Smart Guys in the Mirror

Several years ago a lot of Smart Guys discovered how to get rich(er).

They looked at interest rates, energy prices and technology, and borrowed a bunch of money (and/or bought or leased land, equipment and facilities, hired people, and issued stocks or bonds) and set about to find, develop, pump and refine copious amounts of oil- and gas-related energy products.

The catch: they hadn’t figured on so many other Smart Guys doing exactly the same thing.

Instead of getting rich, they created an over-supply of said energy products resulting in a halving of oil and gas prices. Even though interest rates were next to zero, they soon found themselves unable to re-pay all the money they’d borrowed (or committed).

Result? A whole bunch of Smart Guys are losing their shirts and looking for someone to blame. They can’t blame themselves; they weren’t stupid; they were Smart.

What should they have done? Develop it slowly. Leave it in the ground until it was needed. But the Smart Guys are also greedy and short-sighted. So, they’re still pumping oil we don’t need out of the ground at half the price it was. After all, they have bills to pay.

And they’re Smart Guys.

(You and I can figure this out, why can’t the Smart Guys in business, in Washington and the Nobel Economics laureates? It’s not some right-, left-wing, Saudi, Iranian or capitalistic conspiracy. It’s a bunch of Smart Guys who aren’t.)

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2 thoughts on “Smart Guys in the Mirror

  1. Very humorous, if it wasn’t so sad. Did I hear right that some of drilling off the East Coast would be stopped. New law Obama signed? Heard it in the car, so didn’t hear it all.

  2. I believe he changed his mind: rescinded his executive decision of last year.

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