Convulsive Correction!

I work in the world of business and technology. And I have seen an endless stream of terrible, awful, no-good technologies receive billions in funding. The standard worldview among financial “experts” has been that if everyone is investing in something, it must be good. This is not because intelligent people are stupid. It is because people intelligently rationalize stupidity.

The way people think dominates: if you see things through one lens, then everything is filtered through that perspective. It is why people who adhere to different religions never really consider data that would suggest to someone else that their religion is wrong. The same thing is true for notions about health: a person who is focused on macrobiotics or sugar or bran or vaccines will explain everything through that lens. People don't really care that other people, with different health beliefs, may live just as long as they do. We are all very stubborn about changing our minds just because the data might not agree with what we already think.

So people – politicians and businessmen and investors, and every Tom, Dick, and Harry - have an instinctive gut belief that what most people do and think is the right way to go. And so they follow the herd. Does anyone believe Jeff Bezos, owner of the Washington Post, really believes in Free Minds and Free Markets? Apparently, he does now, because the winds have shifted. The same can be said for all the huge companies that have changed their DEI policies. The old giants are toppling.

Thomas Kuhn, in The Structure of Scientific Revolutions, explained how ways of looking at data can be entirely dismissed when a new way of thinking comes along. He points out that science does not build linearly – in normal times we may stand on the shoulders of giants, but when everything changes, we stand on the shoulders of giant killers. Kuhn invented the common use of the idea of a Paradigm Shift.

There are lots of fads in the world, including investment and technology worlds. It was not long ago that everyone fixated on drinking eight extra cups of water or thought that getting in 10,000 steps was the Key to a Longer/Better Life. And now it is living without added sugar, processed food or GMOs. In history, humans have lived through every imaginable fad about human health – macrobiotics, bran, organic, you name it. Every supplement under the sun seems to come into vogue. Almost all of them go out again. But people still remain credulous to a fault. Somehow we desperately read up on, and cling to, the latest “discovery” that eggs are good – or bad.

In the realm of overarching economic expectations, people have been predicting the end of fossil fuels since they were first discovered. And if you go back 20 years, everyone KNEW oil would be $200 a barrel and climbing by now. Go back to the start of Covid, when everyone was sure aviation would not recover to be the same as it was – Zoom meetings would replace travel, and businesses would stop spending money on expensive tickets… all the certainties faded away. But they faded slowly.

Most of these changes are slow, slow enough that most people are surprised when they are confronted with their previous beliefs and assertions. And the shifts, when they occur, do not bring everyone with them. There are always some True Believers left behind when the common perspective changes. Many people are still hydrating like crazy, eating bran supplements, or wearing masks. They might do it for the rest of their lives. But they are still just mere remnants of a no-longer-popular ideology.

Think of all those trends: New business models that rarely, if ever make money – think of Uber and AirBnB and all their competitors. World-beating mobility like Segways, or Scooters (not profit centers even if popular). And think of technologies that also failed or are failing: Blockchain and eVTOLs and EVs in general; battery technologies, hydrogen, wind and solar energy.

But right now, we are in extraordinary times, times that we have never seen before, and almost certainly will never see again. Right now, in this moment, the world is in a wormhole. Everything is changing very, very quickly. And a lot of things that everyone knew to be certainly true are simply disintegrating. It is a paradigm shift – when the world view shifts.

Electric vehicles were very hot – and now they are a lodestone for every car maker except for (maybe) Tesla. I know Ford dealerships who are trying to get all EVs off the lot for good. Everyone knew EVs were going to dominate. But now it looks like they will remain a niche product for those who have a driveway and can afford at least two vehicles.

In aviation, things I have been predicting for years are now coming true. All the eVTOLs have failed or are failing despite billions of dollars in investment. See Lilium, Volocopter, CityAirbus. The electric aircraft, like Eviation and Airbus Electric and Heart and Tecnam – all failed or failing. Hybrids will follow suit for all but the smallest of niches. And hydrogen? Complete collapse. ZeroE, Universal Hydrogen, Airbus… all of the above are being relegated to the “send them research dollars to keep the nerds employed while we try to think of something else” assisted living facility.

Expensive bio-fuels, such as SAF, will absorb billions more before they, too, will succumb to reality. If I truly thought global warming/climate change was the biggest threat to mankind, I would be furious that the cause has been used as an excuse for political kickbacks and shenanigans. Whether or not climate change is real, the funds allocated toward it that were pure corruption have undermined its validity and made a mockery of what were supposed to be noble goals.

In aviation, the tide has turned so quickly that in the past 2 weeks alone, all the previously giddy pundits have turned into skeptics (see AirInsight, Leeham and AviationWeek).

The crazy thing is that the facts have not changed. The bad ideas were bad a year ago, and two years ago. Investing billions in battery technologies has been contraindicated since forever (the net ROI on leading-edge battery investments is awful). But most people, most of the time, are not trying to get it right. They just don’t want to stick their heads up.

This explains why, when ESG was hot, everyone needed to show that they were ESG. The same was true with DEI. Now that two major crashes have happened in short order while DEI hires were behind aircraft controls, I think DEI will be abandoned. No airline, even Delta, can afford to have a reputation for having pilots based on qualities other than their merit as pilots.

The True Believers? Casualties of war. Those companies that believed in government-backed climate change, the ones built entirely on the backs of the terrible, no-good assumptions that underpin ESG and DEI? I mean the ones that did not realize it was all a scam or at least a fad, the ones that went all-in instead of merely paying lip service or sponging up the free money. I hope they rest in peace.

Europeans remain largely True Believers. And so they are either behind on this massive correction, or they will stick to their “principles” and commit suicide. Given the posture of most European countries on Muslims, civilizational suicide is probably the odds-on favorite.

Just as Trump is forcing the Deep State to go back to its Constitutional roots as working for the president, so, too, the fundamental reality is reasserting itself across the entire swath of technology and innovation. What makes this so gobsmackingly, head-shakingly dizzying is that it is happening so quickly that people cannot keep up.

We live in interesting times. And I am loving it.