Economic Waste

Joe Doakes from Como Park emails:

When central planners dictate what Must be sold, what May be sold, and what Must Not be sold, entire industries are forced to retool the factories and establish new supply lines to comply with the latest dictate, regardless of whether it makes economic sense. And when dictates change, chaos ensues until industry catches up. This is entirely predictable but for some reason, always entirely unforeseen.

Think about the scramble to find bottled water and toilet paper when the lock down was announced. Remember why the lock down was extended – not enough ventilators – and why Covid death numbers are ridiculously inflated – not enough test kits to identify Covid so hospitals were told to count every death from respiratory distress as Covid – and now look at stockpile of ventilators nobody needs and thestockpile of vaccine that nobody wants. The dictates forced industry to scramble and now it’s all wasted.

For everyone but a small percentage of the public, President Trump was right: Covid is just a bad flu. The existence of the virus was not a hoax; using the virus to terrorize the public was the hoax. And it distorted the economy in ways we’re still trying to understand. Not just a stolen presidential election, we knew that right away. But how many people lost jobs that still haven’t come back? How many businesses were closed and still haven’t reopened. How much was invested in developing product lines that suddenly are no longer needed?

The slogan of the day changes as people catch onto the old one, but the scam is always the same. In order to transform society from a messy, buyer beware, capitalist system into a sensible, orderly, communist system, there must be an intervening period when citizens are taught the new way of thinking so they fit into the new society. It’s like taking a puppy to the dog park or a toddler to kindergarten so they can be ‘socialized’ to learn the rules of acceptable behavior. And there must be someone to set the rules, of course, lest the new world order degenerate into chaos from an overabundance of freedom.

Except nobody in the world can ever be smart enough to understand all the factors that go into a prosperous economy nor can they understand all the implications of a dictated change to the economy. The invisible hand continues to rule as long as people can figure out a way to let it. The only solution is to kill off enough citizens that the few remaining survivors are those who enthusiastically embrace the new order. And that takes a lot of killing, as Hitler, Stalin, Pol Pot, and Mao can attest. Lesko Brandon hasn’t started killing his own citizens directly, yet, but he’s on the same path as his intellectual guides. And that’s not a good thing.

Joe Doakes

People say Biden is nothing but a second term for Barack Obama. I disagree. Obama was a third term for Woodrow Wilson; Biden is the fourth.

48 thoughts on “Economic Waste

  1. Ran the Dept of Health’s numbers yesterday and calculated case fatality rate for Covid in Minnesota was 0.9%. That accepts the inflated number of deaths with Covid (as opposed to by Covid). The lockdown/masking Karens would have us believe the reduction from much higher CFR predicted two years ago was due to their efforts. Nonsense. The virus swept away many elderly and those with pre-existing conditions that we aren’t supposed to talk about because it’s racist, ageist, fat-shaming and so forth to point it out. Remember the models predicting 40,000 deaths by autumn 2020 even with mitigation? The mass cold storage morgue? Down the memory hole. Winston Churchill would not be saying “this was their finest hour.”

  2. It’s gotten so every time I see some chud wearing a maskie, I want to do them a favor and punch them in the nose, so it actually does something (soak up blood).

    The only people who gained anything from wearing a maskie are blacks, who’ve successfully pulled off uncounted crimes because they all wear them.

    And it’s actually a wasted effort anyway since the media wouldn’t identify them *before* the Dempanic.

  3. Blade;
    I would add that AntiFa thugs and the FBI operatives that coerced the Michigan kidnappers and January 6 insurreckshun to cause trouble, also benefited from masking.

  4. That is correct BH. Although antiFags were masking up well before the Dempanic, having thousands of other witless chuds wearing masks helped them blend into the low IQ community.

    The CIA don’t care ine way or the other. If you get caught, they’ll just disappear your ass.

  5. “There are only three business strategies,” the business professor intoned, “you can sell on cost, quality or uniqueness – and that’s it.”

    A guy, who looked a lot like Rodney Dangerfield, called out from the back of the room, “You’re wrong, there are four strategies.”

    “Well then, sir,” the professor said with not a little disgust, “enlighten us.”

    “Get the government to make people buy your stuff.”

    After a stunned silence, the professor nodded in agreement.

  6. Obama was a third term for Woodrow Wilson; Biden is the fourth

    Interesting. And that brought to mind the apparent similarity between the unelected regimes of Edith Wilson and (Doctor!) Jill Biden.

  7. Over the last year, China has only succeeded in holding a giant beach ball under the water. There is no way out of periodic, draconian lockdowns other than vaccinate the population as well as possible, buttress hospital capacity, and accept zero covid is impossible. Nearly every single Chinese will get COVID-19 eventually.

  8. I was lucky enough to take two semesters of economics in the mid 1990s. Lucky because at that point, thanks to what was revealed by the collapse of the USSR, and the CCP’s abandonment of marxism, economics textbooks were free from praise of command economies. Textbooks also were not woke in the 1990s.
    Market economies produce more wealth than command economies. The mechanism is well known, it is axiomatic that a person will not voluntarily pay for a thing if the cost of that thing is greater than the person values it at. The problem with a command economy is that the value of a thing is determined by a small group of people who do not share the values of the people who produce and consume that thing.
    It isn’t taught much these days, but from the 1950s until as late as 1990, the CIA greatly overestimated the growth rate of the Soviet economy, often placing it the same as or greater than the economic growth of the US.
    Economic growth is not the greatest good, but it is essential for human flourishing. We have forgotten that in recent decades.
    I am surprised by the number of people who call themselves conservatives who support the abomination called a “carbon tax.” This is central planning in a command economy. The idea that the same group of talentless dweebs who become representatives and senators better know the value of a tank of gasoline or LNG than the people who produce and consume them is ridiculous on its face.

  9. Except nobody in the world can ever be smart enough to understand all the factors that go into a prosperous economy nor can they understand all the implications of a dictated change to the economy.

    JD, are you suggesting that smart enough climanazis should requalify as economists because they got every… climate… fact… right? Just ask them!

  10. The only solution is to kill off enough citizens

    All Globalists are Malthusians. All that is happening is financed by them and is their plan. Just wait 6 months and you will see that this conspiracy will also turn out to be reality. Just like everything else. But by then, will enough of us remain to care?

  11. Covid panic porn from March, 2020: https://www.kare11.com/article/news/health/coronavirus/what-data-did-gov-walz-use-to-predict-the-coronavirus-effect-on-mn/89-0d967d35-bdee-412c-b1e6-b38a437b711d
    Don’t forget that Walz, working on models developed by a couple of grad students at UM, predicted 70,000 Minnesotans dead from covid by June 2020, regardless of mitigation measures, and that number is what he based his dictatorial rule on.
    He was wrong. He listened to the wrong people, probably because they told him that only Wise King Walz could save the state.

    BTW, I got this from the NY Times daily newsletter this morning: Until recently, Hong Kong — like mainland China — had been largely successful in keeping out the virus, which meant that vaccine skepticism did not bring large costs.

    Keep the virus out from where?

  12. In my county in NW Wisconsin, population ~ 45,000, there are, today, 12 active cases of covid with one person hospitalized for covid-related illness. Wisconsin DHS calls this caseload “High.”

  13. “Over the last year, China has only succeeded in holding a giant beach ball under the water. There is no way out of periodic, draconian lockdowns other than vaccinate the population as well as possible, buttress hospital capacity, and accept zero covid is impossible. Nearly every single Chinese will get COVID-19 eventually.”

    Close. Let me help you there . . .

    “Over the last TWO years, AMERICA has only succeeded in holding a giant beach ball under the water. There is no point to periodic, draconian lockdowns. Buttress hospital capacity and accept zero Covid is impossible. Nearly every single AMERICAN will get COVID-19 eventually.”

    In other words, The Great Barrington Declaration was correct and Liberals have been wrong all along (if they were simply morons), or intentionally lying all along (if they were nefarious). Glad we agree.

  14. Under the heading “bolster hospital beds,” we find this:

    https://www.house.leg.state.mn.us/comm/docs/radytZw7G0eLVa6Qe_SiGA.pdf

    Minnesota has had a moratorium on adding hospital beds since 1984. The legislature wouldn’t let hospitals add more beds because that would encourage hospital administrators to fill those beds with welfare patients and send the bill to the state. Now, to add a hospital bed, there’s a long administrative process to prove the additional beds are in ‘the public interest’ which takes years and is only occasionally successful. Add the fact that St. Joseph’s and Bethesda closed, which took 500 beds off the market, and we have a hospital bed shortgage during a pandemic.

    This is entirely the fault of the same smarter-than-you social engineers who believe they can dictate how society should operate, the ones who created the ventilator shortage/surplus, mask shortage/surplus, vaccine shortage/surplus that I noted in my main post above. Oh, and just for the record, they tend to belong to one political party, the dominant political party in Minnesota, the same one whose governor suspended the Constitution to lock down the state.

  15. BTW — Oil is now down in the mid $90’s…

    “Scott Sheffield, chief executive of Pioneer Natural Resources, the shale patch’s biggest oil producer, said in an interview that his shareholders wouldn’t let him spend more [on increased production]. Were any of them willing to budge at $120 crude? “None. Not at all,” he said.”

    /We caught up with most of our large-cap E&Ps [exploration and production companies] in recent days and heard a consistent message that there is no appetite to ramp up production in response to bans/sanctions on Russian oil imports . . . companies and shareholders alike are wary of jeopardising the low-growth, FCF/cash return value proposition that’s taken years to materialise and is finally resonating with investors./
    https://www.ft.com/content/1861fcaa-c00f-48b5-8012-f0d2f32b6a08

  16. ^ I’d think I’d like to see some jail time along with the apologies.

    I disagree. Tar and feather is more appropriate.

  17. Woolly wrote: “I was lucky enough to take two semesters of economics in the mid 1990s.”

    Care to give us your “two semesters of economics” hot take regarding why oil exploration and production companies refuse to increase production — despite higher oil prices??

  18. ^ Since you’re so smart, I’d like you to explain what this means.
    companies and shareholders alike are wary of jeopardising the low-growth, FCF/cash return value proposition that’s taken years to materialise and is finally resonating with investors

    It seems significant because it was part of your gotcha! in not just one, but two threads, so this should be easy for you.

  19. Having two semesters of economics means econ 101 & 102, micro and macro economics.
    That doesn’t give you any particular insight on economics other than knowing the outline of thought on economics. It does not enable you to replace or calculate market forces other than in a general sense, and it keeps you from making ridiculous claims about how economics work.
    But combined with other coursework in literature and history it allowed me to come to the conclusion that great mischief is done by macro economists because macro economics provides the illusion that you are dealing with certainties, the economic equivalent of the laws of physics, while in fact macroeconomics is just the aggregation of micro economic choices made about value by individuals.
    The phillips curve, for example, was thought to show that inflation and unemployment would always have an inverse relationship. Until in the 1970s they didn’t.

  20. ^ Of course — it’s Biden’s fault. 😂
    Would it not be more reasonable to harvest the proven reserves at premium prices and then distribute the cash to shareholders?

    /American oil companies would rather make more money than produce more oil. At least that is what they are saying and, so far, doing. This is the central plank of a bull case on oil prices (and therefore US oil producers). The other big planks would be:
    • Oil is a hedge against inflation.
    • Oil companies are in all the value indices. If we are in the middle of a growth-to-value rotation, oil groups will benefit.
    • The nightmare in Ukraine is nowhere near over, and the shocks to the oil market will keep rolling in, making stable supply from US majors more valuable./

  21. Seriously, E, I cannot imagine why you are sitting in a cabin in the wilderness writing screeds like the Unibomber. With your insights into how the petroleum business ought to be run, you should be raking in millions. You could buy your own island. Why don’t you cash in on your expertise while simultaneously doing a great favor for the rest of the nation by lowering gas prices?

    Do it for the children.

  22. ^ (fwiw) I like Vanguard Index Funds and dividend stocks. I’m retired—my exposure to the market is minimal. I’m waiting for capitulation before I return to the market.

    @jdm — There’s a huge difference within the oil sector between companies which generate their free cash flow from shale operations and those that get their free cash flow from deepwater or conventional production sources.

    Exxon investors can look at its production offshore Guyana, for instance, and be confident that in five to ten years those massive fields will still be producing without much incremental investment required. And even if Exxon wanted to ramp up production in deepwater, the lead time is three to five years to find the new reservoir, then get permits, build and commission the necessary facilities.

    On the other hand, as we saw in 2016, shale oil production can be “switched on and off” much more aggressively. Occidental and EOG and Pioneer’s shale operations would grind to a halt in two years without massive incremental spending on new fracking anyway, and they have much more instant control over the quantities of oil they produce (add rigs, get new oil within months) and the cash they return to shareholders.

  23. American oil companies would rather make more money than produce more oil

    But if oil prices are high, don’t they make more money producing oil then? I mean, why are oil producers wary?

  24. This is pretty subtle… I like Vanguard Index Funds and dividend stocks. I’m retired—my exposure to the market is minimal. I’m waiting for capitulation before I return to the market

    So, you’re in the market – and being in Vanguard Index Funds, not to mention dividend stocks, you’re by definition in *everything* – but you’re not in the market. How does that work?

  25. My past employer had Vanguard funds available for the 401K plan. I shifted to Vanguard’s money market fund (settlement fund) to hold the monies after getting out in December 2021. I am able to shift back into VINIX at a time of my choosing. There’s so much bad news out there — I don’t know who is still left holding stocks that they still need to sell, but that’s what “capitulation” is — an “I give up” selling frenzy that usually marks at least a short-term low.

  26. ^^Only a fool would listen to financial advice from a person who believes the Mueller provided proof that Trump colluded with Putin to steal the 2016 election from Hillary, and who was dead certain that Brexit would not pass.
    If you think that you can use your deep knowledge of how politics affects the economy to make money by timing the market, you are competing with tens of thousands of professionals doing the same thing who are better educated than you are, and who have chosen a career that rewards them for their successes and punishes them for their failures, people who spend their every waking moment thinking about how to improve their ROI by a tenth of a point.
    The number one red flag that alerts the SEC that an investment firm is doing something illegal is if its ROI consistently exceeds the market ROI. That’s how they caught Bernie Madoff.

  27. One of the things that hinders investment in a thing, like oil production, is uncertainty. We now live in a world where unelected health officials can shut down an economy without input from stakeholders. That creates a lot of uncertainty. The experts say that the recent draw back in oil prices is the result of uncertainty about how China will react to the latest increase in Chinese covid cases.

  28. MP, pullback started right before news about WF v2.0. Price went down because it was a war premium and everyone moved on… to WF v2.0. Expect prices to fall even further and Jughead to take credit for it. I am also amazed at statements by the logic-challenged, ie moronic, libturds that Big Oil is all about money and not production – because if they could produce more at current prices they would be lighting their fat cigars with $1000 bills and giving massive returns to their investors while keeping crude supplies from running out. Like I said, brain-lacking morons.

  29. Right — I only needed the discipline to contribute to an S&P institutional fund managed by Vanguard as well as my Roth (VIAFX). Vanguard VINIX was up nearly 30% the last several years — didn’t take any effort on my part aside from automatic contributions. Easy peasy..

  30. I repeat, But if oil prices are high, don’t they make more money producing oil then? I mean, why are oil producers wary?

  31. But I have to ask? Are you admitting that you do not understand energy markets very well and do not understand economic innovation at all?

  32. ^ It’s rhetorically clever of you to take this approach when you don’t know what you’re talking about. I was just asking questions about the topics you expounded on. If you can’t answer my questions nor explain what you asserted, it’s no concern of mine.

    Oh, and by the way, you *do* know that you’re losing money having all your funds in a money market fund, yes?

  33. I don’t know what that number is because it’s not identified. As far as I can see the SP500 is down 8% YTD, DJI is down 8.3%. But sure, if you go with whatever Vanguard gives you to chew on, you might have to limit your losses somehow. That’s fair.

    So, you can’t or won’t answer my questions about energy markets. Got it.

  34. jdm wrote: “ But if oil prices are high, don’t they make more money producing oil then? I mean, why are oil producers wary?”

    One could make the argument — why should a major oil company invest long term capital to produce more oil when the stated objective of the Biden administration is to transition them out of business. And how does one price the that risk?

  35. Biden hasn’t shut the petroleum industry down but has actually encouraged them to invest and pump more. And it’s got nothing to do with the XL pipeline moving non-US oil across the country to go onto tankers and then go overseas, that wouldn’t have even been completed for another year. The high gas prices have to do with oil company decisions and that’s basically all.

  36. Economic observations from the guy who predicted economic disaster when Trump won in 2016, and so missed out on the longest, biggest bull market of the 21st century.
    You can look at a graph of gas price versus time and the “Biden effect” is undeniable:
    The current spike in gas prices began literally on the day Biden was declared the winner of the 2020 election:
    https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m

    People aren’t as stupid as Biden and Emery want them to be.

  37. It’s hilarious — and sad at the same time — to see the people that play politics no matter how dire the situation. They conveniently ignore the fact that, even if the US wanted to ‘drill, baby, drill’, we cannot ramp up drilling quickly. The shale guys are telling everyone that will listen that there are massive shortages of trained labor, drilling equipment (rigs, etc.) as well as sand, etc. Not to mention that Wall Street is still giving a thumbs down on any expansion of capital expenditures by shale firms. Any ramp-up would take at least 18 months.

  38. Emery is apparently simultaneously unable to interpret an ordinary time-series graph and an expert on what causes the price of gas to rise and fall over time.

  39. What do the experts have to say about gas prices in 2022?
    Back in January, the EIA said “EIA expects gasoline and diesel prices to fall in 2022 and 2023 as demand growth slows”
    https://www.eia.gov/todayinenergy/detail.php?id=50878#
    The accompanying graph shows that the price of a gallon of gas in March, 2022, is $3.10/gallon, so we are all good, right? The experts are never wrong, are they?
    BTW, the EIA graph shows the same mysterious inexorable rise in the price of gas that began when Slow Joe was declared the winner of the 2020 election.
    You can believe Emery’s gaslighting blather or your lying eyes.

  40. Barrel of oil
    Week ago: $128
    Now: $96

    Gallon of gas
    Week ago: $4.17
    Now: $4.32

    Oil company profits are at 7-year highs, they get $180 billion a year in government subsidies and they’re issuing $88 billion in buybacks/dividends this year.

    Do the math.

  41. MP, you silly goose! empty tanks and scarcity of supply do not figure into gasoline price equation, dontchaknow? Only variables that fit the narrative are. It is a linear, single variable relationship, just like the climate model, you silly mallard!

  42. In the 10 years before Covid-19, producers over supplied and prices were low. Oil production went into a slumber with Covid-19, they’ve not returned to pre-Covid-19 levels, and prices are high.

    They’re blaming Biden and taking your money, betting that you’d rather blame Biden then pay a lower price.

    It’s worked perfectly.

  43. Every thing that Emery says about the price of oil & gas is spoken from ignorance. crude oil is now the same price it was back on Feb. 24, which was two times as much as it was the day before Biden was declared the winner of the 2020 election.
    https://tradingeconomics.com/commodity/crude-oil
    The price of oil is largely determined not by spot price, but by the price it is anticipated to be in the future, that is, whether oil will be plentiful or scarce in the future.
    I am going to have to be very obvious here, so the chucklehead may — just may — be enlightened.
    The price of gasoline is strongly linked to the price of crude oil. The price of crude is dependent on four factors: supply, demand from current inventory, and futures demand. Obviously, the spike in oil prices we have experienced this month are not due to supply and inventory demand. Two weeks is not a long period to alter those. The spike was the result of uncertainty about interruptions in future oil supply.
    That is why it reveals pitiful ignorance in people who claim that a perceived reduction or increase in the future supply of oil does not affect today’s price at the pump .
    If you don’t believe me, believe the fed: https://www.stlouisfed.org/publications/regional-economist/april-2012/when-oil-prices-jump-is-speculation-to-blame
    Now correlation is not causation, but given candidate Biden’s hostility to American fossil fuel production, and given his cancellation of the XL pipeline, literally at the first moment it was in his power to do so, has clearly sent a strong message about the future supply of oil to gasoline producers and consumers in the US. Today politico reports that the House Democrat Progressive caucus, with over a hundred members, is going to demand that Biden declare a climate emergency and use his vasty power to cancel all federal oil leases, along with student loan debt, for some reason. The demand will not be acted upon — it would doom more democrats in the mid terms if it were — but it will have the intended effect of warning Biden that any attempt to increase US oil production will be met with resistance from within his won party.

  44. And when in the last few thousand years were markets not speculative? The spot price has risen 15% in a single day. But actual global oil consumption has not. Nowhere near.

    It’s to do with something that Lewis Carroll wrote In Through the Looking Glass, called the Red Queen race. Oil production is not constant and each well’s productivity declines by about 4% per year in conventional wells to around 20% per year in shale wells. So in order to just keep production constant, a number of new wells have to be drilled each year to replace the decline from current wells. But, naturally, the most productive wells get drilled first in any lease so we see the law of diminishing returns apply as we drill replacement wells. In other words “it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”. On top of this, due to the low pricing of the commodity over the last 5 years, the capital investment required to replace declining production has fallen short too. In other words, we simply stopped running completely. And the market is simply pricing in the inelasticity of the above.

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