Dave Pollard: Politics & Economics

Saturday Links for the Week: August 23, 2008

Sun, 24 Aug 2008 02:41:50 GMT

Cheryl's family's new pup Bella, taking a break from chasing the sheep.

No Bad News Please, It Ruins My Day: Justin Kownacki: "Instead of making us all give a damn, however, this overwhelming surge of negative news is simply making us all more jaded. Now, instead of caring about how one person (or government) is destroying the lives of innocents, we lament that this negativity is ruining our day. Harshing our mellow. Making us aware that the world is not always a bright, shiny (and stark white) iPhone commercial."

Conversation Embodies and Brings Forth Change in Culture: Juanita Brown met and spoke with Humberto Maturana recently, and took notes: "As a co-inspirator, I can be intentional about the nature of the conversations I introduce into the conversational network that is the organization or the culture I am part of. This is serious, responsible, daring and playful work! How I open spaces of conversation is of the utmost importance to our capacity to co-inspire worlds we choose to live in. All cultural change, for example, is a change in the network of conversations and the manner of living that arises in it. Language and conversations are 'doings' that lie at the heart of our capacity to intentionally bring forth worlds that are life-affirming and ethical... Everything changes around what we want to conserve." Thanks to Amy Lenzo for the link.

A Brilliant Decision-Making Model for Business: My friend Jean-Sébastien Bouchard has co-developed the model above to describe what type of approach to decision-making is needed in organizations, depending on whether the issue is simple or complex (vertical axis) and whether future outcomes are predictable or unpredictable.

In simple, predictable situations (area 1) the traditional command-and-control decision-making of most organizations ("do what I say") works fine.

In more complicated buy still predictable situations (area 2) education and persuasion are needed ("here's why we need to do this") to ensure the decision is understood and properly executed.

In simple but unpredictable situations (area 3) you need a more collaborative, consultative approach using scenario planning and similar techniques ("this looks like the best choice now but we'll meet regularly to confirm as things change").

Most 21st century decisions are made in situations that are (a)complex, (b) very unpredictable, or (c) both complicated and unpredictable (area 4). In these situations, management and 'expert' decisions are inevitably incompetent, and the wisdom of crowds is needed ("let's collectively understand what's happening here, and explore our options together"). Jean-Sébastien calls this approach co-creation, and his partnership Grisvert uses Open Space and similar methods to help organizations achieve it.

There are, alas, a growing number of situations that are both complex and highly unpredictable (area 5), where effective decision-making is essentially impossible. I would argue that climate change and Peak Oil are beginning to emerge as such issues. My sense is that organizations will soon realize that our entire economy needs to migrate from a growth economy to a steady-state economy, one in which business must migrate from having a primary responsibility to the short-term wealth of its owners to having a primary responsibility to the long-term health and well-being of all-life-on-Earth. But it is impossible to know how or when that will happen, and impossible to decide what to do about it now. It is too complex to fathom and too uncertain to navigate. In such 'chaotic' situations, Dave Snowden says we tend to turn to charismatic (or tyrannical) leaders, and let them make decisions for us, on the basis that "anyone's guess is probably as good as anyone else's". Chris Corrigan chimes in on chaos: "There are tools for being in the chaos…Individually I think these include presencing practices, discerning and sitting and journaling and making sense of things. Socially I think these are practices of simply being in community in a skillful way, like a jazz ensemble, so collective improvisation and collective presencing. I would [recommend you] flesh that section out a bit, because people want you to be able to offer something in that [area 5] corner." Brave new world, here we come.

...and What Management Needs to Learn to Use It: As if in response to the above model, Kathy Watt of LearnNB says business leaders "need to experience some personal and professional humility, and admit that we don’t really know how to solve some of the complex challenges that we are facing." Thanks to Harold Jarche for the link.

A Research Report from Real Climate Scientists: While the well-financed and opportunistic Lomborgians go on denying the reality and need for action to tackle global warming, James Hansen and an international team of climate scientists do real research using real data, and their conclusions are understandable even to the layperson:

The eventual response to doubling pre-industrial atmospheric CO2 likely would be a nearly ice-free planet, preceded by a period of chaotic change with continually changing shorelines. Humanity’s task of moderating human-caused global climate change is urgent...Remaining fossil fuel reserves should not be exploited without a plan for retrieval and disposal of resulting atmospheric CO2. Paleoclimate evidence and ongoing global changes imply that today’s CO2, about 385 ppm, is already too high to maintain the climate to which humanity, wildlife, and the rest of the biosphere are adapted... Although a case already could be made that the eventual target may need to be lower, the 350 ppm target is sufficient to qualitatively change the discussion and drive fundamental changes in energy policy. This target must be pursued on a timescale of decades...A practical global strategy almost surely requires a rising global price on CO2 emissions and phase-out of coal use except for cases where the CO2 is captured and sequestered...With simultaneous policies to reduce non-CO2 greenhouse gases, it appears still feasible to avert catastrophic climate change. Present policies, with continued construction of coal-fired power plants without CO2 capture, suggest that decision-makers do not appreciate the gravity of the situation. We must begin to move now toward the era beyond fossil fuels. Continued growth of greenhouse gas emissions, for just another decade, practically eliminates the possibility of near-term return of atmospheric composition beneath the tipping level for catastrophic effects...The stakes, for all life on the planet, surpass those of any previous crisis. The greatest danger is continued ignorance and denial, which could make tragic consequences unavoidable.

[Our reaction: The Democrats now favour some offshore drilling, and the Republicans are ready to invade the Arctic to stake their claim to fossil fuels under the melting ice, and the Canadian Northwest Passage for shipping. Sigh.]

The Most Secret Place on Earth: "American planes dropped an average of one planeload of bombs on targets in Laos every eight minutes, 24 hours a day for nine years, making it the most heavily bombed country on earth per capita in the history of warfare."

Michael Pollan Talks About What We Should Eat: A video of Pollan, espousing his Eat [Natural] Food, Not Too Much, Mostly Plants message, in which he explains that eating well is expensive, because the industrial food system is heavily subsidized and externalizes the environmental, animal welfare and disease costs that result from its operation. A free podcast of the full 74 minute interview is downloadable here. Thanks to Craig De Ruisseau for the link.

...and Here's a Modest Proposal for Sustainable Eating: A ten-point program (with a few embellishments from me):

Know what you’re eating. Find out where it comes from and what’s in it. Think about what's in season now. A lot of these foods will turn out to be local.
Get cooking. And try making things from scratch. You'll save money and rediscover skills you forgot you had.
Plant something.
Pack a bag lunch.
Drink tap water. It's healthier for you, and it's free. And better for the environment.
Learn about and celebrate the food traditions your family and community still possess.
Invite someone to share a meal. Strengthen the bonds of friendship and community by cooking and eating together.
Learn about endangered local foods and how we can bring them back to our tables.
Conserve, compost and recycle. Build a cold cellar.
Vote with your fork and your wallet. Say no to overpackaged, processed, chemical-ridden foods. Say no to factory farms. Say yes to local, organic foods.

Economic Slide Just Beginning, Says the Guy Who Predicted the Subprime Collapse: Nouriel Roubini has been exactly correct in every prediction he's made since 2005. Now he says, it's going to get much worse. "Our biggest financiers are China, Russia and the gulf states; these are rivals, not allies." and in response to those who think the worst is over, he says our problem isn't a subprime mortgage market, "it's a subprime financial system". Thanks to Jerry Michalski for the link.

Biden's Long History of Anti-Russian Sabre-Rattling: The always-insightful Billmon explains why the Joe Biden-led attempt to expand NATO to include Georgia and Ukraine is no different from China signing a military accord with Mexico and then calling for New Mexico to be returned to Mexico. If this kind of hypocrisy is what Biden will push as VP, we're all in deep trouble. Really dreadful choice, Obama.

Last Word on the Ivins - Anthrax - Squalene Case: Lots of coverage this week of the hopelessly weak case against Ivins in the indymedia, but it's not going to make any difference. The mainstream media are allowing the government to sweep it under the rug. Case closed. US servicemen used as guinea pigs for a toxic vaccine as part of the US' own secret bioweapons program. Bush regime needs Saddam-anthrax connection to justify Iraq war, so they concoct one and mainstream media dutifully report it as fact. Yawn. Move on. Thanks to EMJ in BC for the link, and the one that follows.

Telling a Story Persuasively With Pictures: I wrote last month about Back of the Napkin, which teaches you to use sketches to tell a powerful story. Franke James uses graphics to write "visual essays" on her blog, most recently to tell the story of last week's Toronto propane plant explosion, and why it should never have happened.

Just for Fun: Communicatrix Colleen will have you rolling on the floor with her Dirty Keywords Search Song. Only 520 views of this YouTube video when I posted this. Wonder how many there will be afterwards. Also hilarious are The Man Rules (thanks to Cheryl for the link).

Thoughts for the Week:

From Robert Koehler, writing about Russia's invasion of Georgia, Georgia's invasion of South Ossetia, and the endless violence of the powerful inflicted on the powerless: "Human evolution is at a terrifying juncture, as we face, at last, a nightmare that is 2 million years in the making."

A poem from ee cummings (thanks to Loren Webster for the link):

may my heart always be open to little
birds who are the secrets of living
whatever they sing is better than to know
and if men should not hear them men are old

may my mind stroll about hungry
and fearless and thirsty and supple
and even if it’s sunday may i be wrong
for whenever men are right they are not young

and may my-self do nothing usefully
and love your-self so more than truly
there’s never been quite such a fool who could fail
pulling all the sky over him with one smile

What Will Canada Do When the US Tells Us "No"?

Wed, 20 Aug 2008 03:58:24 GMT

It is hard to imagine that the US doesn't have a plan to annex Canada. A nation that has no hesitation in trumping up charges against a country half a world away when it is perceived to threaten its energy security, and then bombing the hell out of it, killing and injuring hundreds of thousands of civilians and utterly destroying its infrastructure and social fabric, would not think twice about seizing control of a nation that offers it even more (and whose animosity would severely threaten its national interest).

There was a plan, in the years between the two world wars, to do just that. It was declassified decades ago and now makes rather quaint reading. But there is no question that there is an American "contingency plan" to annex Canada if need be, just as surely as there is one to bomb Iran as the next stage to secure the oil on which the entire American economy utterly depends.

There are reasons to believe that the US doesn't expect it will have to do this. More than half of all Canadian business, by revenue, is foreign-owned, and the vast majority of that is American. The employment picture is probably comparable, although it's hard to compute when franchisees of foreign companies are considered Canadian companies. Likewise, there are no records of citizenship or residence of land-holders in Canada, so determining how much land is in foreign hands is impossible to determine. But it is pretty evident that the Canadian economy is substantially foreign-owned and foreign-controlled. If we did something to displease our American owners, they could shut down our economy pretty effectively.

This sell-out has occurred over decades, with both Liberal and Conservative regimes dismantling Canadian ownership regulations consistently. Then we signed NAFTA, effectively ceding authority to write social or environmental laws any stronger than those of the weakest laws anywhere in the three countries. When you can't write laws to protect your own people, you really have no sovereignty left. The right-wing Harper minority government has made no secret of its desire for full political and economic integration with the US, and the reaction of the Canadian people has been astonishingly blasé. Our economy is so dependent on the US already that the value of the Canadian dollar relative to the US dollar moves in lockstep with the Dow.

There is reason to believe that this control will not be enough to placate those in the US concerned with trying to sustain that country's unsustainable economy, however:

The US desperately needs the oil from Canada's bitumen sludge mines (the so-called "tar sands"), the worst ecological disaster on the planet. These operations are currently uneconomic, and it will take huge improvements in technology, and the energy from whole farms of nuclear power plants and natural gas from Canada's fragile arctic, to extract the oil from the sludge. It will also take staggering amounts of Canadian fresh water.
Speaking of water, the US needs Canada's Western glacial water to replace the rapidly disappearing glacial water that provides people, industry and recreation with most of their water in most of the Western US states. Canada's water is also running out, except in the Arctic, but the US shortage will be much more severe and come much sooner.
Electricity from Canadian hydroelectric plants supplies a substantial amount of US electrical needs. But Canadians are trying to shut down coal-fired power plants and use hydro power to make up some of the difference.
As global warming melts the Arctic, there will be huge pressure to plunder the hydrocarbons in that area. It's a drop in the bucket compared to the US thirst for oil, but the US is desperate for anything they can fill gas tanks with. Much of this energy is under Canadian waters, but the US has recently said it will not honour Canadian sovereignty over these waters, and considers them "international waters". Burning this energy will, of course, accelerate global warming.
Likewise, as the Arctic melts, the lucrative Northwest Passage will be open for shipping year-round. It is clearly in Canadian waters, but the US disputes this sovereignty.

None of this bodes well for the future of Canada-US relations, and as the US starts to run out of land, the hunger for more land will make the situation even more volatile.

This could all come to a head if Canada were to do (or try to do) any of the following:

Restrict foreign ownership of land, resources or assets or shares of businesses in 'strategic' industries.
Increase social or environmental regulations to the point the bitumen sludge mining operations or Arctic development became non-viable at any price.
Restrict taking of water from Canadian waters, or sale of electricity to non-Canadians.
Proclaim sovereignty over Canadian waters.

These are not especially grievous things for a country to do -- most countries believe it is their right to do these things in areas of their own jurisdiction.

But not Canada. If we were to try to do any of these things, the US would simply say "no". They would start by protesting, and suing us under NAFTA and other extraterritorial laws. And if that wasn't enough they would do whatever it took to get the restrictions on their untrammeled access to our resources, land and waters removed. Whatever it took.

Harper rolled over on NAFTA already, settling for a fraction (still unpaid) of what the NAFTA courts said the US stole from us illegally. He has no intention of doing anything to impede Canada-US integration.

But at some point Canadians will have had enough of Harper's arrogance, just as they did with the previous Conservative administration of Mulroney, and turf him out of office. He is in power now only because his right-wing party competes with four left-of-centre parties who split the vote in our absurd first-past-the-post voting system. Most Canadians would be glad to see the end of him, and sooner or later they will get their way, and a party or coalition amenable to the majority will be elected. And that new government will almost certainly do one or more of the four things above. The US will then say "no" and do whatever it takes to have the restrictions blocked or removed.

What will we do then? I suspect we will do nothing. Four in ten Americans want to annex Canada anyway, according to a recent poll. In another poll, only 57% of British citizens would support action to defend Canada from US annexation.

Canadians are pacifists at heart. Most of us no longer believe the war in Afghanistan is worth continuing, and most of us always opposed the war in Iraq. We have among the most liberal immigration laws in the world, taking in far more than our share of refugees and immigrants (though now, under Harper, American war objectors are no longer accepted, but that will be a short-lived anomaly). We acknowledge, I guess, that our natural wealth was a fortune of birth, not something we really earned. It belongs to the world, to all of us, and if someone wants to steal it from us, we'll just shrug and say "too bad, it was nice while it lasted".

Americans, believers in manifest destiny, the private ownership of everything, might makes right, and the end justifies the means, can't really understand this. They see it as cowardice, or complacency, tacit approval for their takeover of everything Canadian, and for their American worldview. They will turn the rest of Western Canada into a deforested and toxic wasteland, and Northern Canada into a melting, oil-slicked military stronghold. And we will let them, while convincing ourselves that It's not really that bad, There is no other real choice, I don't know anything about that, or There's nothing we can do about that.

That's what empires do to colonies. And that's what colonies do when they do it.

Category: Canadian Politics

Bruce Ivins and Squalene

Fri, 01 Aug 2008 23:01:22 GMT

The alternative media are abuzz with the news that Bruce Ivins, the USAMRIID research scientist at the US government lab at Fort Detrick who was in charge of work on anthrax vaccines, and who reportedly committed suicide Tuesday, was about to be charged with sending the 2001 anthrax-laced letters (including the one at right) and the resultant murder of five victims.

The main discussion, which salon.com's Glenn Greenwald is spearheading, centres around:

The fact that ABC News consistently reported (based on alleged tests at Fort Detrick) that the anthrax contained bentonite, which implicated Iraq and Saddam Hussein in its manufacture, when in fact it did not; the bentonite story was a complete and unsubstantiated fabrication, and ABC News has never questioned why their 'government sources' fed them this false information, and has declined to identify them.
The fact that Ivins was not charged (the person who was implicated, wrongly, another Fort Detrick scientist named Stephen Hatfill, successfully sued the US government for millions of dollars for defamation) or even publicly discussed as a person of interest before his 'suicide', despite the fact he was apparently about to face a mental competency hearing, and had a history of writing bizarre letters to newspapers.
The fact that leading journalists were advised by high government sources to take the anti-toxin Cipro before the anthrax attacks.
The fact that the link between anthrax and Iraq may have provided the 'tipping point' in moving media and public opinion to the point where Bush could attack Iraq without a firestorm of protest.

It should be stressed here that Ivins may not have been guilty. His lawyer and family say he's innocent. He's been accused by the US government and was about to face charges, but who's to say he's not just the latest scapegoat now that Hatfill's name has been cleared? I've said before that I'm astonished that so little progress has been made in finding out who was behind it. It's all just too convenient, coming on the heels of 9/11 with a government that had already decided to attack Iraq and was simply looking for a pretext.

This alone should be enough to cause even the most cautious citizen to suspect that the government was either complicit in, or cynically and deliberately dishonest in exploiting, the anthrax attacks.

But there's more. Google Bruce Ivins' name and you'll find a lot of discussion about an oil called squalene. Google his name and squalene together and what comes up is interesting.

Squalene was used in anthrax vaccines given to US (and other nations') troops in the Middle East. US troops were, according to this book and a lot of veterans groups, and at least one clinical study, used as guinea pigs to test this oil, which was not authorized for use on humans because of identified dangers and side-effects: There is compelling evidence that squalene causes crippling permanent autoimmune diseases. But by pumping the autoimmune system it also dramatically improves the effectiveness of vaccines in the short term. The man who fought to have squalene tested on humans, and got his wish when the US sent troops to Iraq, was, according to Gary Matsumoto's book -- Bruce Ivins.

I'm not saying he's guilty. But, just for a moment, imagine you're an unhinged scientist trying to get your dream vaccine cocktail tested on humans when everyone else is saying it's too dangerous, and you're something of a Christian fanatic. What better way to do it than to send anthrax (that you have access to) through the mails to incite panic and a war against Islam?

Ivins had method and opportunity and, it would seem, motive. If this is true, it's a motive the US Government never wanted the public to hear about. That's perhaps why they didn't arrest him alive. His 'suicide' lets them try to bury the story.

And if it's not true, as at least one long-time studier of the anthrax letters maintains, and Ivins was just hounded to death by government investigators determined to pin this on someone before the November elections, that raises even more questions:

Why haven't authorities, having spent millions of dollars, including a lot spent on the wild goose chase after Hatfill, been able to even identify the source of the anthrax? Is it mere incompetence, or are they being deliberately put off the trail, and if so, by whom?
Why was Ivins made the fall guy? Is it that he was emotionally weak and financially vulnerable?

Fascinating. Stay tuned.

Category: US Politics

The Seven Steps to Business Sustainability

Tue, 08 Jul 2008 03:56:21 GMT

Interface Carpets' sustainability model

It's tough explaining sustainability to executives. When it comes to knowledge, and acceptance of responsibility, they are all over the map. Surprisingly, those in the most polluting industries are often more advanced in their thinking than those in 'service' industries. The way to get attention for the subject, and the way to approach the issue, depends on who your audience is.

My French teacher likens it to the challenge of getting a very obese man to adopt a diet. If he thinks he's just 'big-boned', or thinks it's someone else's fault, or thinks the risks to him are non-existent or overblown, or thinks nothing will work, you have a challenge. If he's doing his best, but it isn't good enough, you have a challenge. If he thinks it's just 'his problem', and no one else is being hurt by it, you've got a challenge. And let's face it, diets are tough -- hard work, lifelong change, high failure rate, and no fun. And the worst thing you can do is point out how hard it's going to be, and how far away the goal is.

I've spoken to a lot of business execs about this subject in recent months -- delightfully, it's part of my job. And I've learned that there's a way to 'get to' everyone, if you listen enough first to know what approach to take. And I've learned that positive approaches that stress benefits and opportunities generally work better than approbation, though executives are naturally attuned to matters of business risk, if those risks can credibly be portrayed as big enough or imminent enough (a big 'if').

So I've developed a Seven Steps to Business Sustainability model, which I outline below. The trick with this model is not to overwhelm or discourage businesspeople who are still at the early steps by showing them all seven. My approach is to take them through a 'script' to discover what step they're currently at. If they're like the majority, still at step 1 or 2 (or not even there), I will only talk about steps 1-3. If they're at step 3 (about 1/3 of business execs are) they're ready to be congratulated and introduced to steps 4-5. If they're at step 5 (very few are) they're ready to be nominated as sustainability leaders, and ready to look at the whole enchilada.

What I like about the model is that it follows the process we all follow in dealing with threats, like forest fires or hurricanes or computer viruses. It starts with acknowledgement, and then moves on to short term and then long-term actions to cope with it.

Here's the model and the 'script':

Awareness: Do you know the facts about climate change -- what it means to your business and to our whole planet, and what the regulations are that affect your business and the businesses of those you deal with, and how important an issue it is to your customers, to your employees, to your competitors (and what they're doing about it) -- and to your children and grandchildren? This is the most difficult step, and it's rare I get an unqualified yes. If I don't:

I take the exec through the effects of climate change on crop yields, forest and ocean resource productivity, the spread of hot-weather plant, animal and human diseases (like the mountain pine beetle threatening the entire Canadian boreal forest) and pandemics, on water availability, on demand for air conditioning, on ecosystem crashes and biodiversity losses, on weather patterns, drought, flooding, severe storms and desertification, on glacial melt, permafrost stability, ocean currents and global sea levels, and on
stability of infrastructure and transportation
I talk about the business risks associated with climate change: insurance cost spikes, risk of shortages of natural resource production inputs (and cost increases as they become scarce), disaster preparedness, recovery and contingency costs, business interruption risks, supply chain disruption risks, transportation interruption risks and cost increases, business relocation costs, and dirty-tech retooling costs
I explain the reputation risks of companies perceived to be behind the curve, and the competitive advantages that clean-tech innovators and early-adopters can achieve
I tell them what long-term investment fund managers and bankers are looking at in determining investment and credit worthiness of companies, and how securities authorities are responding to these investors' demands for more disclosure of what companies are doing about climate change
I walk them through the current myriad of regulations in effect around the globe, and how they are quickly becoming more stringent and requiring more information collection and disclosure
I provide current emission information for Canada and its provinces, along with reduction targets

So much for Kyoto: Greenhouse Gas (GHG) Emissions 2006 and 2020 projections for Canada, MT CO₂ equivalents, data per Government of Canada, map by Tory's LLP

Acceptance: Once I have the exec briefed on the facts, I ask: What do you think is the responsibility of your company to tackle the challenges of climate change and environmental sustainability? What is the responsibility of governments? What is your personal responsibility as a business leader, and as a citizen of Canada? How does that responsibility extend to other jurisdictions in which you do business? How do you trade off your short term responsibility to shareholders against your long-term responsibility to future generations? When I first started asking these questions, it was to surface global warming deniers, who even a year ago were fairly common. Now I'm astonished to discover this is quickly becoming one of the issues keeping executives (especially those with children) awake at night. When there's no microphone or camera on them, they will tell you they care about this issue. Most still think government needs to take the lead, to create a 'level playing field' they'll gladly comply with. But increasingly they'll admit that there is no level playing field, that cheats will always cheat, that greenwashing can work, that it's one thing to make complicated environmental laws and another thing to enforce them, that 'free' trade agreements can render environmental laws null and void, and that this troubles them. They're accepting responsibility, and now asking, not what do they have to do, but what can they do?
Compliance: Once they are aware of the issues, and accept responsibility for dealing with them, I ask them: Are you in compliance with climate change and other environmental laws in force at each level of government in each of the jurisdictions in which you operate? This is a fairly straight-forward discussion that depends, of course, where they do business. They need to learn about caps, emissions levels (absolute and 'intensity-based'), reduction targets, fines and penalties, credits and 'carbon' taxes. The frustration with the myriad of different regulations, and different types of regulations, is palpable. Most executives I speak with would prefer more stringent, but simpler, more consistent rules to the current situation.

Maps of Vancouver and Montreal showing flooding of Richmond/Ladner, lower mainland, Montreal East and South Shore if Greenland ice cap and West Antarctic ice sheet melt, via http://flood.firetree.net

Mitigation Strategy: I'm now finding that most businesspeople, even those in small businesses and those that do not directly emit pollutants or use large amounts of raw materials, water or energy, are ready to tackle steps 4 and 5. To explain mitigation, I say: To the extent a company is responsible for significant GHG emissions, or depends on suppliers that are, it will be essential to find alternative ways to produce goods and services that do not have such a negative impact on our environment. What programs do you have in place to measure and voluntarily reduce your carbon footprint, including that which originates from your suppliers' production and is incurred in foreign jurisdictions. There are some really novel programs out there, as well as some really poor ones. There are even some incentives available, aside from the reputation and innovation and first-mover advantages of bold mitigation strategies.
Adaptation Preparedness Strategy: Where mitigation is about reducing the company's negative impact on the environment, adaptation is about reducing the impact of environmental crisis and climate change events on the company. These impacts depend on the nature and location(s) of the business and include the matters described in step 1 above such as disease and pandemic outbreaks, chronic shortages of (and price surges for) water, energy and natural resources used by the company and by its suppliers, extreme weather events, flooding and water shortages of cities in which the company operates or sells products, chronic blackouts, brownouts and telecom and other infrastructure failures, loss of insurance coverage, market and rate instabilities, and threats and attacks from desperate individuals, groups and nations (the poor will suffer the worst consequences of climate change, and have the weakest social safety nets). No one can be prepared for all such eventualities, but simulations and other applications of complexity modeling, and disaster and contingency planning, can help companies be as ready and as resilient as possible. I've seen a fascinating simulation of how a global pandemic outbreak of influenza or a once-isolated tropical disease can cripple the global economy, not because of the number of deaths, but because of human panic bringing economic activity to a standstill.
Holistic Sustainability Strategy: The discussion of steps 4 and 5 above is usually all most businesspeople can handle at this point in our understanding of sustainability. But there are a few companies that have seen where this is all leading to, and I'm ready for them. The chart at the top of this article shows the Cradle-to-Cradle model that Interface Carpets uses. This is the ultimate resilience strategy: reuse and cycle everything, and produce more energy and cleaner water than what you use. This approach acknowledges that we are all part of a complex and interconnected economy, and that the environmental impacts of our suppliers and customers are as important as the ones we are directly responsible for. If you need no new materials or resources to operate, and if you take everything back from your customers and reuse or recycle it, then you have made your entire cycle of production endlessly renewable. Not only does this mitigate your environmental impact, it makes you relatively immune to the impacts of environmental crises and climate change on your suppliers and even your customers.
Zero-Growth Economy Strategy: Climate change is making us aware that there truly are limits to growth, and that no company or economy can keep 'growing' forever. Our current economy is completely dependent on consumers buying more and more 'stuff' every year, and it is truly unsustainable. Likewise, our capital markets, and shareholder expectations, are based on large annual increases in profits. So how can a company make the transition to a steady-state economy, and thrive with the same profit each year? Economists like Richard Douthwaite, Herman Daly and Peter Brown have suggested what would be needed to make such a transition at the macro (country) level. Businesses need to start thinking about how such a transition will affect individual businesses, industries and markets, and make the structural and strategy changes necessary to make that transition too.

I think there will be a huge market for business advisors who will be able to take companies one step at a time from step 1 to step 7. I know there are a few people (like Gil Friend) who do this. We'll soon need a lot more.

Category: Understanding Economics

What If You Had 30 Minutes to Teach a Graduating Class?

Thu, 03 Jul 2008 02:38:22 GMT

Every year at this time we get to read/hear/see some of the best commencement speeches to graduating classes. Some of them are quite inspiring, but what interests me is that, after years of supposed 'education', graduates get to hear advice, rather than information or knowledge.

If I had 30 minutes to address a graduating class I would resolve to actually try to impart some knowledge, rather than advice. Personally, I only take advice from people who know me, and who I trust, so I don't think giving it to a bunch of restless strangers is, in the long run, very useful.

When I mentioned this to a friend, she asked me:

If you had 30 minutes to teach (rather than preach to) a graduating class, what would you teach them?

In the past year I have learned so much that I would answer this question much differently today than I would have at any previous point in my life. What I would do would be to show them how the world really is, and I would do it entirely with data presented in graphical format. I would not interpret it, or tell them what it meant. I would let the facts speak for themselves, and trust them to be smart enough to figure out how to act on it. My objective would be to infuriate them, provoke them to say (as graduate students have told me on more than one occasion): Why didn't anyone tell me this before; why don't they teach this in school?

Here are some of the data I would show them:

Large corporations have, for years, been eliminating more jobs than they have created, and this trend is accelerating. The data supporting this (for the US) are shown above. Just to keep even with growth in the labour force, the US needs to create 150,000 net new jobs per month, and Canada needs to create 20,000.
Virtually all the new jobs that will be created in the next decade (all by small to medium sized employers) will be low-paying clerical, administrative, and retail sales and service jobs. The data supporting this (from the US Department of Labor) are shown below.

Since 1970, the top 5% of income earners have more than doubled their real incomes and net worth. For the other 95%, real income and net worth have decreased. If home prices and stock prices dropped a mere 30%, the majority of the population of affluent nations would have a negative net worth. We have more assets than ever before, but far more debts, and average spending is now 4% more than average earnings. This is despite the fact that, during this period, most families grew from one-income to two-income families. The income inequality curve (below) is so steep it's almost invisible. And for 99.9% of families, the chances of significantly improving your economic status (the second chart below), no matter how hard you work, are negligible, much less than the chances of your economic status significantly falling.

Then I'd show a chart showing what Fortune 500 executives think are the biggest risks facing their companies and facing the economy in the next generation, and the 10 things they say currently keep them awake at night. Hint: global warming and talent shortages are not on these charts; consumers slowing down their rate of ever-increasing consumption is.
Next I'd show charts of how our governments spend their money, in both affluent and struggling nations: How much goes for military, defense and 'security' spending, how much for corporate subsidies, consulting fees, tax breaks, debt repayment and 'pet' projects, versus how much goes for health, environmental protection and education. And with them I'd show charts of average de facto tax rates for different income levels (pretty much flat lines). And I'd show the trends of US government debt levels and trade deficit levels, which affect everyone in the world. I'd show what would happen to debt repayment costs if we get another interest rate spike like in 1980. And I'd show the trends of how much of our 'wealth' is generated by 'financial' activity versus activity producing real goods.
After that I'd show the simulation of the human cost in deaths and disability (significant but manageable) and the economic cost (staggering) of a global influenza pandemic, alongside health experts' cumulative probability chart of such a pandemic occurring over the next 50 years.
Next I'd show maps of deforestation, fresh water and air pollution, and soil degradation around the world, alongside violent death and suicide rates where these problems are the worst, and life expectancy charts in AIDS-ravaged countries and in the former Soviet republics.
Then I'd show Hubbert's Peak Oil chart, and a supply/demand chart showing what happens to prices when demand for a product is rising in some places by over 20% per year while global supply is in long-term, permanent decline. Beside it I'd list all the products that currently depend on cheap oil.
After that I'd show charts of life expectancy, disease rates, suicide and murder rates, poverty and bankruptcy rates between 1929 and 1939, alongside economic data for 1920-1928 and 2000-2008, and a couple of the historic 80-year-cycle curves in The Fourth Turning.
Next I'd show a map of the world highlighting the area with a current population of a billion people who will be underwater if the Greenland ice cap and Western Antarctic ice sheet both melt. Superimposed on it I'll show global population since 'prehistoric' times, and the 'normal' population curves of the six most-studied previous civilizations.
Then I'd show the charts of biological and biodiversity loss in the past five great extinctions in history, and the data to date for the current, sixth great extinction.
Finally, I'd show the famous scene (below) from Al Gore's film An Inconvenient Truth showing average Earth temperature (blue line) and atmospheric carbon dioxide concentration (red line) for the past 650,000 years (with Gore on the forklift at right)..

My 'speech' would contain no pleas, no exhortations, no wise counsel, no clever quips. Just enough information for them to think, just for a few moments, about what they intend to do with the rest of their lives. And then I'd sit down.

I wouldn't expect any applause.

Category: The Education System

The Wal-Mart Dilemma, the Two-Income Trap and the End of Oil

Fri, 13 Jun 2008 00:23:06 GMT

I've written before about the Wal-Mart Dilemma: Less disposable real income for workers forces suppliers to lower prices and quality by offshoring production and service and laying off domestic workers, so they have even less disposable income. It's a classic vicious cycle.

Its consequences -- unemployment, underemployment, low wages, low product quality, and endemic poverty -- are visible everywhere in North America, and the disease is spreading. The solution -- duties on imported goods and services that can reasonably be produced locally -- is enough to make globalists and 'free' traders foam at the mouth, and they have invested heavily in politicians to make sure it doesn't happen.

With the advent of $130/bbl oil and $4/gal gasoline ($5-6/gal in Canada and Australia, $8-9/gal in Europe, $3/gal in China) the Wal-Mart Dilemma is starting to be felt in many products that are made of or dependent on oil, such as:

food
transportation
heating and air conditioning
health products
clothing
road and energy infrastructure

What will the average citizen do when these goods become unaffordable? Here's my take on how the Wal-Mart Dilemma will play out:

We will eat less healthy foods. The cheapest foods are the processed, canned goods made from leftover food products, the stuff that would never sell if presented in its natural state on the shelves. Sugar, corn and soybeans are still very cheap, despite their appeal as bio-fuels. Because we're mostly (thanks to the Wal-Mart Dilemma and the Two-Income Trap) underpaid, overworked, two-income families, there is no time or energy to prepare healthy meals from scratch, so we'll continue to patronize take-out junk food places, but buy more of the cheaper, less nutritious items on their menus.
We will buy very cheap 'second cars'. Two jobs means two cars are needed by most of our suburban sprawl families, but despite the jump in gasoline prices, only 20% of the cost of car ownership is fuel. Rather than going to unaffordable hybrids and diesel vehicles, we will buy new Chinese and Indian-made $2500 'junk cars' as their second vehicles, letting them keep the luxury of one gas-gulping SUV (for the illusion of safety), while keeping the overall cost of car ownership at 1990s levels even with $7/gal gasoline. "Your turn to take the Tata to work, dear!"
We will use space heaters and room air conditioners (made guess where?) instead of central ones. With ever-larger homes to heat and cool, there will be no money for re-fits, so we will close off unused rooms and condition smaller areas (as much as possible given the laws of thermodynamics) to the temperature we've become accustomed to.
We will use alternative remedies instead of prescription drugs.
We will buy no-name clothing (made guess where?) and put fake brand names on it. The kids will never know. In fact, they'll show us how.
We will start simultaneously importing and selling (and leasing back) our infrastructure. The Alberta Tar Sands equipment and labour pool is the latest model for this. Huge amounts of equipment are brought in because it's too expensive to build it here. Cheap labourers build it in China, and other cheap labourers are imported to install and operate it. In return, China gets to own part of the project. US agriculture pioneered this model, and 'seasonal labourers' (many of whom will stay on under the radar, doing other work for under minimum wage in jobs and conditions we wouldn't accept) will become the way in which more and more domestic infrastructure is established and maintained.

This is the Wal-Mart Dilemma turned into an entire self-defeating economy, and the vicious cycle of unemployment, underemployment, low wages, low product quality, and endemic poverty will become our way of life. It's a consequence of (a) the structure of our dysfunctional economy and (b) human nature -- to work around 'problems' with the minimum possible change to our lifestyle, rather than making long-term, sensible but difficult fundamental changes -- like buying (and making) only expensive hybrids, revamping public transit, making our homes energy-efficient, buying durable, local, sustainable goods and "eating food, not too much, mostly plants". We will, instead, become third-world nations.

There are those that think $7/gal gasoline is just what we need, that it will bring about needed economic reforms and changes in behaviour. They just aren't paying attention.

Category: Understanding Economics

How to Prevent a Revolution

Tue, 10 Jun 2008 00:38:42 GMT

Ten easy steps to forestall an uprising from outraged citizens:

Lie about what's going on. Tell the people the war is being won, or is at least winnable. Tell them inflation is almost non-existent, and be consistent about it in the face of all the evidence that it's really out of control. You need to do this in order to crush the unions and suppress strikes and demands for cost-of-living wage increases. Tell them that unemployment is low, by excluding all the people working multiple part-time jobs and all the people who have given up even looking for work. Don't even think about computing how many are seriously underemployed. Pay junk scientists to deny global warming and how industry is ruining people's health. Tell them that the staggering, unrepayable levels of debt are too hard for the average person to understand, and nothing to worry about. And make sure you have control of the media, so they echo all the lies without so much as a whimper.
Print lots more money. Don't worry about the fact it will soon make your currency worthless in international markets. Let your banker friends loan it to the average citizen, way beyond what they can repay, so they can buy shoddy imported junk and feel as if they're getting wealthier. Bail out your banker friends with taxpayer money when the debts go bad. When that runs out, print even more.
Dumb down the education system. Under no circumstances allow anyone to teach economics in secondary schools. Starve the system of funds, and force teachers to pass illiterate students anyway. Under no circumstances allow anyone to teach students what's happening elsewhere in the world, or what happened in history (especially the history lessons of wars and the Great Depression).
Make the economic victims feel guilty and responsible. Perpetuate the myth than anyone can be rich and powerful if they work hard. When the poor get ill on the only food they can afford, blame them for gluttony, smoking, drinking and not exercising. Portray the homeless as lazy, and the unemployed as incompetent and shiftless. Let religions that preach dependence on the state as shameful, irresponsible and unworthy of admission to heaven run the schools and charities.
Crank up the propaganda machine. Follow the three rules of tyrants everywhere: Oversimplify, Distort, and Smear. Oversimplify complex issues, and reduce them to absurd black vs. white dichotomies ("you're with us or you're with the terrorists"). Distort the truth through Orwellian names ("clean skies act") for your most grievous outrages, and by repeatedly misrepresenting the facts ("Saddam had WMD and supported Al Qaida") and mis-quoting opponents out of context. Smear opponents and critics by repeating barefaced lies about them until they're accepted as truths. If that doesn't work, blame 'illegal' immigrants for all the problems you face.
Steal: Steal from future generations to keep today's citizens at bay. Incur debts that future generations will never be able to repay -- you'll be long gone by then. Exploit struggling nations by using global banking and trade consortia to strongarm them to give up their resources and labour for next to nothing, and accept your garbage, overpriced munitions, and worthless money in return.
Make your economic partners co-dependent. If they sell you so much that they can't afford to lose you as a customer, you can dictate price, and everything else. Make it abundantly clear that if you go down, so do they.
Punish whistle-blowers and intimidate opponents. What's a little torture or 'disappearing' of dissidents to foreign prisons in defence of the homeland? It provides an example for what might happen when citizens misbehave.
Promise to do something within ten or twenty years. Say you'll wipe out the debt in twenty years, or reduce carbon emissions in fifty. No one will remember then what you promised today, and you won't be around anyway, so the failure will be blamed on the next guy. Meanwhile you sound like you care about the problem when you don't.
Lower expectations and crush hope. When you get into power, paint a dismal picture of what you've inherited from the previous administration. Warn of the need for hard work and austerity ahead. Say that wars will take many years to win, but by spending much more on them they might be modestly shortened. Reassert that there is no alternative. Steal an election or two, so people give up voting for president. Gerrymander the boundaries of electoral districts so people give up voting for representatives. If that isn't enough, give all the police tasers.

Category: The Political Process

Why McCain Will Win in November

Wed, 04 Jun 2008 03:58:46 GMT

US electoral college votes, 2004; 2008 might be even worse

It now appears that Barack Obama has enough delegates to win the Democratic Party nomination for this November's election. He will be running against the heir apparent to the most unpopular president in history. When Bill Clinton left office eight years ago, he was much less unpopular, yet his bumbling was still too much for his successor, Al Gore, to overcome (though, thanks to the inability of the US system to accurately identify the winner of the election, we may never know who actually won in 2000).

So why is John McCain, who has done little to distance himself from his incompetent and despised predecessor, running neck and neck in the opinion polls with Barack Obama?

If you've read Joe Bageant's Deer Hunting With Jesus, you'll know why. There is a core group of white, uneducated working class Americans, perhaps 30% of the total electorate, who would vote for any Republican for president (other than those directly tainted with the Iraq failure). That core group is spread across most of the states other than New England, NY/NJ and the West Coast states. Those 39 Southern, Central, Midwestern and Western states are worth 385 of the 538 electoral college votes.

There is a comparable percentage of Americans who would vote for just about any Democratic nominee, but they are concentrated in the remaining 11 states, with only 153 electoral votes between them. The main so-called "battleground" states, Michigan, Ohio, Florida, Wisconsin, Iowa and Minnesota, have 105 electoral votes between them. All of them have large, white, working-class populations, and are the Republicans' to lose (or to steal). Look at the state-by-state polls and they are likely to pick up Pennsylvania and Michigan from the Democrats, giving McCain well over 300 electoral college votes.

So despite the fact that McCain is following the dismal Bush, in an economy that's in a shambles thanks to Republican mismanagement, he would probably win the election over Obama today, and the muckraking, xenophobia-stirring and fear-mongering the Republicans do so well has barely begun. Why is this Republican core vote so solid? Joe explained it simply: White, uneducated working class Americans don't believe politicians can or will do anything to improve the economy, health care, education, or the environment. The only area of difference they can perceive is the war against Iraq, which they have now been brainwashed to believe is synonymous with the war against global terrorists. And, here's the kicker:

They are mad at Bush not because he entered a brutal, expensive and devastating war under false pretenses, at a cost of at least a trillion dollars, bankrupting the nation in the process. They are mad at Bush because he didn't win the war.

Remember: The vast majority of Americans have never owned a passport. All John McCain has to do is say, over and over again, with his war medals displayed, that he will win the war, against Iraq and then against Iran and other deemed 'enemies' of America. His supporters can focus their attention on anti-immigration rhetoric and stirring up fear of more attacks (and of rising crime). With that strategy, he can't lose. And he won't.

If the Democrats can't muster any better than a neck-and-neck contest after the Republicans have been overwhelmingly acknowledged to have made everything vastly worse for the past eight years and sunk to the lowest level of presidential popularity in poll history, they have lost before they've begun.

Category: US Politics

PS: Dave's travel schedule for the next few months:

Seattle June 14-15 (SLA),
Montreal June 18-19 and September 18,
San Jose CA Sept 23-25 (KMWorld),
Bowen Island BC Sept 28-Oct 1 (Art of Hosting). Meetup, anyone?