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You could probably do some simulations to see this was almost always going to be a losing strategy. Detailing the N order effects is good accounting, but the picture likely gets murkier the more you try to extrapolate N+1.
The separation between the cause and the effects are way less important than their polarity. High-order effects tend to be smaller, but they are also way more numerous, so things can cancel out or end-up resolved on either way.
https://www.law.uchicago.edu/sites/default/files/file/coase-...
Although, I am all for a data driven world but somehow it is my opinion that we have ended up with the worse of both as combined with the goodhart's law, this measurable thing just ends up somehow getting manipulated for short term gains over real long term damages.
As is your case in the example, the business will ruin the river for everyone having severe damage both culturally and I think financially as well given downstream effects of all people depending upon that river.
But the business has externalized the losses to the people and the people have externalized the responsibility of the river to the government and the government believes in absolute free capitalism! (or sometimes the businesses give the government some money in the pocket ie. corruption. "Cost of doing business" they said.)
Just because somebody tells us they are not lying does not mean they are not. But some people believe it because it makes them feel great again.
The idea that a chump who bankrupted a casino could outmaneuver the country that invented the term "checkmate" was always profoundly stupid... so of course, Trump's supporters lapped it up like antifreeze.
1: https://www.cbsnews.com/news/tony-schwartz-trumps-ghostwrite...
To me, the interesting part is that people used to believe it in the first place. Anything that I heard of the guy and his agenda 2025 or whatever it was called had some really weird points which America (and for what its worth, the world, who didn't have any say in the American election but is dragged into it as the prices of my gas station rise)
Was it the silos of internet in an ever-polarizing nation that created the perfect conditions for a trump-esque person to take political power?
I should read more American history but Reagan seems like a similar guy but the only difference seems to be the short-term vs long-term consequences in the damage of Reagan's trickle-onomics (note that Trump's damage is pretty irreparable as well)
$611 for 2x 5 gallon buckets just to do my garage.
First, some context. OPEC/OPEC+ generally set their production to meet demand and to keep oil prices stable. That means they aim for a floor and ceiling on oil prices. Every 3 months they meet and try and anticipate demand. Produce too much and the price is too low. This hurts revenue. Produce not enough and it creates political instabilities, both locally and abroad. It would in particular hurt security guarantees with the US that go back to FDR and King Faisal making an oil-for-security deal in 1945. Now, that doens't mean OPEC members can't and don't cheat. They can and do. But it is generally successful [1].
In January-February 2020 we had the start of the pandemic. A lot of people weren't paying attention or thought it could be contained. That was over by March 2020 and much of the world went into lockdown. A lot of travel just stopped. This had an immediate effect on the oil market. Nobody was buying. Nobody had places to store excess oil. Russia and Saudi Arabia got into an oil price war. And the futures price briefly went negative [2]. This technically was an extreme contango market [3].
So what did the Trump administration do? Well, in my estimation, they panicked. They feared this would be devastating to US oil producers. So then-president Trump went to MBS and cajoled him into getting OPEC to massively cut oil production [4][5]. How much? Initially by 9.7 million barrels per day and then going down over the next 2 years to 6.3 million. That's roughly 10% of global crude oil output.
When I say "panicked", because of the OPEC meetings every 3 months, this would've happened anyway. OPEC would've cut production. The market would've stabilized. Instead, Trump locked OPEC into a 2 year cut and essentially gave them permission to drive up oil prices. And that's exactly what happened. This deal maps pretty much exactly to the pandemic inflation spike.
And nobody talks about it. Republicans were keen to blame Biden. Democrats chose to blame "greedy" oil companies even though no amount of US production could replace what OPEC had cut. Biden even went to Riyadh to beg MBS to increase production and he refused [6]. And nobody talks about any of it.
That was 10%. The Hormuz closure is 15-20% and also impacts natural gas, helium, fertilizer and a bunch of other things not impacted by the OPEC deal. Oil is being kept at a futures price of ~$100/barrel by record withdrawals from strategic reserves. By early July, those strategic reserves will be empty and there'll be no way to inject oil back into the market other than reopening the Strait. And that will lag weeks because oil container ships move as fast as bicycles.
So think back to the pandemic. Shipping containers 6x'ed. Gas prices went way up. It impacted jet fuel and sea freight. All of that is coming in the next month or two and there's honestly little we can do about it now. If the Strait reopened today, these second and third order effects are already baked in.
This is now a structural repricing event and we're going to see crude oil and gas prices near current levels probably for years.
[1]: https://www.macrotrends.net/1369/crude-oil-price-history-cha...
[2]: https://www.congress.gov/crs_external_products/IN/PDF/IN1135...
[3]: https://www.investopedia.com/terms/c/contango.asp
[4]: https://www.reuters.com/article/economy/special-report-trump...
[5]: https://www.reuters.com/article/world/trump-touts-great-saud...
[6]: https://www.congress.gov/117/meeting/house/114185/documents/...
IIRC there’s also major long-term supply destruction happening, because wells have to be capped around the Persian Gulf since the tanks are full.
As the saying goes: “The voters know what they want, and they deserve to get it good and hard”