Charlie Fleetham's Unrational Leadership

We need some proof that unemployment isn’t the end. Maybe that’s why today our leaders have passed yet another extension of unemployment benefits that will keep 2.5 million people going until November.

Our lousy economy has more bone than muscle, and you don’t have to look very hard to see the skeleton taking shape.  Today my daughter told me that one her best friends, a college girl from a college educated family, is having trouble feeding her family. Dad out of work for two years. Mom unable to find any customers for her organic mattress business. Sister trying to get through college. Home on the verge of bank repossession.

The mother of my son’s best friend has three companies in various stages of rigor mortis and is gasping for breath while drowning in $100,000 in debt. Obama and his minions know the best lies have the longest legs.  For more than a year they have been telling us that the recovery is in gear, but they must know that millions of Americans won’t ever work again.  Not even for minimum wage.  Which is the real point of this blog.

When another five or six million people join the army of unemployed and the government runs out of money,  the surface of our fine and ordered civilization will peel back and reveal a brave new world where men will work in white shirts for $3.00 an hour.  Mark my words. The Great Deflation started today.

Lots of Father’s Day paens out there, but it was Nicholas Kristof’s “My Fathers’ Gift to Me,” in today’s Times that inspired me to write about my old man.

George H. Fleetham was born in a Michigan farm house in January of 1925 and died in Rockland County New York in September of 1974 after falling off his bike at a railroad crossing. It was a “one in a million” tragedy. I was twenty-one when we laid him in the ground in the country cemetery in Sunfield, Michigan. I’ve often wished that I had a list of his sayings that I could give to my kids, but I don’t have many to pass on. Either Dad wasn’t a talker or I wasn’t a listener. I suspect it was a lot of both.

He worked as a chemical engineer for Mobil Oil at Lexington and 42nd, but he was a carpenter at heart. I remember the summer of 1965 when he took a month off to work on the old farmhouse in Michigan. In those days, before I enlisted in the East Coast Hippie Revolution, I was still his number one helper and for three weeks I pounded nails, lifted windows, held ladders, and cut boards. I learned how to measure twice and saw once. We worked sun up to sun down and the pay off for me was a promise to play golf before we returned to New York.

On the last day of his vacation, after he had squared in the last window, he took me to the Portland Golf Course. I can still remember him wandering down the fairway in orange shorts, shanking every other shot, and grunting all the while how much he hated golf …. because he couldn’t control it. We finished in the setting sun and walked into the club house bar, crowded with laughing men. I can still see him chugging down cold beers while I tore into the best cheeseburger of my life. I remember he looked at me with his warm brown eyes and told me that I had worked hard and that I was a fine son.

In a recent debate in the Michigan Senate on the state bank concept, Senator Tom George of Kalamazoo trotted out all the usual suspects in his denunciation of the state bank: the bank would have to borrow money to get started, the bank would make only high risk loans, Michigan citizens would be on the hook for the bank’s debts, blah blah blah.

We can use this argument against the formation of any bank or against the bailing out of large banks, i.e. Citibank, Bank or America, Chase—you know, the ones the fund the campaigns of George’s masters in Washington.

Needless to say, George misses the major advantage offered by a state bank—recycling interest payments back to the state instead of off loading them Wall Street to fund the coffers of the Democratic and Republican elites. Currently, the public institutions in our state are paying billions of dollars in interest each year and most of this money leaves Michigan. Wouldn’t it be nice to have this money for our roads, bridges and schools?

Like an economics professor from a bible college, Tom Friedman called us to the altar today in the Sunday Times with an article entitled “This Time is Different.”

He establishes his theme by referencing a letter to the editor written by a friend who takes the hit for BP’s oil spill and declares that he has been born again in a sustainable skin.  He’s going to bike to work.  To the Pentagon!  Hallelujah!  Praise God and pass the tofu. Moral lesson revealed,  Rev. Friedman  launches into a sermon right out of the Big Oil Bible and condemns us for  Deepwater Horizon and its victims because we “sent BP out in the gulf to get us as much oil as possible at the cheapest price.”  Then he beseeches us to “look honestly at our own roles in creating our own problems” and “solve the big problems in our control.” What a bunch of crap.

Twitter to Reverend Tom:  Shill for BP in private.  I’m not in your congregation.   On top of the guilt that you want me to feel for global warming, for genocide in Darfur, and for still believing that the world is round, you want me to flay myself for peak oil.  No thanks, Tom. I’ll pay for my own sins—not for yours. I’d rather drive an SUV.  For the Antichrist.

In a comment to my post on the Blue Economy, James Samuel of New Zealand said the new food economy is getting local.  This is something that I have been preaching about for a few years.

As energy costs increase, food providers will be driven more and more into the metropolitan centers, where there is relatively cheap water and wastewater treatment – especially in depopulating cities like Detroit, Buffalo, and Cleveland.  Last week I pitched this idea to a small group of BASF managers in a conversation about the Blue Economy.  They said food localization is already underway in Europe and Asia and they expect it to gain momentum in the US  in the near future.

The Blue Economy is one of those invisible traits that show themselves from time to time.  To learn more, check out my Proposal for a Blue Economy.

The boys and girls club that runs this state like a high school clique of “in” kids has returned from the annual party on Mackinac Island.  And Tom Walsh, the honcho business writer from the Free Press  is wondering if our dear leaders “could fall back into their old bad habits?”

Maybe I missed the email but when did these over paid adult children learn good habits?  Last time I looked, the taxes on my business were still up more than 30% after Granholm and her pals in the Legislature decided to shaft small businesses with the cursed MBT.

Most people don’t realize that the MBT shifted the tax burden from her corporate buddies to small business folks.  Last year my line of credit was taken away even though I had never missed a payment.  In the last two years my health care costs increased 68%.  Any help from our state leaders on that one?  Nope.  Come to think of it, I have been in business for almost 20 years in Michigan and I have yet to receive a single call or email from any city, county or state official, elected or otherwise, asking me if I needed any help.

I wonder how many of Walsh’s friends at Mackinac have actually had to sell a product or service in the last two years in Michigan?  Or make a payroll?  Or personally  lay off an employee? If Michigan leaders want to really learn some lessons, they’ll  stop going to Mackinac and  start a business.  That’s the only way they will learn the real lessons they need to turn around our state.

Lots of buzz in the Peak Oil Hive about the recent oil production forecast from the U.S. Energy Information Administration (EIA).

Folks are comparing the last four reports from the EIA and discovering that oil production forecasts have fallen by 14 million barrels a day – from 118 million barrels a day to 104 barrels a day.  Though I’m not the sharpest knife in the drawer, I thought Peak Oil meant that production goes to a top and then starts going down. If we are currently getting 86 million barrels a day then how does an increase of  18 million barrels translate into an admission of Peak Oil from the EIA?

What we have here are two failures of admission. Our leaders, i.e. our government, refuse to admit we are running out of oil.  And our thought leaders refuse to admit they are so desperate to get some truth from our government that they’ll make up their own.

When something falls apart, like trust between the governed and the government, it’s very difficult to put it back together the way it was.  We have to learn how to trust ourselves because the devil knows the best lies rest in the truth.

I woke up in a Holiday Express to an article in the Dayton Daily News about radioactive fish.

The article covered the story of the Vermont Yankee nuclear plant, which has been leaking tritium into monitoring wells and making people nervous about the local water supply.  Making the situation worse, a fish that tested positive for Strontium 90 was caught in the Connecticut River, four miles upstream from the plant.  Strontium 90 has been linked to bone cancer and leukemia.

The usual suspects were lined up to confuse readers. State officials dismissed the plant as the source of the ST-90.  A chief of preventive services said that nuclear testing and Chernobyl were to blame. An expert consultant said ST-90 was everywhere and that radioactive fish are okay to eat.  State health officials said that the amount of ST-90 was consistent with baseline levels.   But an Australian doctor countered that baseline levels had not been established for ST-90.   Then finally, a Connecticut River fishing guide said the obvious, that ST-90 doesn’t do much good for the image of local fish.

So who is right or what is right?

Do you ever get the feeling that the mass media is consciously confusing us?  Scroll through the headlines on Bloomberg’s web site on almost any day and you will see contradictory headlines  like “Oil prices fall on economic worries,”  and “Oil prices rises on growth speculation.”   Does anyone really know what’s going on?

Last Monday, I attended the Crain’s  “East Meets West”  Conference in Grand Rapids.   The ex-Mayor of Indianapolis, Stephen Goldsmith wowed the audience with stories of how he slayed the dark side of unionism and bureacracy (laziness and selfishness) through management by walking around … and listening.  Then, State Rep. Marie Donigan (Royal Oak) chatted up her idea to create a state office to promote regional collaboration between Michigan communities.

Needless to say, the red-hearted Grand Rapids folks were polite about yet another Lansing money sucking idea, but let’s get serious here.  Regional collaboration isn’t going to happen in this state until our communities start going bankrupt and we force the administrators and unions to figure out how to work together.

An office filled with consultants and studies and of course, a few ex-state legislators who just happened to be term limited out of their jobs isn’t going to make any one in government to agree to give up their job or their city council seats or their budgets.  In fact, the real impact of Donigan’s  Intergovernmental Advisory Office (embodied in House Bill 5930) will be to delay regional collaboration by encouraging meaningless studies, community dialogues, conferences, etc.

As most people in the business know, there are many laws on the books in Lansing that actually make it more difficult for communities to cooperate, including Public Act 116 of 1954, which permits intergovernmental collaboration agreements to be used as a cause for recall efforts against elected officials. Check the Citizens Research Council report which describes the many legal obstacles.

If Donigan wants to serious about regional collaboration, she’ll quit the kissing and hugging and square off the real roadblocks to regional collaboration—her fellow legislators in Lansing.

Michigan is at an economic crossroads. Michigan-based business leaders face decisions that will determine our future for generations to come. Michigan has the worst unemployment rate in the nation. In 2009 the unthinkable happened: Chrysler and GM declared bankruptcy, and our largest city, Detroit, is struggling to stay out of  bankruptcy.

As usual, it is easier to fix blame then it is to fix the problem. The experts say that union wages, health care and retirement costs, and taxes are too high in Michigan. They say that automotive executives have taken too long to face the reality that Asian competitors make better vehicles for less money. And they say that our politicians are too divided and too selfish to come together and lead us out of these crossroads.

But why focus on the blame? There is another path. Michigan’s economy can survive this crisis, and it can also turn itself around economically by understanding and executing these five simple strategies:

1. First, change ourselves:
Michigan’s political, business, community and labor leaders need to take personal responsibility for this situation and figure out how we must change. We have to quit telling other people to change. We have to fix ourselves first. Are we afraid to take risks? Do we lack creativity? Are we selfish? Are we lazy? Are we stuck in “Comfortopia”? The truth is hard to face, but the solution lies in changing our own personalities—nobody else’s.

2. Tap energy – not efficiency:
Michigan has a machine personality and it needs to let it go. Efficiency is not the universal solvent. While we talk about closing plants and reducing costs, other states talk about tapping energy. What energizes our people the most? What drives them to sacrifice? Currently, manufacturing comprises only 3% of Michigan’s economy. While we focus on preserving and optimizing this small slice, other opportunities fly away to more confident and upbeat regions.

3. Walk into the fire:
In Michigan, when we see a problem, we hire consultants and academics and we ask them to put out the fire. They go, look, and return to say: “You have a fire.” Then, we ask them to form a committee and make a recommendation and after they take some time doing this, they return with a set of things that have to be done before we can put out the fire. Unfortunately, this is how we tackle racism (we are the most racially divided region in the country), invasion of the carp in the Great Lakes, and the demise of manufacturing. We need to walk into the fire and take the heat ourselves.

4. Drive the change with creativity:
Instead of competing for manufacturing, we need to compete for the most creative talent. China will graduate over 400,000 engineers this year (compared to our 125,000). If we strived to make Michigan friendlier to immigrants and actually recruited the best and the brightest to live in our communities, we could rely on this influx of talent to take us out of these crossroads and onto a successful path.

5. Think ahead two generations:
Imagine the great grandchildren of the current generation. Ask them what they want us to do now to make life better for them. More than likely they will say: “Make a difference today.” To do this, we have to educate all of our people—not just the children. Although our governor has called education “the fifth road on our map to a powerhouse economy,” our legislature continues to cuts education funds. Have you ever noticed that training is always the first item that gets cut in rough times?

Clearly, we need to envision a future without so much manufacturing. Our leaders are fashioning a rescue based on this assumption: If the government hands out money, then manufacturing will want to stay in Michigan. This thinking ignores the dramatic shift in our collective personality. People are not programmable machines. What if people don’t want to work in factories, or build factories, or maintain factories, or even live next to factories anymore?

What’s Michigan’s New Economy? Is it making clean water? Is it building a biotech powerhouse? Is it creating the best place to live in America? Nobody knows for sure, but the journey runs through our own personalities.

Charles Fleetham is the author of “The Search for Unrational Leadership: Using Rational and Irrational Methods to Change Your Life” (Right Brain Books)