On what basis can the bankruptcies be blamed solely/mostly on consumer behavior, versus the viability of many fracking companies being staked on an impermanently high oil prices? The oil industry is notorious for boom-and-bust cycles.

Who's culpable for the bankruptcy of businesses that were only viable under a Zero Interest Rate regime? Should we blame consumer exuberance - or excessive consumption - for pushing up interest rates and causing bankruptcies?

The Fed dropped the ball by keeping rates low. Their choice to keep them artificially low created mountains of problems that we’re still suffering from.

Notably at least partially due to political pressure from Trump - including threats to fire the chairman of the Fed - to avoid higher interest rates and even defaults on his and his families extensive real estate holdings.

[https://apnews.com/article/2a21e92ed9129e91e713495c9ef50050] [https://www.hindustantimes.com/business-news/kushner-compani...]

In the Antithesis of a trump supporter but don’t make it seem like Obama couldn’t have done anything when he benefited from the low rate environment too.

Did Obama threaten to fire the head of the Fed if he raised rates? Or say anything, actually? Because I don’t remember any of that.

Because if he had, then he’d be easy to blame. If he hadn’t then it’s squarely on the fed isn’t it?

Since Trump explicitly did take action, why should he not get blamed for his part in it?

What does that have to do with the original statement?

Consumers are not responsible for macro-economic changes that make a subset of businesses unviable. I was likening Shale Oil companies that could only be profitable at >$95 a barrel to companies that were only viable when capital was cheap - both groups should have known and planned for the respective numbers changing.

Again, what does that have to do with the original statement?

This entire thread is interrogating whether consumer behavior (excessive consumption ) is to blame for business failures as suggested, but never explained by the original statement.

It’s trying to describe excessive consumption, which is always going to be subjective - except perhaps if we use the description ‘drives up prices beyond historic norms’. Which is why they put it in quotes.

And excessive production is also always going to be subjective - except perhaps if we use the description ‘causes a glut of product which drives the price of a product below the reasonable/historic cost to produce that product’.

So excessive production is that which bankrupts producers. And excessive consumption is that which drives up prices unsustainably. Yeah?

> ... except perhaps if we use the description ‘drives up prices beyond historic norms’. Which is why they put it in quotes.

This makes little sense for oil - there are no "historic norms" for the price of oil; just a very wide band of prices. The OPEC cartel was formed was to coordinate production to tame price swings and increase profitability.

> So excessive production is that which bankrupts producers. And excessive consumption is that which drives up prices unsustainably. Yeah?

These cycles are normal, and self-correcting, lagging positive-/negative-feedback cycles are a recurring theme in many disparate fields. Governments, businesses and consumers may not like the implied instability, but picking a single point on the sinusoidal plot and declaring that "this is the optimal amount of consumption/production/profits"[1] seems misguided to me, simply on the basis that its inherently unstable.

1. Or declaring an optimal number of predators and prey if it's a prey-predator cycle.

So we agree that the original comment was no less ambiguous or confusing than after this analysis?

No, we are don't agree. I challenge the existence of a "correct" level of consumptions, and how it's derived is still ambiguous - all I have gathered so far is that it's below whatever it was when the shale oil companies went out of business. I can think of a couple of confounding factors, so I'm confused why consumer behavior should be assumed to be the primary driver here.

I don’t think it was? And the original quotes (looked like ‘scare quotes’ to me) showed the author wasn’t being very solid about it, or maybe even making fun of the idea.

IMO, the only way to ever even attempt to judge these things is in hindsight for the reasons you state.