Society in General

Western Bankruptcy in Two Ways

Posted on by Ron Clutz

Walter Russell Mead explains in his Hudson Institute article End of the German Idyll.  Excerpts in italics with my bolds. H/T John Ray

G7 leaders during a working session at the G7 summit in Schloss Elmau on June 28, 2022 near Garmisch-Partenkirchen, Germany. (Photo by Stefan Rousseau via Pool/Getty Images)

Germany looked normal over the weekend as a genial Chancellor Olaf Scholz welcomed the Group of Seven leaders and their guests to the luxurious Schloss Elmau in the Bavarian Alps. But those appearances are deceiving. Germany is facing its gravest challenges since the foundation of the Federal Republic following World War II.

This is very sudden. As recently as 2020, almost the entire world agreed with the smug German self-assessment that Germany had the world’s most successful economic model, was embarking on the most ambitious—and largely successful—climate initiative in the world, and had perfected a values-based foreign policy that ensured German security and international popularity at extremely low cost.

None of this was true.

  • The German economic model was based on unrealistic assumptions about world politics and is unlikely to survive the current turmoil.
  • German energy policy is a chaotic mess, a shining example to the rest of the world of what not to do.
  • Germany’s reputation for a values-based foreign policy has been severely dented by Berlin’s waffling over aid to Ukraine. And German security experts are coming to terms with a deeply unwelcome truth:
  • Confronted with an aggressive Russia, Germany, like Europe generally, is utterly reliant on the U.S. for its security. At a time when American foreign policy increasingly prioritizes Asia and isolationist sentiment among both Republicans and Democrats appears to be rising, if Donald Trump returns to the White House in 2025, German security will depend on his goodwill.

Mr. Scholz and his coalition government have responded to Vladimir Putin ‘s invasion of Ukraine with a series of, by German standards, revolutionary changes. Germany is beginning to rearm. It is, with some false starts, sending weapons to Ukraine. It has taken the first steps toward energy independence from Russia, even at the cost of its ambitious climate agenda. Coal plants will lumber back to life, new gas-processing plants will be built, and Germany is asking Europe to delay decarbonization mandates that no longer seem realistic.

But the real work remains to be done.
Modern Germany was above all an economic project.

The collapse of the Third Reich left Germany morally devastated, physically wrecked and economically bankrupt. From the moment of its foundation in 1949, the country ‘s central goal was economic growth. That growth could:

  • repair the destruction of the war,
  • promote Germany ‘s peaceful integration into Western Europe,
  • blunt the appeal of communism, and
  • build a national identity independent of the malignant fantasies of the Hitler era and the bombast of Wilhelm II.

The hard work of the German people, the pragmatic policies of the political class, the skills and determination of German management, and the favorable international climate resulting from the development of the American-led world order took Germany to economic heights.

In recent years, the German economic miracle depended on a combination of industrial prowess, cheap energy from Russia, and access to global markets, particularly in China. Today every one of those pillars is under threat. German mastery of automobile technology through a century of engineering is challenged by the shift to electric vehicles. The chemicals industry, in which German technology has led the world since the 19th century, is coming under environmental challenges as global competition intensifies.

Those challenges are exacerbated by the loss of cheap and secure Russian natural gas.

Green energy, despite massive German investment, will be unable to supply German industry with reliable and cheap power for a long time. In the meantime, the alternatives to Russian pipeline gas are expensive and controversial. Nuclear power gives Greens the willies; coal is unbearable; liquefied natural gas requires long-term commitments and massive capital expenditures.

Beyond that, Germany ‘s economic relationship with China is changing for the worse. China was long the ideal customer for German products. Its newly affluent middle class fell in love with German luxury cars. Its rapidly growing manufacturing sector voraciously consumed German machine tools and other capital goods. But China ‘s growth is decelerating. Its maturing industrial economy seeks to compete with high-end German producers, often based on tools reverse-engineered from German imports.

Those in the Biden administration who dream that Germany will wholeheartedly join a new global American crusade for values should keep their enthusiasm in check.

Mr. Scholz may agree in the abstract with President Biden about the importance of liberal values and the danger of climate change, but his calculations must reflect the economic facts of German life. This naturally leads to thoughts about how to patch things up with Russia and China.

Mr. Biden ‘s job is not to sing hymns about Western values with Mr. Scholz; it is to make Berlin understand that U.S. security guarantees come at a price. Given the realities of American politics, Germany cannot count on continued American support unless it does more to back the U.S. at a time of grave and growing danger world-wide.

Footnote:

Mead’s essay focused on the challenges of German leader Scholz, but consider the various predicaments self-induced by other members of this G7 gang who can neither talk nor shoot straight.  Mr. Biden increasingly struggles to even read or sign what they write for him, followed by observers noting that it is all lies and mean-spirited malarkey.  UK PM Johnson is a lame duck in political limbo, only in office until his Tory replacement is chosen. President of Italy, 80 yr. old Sergio Mattarella wanted to retire, but agreed to a second term in January when ruling parties couldn’t agree on his successor.  Justin “Fidel” Castreau of Canada has disgraced himself and his office, clinging to power by colluding with the equally unpopular NDP party leader.  Japan’s nation building leader Abe was just assassinated, leaving the current novice Japan PM much lesser known or appreciated by Japanese people.  Macron of France won his personal election, but his party lost bigtime in legislative seats.

Any bets on who has the right stuff to restore and advance Western Civilization?

 

Briggs Schools Justice Kagan on Expertocracy

Posted on by Ron Clutz

William Briggs writes at his blog Elena Kagan’s Blind Love Of The Expertocracy: SCOTUS Slaps The EPA.  Excerpts in italics with my bolds and added images.

SCOTUS ruled 6-3 that, in effect, without Congressional authorization, the EPA does not have the power to regulate carbon dioxide. Justice Elena Kagan dissented.

Kagan opened her dissent thus (whole opinion; with my paragraphification for screen readability):

Climate change’s causes and dangers are no longer subject to serious doubt. Modern science is “unequivocal that human influence”—in particular, the emission of greenhouse gases like carbon dioxide—“has warmed the atmosphere, ocean and land.” [Cites IPCC] … The rise in temperatures brings with it “increases in heat-related deaths,” “coastal inundation and erosion,” “more frequent and intense hurricanes, floods, and other extreme weather events,” “drought,” “destruction of ecosystems,” and “potentially significant disruptions of food production.” [Cites, of all things, a case in which this was quoted.]

If the current rate of emissions continues, children born this year could live to see parts of the Eastern seaboard swallowed by the ocean. See Brief for Climate Scientists as Amici Curiae 6. Rising waters, scorching heat, and other severe weather conditions could force “mass migration events[,] political crises, civil unrest,” and “even state failure.”

So Kagan has bought and believes, seemingly sincerely, the failed predictions of global warming, which she calls “climate change”. This is her adopted opinion, provided her by climate Experts, who claim there is no “serious doubt” about their theories.

We have seen many times that her (or her Experts’) quoted predictions of doom are false. There have not been an increase, but a decrease, in floods. Same for drought. There is no “destruction of ecosystems.” And just last week a paper appeared—a peer-reviewed paper in the regime-approved journal Nature, going by the name “Declining tropical cyclone frequency under global warming“—which shows the number of tropical cyclones have been decreasing, not increasing.

Here’s a picture from that paper (ignore the straight and red lines, which are models and not the data):
So Kagan’s suppositions about the dooms of global warming are false, and known to be false with only a little investigation. Which she did not make. Nor did Wise Latina, and nor did the other guy who’s now retired and will be quickly forgotten. Both signed Kagan’s dissent.

Their non-curiosity and blind acceptance of the Expert Consensus is point one. And really is our only point, as we’ll see.

Under the Clean Air Act, as Kagan writes, Congress gave power to the “EPA to regulate stationary sources of any substance that ’causes, or contributes significantly to, air pollution’ and that “may reasonably be anticipated to endanger public health or welfare.’”

As we know, EPA called carbon dioxide, the basis of almost all life on earth, the very stuff of your breath, the food of plants, “pollution”. And started to regulate it. Scientifically, this is like the American Medical Association saying “not all women have cervixes”, and allowing the AMA to regulate the English language.

Do people forget, or maybe they never knew, that CO2 is plant food? And not only plant food, but the plant flood. Back in olden days, they used to teach photosynthesis. No longer? Remove CO2 and plants die. Then you die.

So what the EPA did in trying to regulate CO2 was ridiculous—unless you really do believe global warming, a.k.a. “climate change”, is an “existential crisis.” As Kagan, Wise Latina, and Gone Guy believe, or say they do. But which all observations show is not so.

Models, on the other hand, show the “existential crisis” is true. And all models only say what they are told to say. So models are told to say that “climate change” is an “existential crisis.” Experts told models to say this.

Experts, therefore, value models over observation. The Deadly Sin of Reification.

The real problem, then, is letting Experts make decisions based on models which are beautiful, to Experts, but which make lousy predictions. Experts are trusted too much.

Even if you think not, and still believe the models, nothing follows from them. That is, no policy is suggested, implied, or necessary because of the models. Not one. It is separately true that all policies, suggested from any source, have consequences, which may be known to greater or lesser extent—their uncertainty in them also are models.

It is scientism, a fallacy, to say Experts who wrote climate models also know what is best to do about the weather. Scientifically, it is like saying the CDC knows what is the best rate to pay for rent during a disease outbreak. Which they did say. And were rebuked for saying. A rebuke which they ignored. Which may happen here with the EPA, too.

Therefore, even if you believe the models, which stink, a fact that requires only minor effort to check, it does not follow the Experts who created those models, including agents in the EPA, know what is best to do about model predictions.

That power should fall to Congress, and to state and local governments, who have that mandate.

In other words, the Expertocracy, which was in part struck down and which Kagan dissented against, is based on two false assumptions. The first is that Expert models have skill. They do not. And the second, which is independent, is scientism, which is that scientists with expertise in one are are equipped with greater senses of good and evil on all subjects, which is absurd.

Kagan, though, embraces the Expertocracy. She said (her emphasis):

Members of Congress often don’t know enough—and know they don’t know enough—to regulate sensibly on an issue. Of course, Members can and do provide overall direction. But then they rely, as all of us rely in our daily lives, on people with greater expertise and experience. Those people are found in agencies. Congress looks to them to make specific judgments about how to achieve its more general objectives. And it does so especially, though by no means exclusively, when an issue has a scientific or technical dimension. Why wouldn’t Congress instruct EPA to select “the best system of emission reduction,” rather than try to choose that system itself?

Second and relatedly, Members of Congress often can’t know enough—and again, know they can’t—to keep regulatory schemes working across time. Congress usually can’t predict the future—can’t anticipate changing circumstances and the way they will affect varied regulatory techniques. Nor can Congress (realistically) keep track of and respond to fast-flowing developments as they occur.

Kagan is quite wrong. For all the reasons we discussed. Congress (as sick as that institution is) does know enough, and it knows vastly more than weather Experts about law. Because it knows, or is supposed to, what laws are, and what laws should do, and what the consequence of laws are. Climate or weather Experts do not. Congress can consult with Experts: “If we pass this law, what are the bounds of uncertainty on this particular weather-effected thing?” That is sensible. But it is rank foolishness to trust weather Experts to decide what laws are best, even if you by subterfuge call those laws “regulations”. And it even more dangerous to trust people who have something to gain, as Experts do, to decide what is “best” to do.

The impetus for the Expertocracy, and the faith in it, is there in Kagan’s words. She reasons, in effect, that Experts know more than anybody else on their subjects of expertise, therefore we have no right to interfere with their decisions on any subject.

It is a bad argument because Experts don’t always know best about their own subjects, as we see now everywhere. And even if Experts do know best about their subjects, they don’t know what is best to do about them.

Huge: EPA Loses–America Wins

Posted on by Ron Clutz

Democrat Rep. Alexandria Ocasio-Cortez on Thursday called for the Supreme Court to be abolished after the High Court reined in the EPA’s power to regulated greenhouse gases.

Scotusblog reports on this latest return to sanity by the US Supreme Court. Supreme Court curtails EPA’s authority to fight climate change  Once again the court refuses to legislate an issue that belongs to Congressional deliberation. Excerpts in italics with my bolds.

In a 6-3 decision that may limit agency power across the federal government, the court held that Congress did not clearly authorize the EPA to adopt broad rules to lower carbon emissions from power plants.

The Supreme Court on Thursday truncated the Environmental Protection Agency’s power to regulate greenhouse gases. The ruling may hamper President Joe Biden’s plan to fight climate change and could limit the authority of federal agencies across the executive branch.

By a vote of 6-3, the court agreed with Republican-led states and coal companies that the U.S. Court of Appeals for the District of Columbia Circuit was wrong when it interpreted the Clean Air Act to give the EPA expansive power over carbon emissions. The decision, written by Chief Justice John Roberts, was handed down on the final opinion day of the 2021-22 term.

Two different and conflicting sets of regulations – neither of which is currently in effect – were at issue in the case, known as West Virginia v. EPA. In 2015, the Obama administration adopted the Clean Power Plan, which sought to combat climate change by reducing carbon pollution from power plants – for example, by shifting electricity production to natural-gas plants or wind farms. The CPP set individual goals for each state to cut power-plant emissions by 2030. But in 2016, the Supreme Court put the CPP on hold in response to a challenge by several states and private parties.

In 2019, the Trump administration repealed the CPP and replaced it with the Affordable Clean Energy Rule, which gave states discretion to set standards and gave power plants flexibility in complying with those standards. The Trump administration argued that it was required to end the CPP because it exceeded the EPA’s authority under Section 7411 of the Clean Air Act, which gives the EPA the power to determine the “best system of emission reduction” for buildings that emit air pollutants. That provision, the Trump administration contended, only allows the EPA to implement measures that apply to the physical premises of a power plant, rather than the kind of industry-wide measures included in the CPP.

Last year the D.C. Circuit vacated both the Trump administration’s repeal of the CPP and the ACE Rule, and sent the case back to the EPA for additional proceedings. Section 7411, the court of appeals explained, does not require the more limited view of the EPA’s authority that the Trump administration adopted.

The Supreme Court on Thursday reversed the D.C. Circuit’s ruling. Roberts’ 31-page opinion began by considering whether the Republican-led states and coal companies challenging the D.C. Circuit’s decision had a right to seek review in the Supreme Court now. Because the Biden administration plans to issue a new rule on carbon emissions from power plants, rather than reinstating the CPP, the administration had argued that the case did not present a live controversy for the justices to decide. But a decision by the government to stop the conduct at the center of a case does not end the case, Roberts emphasized, “unless it is ‘absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.’” And in this case, Roberts stressed, because the Biden administration “vigorously defends” the approach that the Obama EPA took with the CPP, the Supreme Court can weigh in.

Turning to the merits of the case, Roberts wrote that the EPA’s effort to regulate greenhouse gases by making industry-wide changes violated the “major-questions” doctrine – the idea that if Congress wants to give an administrative agency the power to make “decisions of vast economic and political significance,” it must say so clearly.

Section 7411 of the Clean Air Act, Roberts reasoned, had been “designed as a gap filler and had rarely been used in the preceding decades.” But with the CPP, Roberts observed, the EPA sought to rely on Section 7411 to exercise “unprecedented power over American industry.” “There is little reason to think Congress assigned such decisions to” the EPA, Roberts concluded, especially when Congress had previously rejected efforts to enact the kind of program that the EPA wanted to implement with the CPP.

“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day,’” Roberts wrote. But only Congress, or an agency with express authority from Congress, can adopt a “decision of such magnitude and consequence.”

Roberts’ full-throated embrace of the major-questions doctrine – a judicially created approach to statutory interpretation in challenges to agency authority – likely will have ripple effects far beyond the EPA. His reasoning applies to any major policymaking effort by federal agencies.

In a concurring opinion that was joined by Justice Samuel Alito, Justice Neil Gorsuch emphasized that the dispute before the court involved “basic questions about self-government, equality, fair notice, federalism, and the separation of powers.” The major-questions doctrine, Gorsuch wrote, “seeks to protect against ‘unintentional, oblique, or otherwise unlikely’ intrusions on these interests” by requiring federal agencies to have “clear congressional authorization” when they address important issues. Whether coal- and gas-fired power plants “should be allowed to operate is a question on which people today may disagree, but it is a question everyone can agree is vitally important.”

The Ruling WEST VIRGINIA v. EPA

Background  Supremes to Review EPA Authority Over GHGs

Footnote from CO2 Coalition

EPA loses – America Wins

Victory for citizens and businesses alike

In what is likely the most damaging setback ever dealt to those advocating for overzealous enforcement actions against greenhouse gas emissions, the Supreme Court of the United States ruled in favor of constitutional limitations on unelected regulators.

This morning SCOTUS ruled in favor of the plaintiff states in WV v. EPA. This was an important “separation of powers” case. Over 20 states allege EPA improperly used very narrow statutory language as the basis for a national CO2 cap-and-trade program.

The constitutional principle of separation of powers requires that only Congress—through legislation—is authorized to decide major policy issues, not federal agencies. The related legal “Major Question Doctrine” holds that federal agencies must have a clear authorization from Congress before exercising new and significant regulatory power.

According to the ruling written by Chief Justice John Roberts: “But the only interpretive question before us, and the only one we answer, is more narrow: whether the “best system of emission reduction” identified by EPA in the Clean Power Plan was within the authority granted to the Agency in Section 111(d) of the Clean Air Act. For the reasons given, the answer is no.”

This is why we fight.

Statement on the ruling by CO2 Coalition Chair William Happer:

“The decision is a very welcome reaffirmation of the Constitutional rights of citizens of the United States. Untouched is the question of whether the Constitution allows Congress to make scientifically incorrect decisions by majority vote, for example: that carbon dioxide, a beneficial gas that is essential to life on Earth, is a pollutant.”

Democratic Socialists Party Platform

Posted on by Ron Clutz

Everyone can see that a kind of Star Chamber hides in Biden’s shadow and dictates what he says and signs. Over the last year and a half, the game plan has been revealed by the exercise of authority assumed by federal and state Democratic Socialistic party.  The platform below summarizes what we have witnessed from these political operatives.

Establish Wokeism as the new state religion.

Under the guise of “Diversity-Inclusion-Equity, the doctrine is to eliminate pluralism from American Life. Critical Race and Gender Theories, among others, are to be asserted as secular truths, and all other beliefs are to be banned from the public square in the name of separation of church and state.

In the cult of Woke, adherents have a “critical consciousness” and are able to see the “problematics” in everything. This includes in speech, writing, institutions, thoughts, people, systems, knowledge, history, one’s past, and society itself. Society is broken into different groups or classes (social group identity) that are oppressive on one side, oppressed on the other, and in conflict over this. That is, conflict theory is the belief that different social groups in society are always in conflict with one another for power and dominance.  And rather than working together in complex, dynamical ways that can be mutually beneficial, they are at war.

Any criticism or questioning of Woke Doctrine is: racist, homophobic, transphobic, xenophobic, imperialistic, hateful, bigoted, unjust, evil, ignorant, wrong, and a crime against humanity.

Purge Public and Private Institutions of customs and symbols adverse to Wokeism.

To facilitate the dominance of Woke doctrine, the heritage of previous widely adopted beliefs must be purged. Thus monuments of past American heroes must be destroyed, and doubt must be cast over the documents and writings of the founders of the American Republic. Rituals like the Pledge of Allegiance or prayers at public events must be replaced with pride rainbows or kneeling to BLM flags.

Persecute and prosecute individuals whose speech and/or actions are contrary to Wokeism, or who are less than enthusiastic.

To achieve Woke totalitarian dominance, dissenters must be reviled as heretics. And if unrepentent, they must be incarcerated or otherwise excommunicated by removing their reputations and employment. Any spokespersons for alternative opinions to Woke views of history and identity politics must be driven out of public awareness and discourse.

Expand the administrative bureaucracy to extend social and economic control and to deepen dependency upon the state.

By declaring states of emergency, a la Covid or Climate, Executive agencies will create more rules regulating enterprises, indeed all employees public and private, constraining personal choices to align with Woke doctrines. Expanding the regulatory authorities will greatly increase numbers on the public payroll, and shift financial power away from the private sector.

Strip the citizenry of firearms to prevent resistance to the force of governmental edicts.

To complete the state’s monopoly of coercion force over the populace, citizens’ right to self-defense must be rendered mute by confiscating guns and ammunition.

Rig the election process so that the Woke party is always returned to power.

In line with Marxist theory, Woke doctrine includes believing that only one political party is legitimate; that is the one representing the victims of oppression. All others are illegitimate, and cannot be allowed to form the government by means of a free and fair election. The illusion of voters choosing will be maintained, but political communication will be slanted to heavily favor the Woke appointed candidates. Also the collecting and counting of ballots will be coordinated to ensure the right outcome.

Neutralize Congress and Supreme Court as checks upon Executive authority.

With the centralizing of governance in the Executive branch. Congress and the Courts must be relegated to advisory roles. Deliberation will occur in the agencies with Executive oversight, while congressional discussions will give the appearance of representation for the electors. The courts will limit themselves to reaffirming Woke doctrine against heresies arising from time to time.

Postscript

I have used satirical images to poke holes in this mistaken political movement, but this is a serious moment in the struggle for the soul and future of the American Republic.  For example, note these statements excerpted from a recent fundraising email from Ron DeSantis, addressing these same points in resolute language. The Appeal of Ron DeSantis

Our country is currently facing a great threat. A new enemy has emerged from the shadows that seeks to destroy and intimidate their way to a transformed state, and country, that you and I would hardly recognize.

This enemy is the radical vigilante woke mob that will steamroll anything and anyone in their way. Their blatant attacks on the American way of life are clear and intensifying: stifling dissent, public shaming, rampant violence, and a perverted version of history.

A group that will, literally, tear down monuments and buildings but — perhaps in an even more sinister way — tear down the American spirit itself.

To destroy America, they go after the family unit, parental rights, traditional moral values, the church, and fact-based education.

Over the past few years, we’ve watched horrified as this group has attempted to brainwash our children into thinking we live in an evil, racist, irredeemable country.

With regard to Covid, we listened to them deny science and data to exert political theater all the while trampling over personal liberties enshrined in the Constitution.

We saw them take to the streets for an entire summer like outlaws burning, looting, and destroying everything in sight while being told they were “mostly peaceful” and “passionate.”

We watched Big Tech moguls in Silicon Valley be the arbiters of truth – deciding who gets to speak and who gets silenced through the digital public square.

We The People still have a say. We know the truth, you and I, about America and the country she is and can be. We must fight to defeat these false pretenses and predetermined narratives.

I am choosing to counter this enemy with faith, with reason, and with freedom. As Governor of the Free State of Florida, I have chosen to lead with a vision that builds America up rather than tears it down.

Together we can ensure that our children are raised to know they live in the greatest state in the nation, the greatest country in the world and that they have an opportunity to continue making them even greater.

Am I embarrassed to speak for a less than perfect democracy? Not one bit. Find me a better one. Do I suppose there are societies which are free of sin? No, I don’t. Do I think ours is, on balance, incomparably the most hopeful set of human relations the world has? Yes, I do.

The World Is Not Over, But On The Wrong Track

Posted on by Ron Clutz

Jeff Thomas writes at International Man It’s Not the End of the World with some advice for those of us watching the governance train wrecks around the world. Excerpts in italics with my bolds.  H/T Tyler Durden.

Periodically, I’ll encounter someone who has read one of my essays and has decided not to pursue them further, stating, “You’re one of those ‘End of the world’ guys. I can’t be bothered reading the writings of someone who thinks we’re all doomed. I have a more positive outlook than that.”

In actual fact, I agree entirely with his latter two comments. I can’t be bothered reading the thoughts of a writer who says we’re all doomed, either. I, too, have a more positive outlook than that.

My one discrepancy with such comments is that I don’t by any means think that the present state of events will lead to the end of the world, as he assumes.

But then, neither am I naïve enough to think that if I just hope for the best, the powers that be will cease to be parasitical and predatory out of sympathy for me. They will not.

For any serious student of history, one of the great realisations that occurs at some point is that governments are inherently controlling by nature. The more control they have, the more they desire and the more they pursue. After all, governments actually produce nothing. They exist solely upon what they can extract from the people they rule over. Therefore, their personal success is not measured by how well they serve their people, it’s measured by how much they can extract from the people.

And so, it’s a given that all governments will pursue ever-greater levels of power over their minions up to and including the point of total dominance.

It should be said that, on rare occasions, a people will rise up and create a governmental system in which the rights of the individual are paramount. This was true in the creation of the Athenian Republic and the American Constitution, and even the British Magna Carta.

However, these events are quite rare in history and, worse, as soon as they take place, those who gain power do their best to diminish the newly-gained freedoms.

Such freedoms can almost never be destroyed quickly, but, over time and “by slow operations,” as Thomas Jefferson was fond of saying, governments can be counted on to eventually destroy all freedoms.

We’re passing through a period in history in which the process of removing freedoms
is nearing completion in many of the world’s foremost jurisdictions.
The EU and US, in particular, are leading the way in this effort.

Consequently, it shouldn’t be surprising that some predict “the end of the world.” But, they couldn’t be more incorrect.

Surely, in 1789, the more productive people of France may have felt that the developing French Revolution would culminate in Armageddon. Similarly, in 1917, those who created prosperity in Russia may well have wanted to throw up their hands as the Bolsheviks seized power from the Romanovs.

Whenever a deterioration in rule is underway, as it is once again now, the observer has three choices:

Declare the End of the World

There are many people, worldwide, but particularly in the centres of the present deterioration – the EU and US – who feel that, since the situation in their home country is nearing collapse, the entire world must also be falling apart. This is not only a very myopic viewpoint, it’s also quite inaccurate. At any point in civilization in the past 2000 years or more, there have always been empires that were collapsing due to intolerable governmental dominance and there have always concurrently been alternative jurisdictions where the level of freedom was greater. In ancient Rome, when Diocletian devalued the currency, raised taxes, increased warfare and set price controls, those people who actually created the economy on a daily basis found themselves in the same boat as Europeans and Americans are finding themselves in, in the 21st century.

It may have seemed like the end of the world, but it was not. Enough producers left Rome and started over again in other locations. Those other locations eventually thrived as a result of the influx of productive people, while Rome atrophied.

Turn a Blind Eye

This is less dreary than the above approach, but it is nevertheless just as fruitless. It is, in fact, the most common of reactions – to just “hope for the best.”

It’s tempting to imagine that maybe the government will realise that they’re the only ones benefitting from the destruction of freedom and prosperity and they’ll feel bad and reverse the process. But this clearly will not happen.

It’s also tempting to imagine that maybe it won’t get a whole lot worse and that life, although not all that good at present, might remain tolerable. Again, this is wishful thinking and the odds of it playing out in a positive way are slim indeed.

Accept the Truth, But Do Something About It

This, of course, is the hard one. Begin by recognising the truth. If that truth is not palatable, study the situation carefully and, when a reasonably clear understanding has been reached, create an alternative.

When governments enter the final decline stage, an alternative is not always easy to accept. It’s a bit like having a tooth pulled. You want to put it off, but the pain will only get worse if you delay. And so, you trundle off to the dentist unhappily, but, a few weeks after the extraction, you find yourself asking, “Why didn’t I do this sooner?”

To be sure, those who investigate and analyze the present socio-economic-political deterioration do indeed espouse a great deal of gloom, but this should not be confused with doom.

In actual fact, the whole point of shining a light into the gloom is to avoid having it end in doom.

It should be said here that remaining in a country that is tumbling downhill socially, economically and politically is also not the end of the world. It is, however, true that the end result will not exactly be a happy one. If history repeats once again, it’s likely to be quite a miserable one.

Those who undertake the study of the present deterioration must, admittedly, address some pretty depressing eventualities and it would be far easier to just curl up on the sofa with a six-pack and watch the game, but the fact remains: unless the coming problems are investigated and an alternative found, those who sit on the sofa will become the victims of their own lethargy.

Sadly, we live in a period in history in which some of the nations that once held the greatest promise for the world are well on their way to becoming the most tyrannical.

If by recognizing that fact, we can pursue better alternatives elsewhere on the globe, as people have done in previous eras. We may actually find that the field of daisies in the image below is still very much in existence, it’s just a bit further afield than it was in years gone by.

And it is absolutely worthy of pursuit.

Why The Protests Over Abortion and Guns?

Posted on by Ron Clutz

As Jimbob notes in this cartoon, the people in the streets are nearly always leftists appealing to the state to take away someone else’s freedom.  This latest round is triggered by Supreme Court decisions confirming American constitutional rights, contradicting the left’s agenda.  They respond with outbursts of emotion and rage, rather than  by reading and understanding what they have gotten wrong.

Bruce Pardy explained the dynamics in his National Post article Meet the new ‘human rights’ — where you are forced by law to use ‘reasonable’ pronouns.  Excepts in italics with my bolds.

Human rights were conceived to liberate. They protected people from an oppressive state. Their purpose was to prevent arbitrary arrest and detention, torture, and censorship, by placing restraints on government. The state’s capacity to accommodate these “negative rights” was unlimited, since they required only that people be left alone.

If only arm twisting were prohibited beyond the ring.

But freedom from interference is so 20th century. Modern human rights entitle. We are in the middle of a culture war, and human rights have become a weapon to normalize social justice values and to delegitimize competing beliefs. These rights are applied against other people to limit their liberties.

Freedom of expression is a traditional, negative human right. When the state manages expression, it threatens to control what we think. Forced speech is the most extreme infringement of free speech. It puts words in the mouths of citizens and threatens to punish them if they do not comply. When speech is merely restricted, you can at least keep your thoughts to yourself. Compelled speech makes people say things with which they disagree.

Traditional negative human rights give people the freedom to portray themselves as they wish without fearing violence or retribution from others. Everyone can exercise such rights without limiting the rights of others. Not so the new human rights. Did you expect to decide your own words and attitudes? If so, human rights are not your friend.

Then, some comments about the abortion street theater from Rajan Laad’s American Thinker article Decoding the Democrat protestors after Roe.  Excerpts in italics with my bolds.

The recent ruling from the Supreme Court that overturned Roe v. Wade launched a thousand protests, which the Democrats called “The Night of Rage.”

In Washington D.C., hundreds of pro-abortion ‘activists’ marched, shouted slogans, and held signs outside the Supreme Court building and beyond.

Crowds ‘demonstrated’ before the federal building in downtown Chicago. The cacophony of ‘protests’ was also witnessed at the Georgia Capitol in Atlanta, the Wisconsin Capitol in Madison, and in Flint, Michigan.

There were ‘marches’ in downtown Seattle, Philadelphia, Boston, and Los Angeles.

There were ‘demonstrations’ in Richmond, Virginia; Jacksonville, Florida; Columbia, South Carolina; Raleigh, North Carolina, and Topeka, Kansas.

In Phoenix, ‘protesters’ managed to break the doors of the Arizona Senate building.

Some of these ‘demonstrations’ involved road blockades while obscenities were shouted elsewhere.

Enraged ‘protesters’ also descended before the homes of the six conservative Supreme Court justices.

Also, this week the Senate passed a gun control bill, that among other things, enables the confiscation of guns on the basis of suspicion. But conservatives didn’t hit the streets demonstrating that their rights were encroached upon.

For decades, since the beginning of the Nixon era, the Democrats have been the party of “demonstrations.” The operation has become so smooth now that they can muster raucous nationwide protests for any issue in a matter of hours. It is almost as if they have a sleeper cell that can be activated on command.

Democrats use these groups like disposable commodities. They will be cheered as a group but overlooked as individuals. They will always be part of the crowds. but never be allowed on stage. The stage is reserved for the Hollywood star or the pop singer or the politician. If they secure a victory, the Democrat ‘elites’ will enjoy the fruits of power and receive invites to galas. The activist will always be out on the streets.

Comment:

The protests are about purifying the population of the “wrong thinkers”.  It means cancelling any woman (yes, they do know what one is) concerned about ending the life of her unborn child.  It means forcing doctors and caregivers to act against their principles to do procedures to abort an embryonic human life because someone couldn’t manage their sexual practices to prevent it.

The guns thing is even more obvious.  Responsible gun owners are to have their self-defense removed so that outlaws can roam freely without fear of lethal confrontation.  Urban snowflakes want rural folks disarmed so they can feel safer in their crime ridden neighborhoods, even though they aren’t.

And on it goes.  Anyone who has a longer and higher quality life because of fossil fuel products must be deprived of it to “save the planet.”  Anyone thinking otherwise is to be silenced and ostracized.  There is only one right way to think; all others must be cast aside.

 

 

One More Time: Shooters Are Disordered Personalities

Posted on by Ron Clutz

One more time:  These shooters assaulting their fellow citizens are disordered personalities, not people suffering from emotional problems who can be helped by counseling therapy.

John Dale Dunn, M.D. explains in his American Thinker article Don’t assume school shooters are mentally ill.  Excerpts in italics below with my bolds.

There is a lot of mumbo jumbo psych talk circulating around the dead bodies in Uvalde, a town I knew pretty well because I consulted frequently with their hospital administrator.

I want to remind readers of the problem of personality disorders (PD) and distinguish PD from mental illness.

PD is pattern of anti-social or dysfunctional behavior that is not caused by mental illness but by bad manners and bad social adaptation. There are 3 groups of personality disorders. In the Emergency Medicine part of my life,

I taught residents that PDs are the weird, the wild, and the withdrawn.

The killers and criminals are usually in the wild group, who are the most anti-social and disruptive.

Here is a typical listing available from a search at: https://psychone.net/list-of-personality-disorders.php

Class A (The Weird)

Odd or eccentric disorders

·         Paranoid personality disorder 

Characterized by suspiciousness and a deep mistrust of people, paranoid personalities often think of others as manipulative, cunning or dishonest. This kind of a person may appear guarded, secretive, and excessively critical. More..

·         Schizoid personality disorder 

People with schizoid personalities are emotionally distant and tend to prefer to be alone. They are generally immersed in their own thoughts and have little interest in bonding and intimacy with others. More..

·         Schizotypal personality disorder 

This disorder is characterized by odd and unusual “magical” beliefs. These individuals may have an eccentric way of behaving or dressing. They also tend to display outlandish beliefs such as believing that they can see the future or travel to other dimensions.

People with this condition often have difficulty connecting with others and establishing long term relationships. Overtime, they may develop a fear of social gatherings. More..

Class B (The Wild)

Dramatic, emotional or erratic disorders (wild) 

·         Antisocial/psychopath personality disorder

Individuals with this disorder are known to be manipulative, irresponsible, and have a history of legal difficulties. They show little respect for the rights of others and feel no remorse for their actions. They also leave a trail of unfulfilled promises and broken hearts.

Antisocial personalities are also at high risk for drug abuse (e.g., alcoholism; meth) since many are rush seekers. While they seldom suffer from depression or anxiety, they often use drugs to relieve boredom and irritability. More..  (Dunn note–this PD is male dominant) 

·         Borderline personality disorder

Borderline personalities are impulsive and have extreme views of people as either all good or bad.

These people are unstable in relationships and have a strong fear of abandonment. They may form an intense personal attachment with someone they barely know and end it without no apparent reason. They might also engage in a pull and push behavior that usually ends with their partner leaving permanently.

Self-mutilation, suicidal gestures or attention-seeking destructive behaviors are not uncommon. Borderline personalities are three times more likely to be female. More..

·         Histrionic personality disorder

People with this condition engage in persistent attention-seeking behaviors that include innapropriate sexual behavior and exaggerated emotions. They can be oversensitive about themselves and constantly seek reasurrance or approval from others.

Excessive need to be the center of attention, low tolerance for frustration, blaming others for failures are also characteristics of the histrionic personality. More..

·         Narcissistic personality disorder 

Narcissistic personalities have a blown up perception of themselves and an excessive desire for attention and admiration. Individuals with this disorder have a false sense of entitlement and little respect for other people’s feelings. They are oversensitive to criticism and often blame others for their failures.

Prone to outbursts of anger and irritability, the narcissistic personality tends to be manipulative in interpersonal relationships. But deep beneath the surface lies a vulnerable self-esteem, susceptible to depression and feelings of inferiority. More..

Class C (The Withdrawn)

Anxious or fearful disorders 

·         Avoidant personality disorder 

This disorder is described by chronic social withdrawal, feelings of inferiority, over-sensitivity and social withdrawal.

People with avoidant personality disorder are constantly fearful of rejection and ridicule. They form relationships only with people that they trust. The pain of rejection is so strong that these individuals prefer to isolate rather than risk disappointment. More..

·         Dependent personality disorder 

Individuals with this condition have an abnormal desire to be nurtured that leads to submissive and clinging behavior. Dependent personalities have difficulty making their own decisions and seek others to take over most important areas in their lives.

They will often go to great length to obtain nurturance from others, have separation anxiety when alone and desperately seek another partner when a close relationship ends. More..

·         Obsessive-compulsive personality disorder (OCPD)

Not to be confused with OCD. People with OCPD are perceived as strict and demanding by others. They have a persistent preoccupation with perfectionism, orderliness, and efficiency, at the expense of interpersonal relationships. They also show an excessive devotion to work, productivity and exhibit rigidness and stubbornness.

People with OCPD usually have a negative view of life and often become withdrawn and depressed.

I was a corrections physician for almost 30 years as a contribution to our hometown and local law enforcement/incarceration services. I know a little about criminals. Here are three essays, two short, one long, on the issue of criminality and mental disorders.

https://www.americanthinker.com/blog/2018/02/mental_illness_and_misconduct.html

https://www.americanthinker.com/blog/2018/03/personality_disorders_and_mass_murder.html

https://www.americanthinker.com/articles/2016/02/senator_cornyn_and_the_inmates.html

Consider my warning: PDs are not a mental illness, they are a culturally dysfunctional behavior problem. PD individuals are not psychotic or out of touch with reality — they just have a bad set of behavior and social controls. They got messed up on the way to adulthood and functional good behavior.

 

My Comment:

Dr. Dunn puts analytic rigor to confirm a suspicion many of us have, that these violent acts by individuals demonstrate the breakdown of socialization in our societies.  Current political initiatives aim to denigrate and defund law enforcement, and to not prosecute criminal behavior.  Educators are proudly replacing family values with ego-centric pleasure gratification.  How can this be anything but a concerted effort to infect free societies with more and more mal-adjusted, disordered personalities?  And social media adds fuel to the fire.

The wokeness destruction of our institutions must be reversed, and families must function to raise children to care about and respect others.  Otherwise, when the social bonds are completely dissolved, the jack boots will come in.

See also Hey Groomers, Leave Those Kids Alone!

 

 

 

 

 

 

Where Leftist Media Saturation Leads

Posted on by Ron Clutz

Tyler Durden writes insightfully on the current cultural war in his zerohedge article Why Are Twitter Employees So Afraid Of Free Speech? It’s About Market Saturation.  Excerpts in italics with my bolds.

When a franchise sets out to compete with other companies that have a superior market or branding presence, they will sometimes exploit a strategy called “market saturation” in order to undermine their opponent’s visibility. An example of this is Starbucks, which sought to co-opt and then destroy the concept of the neighborhood hipster coffee shop by flooding every city and town with their own stores. After several years, there was at least four Starbucks within a mile of every other Starbucks store and often these franchises would sit right across the road from each other.

Every coffee house was now a Starbucks coffee house.

You might ask – What the hell does this have to do with Twitter? Well, remember this analogy for later because it’s important, but it has a lot to do with the manner in which the political left operates and how social justice warriors and trans activists take control of the narrative. And guess who has been running Twitter until recently? That’s right, extreme leftists based out of the social justice Mecca – San Francisco.

Twitter is supposedly one of the largest social media companies in the world (though this has come under question recently as it has yet to be determined how many users on the platform are actually fake), and basing this massive communications hub out of one of the most communistic/collectivist cities in the US already set the stage for unprecedented political bias.

When your company is headquartered in such a place, the vast majority of people you hire will be part of the social justice hive mind. It’s saturated.

Why is this a problem? Leftists don’t believe in work, they believe in activism, and they even believe that their activism is so important to the world that they should be paid for it as if it is the same as work. This is not an exaggeration; they really are that crazy. That’s why when it became apparent that billionaire Elon Musk, a self described proponent of meritocracy, was going to take over the platform, the employees freaked out. Not because they thought they were going to lose their jobs (though that was a concern), but more so because they were horrified at the notion that Twitter as a communications platform would be “forced” by Musk to allow free speech. Meaning, Twitter employees have spent most of their careers trying to erase one side of the political discussion (conservatives), and the prospect of all that censorship disappearing has them frothing at the mouth like rabid dogs.

Again, it’s about saturation.

Though leftists often greatly overestimate their influence within the overall culture, they don’t really care so much about convincing the public of the legitimacy of their ideology. Rather, what they are obsessed with is their beliefs becoming the ONLY beliefs that are perpetuated in the mainstream. No other franchises can be allowed a foothold in media, in popular culture or on Big Tech platforms. They see the public as a blank canvas, a lump of clay that can and should be molded, and they think that if the public is bombarded daily with the social justice cult message then this will eventually translate to a manufactured majority that serves their interests.

A perfect example is the concept of “pride month.”

Since when does 2%-3% of the global population need an entire month to celebrate their obscure sexual habits? Since when does almost every major corporation need to brand their products with pride propaganda during June? Because saturation works, to a point. In the US, where there has been a constant bombardment of LGBT propaganda in media, the number of people identifying as gay and trans rose from around 2.5% in 2008 to over 5% in 2016, and it’s still climbing today. Remember, the gay lobby has long argued that homosexuality is inborn. So, somehow, the rate of people born gay doubled in the span of 8 years, and only in the US and certain parts of Europe. How is this possible?

It’s not possible. Not statistically or scientifically. There was no stigma in 2008 in terms of identifying as gay; there wasn’t really any stigma as far back as the 1990’s. On top of that, survey methods are generally anonymous anyway. So stigma can’t be used as an excuse for the abnormality in stats. Furthermore, the rise in gay identification is almost entirely among Gen Z teens and young adults (an easily manipulated subsection of society). Again, there is no stigma in any age group today. In fact, it’s quite the opposite. The LGBT movement has become a political movement and a pop culture movement driven by corporate saturation. It is considered trendy among young people to be gay or trans, and so the percentage rises according to the trend.

Leftists have long understood a concept which most of their political opponents have not, and that is the power of cultural gatekeeping.

They understand that by forcefully injecting their ideology into every aspect of a culture through key sources of entertainment and information distribution as well as public schools, they can create the illusion that they are the majority. And by creating the illusion of a majority, you can one day turn that illusion into a reality as millions of people start to assume that there is only one way to see the world – The leftist way.

In a recent meeting with Elon Musk to discuss the future of the company, Twitter employees were particularly grieved by the notion that the business would be run on meritocracy and that Musk argued in favor of people being able to say whatever they want within the bounds of the law (no death threats). Twitter is a platform that has been declining for years, but it is true that there is no alternative in existence yet with the same level of cultural reach. Employees have been enjoying an incredible level of power – the power to omit, to bury and to erase any messages, facts or people that contradict the greater hive mind.

They see this as their job and the thing that brings meaning to their lives.
Now, that power is about to be taken away.

Not surprisingly, many globalists also share the same sentiments as Twitter workers. Max Boot, a long time member of the Council on Foreign Relations, had this to say about the potential for free speech on Twitter:

Note the level of hypocrisy: For “democracy” to survive, we need MORE censorship?

There is something very wrong with the existence of only a few major communications networks becoming integral to social and economic cohesion within a society. It’s not just about a handful of corporations working together to form a technically legal monopoly, it’s also about the ability of those companies to digitally shun entire groups from the wider discourse. As Big Tech platforms become more integrated into our financial life, those same companies could even block entire groups of people from economic access.  They could literally starve people to death if they disagree with the collectivist narrative.

This is the power that leftists really want; the power to silence
and to destroy all other ideals besides their own.
And they get to that goal by first achieving market saturation.

On the bright side, companies like Starbucks got the saturation they wanted and it’s killing them. With so many franchises everywhere, they are now competing with each other and cannibalizing each other. You’ll find that this is also a common theme among leftist movements. With so many different professional victims battling over an ever shrinking piece of the pie, it’s only a matter of time before these people eat each other alive.

Unfortunately, they may destroy our country well before our society
gets a chance to wake up from the madness and rebalance the scales.

2000 Mules is the Smoking Gun

Posted on by Ron Clutz

Now we know why they avert their eyes from watching the film 2000 Mules.  And why the panel investigating the January 6 protest didn’t dare to screen the documentary.  Because it shows beyond reasonable doubt that election theft activities were coordinated and replicated in multiple states, proving a national criminal enterprise rigged the 2020 US Presidential election.  The smoking gun is there for all to see, and even more, it is only part of the pattern of corruption.

Charlie Johnston explains in his American Thinker article D’Souza’s Mules Left Tracks.  Excerpts in italics with my bolds.

Many conservative commentators have noted that Dinesh D’Souza’s documentary, 2000 Mules, offers compelling evidence of large-scale vote fraud. It offers more than this, though. It provides compelling evidence of a massive, centrally coordinated conspiracy to commit vote fraud. Examining several states with different voter laws while focusing on just one form of fraud, the movie found that the method of fraud was executed identically in each of these states.

That is prima facie evidence of central organization and management.

From the moment counting was stopped in the dead of night in five Democrat-run swing states on election night, Democrats and the media have treated anyone who questioned election integrity in 2020 like a mob boss treats anyone who threatens to testify against him: shut up, or we will cancel you.

Democrats and the media routinely smear anyone who questions the election results as a conspiracy theorist.  They routinely pronounce any evidence that emerges as “debunked.”  For the record, “debunked” does not mean “inconvenient to the leftist narrative.”  It means “thoroughly investigated and proven to be false.”  Almost none of the evidence has been debunked; very little has been officially examined.  Leftists treat actual evidence like how a vampire treats a crucifix.  There is no reasoned discourse, just a lot of hissing and snarling.

From well before he took office, Donald Trump faced an ongoing administrative coup attempt. First was the long-running Russian collusion hoax, mounted by Hillary Clinton and the Democratic National Committee and abetted by the FBI and intelligence agencies. Federal employees who were, theoretically, subordinate to Trump gleefully worked to undermine his administration. Two baseless impeachments were mounted against him by Democrats who know nothing other than shrieking partisanship anymore.

The slow-moving coup finally succeeded on the evening of November 3, 2020, when those five states quit counting ballots to give Democrats time to “fortify” the election. The last real hurdle to thwarting election integrity came on December 11, 2020, when the Supreme Court ruled that Texas and 18 other states lacked standing to complain of massive fraud. How states that conduct honest elections lack standing to complain of states that don’t in an election that affects them all is beyond my understanding. It looked like unconditional institutional surrender to massive fraud to me. All hail the barbarians!

D’Souza’s documentary examined only the slice of fraud that involved
organized physical ballot-stuffing.

It did not touch on compromised voting machines and systems or unconstitutional, administrative election law changes. If the single slice that 2000 Mules so effectively biopsied is filled with the cancer of fraud, it is willful ignorance to believe that everything else was clean.

If the election of 2020 had been fundamentally clean, Democrats and the media should have been the loudest advocates for a thorough and bipartisan investigation of the election to put widespread doubts to rest and own the conservatives. (By bipartisan, I do not mean like the J6 committee, where the Democrats unilaterally appointed all members, including a couple of Republican chumps for show.) Instead, the left hisses and snarls at every piece of evidence brought forth, no matter how compelling. A guilty man tries to suppress every bit of evidence at his trial, never knowing which piece will seal his conviction, while an innocent man tries to get every piece into evidence he can, never knowing which piece will exonerate him. To assess credibility on this, look who is trying to suppress evidence and who is trying to get evidence into the public record.

At this stage, it is hard to credit Democratic and media intransigence to anything innocent. If they are not just stupid, they have become co-conspirators in the only actual insurrection America has seen over the last six years. Understand, this coup was not primarily aimed at Trump and conservative Republicans; it is a coup against the very idea of self-government. Alas, many Republicans may disagree with elements of Democratic methods but agree with them that a self-serving elite class should rule the citizen-serfs they think constitute the American people.

The relentless smears, the constant howls, and the shrieking rage of the leftists are not because they are so offended that the right would challenge them. It is because the mud of massive deception is being washed away to reveal the rock of stark fraud the left mounted to steal an American presidential election. That is genuine insurrection. Confession, repentance, and forfeiture of all offices of public honor or trust by the conspirators could begin to establish American honor and liberty anew. That, of course, will never happen. Power is the left’s only god, and pursuit of it by any means its only liturgy.

Republicans will win by unprecedented margins in November. If they hold the left to account for its depredations against the American system of law and systemic attack on the Bill of Rights, we can begin to crawl out of this hole of despotism. If, instead, the Republicans largely choose to let bygones be bygones, as they have done with the Russian collusion conspirators, there is little hope that America can long survive as anything the founders would recognize. Renewal will come. Americans will not forever submit to be ruled by any class of people — and certainly not to this degenerate class of aspiring despots.

However it comes, D’Souza’s documentary is the seminal moment the tide washed away enough mud that, despite their shrieks and howls, the left can no longer hide the ugly truth of what it did.

Massive election fraud in 2020 is a conspiracy, but it is no longer merely a theory.

OPEC runs out of spare capacity, makes bullish case for oil

Posted on by Ron Clutz

Mohammed Barkindo, the secretary general of OPEC, has warned that “OPEC is running out of capacity,” and that “with the exception of two or three members, all are maxed out.” PHOTO BY REUTERS/DADO RUVIC/ILLUSTRATION/FILE PHOTO

Eric Nuttall explains at Financial Post OPEC running out of spare capacity confirms our multi-year bull case for oil.  Excerpts in italics with my bolds.

Oil companies are going to be pumping high returns to investors
for much longer than people realize

Imagine life without insurance. The constant worry of an unexpected accident, such as your house burning down or car getting stolen, wreaking financial havoc without the economic certainty that everything would be OK in the end. This is where the world is heading in the next several months.

The Organization of the Petroleum Exporting Countries’ (OPEC’s) spare capacity, the oil market equivalent of insurance, has since the 1960s been available to avoid severe price spikes by smoothing out periodic supply disruptions caused by geopolitical events.

Now, owing to too many years of insufficient investment, as the needs of social spending and sovereign revenue dwarfed those of investing in incremental capacity during a multi-year period of low oil prices, OPEC’s spare capacity is set to become exhausted.  This imminent reality will be a watershed event and has enormous implications for the oil market that investors must urgently appreciate.

We have for more than a year argued the world was hurtling into an energy crisis of epic proportions that would result in a multi-year bull market for oil.

Our bullish thesis had four basic tenets:

♦  persistent demand growth for at least the next 10 years;
♦  the end of shale hyper-growth in the United States, defined as shale production growth rates that no longer exceed global demand growth;
♦  stagnant production growth from the global super-majors resulting from eight years of insufficient investment and, finally,
♦  the exhaustion of OPEC’s spare capacity.

The hardest of these four core assumptions to prove by far was the last one. U.S. shale growth rates could be forecasted by talking with oil executives and modelling corporate cash flows. One could easily see that spending by the super-majors had peaked in 2014, falling to half of those levels today, while also being burdened by increasing pressures to decarbonize, so we could predict and model stagnant growth for years to come. And demand growth was boosted in the short term by the emergence from global lockdown, and is supported over the medium-to-long term by the realities that limit alternatives from reaching enough critical mass to meaningfully displace oil in the next several decades.

OPEC’s spare capacity, however, was the tricky one. Monthly data released by several different sources can vary wildly. Given the strategic importance of oil revenue to many Gulf States, hard data on productive capacity has at times been viewed as state secrets and either difficult to get or taken with some skepticism. How then can we be so confident that OPEC’s spare capacity is nearing exhaustion? Because they just told us so.

Last week, the Royal Bank of Canada hosted a spectacular energy conference in New York with the highlight being a keynote speech by Mohammed Barkindo, the secretary general of OPEC. That same night, I had the good fortune to have dinner with him, which to an energy enthusiast was the equivalent of a tech investor getting to hang out with Elon Musk. I found him to be a warm, insightful, soft-spoken and, surprisingly, straight-talking gentleman.

In his keynote speech, Barkindo warned that “OPEC is running out of capacity,” and that “with the exception of two or three members, all are maxed out.” Further, “the world needs to come to terms with this brutal fact” and that it is a “global challenge.”

Why is this so incredibly important? Well, what would happen if the U.S. Federal Reserve ran out of hard currency? It would just simply print more, with fresh bills sent to banks via armoured car the next day.

For oil producers, the cycle time to produce more oil is measured not in days, but in years.

With short-cycle U.S. shale set to grow at a fraction of historical rates, the world is now almost entirely dependent on long-cycle production, yet the global super-majors are entrenched in a multi-year period of stagnation due to too many years of underspending, and now OPEC, out of incremental capacity, is constrained by the very same challenge.

With oil inventories already at multi-year lows, demand back to pre-COVID-19 levels and structural challenges to supply growth, we believe oil prices will have to act as a demand-destroying mechanism, rising to a high enough level that kills discretionary demand, thereby balancing the market, while also staying there long enough to give the super-majors the confidence needed to start adequately spending again.

Given industry cycle times of four to six years, we believe that oil companies are set up to return egregiously high returns to investors for much longer than people realize, leading to a rerating from valuation levels that still imply the end of oil is nigh.

Eric Nuttall is a partner and senior portfolio manager with Ninepoint Partners LP.