Wednesday, September 30, 2015
Everyone knew the shale oil boom would last for years. "Consider the price of oil," they said. "It won't drop below $50 a barrel even with the extensive drilling in North Dakota." That was then. Now, North Dakota has thousands of dwellings under construction with no one to put into them. Man-camps have disbanded. Thousands have left the state with the price of oil in the gutter. The bust defied conventional wisdom and the "known." Boom and bust has a long history in American economics. It most frequently happened with gold mining. One would think that given the past, the present day investor would be smarter. But no, each time everyone thinks this boom is different. What goes up, stays up. PR practitioners should know better because they see fads rise and fall in the media daily, but they are not immune. They reflect the "known" in their publicity and rarely question whether it makes sense. After all, everybody believes a certain way. Why buck the trend? So, they don't, and the outcome is that they too fall when the bust comes. We ought to know better.