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Stop the world, Jeff wants to get off
Peter Foster, Financial Post
… Mr. Rubin has since departed from CIBC. This, he claims, is significantly due to his new book: Why Your World Is About To Get a Whole Lot Smaller. It’s easy to see why the bank wouldn’t like it. But that’s likely not because it’s too boldly insightful, as Mr. Rubin might believe. It’s because Mr. Rubin has gone from the dismal science to the Dark Side.
The former CIBC star is both a fine writer and an engaging speaker, but he has contracted a bad case of Peak Oil Theory, a condition that afflicts those inclined to anti-materialism, Big Oil paranoia and Pollyanna-ish belief in policy wisdom (But then Mr. Rubin is actually in favour of carbon tariffs, which would collapse world trade faster than you could say Smoot-Hawley).
Mr. Rubin admits to having caught the Peak Oil bug from Dr. Colin Campbell, its leading guru. Dr. Campbell thinks that the plateauing of conventional oil production would mean “the end of economics.” Similarly, Mr. Rubin claims to foresee the end of life as we know it, and asserts that “It is hard to say which possibility is more alarming to economists — that the world has reached its peak oil production plateau, or that the rules of their vocation don’t seem to be working any more.”
But Peak Oil is essentially a primitive, static theory based on treating the entire energy economy as if it were a single, depleting oil well, underplaying innovation and failing to grasp — or refuting– the role of market pricing because, as Mr. Rubin claims, economics only tells “half the story.” To argue with a Peakster, meanwhile, is to be cast as someone who “just doesn’t want to believe.”
(3 June 2009)
Jeff Rubin’s Shrinking World (book review)
Crawford Kilian, TheTyee.ca
* Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization
* Jeff Rubin
* Random House Canada (2009)
After a quarter-century of increasing free trade and globalization, we have seen our prosperity suddenly stagger — even in China, where mere six per cent growth is effectively a recession. While GM goes bankrupt, investors still dream of a return to “normal”: the happy years before 2008.
Jeff Rubin, chief economist at CIBC World Markets for almost 20 years, makes it clear that those years were decidedly abnormal, a three-decade holiday from reality.
Globalization wasn’t the result of wise economic theories brilliantly applied. And the recession didn’t happen because American deadbeats took out mortgages they couldn’t afford. Globalization thrived on cheap oil. When the price of oil went up, recession followed.
(3 June 2009)
Small new world
Jeff Rubin, National Post via Vancouver Sun
In a new book, Jeff Rubin argues that more expensive and less plentiful oil will spell the end of globalization
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I have good news and bad news for you. First the bad news.
With global oil supply dwindling and demand rising, you can expect scarcity. And scarcity means high prices. You can expect triple-digit oil prices in the near future. Yes, the price at the pump is going to go up. Count on it. In the United States, that should translate into as much as $7 per gallon of gasoline, and about $2 per litre in Canada. Europe is of course already paying those prices, so they should get ready for the equivalent of double-digit gas prices. But it will also hurt in a lot of ways you may not be thinking about.
Life as we’ve known it is up for grabs in a world of expensive fossil fuels. Expensive oil means a severe curb on the free-spending lifestyle that cheap energy has afforded us for some time now. It means you can say a long and wistful goodbye to the inexpensive products manufactured on the other side of the world. You may not love them, but they have been stretching our dollars for a while now and holding down inflation at the same time. You’ll miss them when it starts to become clear that your paycheque just doesn’t go as far as it used to.
Your food in particular is going to cost a lot more — in fact, it is already getting more expensive all the time.
(28 May 2009)
Jeff Rubin interview
Kate Mackenzie, Financial Times
‘When you spend more on fuel than food, an economic contaction will follow’
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Earlier this week I spoke to Jeff Rubin, former chief economist at CIBC and one of the most mainstream of the economists who believe in peak oil (in that he believes conventional oil production has peaked). He’s recently had a book published called ‘Your world is about to get a whole lot smaller’, about globalisation in the age of energy scarcity. Following is an extract of our conversation:
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What do you think the oil price rise to now $68 will mean for economic recovery?
I think we’ll see a return to triple digit prices very early into an economic recovery, probably within 12 months of that recovery being under way, and I guess the issue is going to be: will the return to triple digit oil prices lead us right back into recession? Because I think triple-digit oil prices have played a much larger role in the global recession than it’s yet been given credit for.
(3 June 2009)
