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Page added on November 1, 2014
Peak Oil Derp
Paul Krugman (remember him?) has been taking about what he called inflation “derp,” meaning an opinion held in contravention of all evidence, and posts this handy chart:
As I recall, runaway inflation has been a standard prediction of much of the Peak Oil blogosphere over the past several years as well. This was also combined with warnings of the imminent collapse of the U.S. dollar and a default on the federal debt. Many Peak Oil commentators also called for eliminating the Federal Reserve, and a return to the gold standard.
My question, and I ask it in all sincerity, is, why? These economic ideas come directly from the right-wing “Austrian School” of economics. Why were these obscure, right-wing economic doctrines embraced by so much of the Peak Oil commentariat? You know who these people are, so I’m not going to name names.
What’s exceptionally bizarre to me about this is that Peak Oil, rightly or wrongly (in my opinion wrongly), has been associated with the political Left. Yet so many people in the Peak Oil sphere enthusiastically embraced the narrative being promoted by right-wing Libertarians that the Federal Reserve is the (exclusive) source of all our economic woes, that gold is the only “real” money, and that “money printing” will lead to runaway inflation and a “debasement” of the currency. If you read many peak oil sites, you would also hear constant scorn being heaped on the likes of Krugman and Ben Bernanake (like Krugman, Bernanke seemed to inspire a bilious, visceral hatred in the angry white males of the blogosphere that Janet Yellen simply can’t match. Must be something about bearded Jewish Princeton economists)
Again, why? Why did so much of the Peak Oil movement embrace these narratives promoted by people like the Koch Brothers and Ron Paul? It’s strange bedfellows indeed – you had libertarian free-market fundamentalists espousing the exact same economic ideas as people who believed that the very substance that underpins modern industrial capitalism was irretrievably running out. How did they end up espousing the exact same economic philosophy? Why did so many Peak Oil people align themselves politically with extreme free-market fundamentalists like Ron Paul, who believes that a nineteenth century economic regime with no central banking, regulations or worker protections is the key to prosperity for all?
And many in the movement have been doubling down on this. If you point out that inflation is low, you get conspiracy theories about how inflation numbers are secretly being manipulated. Oil prices are going up, but of course Peak Oil people should know that has nothing to do with money printing but rather the increased costs of going after harder-to-get oil sources. College and medical costs have been rising, but that’s because these industries are predatory and fuelled by federal subsidies. Housing costs have been rising, but this is due to a housing bubble, scarcity (in urban areas) and extreme income inequality. These aren’t caused by “money printing.”
I think maybe the idea is that if the authorities were not talking about Peak Oil, than they were not talking honestly about other things, and conspiratorial anti-government ideologies were embraced. And the biggest ones on offer ready to go was the ones being stoked and kept alive by anti-government libertarians and the John Birch Society. So, many peak oilers encountered these ideologies and signed on board, thinking that these ideas were another “suppressed” ideology just like peak oil. If the authorities were lying and keeping peak oil a secret, then they must be lying about the Federal Reserve and money printing and all of that as well. And economists like Krugman were in on the scam!
I think there’s also an element of nostalgia. Ron Paul and his libertarians portray an idealized world before the Progressive movement and central banking destroyed a land of plucky individualists and striving entrepreneurs. The fact that the people themselves who lived in this time period (1880s-1920s) fought to end the rapacious rule of Robber Baron elites, the impoverishment (and sometimes outright murder) of the working classes and the complete immiseration of people who had no social safety net to fall back on (no “private charity” was not better) is not mentioned. America’s expansion took place before central banking and during the days of the gold standard (or bimetallism), and there fore if we go back to those days we will go back to economic expansion. Correlation does not equal causation, however. The nineteenth century expansion was caused by a wide-open frontier (the Homestead Act, land speculation), plentiful raw materials, and new technologies (telegraphs, railroads, electricity). Not to mention constant booms and busts occurred during that time ruining millions of people and plunging them into desperate poverty much worse than today. All of this is ignored by Libertarians.
Finally, there is a general anti-centralization, anti-government vibe in much of the movement that was amenable to the anti-government message of libertarianism. But the anti-government message of libertarianism has always been self-serving. It’s all about eliminating the regulations that hold back and restrict the power of the wealthy while maintaining and strengthening the powers of the wealth and corporations. The people who sign onto that agenda are “useful idiots” for the plutocrats. Many peak oil commentators (Kunstler specially) are openly nostalgic for the Horatio Alger days of nineteenth century America and believe that they can magically be recreated by shrinking the government. Peak Oil feeds into this nostalgia and distorts their views, causing them to embrace this libertarian idealization of the Robber Baron era.
But by embracing these fringe economic ideologies, hasn’t the peak oil movement done tremendous damage to their credibility? By throwing their lot in with these obscure schools of economics and constantly predicting things that haven’t happened (derp), the Peak Oil movement risks undermining the message of very real and imminent dangers of Peak Oil that threaten our civilization and our economy. It doesn’t help matters when people like Kunstler consistently predict a stock market collapse and that all 315+ million Americans will become dirt farmers staring at the backside of a horse all day and living like Amish in the next twenty years when the U.S. oil output is a actually increasing. Yes, its is temporary and these are wells that will deplete very quickly, but rather than examine the implications of that, he just doubles down on his earlier predictions.
And that leads me to another rant. Why is Ron Paul-style Libertarianism portrayed the only possible option for those opposed to the drug war and military industrial complex? This article got quite a bit of attention recently: Has the ‘Libertarian Moment’ Finally Arrived? (New York Times)
Libertarians, who long have relished their role as acerbic sideline critics of American political theater, now find themselves and their movement thrust into the middle of it. For decades their ideas have had serious backing financially (most prominently by the Koch brothers, one of whom, David H., ran as vice president on the 1980 Libertarian Party ticket), intellectually (by way of policy shops like the Cato Institute and C.E.I.) and in the media (through platforms like Reason and, as of last year, “The Independents”). But today, for perhaps the first time, the libertarian movement appears to have genuine political momentum on its side. An estimated 54 percent of Americans now favor extending marriage rights to gay couples. Decriminalizing marijuana has become a mainstream position, while the drive to reduce sentences for minor drug offenders has led to the wondrous spectacle of Rick Perry — the governor of Texas, where more inmates are executed than in any other state — telling a Washington audience: “You want to talk about real conservative governance? Shut prisons down. Save that money.” The appetite for foreign intervention is at low ebb, with calls by Republicans to rein in federal profligacy now increasingly extending to the once-sacrosanct military budget. And deep concern over government surveillance looms as one of the few bipartisan sentiments in Washington, which is somewhat unanticipated given that the surveiller in chief, the former constitutional-law professor Barack Obama, had been described in a 2008 Times Op-Ed by the legal commentator Jeffrey Rosen as potentially “our first president who is a civil libertarian.”
So, according to the article, the reasons for the “Libertarian moment” are:
1.) Opposition to the failed drug war.
2.) Opposition to the military-industrial complex and persistent foreign wars.
3.) Opposition to the prison-industrial complex
4.) Support for gay marriage.
5.) Decriminalizing victimless crimes like drug use, prostitution, and abortion.
6.) Opposition to the banking and corporate bailouts (not mentioned, but also true)
How did these views become associated with the right-wing? It’s a stunning piece of co-opting. In the 1960’s the people protesting the war and dropping acid weren’t right-wing libertarians, they were left-wing hippies. Many were even Marxists! In fact, the left has always supported every single one of the above points. Yet we’re not told the country is moving to the left, or having a “Marxist moment,” instead it’s a “libertarian moment.” And then we’re given all this evidence that Libertarianism is “young,” “hip,” and “cool.” Gee, why is that?
Meanwhile, the age group most responsible for delivering Obama his two terms may well become a political wild card over time, in large part because of its libertarian leanings. Raised on the ad hoc communalism of the Internet, disenchanted by the Iraq War, reflexively tolerant of other lifestyles, appalled by government intrusion into their private affairs and increasingly convinced that the Obama economy is rigged against them, the millennials can no longer be regarded as faithful Democrats — and a recent poll confirmed that fully half of voters between ages 18 and 29 are unwedded to either party. Obama has profoundly disappointed many of these voters by shying away from marijuana decriminalization, by leading from behind on same-sex marriage, by trumping the Bush administration on illegal-immigrant deportations and by expanding Bush’s N.S.A. surveillance program. As one 30-year-old libertarian senior staff member on the Hill told me: “I think we expected this sort of thing from Bush. But Obama seemed to be hip and in touch with my generation, and then he goes and reads our emails.”
How did the left become associated with big, oppressive government? When did it become associated with absolute statism? Do people on the left support any of the above things? WTF? The (real) left has opposed these things forever! But there is not “leftist” or “socialist” moment. Socialism isn’t “young, hip and cool.” It doesn’t have fancy conferences and media personalities (generously funded by corporate elites as the article points out). Hmmm, I wonder why.
Moreover, if you oppose all of the above things (and I do), why must you also embrace the libertarian principles of no regulations for Wall Street, no unions, no worker protections, and no interference whatsoever in the “free” market? If you oppose the above, then apparently “Libertarianism” is your only option. Gee, isn’t that convenient that this anti-military, anti-drug war ideology also embraces eliminating all taxes and regulations on corporations and worker protections? Yet many who would consider themselves leftist have embraced this movement with open arms. As I remarked to KMO, the drug war has served as the best recruiting tool libertarians could ask for. But are libertarians the only people opposed to the drug war? I seem to recall that the people smoking joints in the sixties weren’t exactly right-wingers. What happened?
Here’s what I think – the corporate elites see the writing on the wall with the failure of the drug war, the authoritarianism of the religious right agenda, and the frustration with an out-of control military/police/incarceration complex. These ideas were associated with the left in the 1960’s, but a true leftist movement would threaten corporate power and extreme wealth inequality as well. What to do? The answer: Embrace these obscure right-wing libertarian doctrines of free market fundamentalism and heavily subsidize them to co-opt the left. Voila, you have Libertarianism! Because if the corporate elites can co-opt this social shift and channel into Libertarianism (which they can control), they can ride the social changes without any threat to their wealth and power. In fact, they can even expand it! And that’s exactly what they have done; wealth inequality is back to where it was before the Great Depression, and yet people are fighting for a smaller social safety net, less worker protections, less regulation for Wall Street, and lower taxes on the wealthy thanks to Libertarianism. Genius!
And that ties in to my first point. Because the right-wing libertarian ideas are heavily subsidized, I think a lot of the Peak Oil commentariat jumped onboard, not realizing they were secretly backing the power of the wealthy and corporations. And that’s too bad. Because if you care about the implications of peak oil, you can’t help but be saddened by this ongoing display of peak oil derp. If peak oil wants to be taken seriously (and it should), it needs to start dealing with the real world and real facts, and not embrace these ridiculous fringe ideologies and conspiracy theories.
24 Comments on "Peak Oil Derp"
Sugar Seam on Sat, 1st Nov 2014 10:48 am
wtf is this guy talking about? the vast majority of peak oil acknkwledgers i communicate with are strident progressives … there’s no ronpaul libertarian bent, besides maybe being against the drug war…. chryst, we’re almost ALL in favor of carbon tax!!
Northwest Resident on Sat, 1st Nov 2014 11:03 am
Pretty twisted reasoning in this article. And total non-facts asserted as facts. The writer seems to be trying to make the case that the “Peak Oil commentariat” has been co-opted by the elite and channeled into right-wing libertarianism? This writer must be basing his ideas on what he reads over at SHTF.com.
J-Gav on Sat, 1st Nov 2014 11:23 am
Calling the Austrian School “obscure” is pretty weird.
After all, that is where Hayek, Rothbard and Milton Friedman camped out, and has been the ideological backdrop of U.S. economic policy since Reaganomics!
Plantagenet on Sat, 1st Nov 2014 11:24 am
Peak Oil is not a political idea—its a scientific theory. Just as the theory of gravitational attraction explains why objects like Newton’s apple fall towards the center of the earth, M. King Hubbert’s peak oil theory explains how oil is consumed and depleted. Of course scientific laws have inevitable economic political consequences.
J-Gav on Sat, 1st Nov 2014 11:27 am
I’ll say it again – Over three decades of horse hooey, trickle-down nonsense don’t change the facts: the economy is a sub-system of both nature and human society … not the opposite.
Northwest Resident on Sat, 1st Nov 2014 11:38 am
J-Gav — That three decades of horse hooey has left us in deep shit, to say the least. The fact that they horse hooey pumping is about to come to an end should be a relief, except that the implications of what happens after that are pretty depressing to contemplate. But even more depressing is the fact that the only way we have continued to live as we have these last three decades has been compliments of all the horse hooey being dumped, without which, things would have been dramatically different today. We’ve been stretching that rubber band for thirty years now, trying to keep it all going in a desperate bid to escape the inevitable. Now that the rubber band has been stretched to its breaking point, it is just about time to face the inevitable — and THAT is going to be an entirely different pile of horse hooey to walk through.
penury on Sat, 1st Nov 2014 12:08 pm
I am afraid that I would have to echo NWRs opinions. When all data is collected and released by people whose position in life depends upon the pleasure of the people dependent on that data for wealth creation, then guess what? The data will always support their masters. However, we can lie, cheat and steal for a long,long time but the piper must be paid. I do not fear the gathering storm for myself, I have lived a great life but I fear my grandchildren will never experience the wonders which we today take for granted. I live in a relatively prosperous area, however over the past 6 years the decay of the infra-structure and the lack of upkeep on homes, businesses, or other needs of life in order to pursue the aquistion of toys has become readily apparent to anyone willing to look. The darkness is gathering for this country and increased spending on the MIC will not halt the decay it will only exacerbate
it. Perhaps I am wrong, I for one certainly hope so.
Joe Clarkson on Sat, 1st Nov 2014 12:10 pm
This author correctly wonders why Peak Oil commentators like Kunstler, Meijer/Foss, and Martenson are so hung up on management of the financial sector and debt by central banks and other government actors.
But I doubt that they have been co-opted by the Koch brothers. The Kochs, and others of their ilk, believe that if the government just disappeared, the economy would thrive and everyone would get their just rewards, however great or small that reward might be.
I think that most Peak Oilers (including the Peak Oil commentariat) know that nothing is going to prevent rapid economic contraction or even collapse. They believe the market economy and the financial sector to be highly complex and brittle aspects of complex civilizations which cannot help but shatter under the overwhelming pressure of resource depletion.
Krugman and other Keynesians are more right that the Austrians, but only so long as growth-oriented economies hold together. Peak Oilers know this and think that we should be preparing for the devastation that continuous recession will bring, rather than trying to keep BAU going on forever. I think this is the reason for their continuous skeptical commentary on frantic dead-horse-beating by Bernanke, Yellen and Draghi.
shortonoil on Sat, 1st Nov 2014 12:19 pm
“It doesn’t help matters when people like Kunstler consistently predict a stock market collapse and that all 315+ million Americans will become dirt farmers staring at the backside of a horse all day and living like Amish in the next twenty years when the U.S. oil output is a actually increasing.”
James has evidently got a lot more work to do. Here is another bird that thinks that glorified paint thinner, and moonshine is oil. We are now investing 3 barrels of Middle Eastern oil to get 2 barrels out of some North Dakota cow patch. Like my old granddad used to say, “there is no substitute for stupidity”.
As the end of the oil age draws ever closer expect more of this flavor of diversion. Anything that might disturb the status quo will be attacked vehemently. If they are smart enough to spell “cat” they’ll be dragged out to discredit all that still have some contact with reality. The PO community supports only one very discernible concept; that we live on a finite planet, with finite resources. Anyone who argues with that is an idiot; treat them as such.
bobinget on Sat, 1st Nov 2014 12:37 pm
War Economy Unrecognized..
The entire world’s oil supply hinges on exactly one million barrels p/d ‘surplus’. The US civilian sector
alone uses 19.3 million BB p/d at last count.
(the US military burns classified, unreported amounts)
It’s probable, the European Central Banks will follow Japan’s lead with stimulus. In which case that ‘extra’ million barrels will disappear faster then a fart in a swimming pool.
check out these graphs;
http://www.yardeni.com/pub/globdemsup.pdf
Reminder, the US is currently bombing Afghanistan,
Pakistan, Syria, Iraq, Sudan, Yemen, along with French, Mali. Doubtless several other countries we don’t know about.
Without airfield use of our great NATO Allie Turkey, US and coalition aircraft must refuel on the fly for the 1,500 mile RT.. IOW’s we are burning shitloads of jet fuel to protect Iraqi oil.
Plantagenet on Sat, 1st Nov 2014 1:04 pm
@Joe
Gosh….the Koch brothers sure are evil boogeymen. I’m shocked that the ACLU has accepted millions of dollars from the Koch brothers to fund ACLU legal challenges to the Patriot Act and other ACLU activities. I’m calling on the ACLU to promptly return the ca. 20 million dollars in dirty money they have received from the Koch Bros.
Dredd on Sat, 1st Nov 2014 1:14 pm
Once we figure out what planet we are on we can ask some questions.
How does it work?
Who has been here the longest on it?
What will be here when we are gone?
Perhaps we will then realize that left-right politics is just another insane fantasy in a plethora of dementia induced lip movements.
P.S. The Real Dangers With Microbes & Viruses
Davy on Sat, 1st Nov 2014 1:20 pm
I would call it the spell cast by BAU. This spell consists of what has been and the status quo blinding the view of an oncoming train of change. All the people and the “isms” this guy speaks about are from the paradigm of growth. The references to the psudo science of economics and the various apostles are growth gods. This blogger is another one of the endless denialist.
These folks cannot connect the dots to a possible end of modern industrial life. If it were not for peak oil it would be peak something. We definitely see peak population, peak ecosystems destruction, and peak high quality resources depletion among a few.
Here recently we have been touching on the near term dangers. These dangers are primarily financial, political, and liquid fuel related. We have direct, quantifiable, and scientific evidence of these problems as approaching predicaments. If one connect several diverse fields of study we get a picture of limits of growth with diminishing returns resulting in dangerous systematic instability.
We know the financial system is very shaky and increasingly unstable. We also have good evidence of a near term peaking of quality oil supply that is affordable to produce. The decline in the net energy oil offers society is the result of this peaking as Short has so well described. It is these predicaments that in a way are the Peak Everything Heinberg wrote about in his great book with that title.
We cannot use the academic thinking of yesterday to describe a “pole shift” from growth to descent. The scientific foundations of descent are profoundly different than growth systematically. This will especially be true of how our society reacts to these new effects. We as a people cannot react with the same logic we used in growth.
There are fundamental differences between growth and descent that are vital to embrace. One of those is there is no managing descent there is only mitigating the fall. Some issues are economic abandonment, dysfunctional networks, and systematic turbulence. These predicaments will be an awakening to a brave new world where paradoxes will be common and with normal logic being turned upside down.
Plantagenet on Sat, 1st Nov 2014 1:35 pm
I just don’t see all these new paradigms in the global political setting. Russia led by a revanchist Putin? Thats no different then the expansionist USSR and expansionist Imperial Russia that existed for the last 500 years. Religious wars and religious fanatics in the middle east? Same thing—1400 years of Muhamadins screaming Allah Akhbar have waged war on the world. Nothing new there. Globalism and Empire? Look at the Roman Empire or the Spanish Empire of the 16th century. The only thing that is new is peak oil—since we live in the oil age, peak oil may really change things.
JuanP on Sat, 1st Nov 2014 1:38 pm
I lost my interest early on. That is one long whatever it is. Mental diarrhea?
Mike999 on Sat, 1st Nov 2014 2:17 pm
Since when have the people who believe in the concept of peak oil been linked to the Gold Nuts, and the Austerity fools?
Citation Needed.
How many times does it have to be said: When you’re at $100 a barrel oil, even $80, you’re at peak oil. High prices Drive a search for Alternative Fuels. Supply and Demand.
When you’ve drilled 2 miles below the Gulf of Mexico to get oil, you’re at Peak Oil. If you can’t grasp that concept, the search for oil in the most remote, hostile regions of the planet is Peak OIl, you need to get a GED.
rockman on Sat, 1st Nov 2014 2:18 pm
Juan – Me too so I jumped to the last thought: “If peak oil wants to be taken seriously…it needs to not embrace these…fringe ideologies…” And that left me very confused: I thought we peak oilers were fringe ideologists. At least that’s what some people here claim. LOL.
Frank on Sat, 1st Nov 2014 4:28 pm
good article!
i1 on Sat, 1st Nov 2014 6:25 pm
Hyper consumption fueled by cheap oil would be impossible under a gold standard. That is, the benefits of deflation would have been enjoyed by the commons, and they couldn’t have that.
Think of all the debt that will now go unpaid. Fiat currency is in fact a product of the fossil fuel age and will disappear with it.
Joe D on Sat, 1st Nov 2014 9:06 pm
“I’m calling on the ACLU to promptly return the ca. 20 million dollars in dirty money they have received from the Koch Bros.”
Did the Kochs ever give the ACLU $20 million? Probably not.
http://www.washingtonexaminer.com/did-the-kochs-ever-give-the-aclu-20-million-probably-not/article/2551030
Most online citations refer back to a February 2011 blog posting by the libertarian site Reason.com.
The posting, by then-Senior Editor Radley Balko, is titled “The Koch Brothers’ Right-Wing Conspiracy to Undermine the PATRIOT Act.” It was part of an online debate between Balko and liberal writer Jonathan Chait and meant to refute the claim that the Kochs only support Republicans and right-wing causes.
“That $20 million appears to be substantially more than the Kochs have contributed to all political candidates combined for at least the last 15 years,” Balko wrote. He did admit to some uncertainty on his sourcing though, noting that his information came “secondhand” and adding: “I’m waiting to hear back from the ACLU for confirmation.”
*****Three days later Balko wrote a follow-up post, conceding that his efforts to confirm the donation had been fruitless.*****
“Gosh….the Koch brothers sure are evil boogeymen”, they may not be “evil boogeymen” but they sure are a couple of right wing fanatics. Just like you Plantagenet!
wildbourgman on Sat, 1st Nov 2014 9:53 pm
I think it’s simple, people who understand that there has to some day be a peak when it comes to world oil production probably also have enough common sence to figure out that severe debasement of a currency and an ever growing national debt is not going to end well long term.
meld on Sun, 2nd Nov 2014 3:17 am
Lets face it, nobody know what the fuck is going on. All we are trying to do is sift through the lies, double think and half truths to find out why to the human eye the world is collapsing and yet according to government stats everything is just peachy. Either my eyes are lying or the governments are. I choose to believe my eyes, others refuse to accept that level of personal responsibility.
Davy on Sun, 2nd Nov 2014 8:07 am
Wild man, I like the simplicity of your statement. It is a simple sentence that explains the two issues surrounding the current predicament we are in. Personally I believe both to be the tipping point to our global system. I do not know the date of that tipping point nor the degree and duration of the fall but Like Meld says “I choose to believe my eyes”. I see storm clouds. I hear the thunder.
wildbourgman on Sun, 2nd Nov 2014 4:07 pm
Davy, I’m a peak oiler that also started as a right winger that that according to this author supposedly co-opted libertarian values, but in truth I think that’s truly just bull shit. I was a libertarian all the time and just didn’t know it.
I think that the author has it wrong and it’s actually the libertarians that are trying to take over the republican party today just as socialist took over the democratic party in the early 1900’s.