Wage Disparity Causing Global Collapse


From Gail Tverberg:

Growth in energy consumption and in world GDP are very closely linked. In fact, energy consumption seems to be the cause of GDP growth...

The reason why this close relationship exists is because it takes the “magic” of energy consumption to make the physical changes we associate with GDP growth. It takes energy to transport goods. It takes energy to heat goods, whether to refine metals or to cook foods. Refrigeration is similar to heating, except that heat is moved out of the space that is to be cooled. Electricity, of course, depends on energy consumption…

An economy that has been hollowed out by a lack of energy supplies is likely to find that a substantial share of workers are earning only very low wages

Nearly every time the price of oil rises very much, the US economy has tended to head into recession

A carbon tax sends high-carbon industries to Emerging Market nations, helping ramp up their economies…

What little CO2 savings took place in the US, EU, and Japan during the 20 year period between 1997 and 2017 were dwarfed by the impact of the ramp up of industrial growth outside the US, EU, and Japan…

Once China, with its huge unused coal reserves, was added to the World Trade Organization, both China’s coal production (Figure 8) and its coal consumption (Figure 9) soared…

Coal is the EU’s largest source of energy, but it has been declining since before 1965…

China’s flattening CO2 emissions since 2013 are an indication that much of its cheap-to-extract coal has been mined out…

The Soviet Union collapsed in 1991 because the Soviet Union was an oil exporter, and the price of oil had fallen too low for an extended period of time, leaving inadequate funding for investment in new productive capacity…

The rising wealth disparity in recent years is a major indicator that the world economy may be headed toward collapse…

If the world economy is headed toward near-term collapse, climate change shrinks back in the list of things we should be worried about…

If the direct and indirect energy costs of storage are considered, the expected climate benefit of wind and solar tends to disappear.    

From Gail Tverberg:

The world economy seems to be on the cusp of a shrinking-back event, with or without the tariffs. Adding tariffs is an indirect way of allowing the US to obtain a better position in the new, shrunken economy, if this is really possible…

The upcoming shrinking-back event is the result of too little energy consumption in relation to total world population…

Too much wage disparity tends to lead to low energy prices, rather than high, because of increasing affordability issues…

With Peak Coal occurring in China, it makes little sense for the United States, the European Union and others to depend as heavily on China as in the past…

Excessive wage disparity sends prices of commodities (such as coal and oil) too low, cutting off production because prices fall too low for producers of these commodities…

By putting tariffs on some goods, Trump is providing a substitute for the missing high oil prices needed to slow the growth of globalization, if the issue of ever-increasing wage disparity is to be solved.

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