Daily Archives: 12 March 2020

A Thought on Joe Biden

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Check out these two videos of a recent interaction between Progressive-Democratic Party Presidential candidate Joe Biden and a constituent in Michigan a couple days ago.

The behaviors in those examples and longer, more contextual versions of it, sadly, aren’t entirely Biden’s fault.

For one thing, much is being made (not necessarily in those two threads) of Biden sticking his finger in the questioner’s face. I disagree: he was pointing, as many of us do, for emphasis and pointing in the direction of the man’s chest without pointing anywhere, or at anything, in particular. It wasn’t until the end that, in his zeal, Biden’s finger came up toward the man’s face.

More importantly, though, as is also being pointed out, that behavior and others like it in the last few weeks, strike me as consistent with, although not by themselves diagnostic of, early stage dementia.

This may be why Biden is being limited (I don’t see him limiting himself) to seven minute speeches (we’ve already seen him tire and visibly fade during 90+ minute debates), few interviews, few interactions of this type, few public appearances at all.

The foolishness and humiliation, though, are the fault of his handlers for continually exposing him and on the part of the Progressive-Democratic Party for letting this charade go on; although at this stage, Party really is limited on what they can do about it.

The best thing that could happen to him now—and best for Party—would be to encourage Sanders to destroy him at the next debate.  Party can’t stop the fight on a TKO, but Sanders can go ahead and knock him out. Of course, a lot of that will be up to the debate moderators and how much they try to protect him.  Biden is wholly incapable of defending himself at this point.

On the other hand, I’m not sure Sanders has it in him to deliver a coup de grâce.

A Speculation on Oil

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I have one of my own, against the backdrop of the oil production and price war just begun between Saudi Arabia and Russia.

The Saudis, dismayed over Russia’s refusal to go along with a proposal to further reduce oil production in the face of declining economic demand that’s potentiated by the coronavirus affair, have announced an increase in oil production.  Russia has responded with a “we can do that, too” threat.

The increase by the one (to begin 1 April) and the threat to match by the other have sent oil prices into the low $30s per barrel with projections into the mid-$20s.  Both nations claim they can afford these prices for the next few years before they exhaust their financial reserves.

Those reserves would be tapped heavily because the Saudis need $80 per barrel to balance its budget, although its debt-to-GDP ratio is in the neighborhood of 25%, so they can borrow for some time on reasonable terms.  Russia needs $50 per barrel to balance its budget, and its debt-to-GDP ratio is in the neighborhood of 15%.

On the other hand, Russia’s currency has fallen about 10% since the oil crisis began, while the Saudi riyal is pegged to the dollar.  Those combine to reduce the strain on Saudi Arabia’s overall economic moves relative to Russia’s.  Russia also faces reduced economic flexibility relative to the Saudis due to the broad reach of sanctions applied to it over its military and cyber adventurism.

The snapshot and short-term future would seem to favor Russia in this pricing and production contest, but the longer term not so much as currency fluctuations and sanctions will continue to accumulate in their relative effects.

If this contest gets to the longer-term, one other factor could come into play that would support Russia against Saudi Arabia: the People’s Republic of China greatly increasing its purchases of Russian oil.  This would favor the PRC, too, as it would give it a nearby source of cheap oil along with a distribution network that would be less vulnerable to international disruption.

It would also deepen Russia’s dependence on the PRC—possibly good for the PRC, but definitely dangerous for Russia.

Note, though, that I’m ignoring the impact of this contest on our own oil (and gas) industry; the contest will not do us any good at all.