The morning after… it’s a pill
Like the way you feel the morning after being fired, or cut from the last spot on the national team the day before the World Championships, you feel like you’ll wake up and it will have all been a bad dream. But as you gather yourself, you realize that “no, that did in fact happen.”
While nowhere near as traumatic, discovering that after my second appeal to LinkedIn I remain “restricted” (which since I can’t login and don’t appear in the platform… one companies restricted is another’s banned), I have decided not only does 2020 suck, but I’m starting to question 2021 (and quite a bit beyond that).
The coronavirus, to me, was a rabbit hole that, through choices made, now politicians can’t take a different path without admitting their failure. Like dropping a nuclear bomb, there is no going back to the way things were.
So, here we are.
Like many, it deeply saddens me to see what the resultant global demand destruction has done to employment in oil and gas in North America. Many friends are out of work and now have to restart their careers. As I think about what I’m going to do for the next 37 years, I share their anxiety. But, hope isn’t a plan, and oil and gas isn’t going back to the way it was. Evolve or die.
So, here we are.
Taxes are going higher. Way higher. And while we can debate around the fringes that if capital gains are a thing, there is a difference between you owning Apple stock and you starting a business yourself (long term and short term vs income). The step up in basis for estates makes no sense. And we don’t incentivize the right behaviors. But, government has slipped from protecting us and implementing the rule of law, to being a nanny state that picks winners and losers based on who has the bigger lobby. There are two certainties: death and taxes.
So, here we are.
I hate the choices future politicians will force on us because they will expand the debt, devalue the dollar and delay the collapse of our economy until it can’t be delayed any longer (or worse, start a war, which has long been the cure of stimulating economic activity and a reset). That will impact our children. Their career options, their living standards, and the opportunities they will have. Some will be good- many will decide that college isn’t that important (as they are both too expensive to generate an ROI and they sell a dream in exchange for a lifetime of debt servitude even if your job is pretty good). But most will be bad, and I’ve braced myself for my kids not leaving home until they get married…. because houses are too expensive.
So, here we are.
And at the end of that tunnel, and coming to grips with it, accepting the things I can’t change and changing the things I can, LinkedIn reminded me that the fabric that all this has been built on: social media, instant gratification, unlimited free content that sells ads to finance their business, is driven by an agenda. And today, I feel more like we are in the Matrix than ever before. I’ve made jokes about wanting the red pill, but now that I’ve had it, I question whether I really wanted the blue one.
Microsoft owns LinkedIn. The company that made personal computing accessible, and built one of the greatest tools of all time: Excel, where you could build cashflow models for any business and Microsoft wouldn’t tell you they didn’t like what you built (after all, how many companies in oil and gas still run primarily on Excel??).
I am reminded of the anti trust case against them in 1998, and at the time I didn’t agree with stifling capitalism. I have evolved. We don’t truly have a capitalist system. We bail out companies that don’t need it (buying Apple bonds and giving loans to airlines when no one is flying) but we allow small companies to fail. Money in politics removes the incentive to do “what is right” and replaces it with “what gets me re-elected”. And when Twitter can put warnings on the President of the United States tweets, as it did over the weekend, I wonder who is truly in control.
I know that for sure, it isn’t me. But, we will do a deep dive on each of these paragraphs over the coming week.
- Why being fired without cause is never without cause.
- How CV has been cultivated and weaponized to promote an agenda that benefits few at the expense of millions
- Why the nanny state isn’t the solution
- Why social media makes us less connected rather than more
- And why anti trust is something society really needs to explore and push… properly.
P.S. Microsoft is on my Wall of Shame and I’ve put them on my “Can’t invest in” list.
What to let you know that you’re producing some of the best content out there. Paul Sankey Podcast was excellent.
As an oil operator who produces ordinary income, I’ve had a problem with the capital gains tax preference for years. As if the money I’ve invested wasn’t already taxed before I had it to invest (the capital gains excuse).
Have you ever checked out Jeff Booth and a book called the “Price of Tomorrow”? It is a fascinating take that brings a lot of the ideas mentioned in your Podcasts together. His overall theme is that technology is deflationary and there is no way to sustain high paying jobs and inflation and growth in the gravity imposed by that deflation.
Me, I listen to your stuff and hear how FANG server farms are under depreciated due to Moore’s Law, and how shale companies have under depreciated their asset base, and that solar can be produced for $0.06 per kw-hr, and I say the costs of production signals aren’t real. So the deflation isn’t real- nobody makes any real money doing any of it and is just kickin the can down the road by stretching the bytes barrels and Kw’s unrealistically.
As for the oil business, it is interesting that there were a lot of old conventional fields when I started work in the 80’s that were not produced at capacity in the 50’s and 60’s. It was not just the Texas allowable system, but managers of those major oil companies knew enough to not produce max out into a saturated market. As a result, fluid levels were high, fields that we ultimately drilled on 10 acre spacing were still on 40s, and things were managed around the concept of “incremental reserve development” and not acceleration. How ludicrous would it be if the Executives at Ford produced F150 trucks at the maximum possible output just because they could?, without regard to the market for them!
Keep up the good work. I know you were really getting a lot of good back and forth on Linkedin and it seems like it has dried up, but everyone that is still following you should pipe up here!
Jim. Great comments and agree on all fronts. Thank you for sharing. I didn’t realize how much I enjoyed the engagement on LinkedIn. But turned out… a lot. I’ll check out Jeff Booth. Thanks for that recommendation.
Have two great podcasts hitting this week- one on Venture capital inflows California which was fascinating and the other on why CO2 is a miracle gas and that burning 50,000 witches at the stake isn’t a great way to fight climate change.
Looking forward to your Podcasts. So many big ideas to tickle one’s brain right now!
It was the best of times, it was the worst of times…..
I get the feeling that there are an army of us, like Paul Sankey, who don’t know what the hell to do investment wise and so I spend my time reading and thinking about “what I’m not going to do next”….
PS- But you’re at least DOING SOMETHING!
“I question whether I really wanted the blue one” I can appreciate that comment.
Life is simple when you aren’t trying to grapple with all of the problems and inconsistencies in yourself and the world.
However, it does provide with endless content. For that, I am thankful.
“Adapt, migrate, or perish” – the single thing I learned in 9th grade Geography class