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Affluent Investor | June 23, 2017

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Debates and Uber and Frackers, Oh My!

Last week’s Republican Presidential debate was the highest rated in history, and was anything but “lacking in substance.” While the RNC and other establishment types want fewer of these events, they are utterly mistaken in that approach. Just as the sheer quantity of debates four years ago necessitated that the candidates get beyond soundbites and actually engage, the sheer numbers of people glued to their sets Thursday — for not one but two debates! — shows that Americans are hungry for just that.

The counter position is that exposing the candidates to greater scrutiny and forcing them to take strong positions makes them weaker in November.

Nonsense. More debates with more substance elevate the process: they include the American people, respect them, and give them a real say in their future. Don’t believe me? Ask yourself why the frontrunner changed repeatedly four years ago based on debate outcomes. And then ask yourself if the handful of wimpy, prepackaged “debates” in previous cycles could have — or ever did — accomplish anything.

Of course, the establishment wants predictable outcomes and “safe” nominees, and they certainly don’t want their chosen ones questioned by the rabble, much less forced to say something principled they can’t backtrack on later. Their wisdom has blessed us with such great two-term Presidents as Jerry Ford, Bob Dole, John McCain. Even Mitt Romney was doing great until he unilaterally disarmed in the final debate of 2012.

Ironically, over on RodMartin.org in a piece called “How to Beat Trump“, I show why this approach leaves the RINOs vulnerable to their worst nightmare.

Speaking of, Trump held his own pretty well, though his feud with Megyn Kelly is foolish and off-message (it also plays right into her hands, as she fully intended). There were several winners and you can read about that elsewhere, but I would like to highlight Mike Huckabee’s Wilberforce moment, in which he may have redefined the legal and political debate over abortion forever. Few will have noticed. But that’s frequently how revolutions begin.

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On a completely different note, U.S. frackers have now officially nuked OPEC. Yes folks, it turns out that fracking is not unviable at sub-$60 oil: in fact, drilling costs are down 50%, with another 30% reduction expected. And while a lot of people are fretting about U.S. rig counts being down, what they’re missing is that U.S. production keeps going up: right now, it’s at a 43-year high.

To quote Ambrose Evans-Pritchard, “OPEC now faces a permanent headwind. Each rise in price will be capped by a surge in US output.” And that’s a problem, particularly for Saudi Arabia, which is burning through its currency reserves like a compulsive gambler playing craps. Their fiscal break-even price is $106 a barrel. Even if that number ever comes around again (and the Iran deal helps ensure that won’t happen), it will just ramp up the frackers even further.

This is what you call a death spiral.

But it’s the exact opposite for us. Before the fracking revolution, America was sending close to $800 billion (with a “b”) overseas every year just for oil. Increasingly, that can now stay home, creating jobs and cutting costs. All that money was funding Russian, Venezuelan and Arab foreign adventures: now they’re all reeling.

Just two Presidential elections ago — and for my entire lifetime before that — the talk was of “peak oil” and “limits to growth.” I said long before fracking that that was bunk. Such shortage as ever existed was always a matter of artificial restrictions and as-yet-uninvented technology. And new technology is always being invented.

Except as to fantasies like wind power and ethanol, the left always bets against technology and innovation. And they’re always wrong: just as there was no global famine killing off 4 billion people in the 1980s, just as there was no new Ice Age in the 1970s, there has been no $500 oil.

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Of course, the left’s war on innovation does not extend only to fracking. Hillary is now targeting Uber for death as well. The sharing economy doesn’t sit well with a carefully constructed semi-public monopoly taxi system, much less with hotel operators threatened by Airbnb and others. Unions are upset. So are big city machines and taxing authorities.

Hillary deems what everyone else considers wonderful “theft.” And the left must always require what it likes and ban what it hates. This is called “tolerance.” It’s also the death of innovation. Perhaps it’s time for the ardent Democrat funders in Silicon Valley to wake up.

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Speaking of death, albeit on a completely different note, I wrote a piece recently called “McDonald’s: On the Brink of Death?” in which I address the question of whether the rumors of their demise might be a tad overstated. Likewise, I recently wrote on the foolishness of the campaign for a $15 minimum wage, and what McDonald’s is doing about it.

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I also wrote an essay for the Daily Caller on how to use a novel new energy technology to strike a better Iran deal (although to be fair, it’s hard to imagine what sort of Iran deal wouldn’t be better than Kerry and Obama’s abject surrender). You should read it, if only to learn what’s about to be powering China and India: it’s pretty incredible.

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There’s a level on which all of this comes back to very different visions of the world: one in which wealth is constantly created by free people getting ahead by solving each other’s problems, and another in which everything that can be invented has been, and the moral imperative is to manage decline while spreading out whatever wealth already exists.

But even a cursory look at the last 250 years proves the falsity of the latter view. Once mankind began to abandon the latter for the former, a revolution in wealth creation began — for all people — that is best summed up in the chart (what I like to call “the real hockey stick”). If the left’s view were correct, since most of the world’s population growth has occurred since 1800, that chart would be just as dramatic, but downward. The magnitude of the left’s error on this is hard to express.

Technology allows us to do more with less (as the linked infographic demonstrates in rather striking fashion). It frees up resources to do things we’d rather do. How much more are we able to do because electricity allows us to use nighttime hours? Or because women aren’t forced to use washboards? Those who decry innovation, who see only the potential negative consequences, are themselves oblivious to the oppressiveness of the status quo. And while the left offers “freedom” from that oppression through redistribution, “robber barons” like Rockefeller, Edison, Jobs and Musk just go about making our lives — all lives — better.

My recent article in Fortune Magazine — “Must You Be Ruthless and Selfish to be a Successful Entrepreneur?” — addresses this head on. It’s exactly the opposite. Entrepreneurial capitalism is a societal-level expression of the Golden Rule. Read the essay to see what I mean.

That’s probably enough for today. I’ve had a little bit to say on the marriage ruling and other things recently. You might want to check them out.

But suffice it to say that I remain extremely optimistic. We may face great difficulties: that is always true. But I believe that we are about 250 years into a 300 year process of wiping out abject poverty from the Earth. I believe that many of the trends under way technologically and otherwise spell a freer, better future on nearly every level. And I certainly intend to do everything I can to make that so.

Rod D. Martin, founder and CEO of The Martin Organization, is a technology entrepreneur, futurist, hedge fund manager, and professor. Fox Business News calls him a “tech guru”, Britain’s Guardian labeled him a “philosopher-capitalist”, and Gawker describes him as a “brilliant nonconformist.” He was a senior member of PayPal’s pre-IPO startup team and is a member of the Board of Governors of the Council for National Policy.

 

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