American resurgence

Ambrose Evans-Pritchard believes that the US is about to bounce back and achieve new awesome things.

As best I can tell, his argument is threefold: 1) America has a good chance of achieving "energy independence" due to shale oil and hydraulic fracturing; 2) re-insourcing (bringing back manufacturing jobs) is on the upswing; and 3) America has a relatively high fertility rate for a developed country.

An American resurgence may happen, but it won’t happen for any of these reasons. Energy independence is a stupid concept. Even if the US produces as much oil as it consumes, the price of oil will still be largely determined by production in the Middle East. Ultimately, the cost of energy is what matters, and if the only way to produce energy is to break rocks, energy is going to be expensive.

I’m skeptical about re-insourcing, but even if it is happening en masse, it’s too little, too late with respect to turning the American underclass into a middle class.

Fertility rates in aggregate in America are meaningless. What matters is who specifically is reproducing. Dysgenics reigns with respect to American reproduction rates.

Plus, America has lots of problems that these changes won’t solve. For example, Peter Thiel makes the "point . . . that the government is ‘huge’ but ineffective because it acts randomly." I’m not sure I would have used the word "random" but various government agencies certainly work in ways that run at cross-purposes to the actions of other government agencies, which may be worse than random.


7 Responses to American resurgence

  1. Anonymous says:

    I think the most likely benefactors of “re-insourcing” are robots and the engineers who make them.

  2. Bill says:

    Even if the US produces as much oil as it consumes, the price of oil will still be largely determined by production in the Middle East.

    No. The price of oil is around $90 per barrel right now. It has been as high as $140. Coal can be turned into oil profitably around $70. Shale oil and tar sands are also profitable at around this level, lower actually for tar sands. Saudi oil costs around $10 to extract. Oil prices have not been close to that low since the 80s.

    For quite a while into future, the price of oil is going to be set by extraction costs in North America (or, conceivably but not likely, coal to oil costs in China). It isn’t set by those costs right now because the capacity has not come on line yet. For a shorter while, as Saudi production declines and North American production rises, price will exceed extraction costs like it does right now — this is why there is a gold rush into tar sands and shale oil right now. The market finally believes that no new, cheap source is about to spring online to crush oil prices.

    Of course, the greenies could fuck everything up, but the money is big enough that they probably get steamrolled.

    This is mostly a nit, though. There isn’t going to be any American resurgence any time soon. The bad stuff hasn’t even happened yet.

  3. Bill says:

    Oh, I should have mentioned that extraction costs will decline via learning-by-doing and scale economies as production ramps up. So, $40 per barrel is a reasonable guess at oil prices in ten or fifteen years (plus inflation, of course).

    This all brings up an interesting question. What is the significance or expected effects from the gigantic boom N Dakota is about to experience over the next 20 years?

  4. Tschafer says:

    Well, AEP is certainly no fool, and some of the things that the doomsayers worry about (like Peak Oil) are almost certainly not going to happen, but that doesn’t mean we’re out of the woods – not by a long shot. If America had a basically healthy society, as we did back in the 1950’s, we might be poised for a resurgance. But we don’t. Pritchard is correct, in that America is in better shape than most the dveloped world, but that’s more of a comment on them than us.

  5. dearieme says:

    Hint to Foseti: I find that I can stop conversations dead by snarling “You don’t mean random, you mean haphazard.”

  6. G.L. Piggy says:

    Thiel may have a point, but the question “compared to what?” has to be asked. The U.S. government may act randomly or haphazardly, but so does the rest of the world’s governments. We have no reason to expect Russia, China, India, or Europe to act a certain amount less haphazardly than us.

  7. james wilson says:

    Oil, coal, and natural gas extraction within America, properly done, would bring a bonanza of jobs and revenue greater than that which funded Scandinavian socialism, and, barring a great political change in direction, will be used for the same purpose. We have been buying our destruction with our wealth for some time.

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