Blood rack, barbed wire
Politicians’ funeral pyre
Innocents raped with napalm fire
Twenty-first century schizoid man
King Crimson, “21st Century Schizoid Man”
You’ve all heard me rant about the “Straussian Two-Step,” which is nothing more than a retread of the Hegelian Dialectic.
Here’s the formal definition:
An interpretive method, originally used to relate specific entities or events to the absolute idea, in which some assertible proposition (thesis ) is necessarily opposed by an equally assertible and apparently contradictory proposition (antithesis ), the mutual contradiction being reconciled on a higher level of truth by a third proposition (synthesis ).
In modern politics it’s used to create a false reality by asserting something that is partially true (at best) or a truth that you yourself as a person in power created.
In today’s case it’s a manufactured energy crisis across the West.
In order to see the Straussian Two-Step however you have to work backwards. This process is not an a priori deduction or an exhaustive fit of investigative journalism.
Rather it is an inductive conclusion based on awareness of the motivations of those in power and seeing how they lead a mass of people to a pre-ordained conclusion. In other words, schizo-posting.
So, say your goal is to legitimize the state takeover, or advance another step forward the state takeover, of an industry. Let’s use oil and gas for today’s lesson.
The first thing you do is manufacture a crisis that will disrupt the supply of the product you want to takeover. In this case, it started with COVID-19, which disrupted far more than just the energy sector.
More than 2 million barrels per day of refining capacity was lost world wide thanks to COVID-19. Given the current hostility to new refineres (more on this later), those barrels are not coming back.
Don’t forget, that for a “Straussian Two-Step” this big you will have to brainwash and/or gaslight two entire generations into hating themselves for being rich, wasteful, spoiled, alive or worse, just plain white.
So, they are already primed to hate all the things at play here — capitalism, Big Oil, Banks, Old White Guys (rich or poor) — and enrage your useful idiots by pushing their already tenuous hold on reality to the literal breaking point.
“I can’t even….” isn’t the most common phrase uttered on Tik-Tok for nothing.
That’s the Thesis part.
So, when the crisis hits thanks to natural gas disruption you forbid buying of from a particular country…
— Hello, Vlad? We’re in a helluva pickle, would you mind invading Ukraine…? Nyet…? Well, we’ll see about that….— missing pages from the Return of Dr. Strangelove working script.
… you demonize not only Vlad but the industry itself for price gouging and preying on the widdle guy during a war.
There’s a word for this… chutzpah.
Predictably, you then allow your fake political opponents …
[enter Cocaine Mitch from Stage Right]
… to produce the opposite argument. In this case, the counter is obviously we need free markets to produce oil and gas. The refiners are just responding to the market.
That fake opposition, of course, also blames Vlad for this crisis to ensure the market’s champion looks not only patriotic but also suitably bought and paid for by Big Oil, Old White Guys, etc.
Both sides of this argument have now been framed 90 degrees away from the real source of the problem, government intrusion into the flow of oil and gas to your homes.
This is a crisis that if left solved to human ingenuity and, yes, the studious application of greed, would be over in a matter of weeks as refineries shut down during COVID would come back online, supply chains reorganized etc.
While the crisis phase would be over quickly, the long term investment cycle set off in refining would take longer to structurally immunize the industry against future supply shocks to accomplish.
And if you’re daft enough to believe government has any of that investment path mapped out on their whiteboards in their noble service to humanity, I can’t even…
If I could buy stock in psychoanalysis right now I’d be long AF.
Prices may not return to normal for years but the market, without intervention by rapacious morons both in government and running them from behind the curtain, would eventually grind the arbitrage out of the fuel industry nearly entirely.
Guess who wins there folks? That’s right you. But, again, you hate yourself for being, well, yourself.
Once the crisis is here and the rhetorical groundwork laid after months of repeating these lies about the cause of the crisis — PUTLER DID IT — it’s easy to move the conversation to where you really want it to go.
Remember the goal. Destroy free markets, nationalize oil and gas.
This means also preparing the next move to get rid of another aspect of the free market while zeroing in on the current crisis. In this theoretical case, we’re looking at the massive diesel crack spreads of refineries, fueling the perpetual motion machine of Marxism’s inherent envy.
Moreover, this situation exploded on the eve of a crucial election to put into the mouths of the crisis actors we call colloquially, “Members of Congress.”
Their solution? Put windfall profit taxes on refiners who are taking advantage of the vulnerable and needy common man. They are evil ‘price gougers’ by accepting the bids from the market for the fruits of their labors which occurred precisely because of artificially inducing a shock to the system.
In the case of diesel fuel in the US this is clearly a manufactured crisis. COVID took a lot of refineries in the Northeast (PADD-1) offline. And given the hostility of the Biden administration and environmentalists to the oil industry as a whole, as I alluded to earlier, those refineries are not coming back online anytime soon.
Don’t take my word for it, take it from the ones who own the refineries.
“Building a refinery is a multi-billion dollar investment. It may take a decade. We haven’t had a refinery built in the United States since the 1970s. My personal view is that there will never be another refinery built in the United States.”
According to Wirth, oil and gas companies would have to weigh the benefits of committing capital ten years out that will need decades to offer a return to shareholders “in a policy environment where governments around the world are saying ‘we don’t want these products to be used in the future’”.
Why would they? If it were your money would you begin the insane process to build an oil refinery in the US today even with crack spreads at $70+ per barrel? Of course not. By the time you filed the first Environmental Impact Assessment application form the spreads could be back to $20 because it’s politically advantageous for the “Straussian Two-Steppers” to take the pressure off for a few months.
Government is keeping the market in a supply/demand mismatch on purpose. That’s the only conclusion you can draw. Because if “Biden” wanted to solve this problem he wouldn’t be draining the SPR, he’d be rolling back regulations on refining oil or offering some of that ‘infrastructure money’ to help the industry rebuild post-COVID.
No matter how committed you are to saving the planet from Climate Change civilization is directly downstream of energy production.
If he wanted lower gas prices he wouldn’t be trying to expand subsidies to poor people, pandering for their votes, he’d be going to the negotiating table with Putler and working out a mutually unappetizing solution to everyone’s interests in Ukraine.
High Bid Wins the Prize
Diesel fuel demand is mostly inelastic, since it’s simply necessary for our daily life. Any supply disruption will cause massive price spikes because people will fall all over themselves bidding up the price of available supply to get what they can.
This is the one thing
morons leftists can’t wrap their head around. Producers aren’t withholding supply and ‘raising prices’ in an open market economy. That’s propaganda. The reality is that consumers bid up the price for everything in demand or withhold those bids when the cost/benefit isn’t in their favor.
There is no need to control this. The things under supply shock will flow to those who have the means to bid for them and producers get the signal there is money to be made increasing supply. It is this give and take that always alleviates shortages, unless they are not allowed to do so because ‘rules.’
As the late, great Gary North told us over and over again, “Everything’s for sale, high bid wins.” If you have anyone to blame for higher diesel crack spreads you need only look in a mirror. Because we could have spare refining capacity by now if it weren’t cost prohibitive, even at these prices, to bring the idle plants back on line.
Remember, everything’s for sale and high bid wins. Everyone does the cost/benefit analysis.
This is the dynamic at play when I use the term cost-push inflation. A supply shortage pushes the bids for basic goods up out of necessity and pouring money into the system through government handouts only accelerates this effect.
Low cost or free dollars flow to the things people need the most and that is the main source of our inflation today.
So, when you see the headlines full of scaremongering like the US only has 20 days of diesel fuel left, this undergirds the bids for limited supply. The futures markets are stripped of their power to coordinate supply over time and producers are stuck being demonized by low quality agitprop from the likes of AOC and Lizzie Slapaho.
Nationalization: The Next Two-Step
Windfall profit taxes are already on the way in Germany, 90% of all profits taxed away to the state. Energy production, when that bill passes, will be nationalized in Germany. The end of rational energy pricing will be gone.
Germany will become another energy subsidizing hellscape like we see all over the world.
The choice in front of German energy companies now is Uniper’s fate, nationalization through bailout, or remain ‘private’ but on a government-mandated cost-plus business model the profits from which will never outcompete the depreciation curve.
Today here in the US the Democrats are pushing for outright nationalization of all oil and gas production. That was the goal all along, the thesis. The fake antithesis is the “Drill baby, Drill,” crowd on Capitol Hill, crying crocodile tears over the loss of the Keystone XL pipeline for more than a decade.
The synthesis this time around will be finally getting through their long-sought after billionaire’s tax in the form of a windfall tax starting with evil Big Oil. Even if they don’t get it, it’s not like they don’t have other things on their to-do lists to get it done.
They are starting here again because they know no one will seriously consider outright nationalization (the next synthesis) unless there’s a war with Russia…
Join my Patreon if you aren’t schizo
Sorry, but nothing in the mirror is responsible for the mass corruption and manipulation of anything close to a free market along with the immoral, illegal destruction of the fake fiat money.
The system is so irreparably broken now that 1% own 99% of the nation’s wealth (and increasing). This includes crony capitalists along with the evil kleptocrats who have all sold their souls to the devil for power today.
Meanwhile “Boobus Americanus” smiles and remains smack dab enslaved to the hamster wheel while singing Lee Greenwood’s proud patriot anthem. How messed up can we be? I just shake my head and roll my eyes so far back I can see my brain.
#RootedInEvil #WrongOnEverything #DoNotConsent #DoNotSubmit
‘Crony capitalism’ is a contradiction in terms invented by those who hate capitalism.
The proper word is cronyism, capitalism is by definition private, cronyism is a corrupted mix of private and the power of representatives of the government. The more statism, the bigger the government, the more it invites cronyism.
Get your definitions straight: capitalism refers to pure private business.
Hi Tom, I enjoy your writings. Do you think the Democrats will actually be able to nationalize any energy companies? What is your opinion on the results of the Brazil election, and what do you think will happen to Petrobras?
Those are good questions. On nationalize:
1] Google a legal case called “Starr International Company Inc. v. United States”. Too many links to post here, but that is where the US is legally. It is a fascinating story, if you can get into it.
2] The other thing that might be worth looking at is the Attlee Government that came to power in the UK after the Second World War. Few will remember, but the rationing of basic provisions and fuel went on for six years after the war ended and was more severe. This is an emotional verses authoritative link, but you will get the idea:
How Attlee starved the British people
During the time Attlee nationalized almost every major industry in the UK… and the rationing covered up for the mistakes and made “planning the economy” much easier. If you ask me, this is a possible reason for the move against food (mysterious explosions in food processing plants and cuts to fertilizer production). If you get people to accept food rationing, then you can pretty much get them to accept any other type of rationing… and the amount of control you will have over non-self-sufficient individuals in the population will be immense.
3] And here is another jaw dropping fact that few know, I also was stunned to learn it:
BOJ is top-10 shareholder in 40% of Japan’s listed companies
Buying stocks directly was a way to prop up the Nikkei 225, which many investors appreciated, but in the end, guess who the majority shareholder is in most Japanese companies?
That is about as far as I have gotten in that direction and is too complicated for me to fully synthesize; cue Tom Luongo etal here.
Your analysis using the Hegelian Dialectic brings back to mind my long ago economic classes taught by Fr. Przygoda at Loyola and I remind you that the dialectic continues as one thesis destroys the preceding thesis until we arrive back where we began. Perhaps understand how Hegelian and Thomism were really just an extension of the natural laws that govern all human behavior. Just as we now know that Republics become democracies that soon become mobocrcaies and then feudalism in the form of what we call socialism
‘… to produce the opposite argument. In this case, the counter is obviously we need free markets to produce oil and gas. The refiners are just responding to the market.’
These argument, aside of the framing, are in themselves also only partially true. The industry which is dependent on gas and oil does not work like a consumers supply and demand logic. This is not the market of consumers easily being able to choose between supermarket a, or between energy supplier a and b. The industry wants scalability and long term security of availability, the latter in the form of very long term contracts. With energy delivery comes along an expensive infrastructure, technology and know how, which if it has to adapted requires a great amount of investments, know how, and time. Even the technology of industries is adopted and optimally calibrated for a certain type of oil (Russian oil for instance).
In short, industries do not, and can not ‘shop’ in this respect like consumers can.
What is also evident in de talk about ‘dependency’ on Russian oil and gas, is that this is the jargon of militantism and protectionism. Even the smallest items such people have on their desk, is the product of dependency on the products of an international free market. The biggest things are dependent on the most smallest things.
So a politician in Holland (aren’t politicians the most ignorant of people) talked about being fully energy independent in terms of using the Dutch gas fields, not realizing that the technology to get this gas out of the ground, transport it, and us it, is dependent on the products delivered by the international free market.
Awareness of all these dependencies should by now be a reason to not wage war and sabotage markets, to aim at good and cooperative relations with other countries, but these primitives are still stuck in the old militant protectionist model. But then again, the politicians are nowadays, after a century of democracy and dictatorship of the proletariat, representative of the ignorant electorate.
“As the late, great Gary North told us over and over again, “Everything’s for sale, high bid wins.”.”
This is the expression of an American, American culture being anti-culture, pornographic, in lack of class and style, brute. Before the US came to dominate the world, when they visited Europe, they shamefully adapted themselves, realizing that the rest of the world is not in need of their primitive brutalities. After US Americans came to dominate the world, they started to export their brutalisms bluntly.
To calculate someone’s ‘net worth’ is also typically a product of the US, another product of absence of class, style and any refinement. North was also a typical US type of old testament Christian by the way, with rather brute views. A sorry contribution to the Mises institute.
North is also a product of Christian ‘evolution’, if the word evolution can be applied. Where the Christians of the first centuries, before power co-opted Christianity, were socialist agitators, the US Christians became capitalists of the raw type, as fanatically dogmatic as the socialist proletarian agitators of the first centuries, but with views a hundred percent in opposition. North is the story of what happens when proletarians become capitalists…
True Christians are and never were Socialists. Socialism depends on theft to function. Theft is deemed wrong in most religions including Christianity. In fact, ‘thou shall not steal” is one of the ten commandments and deemed a sin.
“The first thing you do is manufacture a crisis that will disrupt the supply of the product you want to takeover.”
There’s no need to manufacture any crisis in order to disrupt the supply of a raw material that is, by its own nature, in limited supply, because it isn’t renewable.
Or, if you want to look at it this way, when you are talking about those in power you are referring to “people” such as the Second Law of Thermodynamics, Mother Earth, maybe throw in some basic theorems of calculus if you want to discuss things like possible peaks of production of oil and gas… I think you get my drift. Those in power are the sort of guys that if they would like their dicks sucked, you absolutely kneel down and suck up like your mum would.
Now, I think you are perhaps trying to make a wider point here, about why, if it’s so bleeding obvious that politicians are trying to legislate human laws against the laws of physics, nobody has stopped yet this sort of insanity. I suppose there are some very beautiful theological points that you are trying to clarify.
Why don’t you just take a short cut and just say: “Peak oil ain’t a theory, people, it’s the reality you’re living in right now”? Seems a lot simpler. Keep repeating till people start taking it seriously. Deal with any side effects afterwards.
I know everything can always be more complicated, but Occam’s razor often works.
Peak oil is Malthus . Malthus is always wrong. But you’re new here.
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