Flat Earth News  

The Guardian has an article from Nick Davies on the sad state of the modern media - "an industry whose task should be to filter out falsehood has become a conduit for propaganda and second hand news". From "Our media have become mass producers of distortion":

Here's a little example of what I call Flat Earth News. In June 2005, Fleet Street told its readers about a gang of feral child bullies who had attempted to murder a five-year-old boy by hanging him from a tree; the boy had managed to free himself. This story was not true. Indeed, it was obviously not true from the moment it started running. There was the commonsense problem that even a fully grown man with 10 years of SAS training who found himself hanging by the neck would have the greatest difficulty in reaching up and lifting his entire body weight with one hand while using the other to remove the noose. How would a five-year-old boy do it?

More than that, there was the evidence in the story itself. From the first day, the police refused to say the boy had been hanged. The parents and neighbours, who told the press how shocked they were, never claimed to know what had happened. The one and only line on which the whole story was built was a quote from the boy's adult cousin, who said he had told her: "Some boys and girls have tied a rope around my neck and tried to tie me to a tree." That's "tie me to a tree", not "hang me from a tree".

It was a nasty case of bullying but not an attempted murder. A 12-year-old girl had put a rope around the boy's neck and led him round like a dog, pulling on it hard enough to leave marks on his neck. That was clearly dangerous. But the boy never claimed she had hanged him from a tree. Indeed, he never even claimed that she had tied him to a tree, only that she had tried to. To double check, we spoke to Professor Christopher Milroy, the Home Office pathologist who handled the case. He said: "He had not been hanged. That was not correct and I couldn't understand why the press were insisting that he was."

Nevertheless, the tabloids ran all over it; and TV and the rest of Fleet Street joined in. The London Evening Standard called it a lynching; the Mail, Guardian and Times ran headlines which stated boldly that the boy had been hanged; the Independent ran a moody feature about fear descending on the boy's estate. Sundry columnists joined in with solemn comment about the youth of today and the impact of violence on television.

The ingredients in this little story run routinely through a stream of other small stories, through stories as big as those about the Iraqi weapons of mass destruction, and then into a flood of media commentary that feeds into government policy and popular understanding - falsehood as profound as the idea that the Earth is flat, widely accepted as true to the point where it can feel like heresy to challenge it.

There never was a time when news media were perfect. Journalists have always worked with too little time and too little certainty; with interference from owners and governments; with laws that intimidate and inhibit the search for truth. But the evidence I found in researching my new book, Flat Earth News, suggests our tendency to recycle ignorance is far worse than it was.

I commissioned research from specialists at Cardiff University, who surveyed more than 2,000 UK news stories from the four quality dailies (Times, Telegraph, Guardian, Independent) and the Daily Mail. They found two striking things. First, when they tried to trace the origins of their "facts", they discovered that only 12% of the stories were wholly composed of material researched by reporters. With 8% of the stories, they just couldn't be sure. The remaining 80%, they found, were wholly, mainly or partially constructed from second-hand material, provided by news agencies and by the public relations industry. Second, when they looked for evidence that these "facts" had been thoroughly checked, they found this was happening in only 12% of the stories.

The implication of those two findings is truly alarming. Where once journalists were active gatherers of news, now they have generally become mere passive processors of unchecked, second-hand material, much of it contrived by PR to serve some political or commercial interest. Not journalists, but churnalists. An industry whose primary task is to filter out falsehood has become so vulnerable to manipulation that it is now involved in the mass production of falsehood, distortion and propaganda. ...

Naomi Klein has an article wondering if the credit crisis and some of the solutions being touted may be another manifestation of disaster capitalism. Beware of what demons you may be unleashing, finance doomers...

Moody's, the credit-rating agency, claims the key to solving the United States' economic woes is slashing spending on Social Security. The National Association of Manufacturers says the fix is for the federal government to adopt the organization's wish-list of new tax cuts. For Investor's Business Daily, it is oil drilling in the Arctic National Wildlife Refuge, "perhaps the most important stimulus of all."

But of all the cynical scrambles to package pro-business cash grabs as "economic stimulus," the prize has to go to Lawrence B. Lindsey, formerly President Bush's assistant for economic policy and his advisor during the 2001 recession. Lindsey's plan is to solve a crisis set off by bad lending by extending lots more questionable credit. "One of the easiest things to do would be to allow manufacturers and retailers" -- notably Wal-Mart -- "to open their own financial institutions, through which they could borrow and lend money," he wrote recently in the Wall Street Journal.

Never mind that that an increasing number of Americans are defaulting on their credit card payments, raiding their 401(k) accounts and losing their homes. If Lindsey had his way, Wal-Mart, rather than lose sales, could just loan out money to keep its customers shopping, effectively turning the big-box chain into an old-style company store to which Americans can owe their souls.

If this kind of crisis opportunism feels familiar, it's because it is. Over the last four years, I have been researching a little-explored area of economic history: the way that crises have paved the way for the march of the right-wing economic revolution across the globe. A crisis hits, panic spreads and the ideologues fill the breach, rapidly reengineering societies in the interests of large corporate players. It's a maneuver I call "disaster capitalism."

Sometimes the enabling national disasters have been physical blows to countries: wars, terrorist attacks, natural disasters. More often they have been economic crises: debt spirals, hyperinflation, currency shocks, recessions.

More than a decade ago, economist Dani Rodrik, then at Columbia University, studied the circumstances in which governments adopted free-trade policies. His findings were striking: "No significant case of trade reform in a developing country in the 1980s took place outside the context of a serious economic crisis." The 1990s proved him right in dramatic fashion. In Russia, an economic meltdown set the stage for fire-sale privatizations. Next, the Asian crisis in 1997-98 cracked open the "Asian tigers" to a frenzy of foreign takeovers, a process the New York Times dubbed "the world's biggest going-out-of-business sale."

To be sure, desperate countries will generally do what it takes to get a bailout. An atmosphere of panic also frees the hands of politicians to quickly push through radical changes that would otherwise be too unpopular, such as privatization of essential services, weakening of worker protections and free-trade deals. In a crisis, debate and democratic process can be handily dismissed as unaffordable luxuries....

The way we respond to crises is always highly political, a lesson progressives appear to have forgotten. There's a historical irony to that: Crises have ushered in some of America's great progressive policies. Most notably, after the dramatic market failure of 1929, the left was ready and waiting with its ideas -- full employment, huge public works, mass union drives. The Social Security system that Moody's is so eager to dismantle was a direct response to the Depression.

Every crisis is an opportunity; someone will exploit it. The question we face is this: Will the current turmoil become an excuse to transfer yet more public wealth into private hands, to wipe out the last vestiges of the welfare state, all in the name of economic growth? Or will this latest failure of unfettered markets be the catalyst that is needed to revive a spirit of public interest, to get serious about the pressing crises of our time, from gaping inequality to global warming to failing infrastructure?

The disaster capitalists have held the reins for three decades. The time has come, once again, for disaster populism.

Michael Klare has an article at TomDispatch on the role of oil in halting US economic growth - "Barreling into Recession: How Oil Burst the American Bubble".

The economic bubble that lifted the stock market to dizzying heights was sustained as much by cheap oil as by cheap (often fraudulent) mortgages. Likewise, the collapse of the bubble was caused as much by costly (often imported) oil as by record defaults on those improvident mortgages. Oil, in fact, has played a critical, if little commented upon, role in America's current economic enfeeblement -- and it will continue to drain the economy of wealth and vigor for years to come.

The great economic mega-bubble arose in the late 1990s, when oil was cheap, times were good, and millions of middle-class families aspired to realize the "American dream" by buying a three (or more) bedroom house on a decent piece of property in a nice, safe suburb with good schools and various other amenities. The hitch: Few such affordable homes were available for sale -- or being built -- within easy commuting range of major metropolitan areas or near public transportation. In the Los Angeles metropolitan area, for example, the median sale price of existing homes rose from $290,000 in 2002 to $446,400 in 2004; similar increases were posted in other major cities and in their older, more desirable suburbs.

This left home buyers with two unappealing choices: Take out larger mortgages than they could readily afford, often borrowing from unscrupulous lenders who overlooked their overstretched finances (that is, their "subprime" qualifications); or buy cheaper homes far from their places of work, which ensured long commutes, while hoping that the price of gasoline remained relatively low. Many first-time home buyers wound up doing both -- signing up for crushing mortgages on homes far from their places of work.

The result was metastasizing exurban home developments along the beltways that surround major American cities and along the new feeder roads that now stretched into the distant countryside beyond. In some cases, those new homeowners found themselves 30, 40, even 50 miles or more from the urban centers in which their only hope of employment lay. Data released by the U.S. Census Bureau in 2004 showed that virtually all of the fastest growing counties in the country -- those with growth rates of 10% or more -- were located in exurban areas like Loudoun County, Virginia (35 miles west of Washington, D.C.) or Henry County, Georgia (30 miles south of Atlanta).

At the same time, cheap oil and changing consumer tastes -- pushed along by relentless advertising campaigns -- led many of the same Americans to trade in their smaller, lighter cars for heavy SUVs or pickup trucks, which, of course, meant only one thing -- a significant increase in oil consumption. According to the Department of Energy, total petroleum use rose from an average of 17 million barrels per day in 1990 to 21 million barrels in 2004, an increase of 24% -- most of it being burned up on American roads.

Let the Good Times Roll (into the Exurbs)

In 1998, when the bubble was taking shape, crude oil cost about $11 a barrel and the United States produced half of the petroleum it consumed; but that was the last year in which the fundamentals were so positive. American reliance on imported petroleum crossed the 50% threshold that very year and has been rising ever since, while the cost of imported oil hit the $100 per barrel mark this January 2 for the first time, an all-time record (though the price was once briefly higher, as measured in older, less inflated dollars).

When that steady price climb, combined with growing dependence on imported petroleum, was translated into the new exurban landscape the economic bubble began to shudder. As a start, there was that ever-increasing outflow of dollars needed just to pay for all those barrels of crude and the resulting surge in America's foreign-trade deficit.

Consider this: In 1998, the United States paid approximately $45 billion for its imported oil; in 2007, that bill is likely to have reached $400 billion or more. That constitutes the single largest contribution to America's balance-of-payments deficit and a substantial transfer of wealth from the U.S. economy to those of oil-producing nations. This, in turn, helped weaken the value of the dollar in relation to key foreign currencies, especially the euro and the Japanese yen, boosting the cost of other imported foreign goods and so threatening to fuel inflation at home.

Meanwhile, two critical developments kept the cost of oil rising: a dramatic increase in global demand, largely driven by the emergence of China and India as major consuming nations; and a pronounced slowdown in the expansion of global supply, due mainly to a dearth of new discoveries and recurring political disorder in key oil fields already in production. This meant that American energy consumers -- including all those long-distance commuters with crippling mortgages and gas-guzzling SUVs -- had to compete with newly-affluent Chinese and Indian consumers for access to ever more costly supplies of imported petroleum. Something had to give.

As the oil import bill kept rising, the value of the dollar kept falling, and inflationary pressures kept building, the country's central bankers responded in classic fashion by raising interest rates. This naturally resulted in substantially higher monthly payments for homeowners with variable-rate mortgages. For many families already stretched to the limit, this would prove the final blow. Forced to default on their mortgages, they then precipitated the subprime crisis by, in effect, puncturing the bubble.

Even then, the economy might have had a chance had that crisis not come in tandem with the $100 barrel of oil. By December, consumers were cutting back on nonessential purchases, producing the most disappointing holiday retail season since 2001. When questioned, many indicated that the high cost of gasoline and home-heating fuel had forced them to economize on Christmas gifts, winter vacations, and other indulgences. "If gasoline prices go up, that means there's less to spend on everything else," said David Greenlaw, chief U.S. fixed-income analyst at Morgan Stanley.

The high price of gasoline was bad news for another pillar of the economy as well: the auto industry. While Japanese companies were busy rolling out hybrid vehicles and small, fuel-efficient conventional cars, Detroit stuck doggedly to its now-obsolete business model of producing large SUVs and light trucks, which had, in recent years, been the source of most of its profits. Once the price of oil went stratospheric, of course, Americans predictably stopped buying the gas guzzlers, signing what looked like an instant death certificate for an improvident industry. In 1999, for example, Ford sold more than 428,000 mid-sized Explorer SUVs; in the first 11 months of 2007, the equivalent number was 126,930 Explorers (and even that puts a gloss on the corpse, as November was one of the worst months in recent automotive history). An auto industry in decline naturally means that many ancillary industries will be facing contraction, if not disaster.

Popping the Bubble

Then came January 2. Although oil retreated from the $100 mark by the end of that day on the New York Mercantile Exchange, the damage had been done. Stocks on the New York Stock Exchange plummeted, suffering their worst loss on a New Year debut since 1983. Gold, meanwhile, soared to an all-time high -- a sure indication of international anxiety about the vigor of the U.S. economy.

Since then, stock market panics have hit major financial centers around the world. Only a dramatic last-minute decision by the Federal Reserve to reduce overnight lending rates by three-quarters of a point before the markets opened on January 22 averted a further, potentially catastrophic slide in stock prices. Many analysts now believe that a recession is inevitable -- possibly a long and especially painful one. A few are even mentioning the "D" word, for depression.

Whatever happens, the American economy will eventually emerge from this crisis significantly weaker, largely because of its now-inescapable dependence on imported oil. Over the past decade, this country has squandered approximately one and a half trillion dollars on imported oil, much of which has been poured down the tanks of grotesquely fuel-inefficient vehicles that were conveying drivers on ever lengthening commutes from the exurbs to employment in center cities.

Today, a large share of this money is deposited in so-called sovereign-wealth funds (SWFs). Americans should get used to that phrase. It stands for giant pools of wealth that are under the control of government agencies like the Kuwait Investment Authority and the Abu Dhabi Investment Authority. These SWFs now control approximately $3 trillion in assets, and, with more petrodollars pouring into the petro-states every day, they are projected to hit the $12 trillion mark by 2015.

What are those who control the sovereign-wealth funds doing with all this money? For one thing, buying up choice U.S. assets at bargain-basement prices. In the past few months, Persian Gulf SWFs have acquired a significant stake in a number of prominent American firms, giving them a potential say in the future management of these companies. The Kuwait Investment Authority, for example, recently took a $12 billion stake in Citigroup and a $6.5 billion share in Merrill Lynch; the Abu Dhabi Investment Authority acquired a $7.5 billion stake in Citigroup; and Mubadala Development of Abu Dhabi purchased a $1.5 billion share in the privately-held Carlyle Group.

These acquisitions are just a small indication of a massive, irreversible shift in wealth and power from the United States to the petro-states of the Middle East and energy-rich Russia. These countries, notes the International Monetary Fund, are believed to have raked in $750 billion in 2007 and are expected to do even better this year -- and each year thereafter. What this means is not just the continuing enfeeblement of the American economy, but an accompanying decline in global political leverage.

Nothing better captures the debilitating nature of America's dependence on imported oil than President Bush's humiliating recent performance in Riyadh, Saudi Arabia. He quite literally begged Saudi King Abdullah to increase the kingdom's output of crude oil in order to lower the domestic price of gasoline. "My point to His Majesty is going to be, when consumers have less purchasing power because of high prices of gasoline -- in other words, when it affects their families, it could cause this economy to slow down," he told an interviewer before his royal audience. "If the economy slows down, there will be less barrels of [Saudi] oil purchased."

Needless to say, the Saudi leadership dismissed this implied threat for the pathetic bathos it was. The Saudis, indicated Oil Minister Ali al-Naimi, would raise production only "when the market justifies it." With that, they made clear what the whole world now knows: The American bubble has burst -- and it was oil that popped it. Thus are those with an "oil addiction" (as President Bush once termed it) forced to grovel before the select few who can supply the needed fix.

In other news:

AutoBlogGreen has a post on a company called Green Star Products that have grown a biodiesel algae in Montana in winter.

Americablog asks the obvious (if frowned upon) question - when Exxon is making world record profits, why does it (and the rest of the oil industry) still get vast tax breaks - "Tax breaks for Big Oil or green energy?".

Technology Review has an article on "Creating Ethanol from Wood More Efficiently" - on a startup called ZeaChem using "Bacteria in termite guts to make ethanol from noncorn sources cheaper".

Technology Review also has a look at the recent spate of cable damaging afflicting the internet - "Multiple fiber cuts to undersea cables show the fragility of the Internet at its choke points", whose cause is still unknown, in "Analyzing the Internet Collapse. Energy Bulletin has a roundup of stories about the opening of the Iran Oil Bourse and conspiracy theories linking this to internet damage. Cryptogon points out that all the rumours that Iran has been cut off are false but that the cables were not cut by ship anchors.

Cryptogon also points to a magazine article about wave power from 1932 called "Putting Nature's Power To Work" at Modern Mechanix.