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TORTOISE VS. HARE

Similar to a family that has slowly spent itself into deep credit card debt the U.S. is now facing realities associated with reducing debt while maintaining an enduring vision of prosperity, opportunity, security and relevance. As with so many families and businesses that have built untenable debt, this country must retrench, retool and reconsider partisan practices and philosophies that have reaped a multidimensional bounty of a muted economy, eroding infrastructure, marginal schools, constant military deployment, and foolish gridlock.

Since 2008, the world’s brightest and most practical economists have unconditionally stated that full recovery from the Great Recession would take the better part of a decade. Further, that a government-induced fiscal stimulus was prudent and required to avert a global depression, and that a carefully crafted balance among government intervention, private investment, entrepreneurial spirit, and long-term vision is essential. So far, too many people have lost sight of the fact that recovery is a slow, deliberate slog and not a sprint back to the good old days.

There is a transcendent geometry at play here. First, this is a global challenge. Second, unwise, errant politicians in the U.S. and other countries have spent more time jousting than addressing their national problems. Third, astounding levels of global competition continue to counter previous options the U.S. had enjoyed for a century.

As Fareed Zakaria noted in The Post American World,(W.W. Norton & Company, 2008) it is not about the decline of this country so much as it is the rise of the rest of the world and other countries’ desire to ascend to what we have enjoyed for so long. It is difficult to sell our products to China when it wants to develop its own consumer markets for its business community. Fourth, U.S. debt rose enormously from 2000-2008, fueled by a period of lax regulation, reduced taxes, and high levels of unfunded spending. Levels of growth enjoyed during the 1990s may have been unsustainable but, rather than carefully managing finances and saving for a predictable contraction cycle, virtually nothing was done.

Vision requires an understanding of cycles. Whether cultural, social, environmental, or economic, all things tend to move in cyclic patterns. Myopic decisions involving fiscal, regulatory, security, education, environmental, or domestic policy have led to a deep financial hole. Unfortunately, extraction is not dependent on any one factor; it will take vision, balance, patience, commitment, collaboration and the seemingly misplaced ability to set aside petty affiliations and congressional competition.

Perhaps most important will be the recognition that recovery and the re-ordering of national perspectives will take time. There is a major transformation afoot that requires perseverance, trust, cooperation and a step-by-step plan that is deliberately and carefully executed. It is not a crap shoot; it cannot be an ‘every man for himself’ proposition; and it cannot be founded on misplaced expectations that, if the right leader is elected and a few policies are amended, jobs will return, prosperity will bloom and everything will be fine. It won’t happen. It is almost 2013; times have changed; the world has evolved and there are just too many factors that weigh against rapid recovery.

Decline can be arrested through visionary policies that create synergies among competing forces. Spending for national defense must be balanced with investment in America’s infrastructure, educational system, and applied science. Policies must integrate a long-term vision for and acceptance of immigration as a major economic engine – but only if properly conceived. Policies must also balance the need for regulations that guide and protect with those that energize and encourage. And, certainly, citizens must demand accountable decision makers who embrace the long view and discard motives grounded in ideology, affiliation, avarice and petty competition.

Is there hope for these things? I believe so. But citizens must first embrace a long-term perspective and recognize that slow and steady will win this race. With other countries struggling and failing to maintain their GDP trajectories, we will begin to see decline in various aspects of international competition. This will provide a platform for new enterprise opportunities and refresh America’s allure for the world’s best and brightest who remain motivated to choose these shores to invest, build business and contribute to society. The game is beginning to change. Will we be ready?

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

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Is Anyone Hungry?

The election year circus has once again managed to overwhelm the media and most citizens who probably should be paying attention to other, more relevant challenges.

The U.S. is facing enormous debt, there is continued loss of life in dubious foreign deployments along with an out of control health care system, rampant natural resource depletion, widespread drought, declining educational performance, endemic financial malfeasance, latent mortgage issues, and a rapidly eroding infrastructure. While the economy has been slow to rebound, the complex equation required for a market crash was not a ‘Black Swan’ event.  We have lived large for too long and must pull back, regroup, and build a wiser platform for sustainable economic development.  Many regulators and economists across the world have provided warnings over the past several decades. Because most of them went unheeded, the slope finally became too slippery and down we went.

But, even with all these converging variables, there is another compelling force that has the power to cripple entire societies, cultures, economies, and empires. Very simply, close to one billion people on this planet are starving. The combination of climate change, population explosions among the poorest nations, failed crops and foolish public policy has led us to the brink of disaster. In many nations, the disaster is well underway.

Through 2001, annual world carry-over grain stocks averaged 107 days of consumption. Due to poor planning, reduced harvests and uneven distribution, from 2002 through 2011 carryover stocks averaged only 74 days of consumption, signaling that the period of world food security has ended. Very simply, this means that the world is now living from one annual harvest to the next, with producing countries hoping to produce enough to meet demand, while grain storage declines.

Exporting countries have begun to restrict exports to maintain supplies and stabilize prices. While this has not devolved into hoarding, it portends for many a hungry future. Unfortunately, for those countries that rely on imports to feed their people, high prices are combining with inadequate supplies to drive up competition for basic grains, resulting in an enormous escalation in malnutrition and death by starvation. By the end of the last century, the number of hungry people in the world was at an all-time low of 792 million in 1997. However, since that time the number has risen to almost 1 billion, with most of the people who are chronically hungry or malnourished living in the Indian subcontinent or sub-Saharan Africa.

While this may not strike chords of empathy in the U.S. population, this country is also experiencing a steady escalation in the number of people living below the poverty line and the number who are under- or malnourished. As a fundamental platform for advanced cultures, grains are under assault as never before. Demand is being driven by two traditional forces- population growth and the number of people in industrialized populations that tend to consume more meat, poultry and eggs, all of which are grain-intensive products.  A legitimate Black Swan that has emerged as a major competitor for grain is the automobile…and fuels that now utilize ethanol distilled from grain. Consider that, in 2011, the United States harvested nearly 400 million tons of grain. Of this, nearly 127 million tons was used to produce ethanol. Competition for grain has never been higher. Population growth, the emergence of more industrialized nations with high GDPs and the huge numbers of new automobiles in those societies (as well as the number of vehicles in the U.S.), have created a win-lose proposition for the planet’s poorest people.

This competition has raised global grain consumption from an average of 21 million tons per year from 1990 to 2005 to 45 million tons per year from 2005 to 2011. As grain stores have been depleted, two additional factors have entered the equation. Regardless the cause, global climate shifts have brought new weather patterns that have introduced drier weather to some areas and much wetter weather to other areas that had previously counted on reasonably stable growing seasons and predictable harvests. Now, violent, unpredictable weather is bringing floods or drought, such as occurred during 2012, when corn harvests were only a fraction of normal levels. Corn prices have gone as high as $8.43 a bushel (back to around $5 currently), based on the lowest corn yields since 2006.

As populations and automobile use have grown, aquifers have been depleted or are running dry. Overpumping and water extraction from reservoirs have allowed farmers to keep pace, but millions of people in India, China and the U.S. are being fed with grains available only because of a total disregard for future water usage. Not only are city water supplies competing with agriculture for available water, we are using it at astounding, unsustainable rates.

Such messages are being lost in political, economic and international news that seems more important as the election nears. Unfortunately, people are dying, social structures are eroding and economies are failing due to crop failure and poor nutrition. While the U.S. has enormous land resources, another serious drought through the Midwest could drastically reduce grain stores and drive costs higher than this year’s record prices. Exports would be curtailed, compounding grain shortages in many parts of the world that rely on U.S. production. Stay abreast of this situation. Water, grain, weather and land available for farming are all linked to a re-stabilizing economy. There are many factors and uncontrollable forces that impact the global and U.S. economies. Keep your eye on grain production, carry-over grain stocks, and food prices. These factors could very well be pivotal in 2013 and won’t be influenced by the election.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).