Grant Williams:
Before we get going, here’s the bit where I remind you that nothing we discuss should be considered as investment advice. This conversation is for informational and hopefully entertainment purposes only. So, while we hope you find it both informative and entertaining, please do your own research or speak to a financial advisor before putting a dime of your money into these crazy markets. And now, on with the show.
Welcome, everybody, to another edition of This Week In Doom. Joining me as always to bring the doom is the green chicken himself. Hi mate, how are you?
Doomberg:
Hey, Grant. How are you doing today? Great to be back with you. Wish we could be coming together under slightly happier circumstances, but we do have a very, very serious topic to talk about today, and ironically probably on the other side of doom in this case.
Grant Williams:
Yeah, no, exactly right, exactly right. The topic at hand is the recent chemical spill in Ohio. And you wrote what I thought was a brilliantly sanguine piece, but even reading it and understanding how balanced it was and how calming it was from someone who has a reputation for spreading the doom, I knew it was a very brave piece. I knew it was a very brave piece the second I opened it. So let’s talk it. Let’s talk about your thought process first in terms of writing that.
Doomberg:
So yeah, as you say, we are Doomberg and we have been known to indulge in a bit of alarmism when we think it is justified. There was a completely different piece we could have written, and we would be highly qualified to write it, and it would’ve stoked a lot of fear and angst, but it would be irresponsible to write that piece because we don’t believe it to be true.
But before proceeding, we should say the biggest danger in writing this piece is having a deep empathy for the victims involved and not wanting to do anything to minimize what has occurred to them because there are, in fact, real victims. And as we said in the piece, if we lived within a few miles of this derailment, we would be furious, we would be panicked, we would be getting out of dodge, and we would question whether we could breathe the air and drink the water. And we would be seeking legal counsel to sue the living daylights out of everybody involved because there is no greater violation than the violation of the sanctity of your home. The analogy would be like how you’ll feel after a break-in, like this place of security and family and love has been violated, and the word violated is real here in this circumstance.
So how do you stand up against a tsunami of hyperbole without coming across as though you’re trying to minimize it, especially for the people that have been impacted by it? And that was the part that we struggled with the most, first, with the decision whether to write it because, believe me, the easy decision would’ve been to just let this mania come and go and not get involved. But also, how do you do that in a way that doesn’t minimize, again, the impact on real people because the impacts are real and the people are real? In searching for an analogy for today’s recording, the best I could come up with is a plane crash. So if a plane crashes, it is extraordinarily tragic for the people involved. And the last thing the family of the victims want to hear is how safe airplane travel is on average.
Grant Williams:
Right. Right. Right.
Doomberg:
Because for them, airplane travel is not safe at all and their loved ones have died or been seriously injured if they’re lucky enough to survive it. It’s not a perfect analogy, but it’s the closest one that I could come up with. And then of course the other danger in writing this piece, of course, is now we have been tagged in every crazy hyperbolic tweet with an expectation that we’re going to engage in a back and forth with the authors of that hyperbole and somehow rebut it. And it has basically made our use of Twitter impossible in the last few days. And I’ve just given up because Twitter, as you know, and as you tweeted this morning, is dissolving very quickly into literally a toxic hell hole.
And on top of all of that, this derailment in particular has become a deeply and cynically political issue very quickly. For the first week it was barely covered in the media and then all of a sudden it became the center of the news cycle. And very quickly, people resorted to their sides. And this became about Biden and his secretary of transportation and their mismanagement of things as opposed to let’s actually take an assessment of A, what occurred, B, what it reveals for risks that we’re taking as society, and C, what should we do thoughtfully to abate those risks on a go forward basis? But that conversation is just drowned in the noise and our piece is drowned in the noise. If you just look at the Twitter analytics, some of the most egregious exaggerations in hyperbole are getting three, four, five times the views and engagement that our piece got, which is fine, we expected that. But it had to be written and so we wrote it. That’s sort of the bottom line.
Grant Williams:
Well, look, we’ll come back to the piece itself and what you said in a moment because it bears repeating in a forum where people can actually listen to the reasoning behind it rather than just read the words and have a fixed understanding of what it was you were trying to say. Right? Because oftentimes that’s the problem. But for me, it’s been so interesting to watch this story emerge because obviously it happened and the initial reaction from people was, this has been covered up and they’re arresting journalists, and why is no one hearing about this outside of Ohio? Why is this being covered up? And it went full conspiracy theory straight away. And then obviously that proved not to be the narrative, the media narrative, then it provided a fantastic vehicle for not just conspiracy theorists, but also environmentalists. It just became, as I watched it, just kind of morphed and changed in the public conscious.
It just became a means to an end for anybody that wanted to tack any kind of political bias onto it. It provided the perfect vehicle. And that’s why I thought your piece was actually so important, is because A, you come at it with the right background, B, it was devoid of hyperbole and it was the only piece, literally the only piece I saw that was saying, okay, everybody, let’s put all our biases aside from a moment and let’s look at the facts and let’s try and understand what actually happened here. Just facts, not opinion, not bias, just facts. And that’s why it’s so disappointing to me that you say that this piece has been drowned out by the tsunami of hyperbole you so beautifully call it.
Doomberg:
It’s been amazing to watch, and of course you know these things, but when they strike close to home, it just happens to be an area that we know a fair bit about. Actually, I know some people who live in East Palestine, for example, and I know many people in the industry. I’ve had lots of conversations with them, which we’ll get into a little later on, about this event and what it means. There is a serious conversation to be had here, but when you dissolve into all of the worst aspects of social media, then it drowns out that conversation. It very quickly causes political polarization and it becomes a game of team sport gotcha as opposed to “Everybody, let’s huddle up and let’s figure out what the best way for it is for society given all of the trade-offs.” And that conversation is impossible in this environment.
It also lays bare the ongoing eroding of journalism in the West, in the sense that it is almost impossible to get long-form, reasonably balanced, thoughtful, well-researched… Look, you could disagree with parts of our piece. We showed our homework. Here’s all the links. So here’s the PDF file where you can literally see down to the rail car what was in it and what happened to it. You don’t get paid to do that, of course. And look, we should just be honest, that piece cost us money. It’s not like we issued it for free. And then we have a wave of unsubscribed from people who are blinded by their hatred for Biden and can’t imagine that we would say that the EPA in this regard should be trusted. We knew that would happen and we knew that it would make our lives miserable. But I’m not saying that to draw sympathy, but I only point that out because the articles that do make money are the ones with the outrageous headlines and that feed into the fear machine.
And again, coming from Doomberg, it sounds slightly hypocritical, but at the same time, we’ve always sort of had a bit of a cheekiness around Doomberg and we’ve always written what we believe to be pieces that are true and that are serious and that point out interesting things about the world. So in this case, if there were doom on the national level, we would be the first to be writing about it because it would be fantastic in the Rawls’ most cynical sense, as in the sense that it would bring an awful lot of eyeballs. But that’s not the piece we wrote. That’s not who we are. That’s not the piece. Yeah, I wouldn’t feel comfortable doing that. But let’s just talk about one piece of this, which I think shows the real failure here. What do you think the most controversial thing in our piece was? I won’t make you answer it because I’ll just pose it as-
Grant Williams:
I would imagine it was your faith and the fact that you trusted what the EPA told you.
Doomberg:
Correct.
Grant Williams:
That-
Doomberg:
That’s it.
Grant Williams:
All right. Okay. Yeah.
Doomberg:
Hundred percent.
Grant Williams:
That doesn’t surprise me. Doesn’t surprise me.
Doomberg:
Dozens and dozens and dozens of “How naive are you? You’re in the can for Biden.” Yada yada yada. There is-
Grant Williams:
I love the fact that naivety is just one dot to “Therefore, you’re in the can for Biden.”
Doomberg:
And look, Biden is currently the president, and we write critically about politics as it pertains to the industries we cover. So we’ve only ever existed under a Biden administration. And to be fair, we would probably be considered more conservative than liberal and probably more libertarian than republican.
Grant Williams:
Yeah.
Doomberg:
But we are not afraid to give credit where credit is due. For example, with Gavin Newsom’s U-turn on nuclear power. We were the first to say that was the correct decision. Kudos to him for having spent his political capital to make that happen. So when we see what’s going on and we see unfairness on one side or the other, we’re not above pointing that out. And that of course, enrages people who have sort of a-
Grant Williams:
Yeah, it’s like pick a team and stick with the team.
Doomberg:
Yeah. But let’s just talk about the EPA. So the reason why people think it is naive that we “trust” the EPA in this instance, and I’ll tell you the very narrow ways in which we are trusting them in this instance, is because frankly, let’s be honest, there’s a vast swath of people in the country who think that the pharmaceutical companies have captured the FDA. And in the post-COVID world, that means that all industries have captured all regulatory agencies and no regulatory agency can be trusted on whatever’s in the headline of the day. Having spent more time than I wish interfacing with the EPA, I can assure you that anybody who thinks the EPA is going to go light on the chemical industry for a spill has never interfaced with EPA, period. And you should see the outreach from executives in the industry thanking us for putting that in writing because they hate the EPA in a lot of ways.
Grant Williams:
Right, right.
Doomberg:
Because they’re brutal and they’re random, and they are sometimes unscientific and always opposed to the industry, and they rarely listen to a balanced case and so on and so on. So the real reason we put that paragraph in there was because the most important part of the piece is what happened to the 24 rail cars that were derailed that either had a spill or were burned and the trust that we put in the PDF file that we found, that we haven’t seen reported anywhere else. It’s out on the EPA’s website. It’s not like they weren’t putting that out there for people to have some calm about the situation. We went and we found it, we did the original reporting, we went through each of the rail cars and researched what was in it and what the likely fate of it was. And that’s what journalism is, like let’s actually go and take a look.
And the reason we put that paragraph in there was because our piece falls apart if that document is fabricated, full steam. And you know what? Shame on us for believing the EPA if that document is fabricated. We don’t happen to think that document is fabricated. This document came out long before this was a national story, and it’s very consistent with every other train derailment document that you’ll see. The odds of this happening are not zero. And look, if we find out tomorrow that the EPA fabricated that document, then we should be embarrassed and well, I mean, I don’t know. I think the odds are that we have no better information to go on, let’s put it that way.
Grant Williams:
Well, but also, it goes beyond being embarrassed because I know you well enough to know that if that comes out and proves to be fabricated, you’ll be the first people to write, “Hey, it’s fabricated. Shame on us for believing it. Here’s what the landscape looks like now. And yes, mea culpa and humble pie and all that stuff, but here is what that means.”
Doomberg:
So as long as that document is true, and I believe it to be true, and I would be shocked that that document would be fabricated, then the rest of the piece, we stand behind it. Here’s the thing: We take risks as society all the time. What are the big challenges that this situation reveals is that there are swaths of the population who are taking serious risks that they’re completely unaware of, and they’re not the ones being compensated for that risk, of course, I mean… So for a variety of historical reasons, which we can get into, there’s a lot of hazardous materials making their way around the country every day that come dangerously close to huge population centers because of the way cities grew up and railroads were first laid down. And there’s a real issue here. There’s a serious discussion to be had. So yeah, in our view, the EPA would not minimize the severity of an industrial accident of this type, period. Quite the answer.
Grant Williams:
Well, let’s get into the piece itself because there’ll be people listening to this that haven’t had a chance to read it yet or read it. And I think this gives a much better opportunity to talk about the piece itself rather than just put the piece out there. So why don’t you walk us through it and we’ll kind of dig into it from there?
Doomberg:
Sure. So there were 24 rail cars that either were breached or caught fire. And that document that we’ve just referenced gives a full accounting of all of that. Now, before diving in, we should say the single greatest anecdote or cure for fear is knowledge.
Grant Williams:
Right.
Doomberg:
And when we were writing this piece, we sort of got it out pretty quickly because two things. First of all, the hyperbole was just exploding. But second, literally had heard from friends in the media that both Jesse Watters and Tucker Carlson were going to run pieces that evening on Fox News, calling this the Chernobyl of Ohio and really inflaming the situation. And we felt it would be a service to our readers if we could get it out before those broadcasts hit the air. In hindsight, after watching them, Jesse Watters did go full Chernobyl and Tucker had a slightly more balanced segment, which is fine.
Okay, 24 rail cars. So then already, just knowing that there were 24, some were burned, some were spilled, what was in each of them, and let’s put our hands around it. And once you can put finite measurements around the problem, then you could begin to rule out the devastating hyperbole. I saw some of the craziest stuff, one tweet that got went viral was, “This is the deadliest environmental disaster in the history of the world.” We last week checked somebody had to die for something to be deadly and we’re unaware of any fatalities, at least yet in the-
Grant Williams:
But the argument never stops there because people say, well, the long-term effects people will-
Doomberg:
I would say the people of Bhopal would disagree.
Grant Williams:
That was the one that came to my mind as soon as you said that. Yeah.
Doomberg:
Exactly. And again, the entire Mississippi River has been polluted and people should be getting bottled water as far away as Mississippi, which we mentioned in the piece like it. Okay. All right, so let’s go through them. Two hoppers of solid polyethylene were burned. What’s polyethylene? Polyethylene is a garbage bag. It’s a plastic pocket. That is what polyethylene is used to make. It’s used to make pipes as well. Solid polyethylene is the equivalent of burning a giant poly trash bags. Nobody should get close to any fire. Campfires have all kinds of toxic chemicals in them. This is the equivalent of a very hot fire. Polyethylene, structurally pretty similar to, say diesel or gasoline. It’s going to burn, it’s going to burn hot, it’s going to burn black. There’s going to be some soot. It’s ugly, but this is not a catastrophe.
Four hoppers of solid polyvinyl were consumed in the fire, and this is a more dangerous plume that produces some HCL, and so you wouldn’t want to get close to that either. But as we said in the piece, polyvinyl is used to make PVC pipes, which basically every modern home in the country is filled with them. And every major house fire has a lot of PVC that’s burning in it. And when we have a house fire, you don’t evacuate multiple blocks because there’s a house fire. One of the hoppers, and when I say hopper, it’s a different form of a rail car.
Grant Williams:
Yep, yep.
Doomberg:
Hopper transport solids, basically. One hopper of wheat was burned, which is the functional equivalent of burning wood. One box car of medical grade cotton balls were consumed. One box car of sheet steel was damaged. One box car of frozen vegetables was consumed. There’s one that we don’t know what it is, it’s just simply had to label powder flakes, and it looks like it was partially burned and the fire was extinguished.
One tanker of propylene glycol was spilled into the environment. Propylene glycol is, I think, 99% of what goes into deicing fluids in the US. It’s a different chemical compound in Canada. We’ve all sat on planes and had propylene glycol sprayed up and down the outside of the plane, and that stuff falls onto the ground. Some of it is sometimes partially recycled, but by and large, this stuff goes into food as a preservative and so on. So we would put that in the, wish we hadn’t spilled it, but probably not a catastrophe.
Now, there’s a couple of more exotic chemicals. One tank car spilled a little bit of ethylhexyl acrylate. This is a pretty reactive monomer, but it’s moderately hazardous and readily biodegradable. Two tank cars of petroleum lube oil were spilled. We’ve had all kinds of oil spills in the country. Two tank cars is relatively inconsequential, except of course, again, in the local environment and in the creeks and all of those things.
Grant Williams:
Yep, yep, no, of course.
Doomberg:
Yes. One tanker of diethylene glycol was fully breached and a second lost part of its load. That molecule is biodegradable, is low toxicity. Again, by the way, this is the perfect example. Diethylene glycol has been used historically as a poison because people will drink it. You don’t want to drink diethylene glycol, it’ll kill you.
Grant Williams:
Right, right.
Doomberg:
The toxicity, everything can be toxic at the right concentration, which is something we can talk about later. This says low potential to absorb in soil and sediment. It’s low toxic. One tank car of butyl acrylate was either lost or burned, they’re not quite sure. And then finally, one tank car of polypropylene glycol was breached, and that material is relatively benign. So that’s 19 of the 24, so you could sort of put those on one side. By the way, none of the chlorinated materials were spilled. They were all burned. All of the materials that were spilled, at least according to the CPA document, were basically oxygenated hydrocarbons, which by and large are biodegradable. And over time in the soil, nature has a way of healing itself.
Grant Williams:
Right.
Doomberg:
Now, the five tank cars, at issue, of vinyl chloride. A vinyl chloride is a very dangerous molecule. Five of them were basically undamaged by the initial derailment and fire. But over the 72 hours after the initial derailment, the local authorities, emergency response teams and so on, became concerned that these tank cars could explode. It’s pressurized, really. This is a gas that has been basically pressurized for shipping. And if it gets too warm or a variety of other challenges, the thing could blow up in a very, very dangerous explosion. So they made the decision with foreknowledge and forewarning to the community, and they evacuated a further perimeter around the area, and they basically did a controlled burn of these five tank cars of vinyl chloride.
That is the most serious thing that happened here. The authorities had a fair bit of time to decide what to do and how to minimize the potential damage. And they executed it quite well, all told. Now what you see when you see that giant black plume is things going way up into the air and then drifting off into the atmosphere. And that’s what happened to the vinyl chloride. There’s effectively no vinyl chloride left. So when you see things on Twitter like 2.5 million gallons of vinyl chloride is-
Grant Williams:
Yes.
Doomberg:
Yeah. There’s 20,000 gallons in a rail car, there were five rail cars, it’s a hundred thousand gallons, it was burned. It’s a big deal. It’s a huge deal locally. But at the same time, this is not Chernobyl. Right? So what do you do with this information now? Well, the first thing you do is, you can now do a proper risk assess… And look, your podcast always begin with this is not investment advice, and I would say even more importantly, there’s not safety advice. We’ve had, of course, many people from the region reach out to us, “What should I do and should I be worried?”
Grant Williams:
Right, right, right.
Doomberg:
I can’t tell you that. It would be irresponsible for me to tell you that. But having a fair bit of experience with industrial accidents like this, by and large, this is a serious event, but it is not Chernobyl. So five rail cars of vinyl chloride were burned. You dilute the product of that burning into the atmosphere, and basically, the further away you get from the event, the less consequential it will be for you. Now, to the locals, they should be rightly angered. As we said, they should be seeking restitution and they should be compensated for the trauma that they were exposed to through no fault of their own. And we’ll get into where the accountability lies here in our view and what we think the logical next step should be in our view. But that’s just a framing.
Once you have your arms around the totality of the event, then you could begin to rule out some of the more hyperbolic stuff that you see on the internet. And that was the real point of the piece. Here’s the document, nobody’s talking about it. It tells you exactly what’s in it. Let’s systematically go through each of those rail cars and give you a finite set of facts that you could wrap your head around to properly put this event into focus.
Grant Williams:
Well, okay, so let’s talk about the response. We’ll get into the roles that the various protagonists played in a second. And as you say, we’ll get into your suggestions about what it means and what should happen. But let’s talk about the response. Let’s talk about the response from people and what this says about society and about our declining ability to process any kind of news without it becoming either one thing or another. There’s no balance. It’s one end of the spectrum. It’s either this is a complete disaster. And to see things like Chernobyl use as comparisons, it was laughable to me, to be honest with you.
I just was shocked that people would jump to that so quickly, but I guess I shouldn’t have been. Or people will say, well, this is just irrelevant. This is people making a fuss about nothing. Because as I think you went to great pains to point out in your piece, this is something and there are things to be upset about, but let’s just try and keep it in perspective. What is it about this lack of perspective that everybody seems to have today that is so problematic?
Doomberg:
Okay, you said something earlier that I didn’t address, that I think explains this entire affair. Because look, derailments happen on average three times a day in the US, and a fraction of those derailments involve hazardous materials and a fraction of those derailments involve leaks into the environment. And we started this piece with the story of a vinyl chloride leak that happened 2.5 miles away from the Philadelphia International Airport.
Grant Williams:
Right.
Doomberg:
And again, while this was a complete tragedy for the local people involved, they didn’t shut the airport down. Thousands and thousands of people traveled through that airport, totally unaware of what was going on 2.5 miles away. But anyway, I digress. The arrest of the reporter is what caused this otherwise unfortunately regular event to have been blown into the conspiratorial arena. What are they hiding from us? And that event, which was when you actually watched the totality of event and you see what happened, but it doesn’t matter, the coverup is always worse than the crime.
Grant Williams:
Yes.
Doomberg:
And nothing drives the clickbait industry like big government and big industry colluding to cover up a far more serious incident in the name of preventing panic, let’s say. So the arrest of that reporter was the seed that bloomed into the mania that we see today, in my view.
Grant Williams:
Now, for people who don’t know, what was the reality about that arrest?
Doomberg:
So it was at a Governor DeWine’s press conference in Ohio, and in the view of the police, this reporter was being loudly disruptive while the governor was speaking. The arrest didn’t go very well and so if you watch just the end of the arrest, you’d think that this is a far more serious circumstance than it is. I think it was a catastrophic mistake to arrest this reporter for a variety of reasons, not the least of which it’s the sea that caused this bloom that we’re now all wading through.
Grant Williams:
Right.
Doomberg:
It was a decision made by somebody. It was, I believe, an incorrect decision, but it was not, in our view, proof of a coverup. But that’s how it was spun, and that’s what drove this thing out of control in our view. And what that means, of course, is in this new media environment, back to your original question, you have to be extraordinarily careful with how you manage the communication around such topics because unfortunately, for reasons justified and unjustified, the faith in our institutions, especially in the US, has probably never been at its lowest. And that’s sad and that’s a deeper problem that goes well beyond this derailment. And I don’t know what the solution to that problem is, but it is a really, really serious one.
Grant Williams:
Okay. So let’s then get into the various protagonists in this situation and your assessment of culpability of what perhaps they should do to change things going forward. Let’s start with the US rail industry, which as you said, there are regular derailments. It’s a hazard of doing business on railroads. Let’s talk about their role in this whole thing as you see it.
Doomberg:
Yes. So before we dive into the railroads, let’s just say, at the highest level, in order of safety, pipelines are safer than the railroads, which are much, much, much safer than trucking.
Grant Williams:
That’s right. Yep, yep.
Doomberg:
So as we said with the opening analogy, the rail industry’s PR around this incident is going to be, “We are extraordinarily safe.” Airplane travel is much safer than driving a car. That’s essentially what-
Grant Williams:
Right, right.
Doomberg:
And again, they will be right in that. So we’ll come back to that later when it comes to, this might be the safest way or a safe way to ship something, but does it actually need to be shipped is an entirely different question that I think the chemical industry needs to ask.
Grant Williams:
Right.
Doomberg:
Okay. The US rail industry is essentially an oligopoly with an extreme rent-seeking powers. So the rail industry doesn’t actually produce anything, it just moves stuff around. But it is extraordinarily critical to the operation of our economy, so much so that even though we are libertarian oriented, there’s going to come a point where we have to ponder whether this isn’t truly a public utility. And there’s basically four major US rail companies in the US and they have something like 85% market share.
And then when you go locally or regionally, they basically have, in many instances, effectively a monopoly. And because they have become the darling of Wall Street, because they have a monopolistic pricing power and a history of showing a willingness to use it, they have underinvested in capacity, they have underinvested in maintenance, and they have underinvested in labor to the point where the industry is breaking down. And there’s a huge friction right now, a multi-year battle between the chemical industry and the rail industry. The chemical industry is one of the biggest customers of the rail industry because, which we’ll talk about when we talk about the chemical industry, there’s a lot of hazardous stuff that needs to be moved around for the economy to work.
Grant Williams:
Right.
Doomberg:
What’s going on right now with the rail industry is they’re acting more and more like private equity, stripping these companies and de-capitalizing them for short-term gain, and their equity or their stocks are being rewarded for it on Wall Street. And the biggest proof of all that you need is that Warren Buffet owns the biggest of them.
Grant Williams:
Right.
Doomberg:
And who better to understand when a company has a huge competitive moat than the Oracle of Omaha? So there’s going to have to be some deep question. Matt Stoller wrote a really great piece when the war first broke out between Russia and Ukraine called from Russian Pipelines With Love, where he talks about the midstream players in the natural gas market in the US basically having a monopoly. And you can’t move natural gas around without going through pipelines in this case and various other intermediaries. And everybody along the way gets to seek their disproportionate share of the value being created.
Grant Williams:
Yep.
Doomberg:
It just drives huge challenges. And here, the rail industry, look, they’re the darling of the pension funds. They just look at the cap table of all of these publicly traded rail companies, and they’re filled with high yield safe bonds that produce exactly what a pension fund needs all the way out to 2050, 2060. You can match your liabilities with your assets and your payment streams and your cash flow streams perfectly. And they’re also the darlings of Wall Street because actually if you just look at the last few years, the ratio of dividends paid divided by capital invested is ever growing.
I talked to a really close friend last night in the industry, I won’t name which industry or who he was, but we had a very long couple hour conversation. It was nice to get caught up with him, and he was very appreciative that we wrote the piece that we wrote. And he’s dealing with this firsthand. His point was, Wall Street does not value investment and maintenance. What’s the return on maintenance? In the long term, the return on maintenance is very clear, but Q3 earnings, Q4 earnings, 2023 earnings, maintenance is a drag, employee redundancy and employee training is a drag until something like this happens.
So this is the trend we’re in. It’s financialization of Wall Street. It is an oligopoly. The consolidation in the industry has been scary. And look, no capitalist should be for monopolies. Monopolies are anti-capitalistic. Matt Stoller and I have a variety of disagreements on a variety of issues. I think his Substack, mattstoller.substack.com, is doing a huge service to bring to bear the fact that we have ever-growing series of monopolies across all industries that are then recycling some of those Ill-gotten gains into political cover to keep extracting monopoly prices from the economy. And this is not a sustainable way to run a capitalistic system. And the rail industry, we believe, is a need of either substantially more government oversight, breaking up some of these large companies, or on the table, I believe is full nationalization and all of the challenges that come with that. But the current system is broken, and it is unlikely that the existing players can be trusted to fix it themselves, in our view.
Grant Williams:
Okay. So that being said, what should the US rail industry do and what are they likely to do, do you think?
Doomberg:
I think, again, how do we run the electricity grids in the US? It’s sort of a hybrid, public-private in a lot of cases, right?
Grant Williams:
Yeah.
Doomberg:
There are government mandates for how much you have to invest and what you can charge, and you have to apply for price increases. And it’s a quasi much less private market approach because just imagine that scenario where you had extreme concentration in the power industry and those power companies were allowed to charge whatever they felt like whenever you needed power the most. There comes a point where an industry becomes a public utility. The concept of a public utility is real. There comes a point where moving things around in our economy on the rail becomes so critical to the operation of so much more of the economy that it can’t be trusted to the financialization of Wall Street. It’s not like they’ve got a history of showing that they deserve that trust. So it’s a complicated answer and we’re not here to say that this is the answer and we should go do it. This is the problem and it needs a different answer than the one we have today. That’s about as far and as comfortable as I’m willing to go as it pertains to the rail industry.
Grant Williams:
Well, it’s interesting. I grew up in the UK, and when I was growing up in the UK, the British Rail was a national utility. It was nationalized. And the jokes about British Rail being unable to be operated properly and efficiently and always trains being late and what have you, were universal. And then at some point they basically sold off British Rail and privatized and people bid for different sections of the network. And that’s what ended up happening. There’s Southwestern rail and there’s Southeastern rail and there’s all these different private companies that have run the rail network. It really hasn’t gotten any better. In fact, as time has gone on, I guess perfectly predictably, it’s gotten worse for all the reasons that you talk about in terms of lower maintenance and trying to squeeze every last drop of profit out of a business and going light on staff. It’s the cycle of these things.
But in the UK, the railroads are very much thought of as a people-moving business because the UK is smaller, everybody, not everybody, but a vast majority of people get public transport into work, for example. So the trains are really thought of as a people moving in the city, not a goods moving utility because the road distances in the UK are small enough that trucking is arguably way more important. And that’s a big difference between the US and the UK, and that so many more people drive in the US and the railroads seem to be, certainly to my kind of casual observation, much more about moving stuff around than people.
Doomberg:
In the US, as you know, has vast distances. And while there are concentrations of production in various parts of the country, there is also, as we’ll probably talk about next, a long tail of small production facilities that many probably shouldn’t exist, that are, again, owned predominantly by private equity companies or are otherwise privately-owned, that are being run for cash, that represent significant safety risk to the chemical industry, and probably, as we could talk about with vinyl chloride a little later, need to be shut down.
Grant Williams:
Right.
Doomberg:
And that’s a difficult decision to make. There’s always a balance. Do we want the chemical industry in the US? Of course we do. The chemical industry underpins 25% of U.S. GDP. So again, there are no solutions, only trade-offs, but there is an awful lot, and I mean an awful lot of shockingly dangerous things being transported. And we should take a second and take a step back and talk about the definition of hazard because the media does a poor job of this as well. What does hazardous mean? It could mean might explode. It could mean very toxic. There’s a lot of different definitions. So a chemical itself might be toxic, but a spill from a rail car might not be that huge of a deal. You wouldn’t want to drink it.
Grant Williams:
Right, right.
Doomberg:
And if it’s burned, yes, it’s combusted into dangerous products, but so does a forest fire. Forest fire produces all manner of carcinogenic materials and the smoke and the smog and all those other things. But what hazard means has become so… What’s the word for it? The media has just blown this up to such-
Grant Williams:
Diluted, ironically.
Doomberg:
Yeah, yeah, yeah. Or the reverse, I mean, blown up into like, if it has the word toxic in front of it, it freaks people out, which I totally understand, by the way. The word chemical has a very, very bad brand in the population. So I’ll just give you one small example. Chlorine gas was used as a weapon of war, right? Chlorine gas is critical to the purification of every ounce of water, every American drinks basically, except for those with a well. How you handle it, what you do with it, and in what form it presents itself makes something that is deadly toxic, incredibly useful in life nourishing. So there’s a lot of nuance here that people need to come to grips with, which is just very difficult in today’s media environment to get a handle on. Let’s talk about the chemical industry because-
Grant Williams:
Yeah, I was just going to get to that. Let’s talk about that. We’ve talked about the rail industry. Let’s talk about the chemical industry’s role in this particular situation.
Doomberg:
Okay. So the chemical industry moves around three types of things. They move around starting materials, they move around intermediates, and they move around final products. By and large, the toxic stuff, with some exceptions, lie in the first two categories, starting materials and intermediates. As we said earlier, pipelines are safer than rail, which are safer than truck. So whether it’s oil, whether it’s, pick your favorite, propylene glycol, like we talked about, the de-icing fluid, some things probably shouldn’t be shipped. By the way, when you kill pipeline projects, Keystone or pick your favorite, you are by definition adding more demand to an already congested rail system. So price goes up, service quality goes bad, derailments go up, all of the things that we talked about, which is why the killing of pipelines has so many second and third order effects that people who are opposed to them don’t consider when they formulate their opposition.
So certain intermediates should just not be shipped, they should not be transprted on public roads. Let’s talk about vinyl chloride as an example. Vinyl chloride monomer is predominantly used to make polyvinyl, which is used to make PVC pipes. And I’m going to speak generally, I know people in the industry who have a 5% exception or whatever, that’s fine, I’m speaking generally. The vast majority of vinyl chloride monomer that is produced in the US, in the developed countries is consumed on the exact same sort of chemical factory zone that it is produced. In other words, it is what’s known as back integrated. So you’re making polyvinyl for pipes and you make vinyl and use it right away on site. And less than 10% of vinyl chloride monomer is shipped to these orphan, non-back integrated, largely old polymer facilities that should be shut down. They just should be shut down. The US could stop shipping vinyl chloride tomorrow, and nobody would notice.
Now, having said that, there are some products that are even more dangerous than vinyl chloride, and I won’t name them because I don’t want to give terrorists any targets, that everyone in the industry knows is a disaster waiting to happen. And we need the chemical industry to address that fact. Believe me, nobody in the chemical industry is happy with this derailment. The best run chemical companies are the most angered by the fact that vinyl chloride monomer is still being shipped. Again, my friend from industry who has very deep knowledge and domain expertise in this area is the first to admit that as a consequence of history and financialization and pressure on Wall Street and boom bust cycles and cost-cutting and bad actors, there’s all kinds of nasty stuff that happens that is a huge stain on the entire industry, and it would behoove the industry to at least get busy getting rid of the stuff that doesn’t need to be on the rails.
Certain hazardous things, if we like the way our economy is run, needs to be on the rails. The stuff that doesn’t need to be there shouldn’t be there. Not everything should be transported. And will you hurt a few players? Will you put a few small factories out of business? Yes. Will it necessarily advantageously impact the larger chemical companies and feed the sort of monopolistic tendencies that the railroad has suffered? Sure. There are no solutions, only trade-offs. Vinyl chloride monomer should not be shipped on the rails today, period. That’s an easy politically expedient fix that can be done. There will be people who need it, who will be angry at me saying it. I’m sorry, but that is an easy solution.
Now, the more tougher ones, the ones that I won’t name, they represent a serious challenge. And the industry has known this for decades, and the industry is of course very serious about it, but they’re also putting a lot of blame on the rail system, which is understandable and frustrating for them. At the same time, we hope that this event causes an urgency around, okay, let’s work big to small. What is the nastiest stuff we’re shipping and what can we do to ship less of it? Less is better. None is preferred. Less is better. Let’s start with the easy stuff. Let’s start with the most important stuff. Let’s get our hands around it, because this could have been a lot worse if those rail cars had exploded or if it was a different material and it was in one of the very large population centers that these materials are routinely transported through.
Look, there was a derailment and explosion in Quebec where something like 40 people died because the rail car transporting oil exploded in the middle of a small town in Quebec. We’ve had these types of incidents that were extremely deadly and pretty catastrophic. Heaven forbid, if a major accident occurred with some of the materials that we know are being shipped through significant population centers across the country. And the chemical industry needs to get even more serious than they are, spend less time complaining about the railroads and more time looking inward to say, what can we as an industry do to do better? Period.
Now, in conversation with my friend and with other executives, it has to be said that the industry is under assault. Of course, it’s the chemical industry, nasty chemicals. They’re in the bunker all the time. The resource strain that the ESG movement primarily, and in the past couple of years in particular, COVID immigration policies, have presented to the chemical industry as pronounced. So let me tell you what I mean. The number of people that have been diverted away from research and into counting carbon emissions would stagger you, blow your mind. And it’s PhDs like these PhDs have been removed from the lab and have been taught to use Excel spreadsheets.
Grant Williams:
Right.
Doomberg:
And let’s be honest, a fair number at some of the best institutions in the US, upwards of 50% of new chemistry PhDs come from overseas. They do an undergrad overseas. Coming to America is an unbelievable goal for these people. They come here, they get a PhD, they go through the immigration system, they stay and they work in industry. All of that was thrown into disarray because of COVID. So not only do we have less PhDs coming out, the ones that are coming out are being diverted into counting the number of carbon atoms on the head of a pin.
So the policies that we’re enforcing come at a cost, there is a cost benefit analysis for every decision and the cost of diverting away these resources, from inventing new products, inventing safer ways to do business, you name it, and being redirected towards counting and recounting and looking at various categories of carbon emissions, because these are highly technical calculations that require deep subject matter expertise sure to execute well. So there’s a awful lot of blame to go around here, but the industry could start with what’s the worst stuff and how do we stop shipping as much of it as possible?
Grant Williams:
Look, you’ve went through in the piece and you’ve done a fantastic job here of talking through this in a much broader sense, but coming up with potential, not solutions, absolute solutions, but ways that we can perhaps get better at doing this. When you wrap in writing the piece, having those conversations with your friends and the response to the piece, how do you sum everything up in terms of what the problems are, what the potential solutions are, both from an industry up perspective, but also from a communication to the public down perspective? What have you kind of learned from this whole process?
Doomberg:
It’s not a happy answer, Grant. My big takeaway is that this entire affair and all of the strains of it that we’ve pulled apart are nothing more than the manifestation of our broken political system. We are incapable of having lucid adult conversations about serious topics anymore. It’s a huge challenge, and I don’t know what the answer to that is. It’s scary, frankly. It bodes ill for our society in the next two, five, 10, and 15 years. When politics break down and everything becomes a gotcha team sport, I don’t know how you go from serious problem to authentic debate to imperfect but better solution. I don’t know, but that’s what-
Grant Williams:
Well, look, I mean, sadly the response is, it’s an absolute requirement that you have to put any politics aside if you are going to come up with solutions because they have to be apolitical by definition. The party in power, in a position to make these decisions and implement these policies have to be able to put aside how that might play to their base if it is a better solution. We’ve seen all this with the pipelines and the Biden administration obviously. We’ve seen it in Canada with Trudeau. We’ve seen decisions being made that are clearly not in the best interests of being the best, although not perfect solutions because of the way it’ll play to people’s bases. Sadly, I share your fear and I share this idea that until and unless that can happen, there is no chance of being able to just put in place policies that make the most sense.
Doomberg:
Yeah. Let me give you a concrete example. Gavin Newsom on one side of the equation was correct in what he did with Diablo Canyon. President Trump was correct to warn the Germans about their dependency on Russian natural gas.
Grant Williams:
Right, right.
Doomberg:
I can say both of those things, agnostic to the fact that one is a hero of the progressive left and the other is a hero of the populist right, my opinions on both of them as politicians not withstanding, it doesn’t make me a traitor to either camp to say, Gavin Newsom was right on Diablo Canyon and President Trump was right on German natural gas policy.
Grant Williams:
Well, but sadly it does.
Doomberg:
Of course.
Grant Williams:
It makes you a traitor to both camps, right? And that’s the great sadness here, right? That’s the great sadness, that being balanced, being pragmatic, and being levelheaded is guaranteed to piss off everybody. Right?
Doomberg:
And hence, our ongoing contemplation as to whether we should just stop being on Twitter altogether. There comes a point where it is just unmanageable and bewildering. I’m sure I probably won’t leave Twitter because it is in many ways a fantastic platform that provides an enormous service like the countless DMs we’ve been able to have with people who live in the region asking us various questions about the issue. But at the same time, boy, I mean, when you want to talk about a toxic spill, go to Twitter for all the toxicity you could ever have.
Grant Williams:
Yeah. Twitter is becoming something of a toxic spill. So well, listen, we still have a bit of time, so there’s something else I want to touch on. There’s another piece you wrote about a week or so ago, and that is your piece about we want to see more, which was another pun about using the name of Seymour Hersh. This Nord Stream pipeline article that he published on Substack, I find what’s happened around that truly, truly extraordinary to witness. Here’s a guy, a Pulitzer Prize-winning investigative journalism, arguably one of, if not, the finest investigative reporters still alive today from an era that is long behind us, sadly, publishing a piece on Substack saying absolutely definitively it was the US that blew up the Nord Stream pipeline, going into extraordinary detail about dates and times and people and what was said to who.
And of course, the story was based off a single source, which one can say, okay, fair enough, if that’s the reason that The New York Times wouldn’t touch it or The Washington Post wouldn’t touch it because it had a single source, I can understand that. So he published it on Substack. What I can’t understand is the fact that in the wake of this publication on Substack and the wake of the incredibly serious allegations made in that piece, and I’m going to get you to talk about those because you did so brilliant in your piece, the story then becomes reportable because the story is not necessarily the Nord Stream pipeline, but the fact that a guy with this pedigree has said such and such. And The New York Times and The Washington Post, it will be very easy for them to report about this story all of a sudden. But again, complete crickets, not a word of it in either newspaper. The New York Post took a run in it, and the news wires, Bloomberg, Reuters kind of took a small run of it. But this article and this idea has just been killed.
Now, I’ve seen Seymour Hersh being interviewed on various platforms in this last week, all of which have the taint of crazy subversive media democracy now. And depending on your political stance, you know that most people say, “Oh, well, that’s a quack network and that’s where he belongs. Therefore, there’s no validity to the piece.” I’ve been shocked, genuinely shocked, and it takes a lot to shock my news test, because I am going more cynical with every passing day, at how this story has been handled. Talk a little bit about your experience, the piece you wrote and the response to that.
Doomberg:
Yeah. So as you say, there was a time when, and we opened the piece with this great line, which is back when the media establishment was against war and distrusted the US intelligence apparatus, Seymour Hersh was considered a top tier investigative journalist. Now, look, that was 50 years ago. Lots of things can change in 50 years. And as we said in the piece, he became a bit of a nuisance when he started writing skeptically about the Obama administration, let’s be honest. Because when he wrote about the treatment of Iraqi war prisoners-
Grant Williams:
Abu Ghraib. Yeah.
Doomberg:
Yeah, Abu Ghraib. He was not considered a quack or past his prime or a crank or a conspiracy theorist. It was only when he begin writing about the killing of Osama bin Laden that the media really turned on him, which is instructive in of itself. Okay.
Grant Williams:
Yeah.
Doomberg:
As you said, first thing we did was like, “Hey, this is a single source.” Not to say a single source, it’s anonymous. And look, we’re not professional journalists, but we try to be professional in our journalism.
Grant Williams:
Yes.
Doomberg:
At Doomberg, we are sort of citizen journalists, I guess, for a tired term. But we try to be professional. We try to show our work. We try to make sure our facts are right. We don’t always get our facts right. When we get a fact wrong, we edit the piece. And it is what it is. Okay, what is the policy around publishing a piece around a single anonymous source? So we went to the Associated Press and we actually found their written policy. It’s basically, “The AP routinely seeks and requires more than one source when sourcing is anonymous.” And they go on to say, “In rare circumstances, one source will be sufficient when material comes from an authoritative figure who provides information so detailed that there is no question of its accuracy.”
Grant Williams:
Right.
Doomberg:
Now, we said in the piece, if he got this wrong, his legacy, given what’s at stake, as an investigative reporter will be destroyed and deservedly so, and we said, and deservedly so in bold and italics. And then we went on to say, okay, let’s put that aside. What does it mean if this piece is true? In our view, the destruction of a deca-billion-dollar energy infrastructure project jointly owned by an ally and an adversary is unquestionably an act of war. And Congress has the sole authority to declare a war. And if what Hersh wrote in this piece is true and if is doing an awful lot of work in what’s coming next, Biden should be impeached.
I mean, this is literally an amazingly dangerous act that risks a nuclear war with a nuclear power. Whatever you want to think of Putin Russia, they are a nuclear superpower. And if a 10, $20 billion project that the US was a half owner of got blown up by Russia or China, what would we do? We just spent the whole week being obsessed with a balloon flying over the Midwest.
Grant Williams:
Yeah.
Doomberg:
Imagine if they carpet bombed Freeport, Texas and blew up the chemical industry down there. This is a very, very, very serious set of allegations. Now, again, the hypothetical of if he is correct is so powerfully important that this needs to be covered. And if anything, as we said, the name of the piece was Let’s See More. Okay, media, don’t just call him a crank, do some reporting, prove him wrong.
Grant Williams:
Exactly.
Doomberg:
I would love it. And by the way, we say in the piece, we hope he is wrong. The best outcome of this reporting is Seymour Hersh has ruined his reputation as an investigative reporter.
Grant Williams:
Agreed.
Doomberg:
And it’s binary now either he’s right or he’s wrong. Now, frankly, when you combine his reporting with the circumstantial evidence of what Biden said and what various members of the State Department said and various text exchanges between you know who and you know who, it is easy to be seduced into thinking this reporting is true. It rings true, I’m being totally honest, but I don’t want to believe it because what it means if it’s true, is pretty amazing. And at a minimum, Hersh’s reporting has handed a giant coup to Russia and Putin from a sort of propaganda perspective. But let’s also be clear, if Seymour Hersh knows what happened, every major intelligence agency in the world also knows what happened.
Grant Williams:
Yes.
Doomberg:
And this is a shocking thing in our view. What does it mean that an administration, if true, would perform an act like this and knowingly work to cover it up from Congress while doing so? If I’m a sitting member of Congress, this should be very disturbing. Now, the problem of course, is Biden’s opposition in this case is dangerously pro-war a lot of the time.
Grant Williams:
Mm-hmm.
Doomberg:
So this is an example where we have true bipartisanship. And I don’t know, as we said in the piece, I’m old enough to remember when being anti-war was considered liberal, and now it has somehow morphed into an alt-right/pro-Putin position. I have draft-eligible children. If Congress were to debate and vote to go to war, my children could be drafted. And at least I had congressional representation along the way, which is the way the US constitutional system is set up. To assume that you could just go flagrantly blow up a deca-billion-dollar energy infrastructure of both an ally and an adversary is amazing to me. And by the way, what does this say for Norway and Germany and what does it say for Germany’s stance towards the US? We talked earlier about how Trump was ridiculed for what he said at the United Nations, and I believe it was 2018, warning the Germans about their ongoing dependency on Russian natural gas.
Grant Williams:
I mean, he was literally laughed at. Yeah.
Doomberg:
Literally laughed at. But I mean, if I’m a citizen of Germany, well, what is our relationship with the US?
Grant Williams:
Well, let’s talk about that because, I think, this to me is the crux of the issue if I’m a citizen of Germany. That’s why it’s so important that this stuff be covered, right? Because I would wager that the vast majority of citizens of Germany know nothing about this, right? Because I think there’s just this amazing curtain that comes down over stories like this that somehow become taboo instantly in media right across the world.
I looked in the UK papers, respectable papers, The Times of London, The Guardian, The Telegraph, the three big broadsheets in the UK, nothing, not a mention. And you realize that for citizens to be outraged, which they used to be, let’s go back to the ‘60s and ‘70s in America and this activist investigative journalism era where so many scandals were uncovered, the Pentagon Papers, My Lai, which was obviously Hersh himself, Watergate, There were a string of scandals that were not only broken by mainstream media outlets, but hammered by those outlets. And they took great pride in doing so. And that’s how people obviously found out. There was no social media back then. That’s how thousands of people ended up marching in the streets, was because of the lead taken by mainstream media publications, hard publications back then.
Why is it you think that this has become such a difficult thing to do? Because I always figured, going back many years, that there would come a point where being able to report these stories again and being the person that exposes this stuff became a badge of honor again, became something that you wanted to do rather than you got silenced. And whilst platforms like Substack afford the opportunity for guys like Seymour Hersh to publish and get out there, it’s still such a tiny, tiny avenue to get a message across to the broader public, and most people aren’t paying attention. How does that end up, Doomy?
Doomberg:
I don’t know. So on the one hand, we have been huge beneficiaries of the development of Substack and the ability to do long form journalism. It is also true that the journalists who work in the mainstream media have an incredibly challenging job and are afforded comparatively small compensation for their efforts because the whole media complex has moved away from them. And the advertising model is broken predominantly by Facebook and Google, and you’d be shocked at how much more lucrative it is for somebody to pursue a different career than traditional journalism. So I don’t want to just be piling on mainstream media. And it’s also true that Seymour Hersh publishes on Substack, we published on Substack, and a lot of the worst garbage we’ve seen about this derailment is also appearing on Substack.
Grant Williams:
Right, right.
Doomberg:
Substack is, in a way, taking serious risk in its light approach to moderation, which we of course have benefited from and approved, but that comes with some consequence, including a lot of garbage shows up on Substack too, which then forces you to decide over time which resources are credible and which aren’t as a consumer. And Hersh’s piece, or all of your bemoaning of the fact that it’s not reached the mainstream media, I know something about Substack, I can tell you that his piece as we record here today has 10,609 likes. What that means to me is, it’s probably been read at least two million times. Substack is getting more and more reach. And those two million that it’s reaching are probably inclusive of a series of influencers because who reads you matters almost as much as how many read you.
Grant Williams:
Mm-hmm.
Doomberg:
I would say this is both a risk and a potential turning point for Substack. When we first saw it, we cringe that it was on Substack. Let me be totally transparent. If it’s wrong, it’s going to hugely damage the Substack brand. And we have created, for us, deeply personal, much like certain events are locally really meaningful. If Substack gets significantly damaged because of this article, this necessarily has fallout for us because we have co-branded with Substack, we love the team at Substack, and it is a platform that has enabled us to pursue the work of our lives, and we’re very thrilled to be partners with them. And we hope, for the sake of Substack in a way, that this piece is right and we hope, for the sake of the US, that this piece is wrong. So we’re deeply conflicted on the piece.
Grant Williams:
Right.
Doomberg:
But, much remains to be seen. And Seymour Hersh has published a second piece where he alludes to the fact that he has a lot more to say on the topic and that he is comfortably dismissive of the attacks against him and the piece since it has been published and that we should all stay tuned for more. So we shall see. Again, there are no solutions, only trade-offs. The solution to the media problem that Substack represents is a low barrier to entry and a free and fair market to develop your own credibility. And if we had written a deeply alarmist piece on this derailment and then it turned out to be what we know it will eventually be, we will have justifiably lost a ton of our credibility. So it is in a way the most interesting potential solution to the degradation of mainstream media that we see on the landscape today. Interesting, has both positive and negative attributes.
But the rise of Substack is vastly underestimated by the mainstream media. It is disruptive, literally disruptive in the way in which Silicon Valley would describe it. They’ve made some mistakes. They’re imperfect, they’re humans. We know most of the main people at Substack obviously, given our prominence on their platform. And they, like everyone else, are human. They wake up, they try to do their best, sometimes they make mistakes and then they go to bed. So Seymour Hersh’s splash onto the seamen Substack was amazing, thrilling, scary, but it certainly made me think. So in a sense, that’s sort of the ultimate form of journalism. Now, let’s see what he says next. He does deserve a microphone. I can’t imagine that he would risk his entire career if he didn’t believe… I believe that he believes what he wrote,
Grant Williams:
Right. Yeah, yeah. And when you’re in that line of work, that’s the barrier. Do you believe it? Can you put yourself behind it and say, “No, this is what I believe to be the truth”? Now, there is obviously a chance that you’re wrong. And the more experienced the journalists, the greater lengths I suspect they go to before they’re willing to say, “I believe this to be true.” And that’s why I think the fact that this was Hersh, with a six or decades of doing this, his process has been honed and refined over the years. And the more of these things he exposed, the more rigorous he has to be the next time someone brings something to him because obviously they want his name behind their story. So one would imagine that his fact checking and the level of comfort he has to get to with a source to print a story like this, the bar must be incredibly high for him to do this.
Doomberg:
Yeah. And as you know, as a content creator and something we struggle with all the time, a piece like this might have 150 facts. Our piece on the derailment had, I’m sure, far more than a hundred facts. And you could get a few facts wrong and not lose the plot. Right? But if you get a fact or two wrong, that can be used as a wedge to discredit the other 148 that he might have published.
Grant Williams:
Mm-hmm. Yeah.
Doomberg:
I mean, the thrust of his accusation and his reporting is that the US and Norway blew up this pipeline. Imagine that he got a critical fact wrong about the nature of the explosives that were used or the day in which it was done or whatever, that would be devastating to his credibility and not necessarily impact the correctness of his conclusions. And people make mistakes. We make mistakes. Not all the time, we try our best not to make them, but when we do make them, we say, okay, let’s fix it on the website right away. And then what do we do wrong so that we can prevent making that mistake again?
And by the way, as your audience grows, that responsibility grows. When we were first starting out and we were being read by a thousand people, that’s a different situation and we were less experienced than where we are today. So it is entirely possible that there are key facts of his reporting that are wrong, but that the underlying conclusion is 100% right. So we’ll see. Again, in a preamble piece, which nobody read, compared to this piece at least, and we quoted it in ours, he said, “This piece is the truth that three months worth of work makes us believe,” or something like that. I could get the exact quote.
Grant Williams:
Right. Right.
Doomberg:
But like he said, “I believe this to be true. And I spent three months working on the piece.” And what I would say is the gauntlet has been thrown down to the mainstream media. The Washington Post has no shortage of contacts in the intelligence community. The New York Times, they have the resources. CNN, Wall Street Journal, pick your favorite. Let’s see. Let’s see more.
Grant Williams:
Well, The New York Times has the resources and it also has a very long-standing relationship with Seymour Hersh and a deeper understanding than any other media of his credibility, of his legitimacy, again, which is why it makes it all the more surprising to me that he’s been effectively kind of shunned by that organization in particular.
Doomberg:
Yeah. And again, that sort of wrapped the whole conversation into a little bit of a bow, like the rise of Substack and the piece, for example, that we wrote about the train derailment compared to the piece we quoted from Newsweek, is a sort of second order and real phenomenon that is disrupting the manner in which we consume information and entertainment. And it’s real. Unless the mainstream media does a better job of responding to a piece like this that appears on Substack, they risk an ever decreasing relevancy in our discourse. And in many ways, that’s tragic. The country was better when people trusted the media and when people trusted the government. The blowback on our reliance on that PDF file from the EPA is sad proof of just how far that trust has been decayed. And one hopes that we’ve not gone so far beyond what is recoverable as a society because that outcome is not a pleasant one.
Grant Williams:
Yeah, look, you’re right. And that trust in government has to be earned. And once it’s earned, it has to be maintained. And successive governments have done a poor job of maintaining that. Well, that is a perfect bow to wrap around this conversation, and I thank you for doing this. We’re recording this on Sunday morning, so thanks for giving up some of your Sunday morning to have this conversation. For anybody listening to this, we’ll post this out in the wild so everybody can listen to it. So anyone that comes across it and isn’t familiar with your work, where can they find you? Just give them all your digits and your @’s.
Doomberg:
So the only digit we’re going to give now is doomberg.substack.com. Given my reluctance to even be on Twitter anymore, I hesitate to tell you where you can find us on Twitter. But all of our writing is at doomberg.substack.com. We publish six to eight pieces a month on energy, finance, and the economy at large, mixing a bit of crypto once in a while. Appreciate the opportunity. I’m glad we’re making this free for everybody, just like we did on the piece. And thank you, Grant, for developing such a great platform for us to have this conversation.
Grant Williams:
All right, my friend, well, I’ll see you around the farmyard sometime soon.
Doomberg:
I hope so. Always great to talk to you, Grant.
Grant Williams:
Bye-bye.
Nothing we discussed should be considered as investment advice. This conversation is for informational and hopefully entertainment purposes only. So, while we hope you find it both informative and entertaining, please do your own research or speak to a financial advisor before putting a dime of your money into these crazy markets.
