The Tapeworm Economy  

Posted by Big Gav

Peter at Karavans has a post on the "tapeworm economy", which is irresistable from a headline point of view. While this isn't related to our energy predicament in any way, it does look at a number of trends which have worried me for a while - the ones which make me think Bush will be known in the future as the "father of american socialism" (though to be fair he is merely accelerating changes which began long before he became "president"). A few years ago I began to wonder how the average person gets by - and Australia seems to be doing comparitively well thanks to our resource boom. I suspect if the housing market ever reverts to values closer to historical norms and/or the resource boom ends then you could start to see some crankiness emerging out in the suburbs...

Ever have the uncomfortable feeling that something's wrong with the economy--terribly wrong--despite the chorus of upbeat pronouncements from Wall Street? Well, you're not alone. In reality Wall Street decoupled itself from Main Street back in the 1980s, but continues to this day to deny the fact. The good news is that every day fewer and fewer people accept this lie.

Back on April 5th, 2006, the NY Times had an article titled The Economics of Henry Ford May Be Passé by David Leonhardt. In it he rolls over the rock and sheds light on some pretty disheartening economic data.

First off, real wages for 80% of Americans have remained stagnant since the mid 1970s. Meanwhile, the top executives who have driven most of American industry into the ground (e.g., the auto industry) or moved it to China and India have made off like bandits in terms of salaries, benefits, stock options, and golden parachutes. Back in the 1950s and 1960s the disparity between executive and worker pay wasn't anywhere near as extreme as it is today. Back then a typical executive at a large company earned 50 times what a worker did. Today that disparity is typically a multiple of 500 or 1000.

Now here's something really interesting data from Stephen Roach, the Chief Economist at Morgan Stanley in a piece called Globalization's New Underclass, from March 2006. In the article he admits that globalization is benefitting only a few at the very top. For the rest of humanity globalization is basically a euphemism for "race to the bottom."

This includes most Americans.


Only in America have concentration of capital and gross disparities in income been twisted into something positive by the professional spin doctors. There are sound economic and moral reasons why both Bill Gates and Warren Buffett asked President Bush not to repeal the inheritance tax a few years ago. Without it wealth becomes even more concentrated in the hands of a few leading to a society like 19th century England where the landed gentry owned and controlled everything. The other 90% lived as serfs.

Welcome to the Tapeworm Economy.

Over the weekend, I listened to a couple audio seminars by Catherine Austin Fitts on what she calls the "tapeworm economy". The tapeworm is a parasite which injects a hormone into its host which then makes the latter crave whatever the tapeworm needs in order to survive and flourish. This is how big business and big banking work as well. They are tapeworms. The interesting thing about Ms. Fitts is that she doesn't just stop at describing the problem; she provides a practical solution for killing off the tapeworm in our communities through local financial systems.

The amount of influence wielded by bloggers seems to be a topic of discussion this week, with the SMH emitting an article called "The rise of the blogger", which claims "bloggers and internet pundits are exerting a 'disproportionately large influence' on society".

Look on my works, ye mighty, and despair !

Back to the real world (the basic thrust of the article seems to be correct but I think the average blogging punter shouldn't overestimate his or her influence), Energy Bulletin points to an article with a similar theme by Bill McKibben called "the hope of the web". Bloggers of various forms, and the rapid lowering of barriers to publishing in general that the internet has made possible, have certainly made the information landscape a lot more interesting, informative and accessible than was the case 5 years ago. I think (or at least hope) the next generation of "always on" people will turn out to be less susceptible to propaganda and media spin than many of us have been.
What gives Kos and Jerome credibility is less their solid and straightforward book than the Web community they've helped to inspire and build. It includes a series of literally interlinked sites, ranging from the enormous if somewhat predictable, such as, partially financed by George Soros, to the tiny and tightly focused. A few are expert blogs on particular topics: the University of Michigan professor Juan Cole, for instance, gives detailed accounts of the day's events in Iraq at his Informed Comment site, Others derive from more traditional journalism: Josh Marshall at Talking Points Memo employs a couple of full-time reporters to uncover and explain the latest developments in the Republican congressional scandals. Others are more traditional blogs (if "traditional" can be applied to a medium four or five years old).

...When we consider Kos's own Web site and its numerous links to other blogs, we see something like an expanding hive of communication, a collective intelligence. And the results can be impressive. A writer with the pen name (mouse name) Jerome à Paris, for instance, organized dozens of other Kossacks interested in energy policy to write an energy plan that I find far more comprehensive and thoughtful than anything the think tanks have produced. It's been read and reshaped by thousands of readers; it will serve as a useful model should the Democrats retake Congress and have the ability to move legislation.

On the subject of George Soros, his old partner Jim Rogers is predicting gold is on course to hit $US1000 an ounce. He appears to be a firm believer in peak oil as well, judging by some of his comments (though anyone riding the commodities boom has a vested interest in the concept of resource depltion in general, so I always tend to take this sort of pronouncement with a grain of salt)
"The shortest bull market for commodities lasted 15 years, the longest 23 years," Mr Rogers, 63, said in Singapore on Monday. So if history is any guide, "they've got a long way to go".

Prices of crude oil, copper and zinc are at records as speculators and hedge funds seek investments delivering greater returns than stocks and bonds. Global supplies have been curbed by a lack of investment and output disruptions, making it harder to meet demand led by China, the world's fastest growing major economy. The Goldman Sachs index of 24 commodities reached an all-time high on Tuesday.

"Supply and demand is terribly out of balance for nearly all commodities right now," Mr Rogers said. "This is not a bubble."

Bullion for immediate delivery reached a 25-year high of $US624.80 an ounce yesterday, still below an all-time peak of $US850 for spot gold in 1980. Crude oil rose to a record $US71.60 a barrel in New York on Tuesday and copper gained the most in nine years.


Lack of investment in new supplies of commodities is driving up prices.

"Nobody has discovered a major oilfield in over 35 years. All the major oilfields are in decline," Mr Rogers said. "Unless someone does something quickly, the price of oil is going to go a lot higher over the next decade."

He depicted a similar scenario for metals. "Nobody has opened any major mines anywhere in the world for many years and it takes a long time to bring new mines on stream," he said.

"All the old mines are in the process of being depleted and demand is continuing to grow."

Mine shortages also figure prominently in this look at the shortage (or otherwise) of uranium that is causing uranium prices to soar from the (very pro nuclear) Nuclear Energy Institute (via Energy Bulletin - who also link to Free Republic on thermal deploymerisation - bizarre place to be getting your news from, but at least the freeper commentary that follows the article is mercifully free of the usual racist, genocidal nonsense many of them like to spend their time writing). Peak uranium, or more likely, no peak uranium - nuclear is still a waste of time from my point of view - conservation and renewables are cheaper, cleaner, safer...
Existing producers, with costs assumedly below the $10 marker (or they would surely not have produced before, unless they had long-term contracts at above this level) have every incentive to stretch production to the maximum, as each pound of uranium must be earning a fantastic profit. So what is wrong?

The answer is important as anti-nuclear people have begun to pick up on escalating uranium prices and some predictions of shortages to claim that there isn’t enough uranium to sustain an upsurge in nuclear power and/or that it will be necessary to exploit increasingly poor grades in future, implying higher costs and carbon emissions from the fuel cycle. To them, uranium is really no different to oil, where the ‘peak oil’ proponents are now rubbing their hands that it is, at last, apparently beginning to run out.

The first point to make is that there is no shortage of uranium resources in the world. As my article in the November 2005 edition of NEI ("Will there be enough uranium to fuel nuclear growth?" – see link below) makes clear, uranium is abundant geologically and there is now a significant upturn in exploration underway, following the price hike. In any case, proven reserves are more than sufficient to fuel a significant expansion in nuclear power – beyond that, further economic resources will undoubtedly be discovered, while new reactor types are almost certain to economise significantly on the quantity of uranium required.

...The essential message is that it simply takes time to develop new mines.

Petrol prices are now at record prices here, with a stream of stories about the likely squeeze on various forms of discretionary spending as fuel expenditure rises. The Herald has a report on various calls for the need to look at alternatives to oil - no one mentions depletion, just perceived OPEC conspiracies and dependence on the "unstable" middle east - and some of the proposed solutions sound like anti-solutions to me.
Mr Cumming said Australia should immediately consider alternative fuels and look at resources available here. He said that, while Australia had abundant natural gas supplies and 500 years of supply of brown coal in Victoria's La Trobe Valley, it should investigate new sources of energy, including technology that converts coal to liquid to run a combustion engine.

"I'm not sure what will need to be done [to convert cars], but the point is that, if this is going to be inflationary and take the edge off Australian goods and services, we've got to seriously look at alternatives," he said. "Maybe our use of energy from the one source makes us too dependant on other people in the world, therefore are we vulnerable to security of supply."

Opposition Leader Kim Beazley said Australia had to reduce its growing dependency on Middle East oil to ease the burden of rising petrol prices on local motorists.

"There is now no substitute for going down the road of long-term effort to render ourselves less dependent on Middle East oil," Mr Beazley told ABC Radio in Adelaide. "The situation in the Middle East, politically, is fraught, the situation with petrol supplies, in the long term, from the Middle East is fraught. We've got to go down the road now [of developing] ethanol, biodiesel and, above all, gas to liquid conversion."

TreeHugger has a post on Mixing It Up: -- Oil Climate & Wind Together which ends with a pleasingly Alice-in-wonderland style suggestion for powering drilling rigs....
This post is a three-in-one. We thought the three stories just belonged together, like Leonardo's perpetual motion wheel sketches (shown above). First off; we have a report that a planned climate impact assessment field trip to the arctic by an international team of scientists will be joined by oil prospectors (we wish it were via The Onion; but it's not). In a second item, it was "quietly reported" this Easter that the US set a new annual CO2 emissions record, for the reporting year 2004 (translation; "quietly reported" = ignored by US media). Let the show begin. Ladies and Gentlement, in the first ring, from The Guardian: "British scientists are at loggerheads with US colleagues over a controversial plan to work alongside oil companies to hunt for fossil fuel reserves in the Arctic. The US Geological Survey is lining up a project with BP and Statoil to find oil and gas in the Arctic Ocean, under the auspices of a flagship scientific initiative intended to tackle global warming". What happens if you accidentally find a sign of oil? It might not really be oil so it's OK. "BP said it was not using the research to prospect in the Arctic and that geological surveys could be misleading: "Very often it's intended to get you an indication, not necessarily of oil in a particular place, but what there might be in adjacent areas. You only find oil and gas if you actually drill." " And in the second ring..which is 'beyond petroleum'...

Crikey's coverage of the global warming "debate" is continuing, with Michael Pascoe describing reality while Christian Kerr dons the fools cap and spouts endless coal company conspiracy theories (the best probably being his assertion that BP has something to gain from the introduction of carbon taxes - which shows he is too lazy to even have a look at how much of their income comes from oil and how much from renewables). Pascoe says:
Yesterday's subscriber comments show greenhouse believers top even cyclists and aerial ping pong fans for provocability. Unlike the other faiths though, the global warmists have Paul Krugman on their side.

Krugman's New York Times column on Monday may have fingered a source of Christian Kerr's 60 Canadian greenhouse sceptics – Exxon Mobil. Krugman launched into the oil giant and its former CEO, Lee Raymond, claiming Raymond turned the company into an “enemy of the planet”, a worse environmental villain than other big oil companies.

The attack wasn't merely for selling a lot of hydrocarbons or giving the occasional Alaskan sea gull an oil bath, but for fighting the science that suggests the warming thing is on. Krugman says that when the greenhouse science was less convincing, major oil companies and kindred souls were members of a body called the Global Climate Coalition, whose aim was to oppose any limits on producing alleged greenhouse gases.

As the evidence began to mount, many companies, including BP and Shell, conceded something needed to be done and dropped out of the coalition – but Exxon decided to fight the science. Krugman:
A leaked memo from a 1998 meeting at the American Petroleum Institute, in which Exxon was a participant, describes a strategy of providing "logistical and moral support" to climate change dissenters, "thereby raising questions about and undercutting the 'prevailing scientific wisdom'. "

And that's just what Exxon Mobil has done: lavish grants have supported a sort of alternative intellectual universe of global warming sceptics. The people and institutions Exxon Mobil supports aren't actually engaged in climate research. They're the real-world equivalents of the Academy of Tobacco Studies in the movie Thank You for Smoking, whose purpose is to fail to find evidence of harmful effects.

But the fake research works for its sponsors, partly because it gets picked up by right-wing pundits, but mainly because it plays perfectly into the he-said-she-said conventions of "balanced" journalism. A 2003 study, by Maxwell Boykoff and Jules Boykoff, of reporting on global warming in major newspapers found that a majority of reports gave the sceptics – a few dozen people, many if not most receiving direct or indirect financial support from Exxon Mobil – roughly the same amount of attention as the scientific consensus, supported by thousands of independent researchers.

It was certainly a rewarding exercise for Raymond anyway. Exxon paid him US$686 million over his 13 years at the top.

Maybe I should be calling Jabba "The Tapeworm" instead ?

The idiot-in-chief (or maggot brain to his friends) is still making excuses about his inaction (and frustration of the attmepted actions of others) on global warming. Wonder how many heat driven blackouts it will take for his Texan neighbours to start giving him a hard time ?
Bush says the jury's still out on whether human activity causes global warming. Even if that were true (it isn't), as Nicholas Kristof (via RealClimate) noted in yesterday's NYT, it's no excuse for doing nothing. The real world is always subject to uncertainty. Excerpt:
The White House has used scientific uncertainty as an excuse for its paralysis. But our leaders are supposed to devise policies to protect us even from threats that are difficult to assess precisely — and climate change should be considered even more menacing than a nuclear-armed Iran....The best reason for action on global warming remains the basic imperative to safeguard our planet in the face of uncertainty, and our leaders are failing wretchedly in that responsibility.

There's no such thing as a sure thing, not even in science. But there is such a thing as taking prudent measures based on the best available evidence and analysis. Assuming, that is, that one cares about doing the right thing, rather than the thing that provides short-term rewards to one's political base.

On a more positive note, GE is moving further into the clean technology camp with an investment in Ocean Power Delivery - developer of the world's first commercial facility that generates electricity from offshore ocean waves.

The world seems to be going a bit mental today - oil at new records in London and outbreaks (or perhaps major escalations) of violence in the Solomon Islands and Nepal.

I'll close with some links from Billmon - one of those coupled quotes posts that I love on Orwellian ducks and another alarming one on "the spiral conflict" in Iran.
The U.S. military is conducting a propaganda campaign to magnify the role of the leader of al-Qaeda in Iraq, according to internal military documents and officers familiar with the program . . . Some senior intelligence officers believe Zarqawi's role may have been overemphasized by the propaganda campaign, which has included leaflets, radio and television broadcasts, Internet postings and at least one leak to an American journalist.

Washington Post
Military Plays Up Role of Zarqawi
April 10, 2006

The programmes of the Two Minute Hate varied from day to day, but there was none in which Goldstein was not the principal figure. He was the primal traitor, the earliest defiler of the Party's purity. All subsequent crimes against the Party, all treacheries, acts of sabotage, heresies, deviations, sprang directly out of his teachings.

George Orwell

The military's propaganda program largely has been aimed at Iraqis, but seems to have spilled over into the U.S. media. One briefing slide about U.S. "strategic communications" in Iraq, prepared for Army Gen. George W. Casey Jr., the top U.S. commander in Iraq, describes the "home audience" as one of six major targets of the American side of the war.

Washington Post
Military Plays Up Role of Zarqawi
April 10, 2006

Somewhere or other he was still alive and hatching his conspiracies: perhaps somewhere beyond the sea, under the protection of his foreign paymasters, perhaps even — so it was occasionally rumoured — in some hiding-place in Oceania itself.

George Orwell

One slide in the same briefing, for example, noted that a "selective leak" about Zarqawi was made to Dexter Filkins, a New York Times reporter based in Baghdad. Filkins's resulting article, about a letter supposedly written by Zarqawi and boasting of suicide attacks in Iraq, ran on the Times front page on Feb. 9, 2004.

Washington Post
Military Plays Up Role of Zarqawi
April 10, 2006

Goldstein was delivering his usual venomous attack upon the doctrines of the Party — an attack so exaggerated and perverse that a child should have been able to see through it, and yet just plausible enough to fill one with an alarmed feeling that other people, less level-headed than oneself, might be taken in by it.

George Orwell

It is difficult to determine how much has been spent on the Zarqawi campaign, which began two years ago and is believed to be ongoing. U.S. propaganda efforts in Iraq in 2004 cost $24 million, but that included extensive building of offices and residences for troops involved, as well as radio broadcasts and distribution of thousands of leaflets with Zarqawi's face on them . . .

Washington Post
Military Plays Up Role of Zarqawi
April 10, 2006

What was strange was that although Goldstein was hated and despised by everybody, although every day and a thousand times a day, on platforms, on the telescreen, in newspapers, in books, his theories were refuted, smashed, ridiculed, held up to the general gaze for the pitiful rubbish that they were, in spite of all this his influence never seemed to grow less. Always there were fresh dupes waiting to be seduced by him.

George Orwell

I think we just have to accept . . . that the terrorists, Zarqawi and bin Laden and Zawahiri, those people have media committees. They are actively out there trying to manipulate the press in the United States. They are very good at it.

Donald Rumsfeld
Interview with Rush Limbaugh
April 17, 2006

Though you could not actually hear what the man was saying, you could not be in any doubt about its general nature. He might be denouncing Goldstein and demanding sterner measures against thought criminals and saboteurs, he might be fulminating against the atrocities of the Eurasian army, he might be praising Big Brother or the heroes on the Malabar front — it made no difference. Whatever it was, you could be certain that every word of it was pure orthodoxy, pure Ingsoc . . . The stuff that was coming out of him consisted of words, but it was not speech in the true sense: it was a noise uttered in unconsciousness, like the quacking of a duck.

George Orwell


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