18 November 2014

Make It a Double

When I was growing up there were three categories of lushes: the crude drank bourbon, the smooth drank scotch, and the sissies drank screwdrivers (so Mom couldn't tell; she still could, of course). Seems to be still the case.

There's been a push, and some pushback, for artisinal bourbons. They don't really exist, of course. Here's the short answer as to what makes a bourbon, bourbon. Note, in particular, that aging is not a requirement. In fact, the latest fancy of lushes is white lightning, often called corn squeezins, because it's just the pure alcohol distilled from corn mash. Put that stuff in burned barrels until it gets some color (kind of like white folks wanting a tan), and you can call it bourbon. Doesn't even have to done in Kentucky, although those that are make a big deal of it.

The point being: bourbon is crude liquor made fast. You can leave it in the barrel for a year or more, but it's still just colored corn squeezins.

I bring this up, because Neil Irwin badly tries to analogize bourbon to petro-products in his piece today. For someone who presents as a quant/economist, bad piece. About the only thing they have in common is that they're both liquids. Too bad that Irwin chose such an approach, since the petromarket is totally screwed up. But bourbon production has nothing to aid in fixing it.

- little physical investment; little barrier to entry
- available nearly instantly, unless you want other wise; the longer you hold the higher you can charge
- typically, but not required to be, made in Kentucky

- lots of physical investment; massive barrier to entry
- not available, if at all, for years after initial investment; holding may, or may not, yield a higher price
- can be found nearly anywhere, that's left unexplored

What is true of petro-products, and needs to be dealt with, is that it is, for first world countries, as vital to existence as clean air and water. As such, it should be husbanded for the benefit of all, and all future generations. The cyclic nature of production, in response partly to market price (but also to more efficient, in the short term, technology), is quite real. Do we, of the current generation, have the right to burn off nearly all of it in our Hummers? The Rand-ians say so. May be we should stuff a cabbage in their mouths.

No comments: