ratios of an oxygen and fluorine salt. I think back and that research seems so much easier, since high school kids replicate some of those experiments today.

But I know it isn’t so simple. It’s easy to replicate those things first because we know what we’re looking for, and second because our technology is so much better. Finding the structure of benzene is a classic case, students learn how to draw benzene very early on in an organic chemistry class, but its structure confounded the best and brightest for decades in the 19th century. They didn’t have the accuracy of scales we do, the easy access to light-based detection methods, or nuclear based detection methods, hell they didn’t even have a theory of protons and neutrons. They knew Carbon and Hydrogen existed, but they weren’t in any way sure how to fit those onto a periodic table yet, and weren’t certain there wasn’t some new element hiding around in Benzene. Putting together an experiment to prove the structure of benzene, using only 19th century knowledge and 19th century technology, is a lot harder than it sounds, and me wishing I could have worked on that discovery instead of my current one is “grass-is-greener-ism.”

Another good one for any discussion: we often laugh at those silly medievals who believed the sun goes around the earth. I mean, even some Greek philosophers proposed it, but alas the medievals were just too closed-minded, right? But actually the geocentric theory did seem to be parsimonious for a good long while. Here’s a fun thought experiment: how would you prove geocentricism using only what you could find in the 10th century? No telescope, no pictures from orbit, just observations of the sky. If you know your astronomy you know there are certain irregularities with the orbits of planets as viewed from earth, and that is a good argument against geocentricism. Yet it was also noted that there is no perception of movement when one is standing on the earth, and that was taken as an argument against heliocentricism. It wasn’t until Galileo’s theory of relative motion that a cogent counter-argument was put in place, and so if you want to prove heliocentricism in the 10th century you’d also have to do the hard work of demonstrating relativity like Galileo did. Copernicus’s model of heliocentricism is often seen as revolutionary, but it still had endless epicycles needed to explain it, more even than geocentricism, making it not that much better than Ptolemy’s geocentricism, so if you want to argue for heliocentricism by attacking epicycles you’d also need to do the hard math that Kepler did in establishing how orbits can be calculated based on ellipses. It really isn’t as easy a problem as it sounds.

So yeah, work is hard but I guess it’s always been hard. We think all the easy discoveries have been made, but those discoveries were made when they were hard to make.

Socialism Betrayed: Racist Great Man theory of history strikes again

There was some mid historian who once said: “The history of modern Europe can be defined by 3 men: Napoleon, Lenin, and Hitler.” This plithy remark sums up much about the “great man” theory of history.

For those who don’t know, the great man theory believes that history is moved not by economic or societal or any large scale forces, but by the actions of individuals, the “great men” (almost never women). This theory opines that it was Napoleon, whose conquests spread republicanism throughout Europe and whose terrorizing of European monarchs lead to the Concert of Europe, it was this Napoleon who defined the course of the 19th century. And in just the same way, Lenin and Hitler in their own ways defined the course of the 20th century, pulling Europe in their directions of communism or fascism, remaking the modern world through their life and death. NATO and the Warsaw pact, whose presence defined Europe for half a century, came about because of Hitler. And Leninist communism, which defined the ideological struggle between East and West, came about obviously due to Lenin.

This great man theory has been attacked by much better historians than I, but I want to focus right now on how it completely invalidates the role of any individual in society except the Great Man himself. Napoleon without an army to command and a state to lead is nothing, and yet his soldiers, his bureaucrats, and the entire nation he inherited are meaningless in the great man theory of history. And the revolutions which toppled the monarchy and allowed Napoleon to begin his rise were not the actions of solitary great men, but a great mass movement of the French people as a whole. It is likely that even if Napoleon had never existed, the conflict between revolutionary republicanism and monarchism which defined much of his legacy would still have happened. And if Lenin had not existed, the conflict between capitalism and communism would likely still have been present.

I’m reading “Socialism Betrayed” by Roger Keeran and Thomas Kenny and it’s startling how in the very first pages of the book, they define their thesis that the great man theory is true and the people of society do not matter.

The collapse of the Soviet Union did not occur because of an internal economic crisis or popular uprising. It occurred because of the reforms initiated at the top by the Communist Party of the Soviet Union (CPSU) and its General Secretary Mikhail Gorbachev

Socialism Betrayed

Really?! It didn’t happen because of nationalist movements among the subjugated peoples of the USSR, like the Estonians, Latvians and Lithuanians? It didn’t happen because of mass movements which defined the collapse of every other Warsaw Pact nation in Europe? It didn’t happen because of the well-documented shortages and flailing USSR economy propped up almost entirely by oil and gas money? How easy it is to do history when you can define your villain and ignore all context!

I can already tell that this book will be dumb. Real dumb. Probably as bad as “The End of Growth” for how much it will ignore the facts to suit and opinion. Why are all the dumbest books I read the anti-capitalist ones?

Send troops to the Fed?

Pardon me for wading into Twitter Drama, but Rohan Grey is a remarkably unserious “intellectual” and I couldn’t help myself.

Before I start, let me share a tiny story from “Zen and the Art of Motorcycle Maintenance.” This book was a thoroughly unenjoyable read for teenaged me, but it has one anecdote that still sticks with me. If memory serves, there is a university that is being threatened with losing its accreditation due to repeated failures and the students are naturally protesting as this would make their degrees worthless. One student talks to the narrator and claims that the University in fact can’t lose its accreditation, because if someone tried to take it “the Governor would send the national guard to protect us!”

I shouldn’t have to spell out the ridiculousness, but I want to hit word count so I will. Accreditation isn’t held in a vault, it isn’t something you can protect with guns and soldiers. Accreditation is the trust that other institutions have in you, and while some of it is legally codified most of its power is in the uncodified trust that a society is built on. You can’t protect accreditation with and soldiers any more than you can protect trust or friendship.

And so it was with bewilderment that I read an Assistant Law Professor on Twitter making the same mistakes as the nameless student from a book. Rohan Grey wants to do an end-run around the debt ceiling by having the Treasury mint a one trillion dollar platinum coin and deposit it in the Federal Reserve. This coin would then pay for the USA’s financial obligations without the need to borrow money. A big (and usually ignored) problem is that the Fed would have to accept the coin, and as Josh Barro writes, the Fed has expressed the opinion that this chicanery is illegal and undermines Fed independence. (Read Barro’s article, it goes into great detail as to why this idea probably wouldn’t work). Undeterred, Grey thinks the Fed’s opinion doesn’t matter, and that if they refuse to accept the coin then Biden should send troops to the Federal Reserve and force them to accept it.

Grey’s mistake is thinking that guns can be used to enforce trust. The Federal Reserve has the trust of the markets, and its power to move markets is based on that trust as much as anything else. The Federal Reserve trades bonds and sets rates, but those bonds and rates have value because people trust the Fed to keep its word, Jerome Powell’s speeches about the Fed’s plans have as much or more power as any action taken by the Fed. Now imagine a scenario where troops are instructed to besiege and occupy the Federal Reserve, where Powell is held at gunpoint and forced to accept a one trillion dollar deposit from the Treasury which he and the Fed have gone on record as saying is illegal. Trust in the Fed would be shattered, nothing Powell says or does matters anymore because the troops (and by extension the President) are running the show. Investors would flee from US government bonds, causing yields (and thus America’s cost of borrowing) to skyrocket, because America’s currency will have been debased against the will of its central banks, and will now be at the whims of the President.

And you may say “that’s fine, I like Biden as President” but do you like DeSantis? Do you trust that DeSantis wouldn’t be willing to send his own troops to force his will on the Fed? Would you buy a 10-year government bond if there’s a chance that DeSantis or Trump will be controlling it 2 years? And furthermore, Powell’s remarks on inflation will become worthless. Maybe Biden doesn’t like the rate rising that Powell needs to do, or maybe when the election comes he wants to juice the economy. So what’s to stop him from leaning over and reminding Powell who’s boss? What’s to stop Trump or DeSantis from doing the same? People like Grey once griped that Trump’s complaining caused the Fed to pause rate rises in 2019 (ignoring of course that inflation went under the Fed’s 2% target, which should cause them to pause rate hikes all on its own). Now Grey wants to make the Fed wholly subsumed by the President, so Trump would be able to do whatever he wanted.

Once you’ve sent troops to the Fed, you can’t unring that bell. Investors invest in American Dollars and American bonds in large part because they trust the Federal Reserve to do its duty with regards to the currency. Shattering that trust with soldiers would shatter investor confidence in the American economy as a whole. You’d have a trillion shiny dollars, but they wouldn’t be worth a pence.

Maker vs Taker states

Last year, Elon Musk paid over 11 billion dollars in income tax, more than the amount paid by every single person I know COMBINED. Yet for all that I have no desire to see him get special privileges, or to have his complaints be heard over other people’s. I know we live in the real world where money buys access, but we should all strive to live in a better world where all are presumed equal regardless of wealth. So if Elon Musk shouldn’t get special favors, why should California or New Jersey?

California and New Jersey have been described as “maker” states, in comparison to “taker” states like Mississippi and New Mexico. California and New Jersey residents pay much more to the federal government than their state collectively receives, and vice versa for Mississippi and Mexico. This has led some lawmakers, like Josh Gottheimer (D-NJ) to call out the “moocher” states, and say that laws should be written to benefit the people of his “maker” state, by lowering their tax burden or enacting their preferred policies.

I’ve seen this exact line of reasoning before all across social media. When Republicans complain about the priorities of the government, Democrats come out of the woodwork to say that since blue states pay more tax, red states need to shut up and put up. Yet this is an absurd, Romney-esque line of reasoning that would have been utter heresy in 2012, the idea that wealthier groups of people should be heard over the voices of poorer groups. The next time Gottheimer complains about Musk, will he remember to shut up and put up since Musk pays more taxes than almost his entire state populations combined?

I think this belies the maddening hypocrisy of the maker/taker argument, it was true when Romney said it and it’s true when Gottheimer and lefties online say it. There is ALWAYS someone richer than you, and if you wouldn’t bend the knee to them then no one should bend the knee to you. Furthermore we live in a democracy, one man one vote. The votes of the poor carry just as much weight as the votes of the rich, and there is no special provision that says otherwise. That goes for poor people just as much as poor states. If Democrats want to be the party of the people, I’d better never hear another one of them insinuate that rich voters matter more than poor voters.

Controversy time: I don’t like ESG investing

ESG (Environment, Social, Governance) is a scoring system some folks have come up with to score which stocks you can “ethically” invest in vs those you shouldn’t. The problem I have is that it seems like a bunch of woo.

The idea is that companies shouldn’t just try to make the most money, they should also protect the environment, advance social justice, and govern themselves responsibly. Yet I’m reminded again of how FTX (you know, the folks who stole investor’s money) got really high scores on ESG despite being a complete criminal enterprise. Other dicey factors seem totally ignored in ESG rankings as well, TotalEnergies SE ($TTE) is a French company directly funding the Russian Genocide of Ukrainians by continuing to ship LNG out of Russia and yet it’s considered a “leader” in the Social category. An otherwise identical company like Exxon-Mobile ($XOM) is considered just “average” in the Social category despite no longer operating in Russia since the war began, so it seems like a little genocide between friends doesn’t affect TotalEnergies’ ESG scores all that much. One wonders just what does affect ESG in that case.

This may seem unfair, after all TotalEnergies is just trying to make money, right? And their LNG is in heavy demand by customers, right? Yet that is exactly what ESG scores are supposed to act against, the tyranny of capitalism to externalize all costs onto the rest of society. Tesla for instance is merely a 9/10 in the Environmental category because despite moving the largest number of cars in history off of fossil fuels, their cars use lithium and the mining of lithium hurts the environment. This is a cost that Tesla externalizes to the rest of us, yet it’s a necessary cost to run their business so they get an ESG ding. But it seems ESG scores are applied randomly and say more about the scorer’s personal biases than anything to do with the companies themselves.

So here’s my advice: forget ESG entirely. If you want to invest ethically, then look at the companies you’re investing in and weigh the costs and benefits yourself. Does Apple adding new privacy features make up for the horrific conditions at the Foxxcon factories? Then go ahead and invest. But that’s a very personal ethics question that no one else can answer for you. If you instead export that question to some ESG-ified ETF, then you’re just letting someone else’s biases run your investment account. And those people might not know the first damn thing about Environmentalism, Social Justice, or Corporate Governance.

It’s easy to support a boycott that would never affect you

I know a guy who, after the Dobbs decision (which overturned Roe v Wade this year), said that red states that ban abortion need to be boycotted (this was not an uncommon suggestion in Liberal spaces). I asked him yesterday what he was up to and he said “oh, just watching the World Cup in Qatar.”. It’s very easy to call for boycotts of things you’d never pay for anyway. if you have no interest in going to Arkansas then you can call for a boycott of Arkansas and feel smug that you’re standing up for human rights. But it’s much harder to obey a boycott for something you like, if the World Cup we’re being held in Arkansas then I know millions of pro-choice pro-LGBT people who would put their morals aside just to watch.

I will not be watching this year’s World Cup. But with how may people I know who will be watching, people who called for boycotts just earlier this year, it’s become clear to me that those calls for boycotts were purely performative, with zero moral backing behind them.

A conversation with Gail Tverberg

After I wrote my post on theoildrum.com, I found that one of its writers, Gail Tverberg, is still highly active in the blogosphere at here website ourfiniteworld.com. I therefore reached out to her by email to ask some questions regarding her time at theoildrum.com and her time since then. I felt the conversation was enlightening, so I have (hopefully with her permission) copied our email conversation here in hopes others can learn as well

Dear Gail Tverberg,

I’m a biology researcher, a blogger on wordpress, and a sometimes internet historian.  I’ve recently found the blog theoildrum.com, which I think is a fascinating window into the time when Peak Oil was more talked about.  I personally remember watching An Inconvenient Truth in school and being taught in class about Global Warming and Peak Oil on the same day.  I can remember walking out of school being very scared for the future thinking about how we could make earth entirely uninhabitable through oil.

Yet while Global Warming is still talked about, Peak Oil has faded from view, despite the work put in by you and the others at theoildrum.com.  I was wondering if I could ask just a few questions about your work there just so I could get to know your feelings about all this.  And I was wondering also if I could put my questions and your answers together on my blog, streamsofconsciousness.blog.  I’ve already written a tiny bit on what I found on your blog, but I’d like to know more.

1. How big/popular was theoildrum.com when you were part of the team there?  I remember Peak Oil being a topic of conversation during my school years, but I wasn’t on the internet as much so I don’t know where it was talked about.  Was there a large amount of web traffic coming to theoildrum.com? 

2. How popular/common was the viewpoint of theoildrum.com regarding Peak Oil?  Did you get a lot of pushback?  As I said, I learned about Peak Oil in school but I don’t know how much it was in the public consciousness at the time.

3. Did your views evolve during your time at theoildrum.com?  The blog was active from around 2005-2013, though I confess I cannot find exactly when you worked there, did your views on Peak Oil change and shift over time or did you feel that events continued to prove your thesis correct?

4. I have read some of your current blog, ourfiniteworld.com, and I’m interested in your current views.  Are they much the same as when you worked at theoildrum.com, or have they changed since then?

I hope your current work is going well, and I thank you very much for any answers you can give me.  Have a pleasant day!

And Gail’s response:

Dear Anonymous,

Thanks for writing. I am glad someone is interested in TheOilDrum.com.

As background, you need to understand that there are really three quite different theories of what our problem is.

A. Peak oil (as well as Peak natural gas and Peak Coal). According to this theory, the growth of the economy is limited by fossil fuel use. Oil, coal, and natural gas are all quite separate. The amount available is limited by technology and something called “Energy Return on Energy Invested.” At some point, if EROEI gets too low extraction stops. In any field, extraction naturally peaks and declines. Low EROEI makes it impossibly to add a huge amount of additional energy supply.

Demand is believed to be pretty much unlimited. People will keep “demanding” more fossil fuels.  Price will keep rising, to get all resources out that can be technologically extracted. While oil will deplete first, coal and natural gas can continue afterward. In fact, wind, solar, and other energy types can reasonably substitute in the future if their EROEIs are high enough.

The economy will keep going on much as before, after “peak oil,” as the transition is made to other fuels. While running out is sort of a problem, rising prices, substitution, and conservation are likely to “save the day.”

“Preppers” can likely continue in the future, as they live today, if they adequately plan ahead. 

B. Global warming / climate change is closely related to Peak Oil theory, but without EROEI limiting what can be extracted. 

Global warming morphed into “climate change” when it became clear that the changes that are occurring are not all in the direction of an increase in temperature.

Under Climate Change theory, there is a very large amount of fossil fuels available for possible future extraction. For example, the UK has an enormous amount of coal for possible use, far under the North Sea. With rising prices or improving technology, perhaps someone might get the benefit of buying this coal. 

Under this theory, it is imperative that people make every effort to stop fossil fuel extraction, because it will not stop by itself. Instead, it will cause huge temperature changes. Humans and their use of fossil fuels seem to be a big part of what has caused the higher temperature changes that we have been seeing to date.

This has become a major political cause.

C. Gail Tverberg’s Physics and History-Based Theory of  Overshoot and Collapse

Our economy is a physics-based system. In fact, it is a “dissipative structure,” just as the human body is a dissipative structure. It requires a mix of energy types, of the right kinds, in the right quantities, or it will collapse, just as a human body requires somewhat the right mixture of foods, in the right quantity, or it will collapse. In fact, even if the economy gets the right mixture of energy types, it will still tend in the direction of overshoot and collapse, just as humans will die at the end of their normal lifetimes. 

In the case of economies, one of the usual limiting factors for energy products is diminishing returns, because the easiest to extract energy supples are removed first. In fact, this same kind of problem occurs for fresh water supplies and minerals of all kinds, indulging copper and lithium. Population, however, continues to grow, so that energy per capita starts falling. With less energy per capita, it becomes impossible to grow enough food for the rising population. Other types of goods and services become more scarce as well.

We know that with humans, a small drop in food supply can temporarily be tolerated (but the population will tend to lose weigh), but a bigger long-term drop cannot. People will become more susceptible to disease and may die.

With economies, the financial system is one system that is likely to be particularly stressed by a smaller supply of energy products. With a falling supply of energy products, ever-fewer goods and services can be made. Thus, supply lines are likely to break. Empty shelves in stores are likely to be a problem. Fewer and fewer airline flights will be offered. Fewer and fewer jobs that pay well will be available. It will become increasingly difficult to make repairs to electricity transmission lines after storms, so lack of electricity will become a major problem.

Financial systems will be stressed because these are based on the assumption of ever-lasting growth. People take out loans assuming that they will have a job that will pay well in the future. This is likely not to be the case. Businesses take out loans assuming that they will sell an increasing quantity of goods and services. Debt defaults will become a problem. Share prices are likely to fall.

It is quite possible that inadequate energy supply will never be recognized as the source of collapse, because governments and educational institutions can never tell people what the problem is. Partly, the problem is difficult to understand. (My brief description here misses a whole lot.) The problem of inadequate supply of goods and services is likely to manifest itself as increased fighting among countries. It may manifest itself as over concern about illnesses that, in previous times, would have quickly evolved themselves down to very high frequency, low severity events that mostly removed a few ailing elderly people. (Keeping people inside is a way to artificially reduce the “demand” for goods and services.) 

A likely outcome of inadequate energy supply is that financial systems will fail. Governments will fail. People are likely to find that the money in their bank accounts can’t really buy goods and services. The situation could look like a Weimar Germany situation, with a huge amount of money trying to buy goods that really aren’t there, or it could look like many people being cut out of the competition for buying for goods in the first place, by pensions being cancelled and money in bank accounts now longer being available. In this case, it is as if debt defaults wiped out the value of bank accounts. Fields will produce less, because machinery used to plant and harvest crops will fall into dis-repair from lack of spare parts, or lack of fuel. 

The expected outcome is that a large share of the human population may die. In fact, most species have historically become extinct. This may occur with humans, as well. On the other hand, humans and pre-humans lived through ice ages, so they may live through a financial collapse, as well as any change in climate. In a finite world, the climate is always changing. It is hubris on our part, to think that we can somehow make the climate do what we want it to. It will continue to change. In some ways of thinking, the timing is getting close to the correct timing for another ice age.

In fact, the economy is set up to expect change and to adapt to change in the climate and in the availability of resources. It is a self-organizing system in which all species of plants and animals have more offspring than they need to replace themselves. The expectation is that “survival of the best adapted” will fix any problem that takes place. While some offspring may die, the survivors will be better adapted to the changing conditions. If humans remain, they will move to habitable places and again flourish and multiply until they again reach a population bottleneck. At that point, population is likely to again collapse.  

Now, to try to answer your questions:

On Nov 11, 2022, at 8:00 AM, User Name <theusernamewhichismine@gmail.com> wrote:

Dear Gail Tverberg,

I’m a biology researcher, a blogger on wordpress, and a sometimes internet historian.  I’ve recently found the blog theoildrum.com, which I think is a fascinating window into the time when Peak Oil was more talked about.  I personally remember watching An Inconvenient Truth in school and being taught in class about Global Warming and Peak Oil on the same day.  I can remember walking out of school being very scared for the future thinking about how we could make earth entirely uninhabitable through oil.

I have never been a Peak Oil theorist. Quite a few of the writers at The Oil Drum were very much interested in Peak Oil theory, but a variety of different theories were discussed. I was not well liked at The Oil Drum because the theory I was talking about was very different from theirs. It was much more financial in nature. It didn’t end up with a “happily ever after” stories for survivalists growing their own crops.

Yet while Global Warming is still talked about, Peak Oil has faded from view, despite the work put in by you and the others at theoildrum.com.  I was wondering if I could ask just a few questions about your work there just so I could get to know your feelings about all this.  And I was wondering also if I could put my questions and your answers together on my blog, streamsofconsciousness.blog.  I’ve already written a tiny bit on what I found on your blog,

I would caution you to be careful in the comparisons you make. There is “oil” and there are “liquids.” It is not fair to compare “oil’” to “liquids.” The various organizations try to confuse people as much as possible by adding in more and more, close-to-worthless products into the “liquids” category. They do this, to avoid showing that the “good stuff” is running out. What we are left with is a mix that doesn’t doesn’t meet the needs of society. You seem to have missed this point in the post you link to.

but I’d like to know more.

1. How big/popular was theoildrum.com when you were part of the team there?

The number of subscribers was a little over 20,000. The number of subscribers to Our Finite World is also something over 20,000 now. Articles were copied over on other sites, both OFW now and TOD then. My theories don’t make it into popular discussion, because they are not easily summarized on the back of a napkin. Also, no politician would ever want this story to get widely distributed. Educational institutions want the fiction to be given that “of course,” there will jobs for students in the future that will pay well. While there may be energy problems, they are easily solvable energy problems.

 I remember Peak Oil being a topic of conversation during my school years, but I wasn’t on the internet as much so I don’t know where it was talked about.  Was there a large amount of web traffic coming to theoildrum.com? 

2. How popular/common was the viewpoint of theoildrum.com regarding Peak Oil?  Did you get a lot of pushback?  As I said, I learned about Peak Oil in school but I don’t know how much it was in the public consciousness at the time.

Both Peak Oil and Climate Change theory depend on a high price of oil (and coal and natural gas) allowing huge amounts of these types of energy to be extracted. I am very doubtful that this is the case. We are now reaching affordability limits on fossil fuels of all kinds. The problem is that the price cannot rise high enough to get the resources that look like they are in the ground, to be extracted, out. This has been Russia’s big problem. It needs a higher price than it was getting from Europe to make the extraction of its natural gas sufficiently profitable. In fact, coal and oil have had much the same problem. People who developed the EROEI theory left out the need for adequate tax revenue for governments, among other things.

Once the price of oil dropped back down in late 2008, and growing oil (or liquids) seemed to be available, the Peak Oil theory disappeared from discussion. Peak oilers had “cried wolf” too often.

I was talking about financial problems associated with energy limits from the beginning. My theory keeps growing and expanding, as I learned more about the real nature of the problem.

3. Did your views evolve during your time at theoildrum.com?  The blog was active from around 2005-2013, though I confess I cannot find exactly when you worked there, did your views on Peak Oil change and shift over time or did you feel that events continued to prove your thesis correct?

I started writing my blog OurFiniteWorld.com in March 2007. In fact, I wrote all my articles on that site, until August, 2007. Sometime shortly after I started writing articles on OFW, TOD asked my permission to copy some of them over onto its website. Not long after, they wanted me to be a regular staff member, and somewhat later they wanted me to be an Editor. Other staff members were mostly college professors or graduate students. I was the only person who did not have a full time job doing something else, so I ended up doing a whole lot at TheOilDrum, between September 2007 and October 2010, including a lot of duties as Editor or the site. 

I wrote only at TOD (not OFW) between September 2007 and October 2010. There was a lot of conflict at The Oil Drum. The two people who started the site came from pretty much opposite perspectives. “Heading Out” was a professor of coal mining technology at a university in Missouri. He thought perhaps coal could replace declining oil supply. “Prof. Goose” was a political science professor from a university in Colorado, interested particularly in preventing climate change. Leanan (a woman)  (who linked to articles every day) also came from a climate change perspective. Several staff members were interested in modeling exactly how oil supply might run out. 

TOD staff members coming from one perspective were very protective of their particular perspective. There were commenters who would push back in argument with respect to articles written, but there was also quite a bit of conflict among staff members.

There was a reorganization of TOD in November 2010, which I wrote about in this post. https://ourfiniteworld.com/2010/11/21/changes-planned-to-the-oil-drum/

Basically, some of the other staff members thought that I had too much power. I was deciding what would run, when, to a significant extent. Also, too many of my own posts did not put forth the “correct” peak oil perspective, at least in the view of other staff members. After the reorganization, there would be a staff of six editors, and there would be a vote to see which articles would be accepted. I would go back to writing on OFW, and TOD would copy over only those articles that it agreed with. There would be a paid TOD staff member who would take care of copying over articles from OFW to TOD, as well as performing other duties.

Technically, my titlea didn’t really change at TOD. I was both a Contributor and Editor from whenever I started being an editor (sometime in 2008) until the site ceased operations in 2013. Nate Hagens was an editor as well, but in practice, I ended up doing a whole lot of the day-to-day work, up until the change in November 2010. Nate was more involved with recruiting staff members and keeping peace among the staff. He also was involved with the finances of the site. I was not involved with the finances of the site or with things like potential law suits against the site.

OFW has grown and flourished because I was telling a different story that seems to be right. Neither the Peak Oil theory nor the Climate Change story is really right in my view. 

Climate change is a popular story because indirectly, it forces people to figure out what they would do with much less energy supplies. In fact, we are losing energy supplies regardless of what we do because of affordability issues. The climate change story allows people to think that they can voluntarily leave fossil fuels. We are losing access to fossil fuels because of the way the self-organizing system works. The climate change story makes these problems seem modest and solvable. Thus, the climate story is popular with both politicians and educators.

4. I have read some of your current blog, ourfiniteworld.com, and I’m interested in your current views.  Are they much the same as when you worked at theoildrum.com, or have they changed since then?

My views are basically the same, with many additions and refinements. I tried to explain a little bit of my current views above. My view of the timing keeps getting moved farther and farther back. 

The End of Growth Part 4: At what point is China no longer a bubble?

I’m still reading The End of Growth by Richard Heinberg. As a reminder, Heinberg claimed (in 2011) that the world’s economic growth was essentially over, and that in the future any “growth” would be an illusion created by nations fighting over an ever shrinking economic pie. A nation may have a quarter or two of growth, or some prolonged growth as they stole more of the pie from their neighbors, but taken as a whole there was no more economic growth left for the world, largely because Heinberg also thought there was no more oil left for the world. The problem or course is how do you explain China?

It’s a lot easier to brush away claims of “growth” in the Western world, growth has been anemic (although still positive) for the last decade and a half since the Financial Crisis. And although US GDP has growth by 20% or more in that time, most Americans don’t “feel” any different, and so it’s easier for Heinberg to claim (as he does earlier in the book) that this growth is all just an illusion funded by debt. But China is different. Growing their GDP at near double digits for 3 decades straight cannot be easily ignored, and the Chinese middle classes have definitely seen massive changes in their lifestyles as almost anyone today in China can afford more and better stuff than their parents could. Houses are larger, food is more varied, technology is cheaper and easier to get to, China continues to experience massive economic growth, and that’s a difficulty for Heinberg who claims that’s impossible.

The first thing he does is punts, like anyone who doesn’t like the outcomes of China growing economically, Heinberg claims China’s growth is really just a bubble ready to collapse. I’m not about to say that China’s economy is perfect or that it doesn’t contain massive real estate speculation, but I’ve been hearing “China’s economy is a bubble that’s about to collapse” for over a decade now and I’m wondering when people will stop claiming this. A bubble is no longer a bubble is it never pops. China’s economy does experience downturns like everyone else’s, but I haven’t seen any evidence that the whole thing has or will soon collapse, as the world “bubble” would imply.

Heinberg goes on to say that China’s growth is also unsustainable because of falling exports to the West, depleting resources like coal, too many old people with too few young people, and all the other stuff that people have been claiming will implode China any day now. My question for today is: when does this end? If China continues growing at a steady clip, at what point do people update their theories to fit the facts? At what point can we conclude that China’s economy is not a bubble and has the momentum to withstand all the same shocks and stresses as a Western economy? China’s economy has more than doubled since Heinberg wrote his book, and I’m curious to know if he would accept this as disproving his theory or if he’s pushed “the end of growth” date back like so many pushed back “the end of oil.”

Now again, I’m not saying China or its economy is perfect. The Chinese Communist party is a totalitarian nightmare committing genocide in its own boarders and threatening war outside of them, the Chinese economy has vast structural problems that the government papers over, Chinese demographics are not ideal for a growing economy and there is no easy solution to any of these. But I don’t think China is going to collapse any time soon, I don’t think it’s economy is just a bubble, and I think people have been claiming the Chinese Sky is Falling for far too long without ever admitting that they are divorced from the actual facts.

Some philosophers are just preachers

The word for “preach” in English comes from the word “proclaim” in Latin. It did not necessarily have religious connotations in that language, you could proclaim just about anything. And yet today the word “preach” in invariably tied to a specific type of proclamation who’s connotation cannot be separated from the word. “Don’t preach at me,” “he’s preaching to the choir,” preaching connotes a way of speaking that accepts no argument and engenders no debate. What is preached is correct (as believed by the preacher), regardless of whether you like it.

That’s why it’s amusing how many philosophers I’ve seen who are just preachers and not, you know, philosophers. Not all of them mind you, some philosophers are ready willing and able to dive into the weeds of actually proving their conclusions (or at least trying to). But I’ve been to church enough times to know when I’m being preached at, so the proliferation of dime-store philosophers online are to me no more worthwhile than the doomsday preachers on the street corners.

Today’s preacher de jure is whoever the hell wrote this which was linked to me as a “compelling argument” in favor of utilitarianism and effective altruism. It includes this lovely passage:

You know what? This isn’t about your feelings. A human life, with all its joys and all its pains, adding up over the course of decades, is worth far more than your brain’s feelings of comfort or discomfort with a plan. Does computing the expected utility feel too cold-blooded for your taste? Well, that feeling isn’t even a feather in the scales, when a life is at stake. Just shut up and multiply.

I’m sure this sounded good as an imaginary debate in the author’s head, “FACTS DON’T CARE ABOUT YOUR FEELINGS” and all, but it gets to the type of anti-utility preaching that I’m surprised a supposedly utilitarian author is falling into. Anti-utility preaching is what I would define as the type of preaching done not for others but for oneself. Even if you are religious, even if you do think preaching can change people’s minds for the better, there are some preachers who have no desire to do that and just want to feel righteous by screaming at all the “sinners.” These preachers aren’t changing minds, they aren’t being productive in any way, and in fact are clearly driven by vanity, which most Christians and other religions think is a sin. In the same respect, if the utilitarian who wrote the above passage were really serious about changing minds, they should probably have had the self-awareness to realize that this method isn’t effective and is probably just turning more people off of their philosophy because they’re being a dick.

Just for fun, this leads me to a thought experiment: effective altruism of the kind this person is advocating for tries to use a kind of “ethical calculus” to calculate the exact goodness or badness of any action, and thus the correct action is the one that maximizes goodness and minimizes badness. Is it worth mutilating a child in order to perform an experiment which will cure cancer? Add up the goodness and badness of each scenario and find out that yes, that is perfectly valid. Even stranger, is it worth killing one person to cure everyone’s hiccups forever? Strangely enough yes, yes it is, this utilitarian preacher reasons that the tiny amount of badness caused by a hiccup, multiplied by *everyone* is greater than the amount of badness from killing of a single person.

So let’s go a tiny bit further, if we accept that effective altruism is truly the best morality, then it must also be true that goodness is maximized by more and more people becoming effective altruists. This follows logically from the fact that effective altruists are going to be better than other folks at making “the right” choices and therefore increasing goodness and decreasing badness with their actions. So in keeping with the hiccup example above, decreasing the number of effective altruists in the world will decrease the amount of goodness and so there must be some reduction in effective altruists that adds up to being worse than murder on the balance of goodness and badness in the world.

Therefore I can confidently state that by its own logic this article is worse than murder. It tangibly reduced my desire (if there ever was any) to be an effective altruist just so I don’t become associated with people like the writer, and it probably did the same to most people that read it. The author can take a nice warm bask in their own vanity, while feeling happy that they got to preach to the sinners on the internet. No minds were changed, no one was “saved,” but the preacher felt damn good doing it and isn’t that really what’s important?

Final addendum, I just looked it up and it seems Eliezer Yudkowsky was the author of this trash. But I don’t feel like rewriting the above post to include that fact so I’ve tossed it here at the end.