Bear or Bull?

We’ve spent a lot of time talking about workers – where they have been beaten up for the last 40 years and how the last 15 years have if anything been worse. We outlined a way out of the problem as well by taking on the overhead per employee in an effort to make labor cheaper.

But what about capital? While this has been a good time to be rich there hasn’t been a good place to invest money, leaving much of it parked on the sidelines. Part of the prediction for a big change after 2017 is a big turnaround in investment, which has been low lately. Where will that money come from?

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A Connected Approach

One of the recurring themes of Barataria is that nearly everything in our life can be evaluated based on how it is connected.  This works for analyzing political and economic power, but it also charts the course of ideas and products.  If our political system isn’t working properly, Barataria would argue that it isn’t connected properly to the society it purports to govern or to new ideas that will help it to change.

I’ve expounded on the subject in many different ways, sometimes without using the same words, as a way of thinking this out in public.  Many of you have responded with insightful comments and a few questions on the side – what is that guy going on about?  I’d like to nail this down into a simple, direct statement.  This is an old work, about five years old, but it is something I want to revist to help make sense of our changing world.

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Whither, Oil?

There is little more important to the US economy than the price of oil. In the last year, about $500B of gasoline alone was sold at gas stations across the nation, with another $180B in other fuel oil – about 3.9% of total GDP.

Despite its importance, no one is willing to predict where the price of oil will be in the future. The Economist said “If your correspondent could forecast that, he would be on a yacht reading The Economist rather than at a desk writing for it.” Indeed. It seems like a task for an idiot to even try, as Barataria has several times in the last year. We were so wrong about it that it might make sense to bet heavily in the opposite direction.

Low oil prices appear to be here to stay, at least through the year. The implications are worth talking about, even if we can’t be sure what happens after that.

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