Cycles of Optimism and Pessimism

BigTex · Posted: Sun Mar 23, 2008 10:39 pm Post subject: Cycles of Optimism and Pessimism

I think what is so unsettling about what's going on right now to people who are peak oil aware is that there are two distinct types of pessimism unfolding.

The first type of pessimism is the normal group pessimism that rolls around every seven years or so and makes everyone decide to stop spending for 12-18 months and just feel a lot less optimistic for a while. This malaise wears off after a while, and it's happy days again and the economy takes off. This is the paradigm that most people relate to.

The second type of pessimism is the belief that the future will be very challenging because the end of cheap oil will replace a tailwind with a headwind, and everything about economic life will get harder. The cumulative effects of fossil fuel use on the environment will also create many problems. That's peak oil.

What's vexing to a lot of people right now (myself included) is that it's hard to tell if:

1. we are in the early stages of the bleak peak oil future we all fear, or

2. we are in a normal downturn in the business cycle and the pessimism we are feeling just the normal cyclical gloominess that will lift in 12-18 months, or

3. we are feeling some combination of the two.

I think that what is likely to happen is that we will emerge from this recession in the normal 12-18 month timeframe, but I think people will be surprised to find that the resulting growth is less robust than the prior expansion because fuel prices will remain stubbornly high going forward.

What's strange at this moment, though, is that for the first time in a long time the peak oil crowd is feeling a society-wide collective sense of discomfort, uncertainty and fear that makes the peak oil minded person think "this must be it", when the rest of society is actually just feeling the CYCLICAL pessimism of the business cycle, not the end times pessimism of the peak oiler. So, to a degree, this broad gloom we are feeling right now may just be a head fake to the people who are peak oil-aware and who think that the rest of the world is finally starting to catch on that there are some BIG problems on the horizon. That may not be happening at all.

It's a weird time.
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canis_lupus

I try not to have that "sailed-off-the-edge-of-the-world" feeling when I do my addition. Here's how I add it up:

1. oil: grab any production / price per barrel / price per gallon chart from TOD. It is pretty evident that oil prices have never done what they are doing short of OPEC intentionally doing it to us. I can rationalize the price increase away (somewhat) but the glaring factor is we're $40 above what Katrina did to oil prices.

2. Financial markets. 'nuff said.

3. The cost of food - which, if oil crashes, may or may not crash depending on how much ethanol we keep making.

4. Population boom

5. water shortages

Any of the above taken by itself is a brow-wrinking cause for concern. Take two together and my doomer meter starts twitching. Add them all up and I just don't see a way out.

Earlier this century I was approached to do some design work for a presentation a guy had to give to one of the intelligence services. He couldn't tell me what was in the presentation which made it hard to bid on (I didn't do the project). He was a statistician and made an interesting observation:

We have reams of data on one-car crashes on wet roads. They happen every day and the Department of Transportation can tell us all we need to know about the conditions that caused the crash. But how do you predict and plan for things that have never happened before? He used the example of a warhead going off in a silo. He said we can plan as best we can for the things we think will happen, but it's always the things we don't know that cause the most pain. He said one failure can be planned for. Two simultaneous failures compound the probability of disaster and three or more can't be planned for at all.

So, I'm picking Peak Oil and the crash of the financial markets because preparation for the two are pretty similar. If my plan B runs out of water because of climate change, I'm hosed.

I wish my dad were still alive so I could have a beer with him and ask what he thought it'd be like nowadays and what it was like in 73' -'73 and '79.

BigTex

Ferretlover

Oh, good! I thought it was just me!
Have you noticed in the last couple of weeks, the threads seem to bounce between "Oh, my god, everything is starting to fall apart," and giddiness bordering on hysteria?
I think I mentioned this elsewhere (and, if I didn't, I meant to!) that somedays it is difficult to have a split personality-knowing and learning more about what is happening and knowing that there's no good way to fix all the problems, but trying to live in an artificial world where everything is hunky-dory now and always will be....
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eastbay

BigTex, that was a really well written posting.

One factor causing the uptick in the doom around here is the ocean of uncertainties and doubts circling around us. There are more this time around led, for the first time, by the gruesome specter of oil and other basic resource depletion.

I too have a sense things will improve in an undulating fashion for a time, but there will never be another sweet economic expansion as we've enjoyed in the past due to the fundamental issue of resource depletion. Cheap and plentiful basic materials power economic expansion. Not money.

That's the big difference this time around. That's the cause for the nervousness.
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mos6507

BigTex

eastbay

Ferretlover

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Ferretlover

BigTex

Ferretlover

Pops

I agree that was a great OP, Tex.

Anyway, I have always been somewhat manic; either I have this great new idea that I obsess on or this great fear. Don't get me wrong, I use all those descriptions in a relative sense.

Way before I read all the stuff about PO, in fact way back I was somewhat of a doomer, while on the flip side I enjoyed learning and doing things for myself which was a little soothing.

Look back at the first posts here, the opinions were all over the map. Go back the The Limits to Growth or Silent Spring or the old testament for that matter.

The thing that does tie all those together is the fact that we each act on the belief those actions will have one certain outcome but they rarely do. We look at the actions of our neighbors, politicians, business people, etc and think the result will be such and such and they rarely are.

It seems it's the things we don't know that we don't know and can't foretell that make it all interesting.

Oh and btw, this isn't the Open so if anyone wants to just do the idle chatter/banter thing why not keep out there?
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