Authored by the Strategic Foresight Group and sponsored by the governments of Sweden and Switzerland, the report attempts to “redefine the water paradigm in the Middle East, so that water can be harnessed in a way that satisfies the social and economic needs of the people.”  The report’s Big Hairy Audacious Goal is to turn water into an instrument for peace in this war torn region.

It examines the current water situation in the Middle East and concludes that the nation states are about to walk off a cliff without a parachute. Nations have been making decisions about water as if it belongs to them, when in fact, rivers, lakes, aquifers, and rain have no consciousness of maps.

For example, the Jordan River supplies five nations: Lebanon,  Syria, Israel, Jordan and the Palestinian Territories and as each entity tries to optimize its own supply, the  Law of Unintended Consequences asserts itself and the overall supply declines. During many periods of the year, the river doesn’t have any flow.

What is the solution? Collaboration amongst national actors who haven’t played nice for a long time.

The collaboration strategy is named, “Circles of Cooperation,” a concept first introduced by Prince Talal of Jordan in May, 2010 at a regional conference, and it draws two initial circles, one around Turkey, Syria, Iraq, Lebanon, and Jordan, and the other around Israel and the Palestinian Territories.

The report is chock full of interesting information, much of it bleak.

• The  Dead Sea is dropping one meter a year due to lack of water and could be reduced to a lake in 20 years.
• The West Bank has five wastewater treatment plants and only one is operational.
• The Palestinian Territories need almost 100% more water then their current supplies.
• One of the biggest challenges in Damascus is unlicensed wells (estimated at over fifty thousand) which are draining the aquifer underneath the city.
• In Lebanon, 40% of the water in its pipes never reaches customers due to damaged or destroyed infrastructure (from the 2006 War with Israel).
• In Iraq, since the 2003 War, over 300,000 tons of raw sewage is dumped into the Tigris River DAILY.

I think there are two major takeaways from this report:

1. Michigan is unbelievably blessed with freshwater compared to Middle Eastern countries and
2. If the authors can seriously propose a collaborative process to help Middle Eastern countries treat water as a regional resource, why can’t we do the same thing in Michigan, when we don’t suffer from war, religious strife, or long standing drought?

I would encourage anyone interested in our Blue Economy to read “The Blue Peace.”

(One has to consider the possibility that Strauss-Kahn was set up as it would be impossible to imagine a similar arrest of a US banker, like Jamie Dimon, the CEO of Chase, or Ben Bernanke, the Federal Reserve Chairman, but it’s too early in this news cycle for a conspiracy theory to emerge despite the fact that Strauss-Kahn was setting himself up for a presidential run in France against Nicolas Sarkozy who is running the war against Libya, etc. etc.)

Strauss-Kahn was traveling back to Europe to attend a yet another critical meeting with German leader Angela Merkel on Greece.  Last year, Greece accepted IMF supervision of its financial matters in return for a $150 billion bailout package and Strauss-Kahn was the Big Man in the deal.

As you may have heard, the IMF forced Greece to make drastic budget cuts in return for the loan, which has created a recession, but the recession has not reduced the deficit. (I wonder why.)  Now, the IMF wants Greece to fully privatize its utilities:

EU and IMF inspectors are pushing Greece to fully privatize public utilities in exchange for the release of its next tranche of aid and a possible extra loan, Greek newspapers wrote on Saturday without naming sources … According to the daily Eleftherotypia newspaper, inspectors currently in Athens have said the government should fully privatize the Public Power Corporation and two water companies, Thessaloniki Water EYATH and Athens Water company EYDAP.

Back on the home front, cities across our state are struggling financially, especially Detroit, which is trying to get rid of a $200 million deficit.   Recently, Governor Snyder spearheaded the passage of a new legislation which empowers emergency financial managers (EFM) to right the sinking ships of our cities.

Would-be EFMs are flocking to training sessions and are licking their lips for a chance to trim pension plans, modify union contracts, sideline elected officials, and more than likely, to sell public infrastructure on the cheap to private corporations.  Is it merely coincidence that in 2010  the Michigan Citizens Research Council published a report on Detroit’s financial condition and concluded that Detroit  has only one asset that could be “monetized”at a rate sufficient to make a major contribution to resolving the accumulated deficit: the Water and Sewerage Department, which wholesales services to suburban communities?

Now it appears the idea of a state bank in Michigan has been buried with the Republican landslide, as  our new leaders roll out their formulas for creating prosperity. But a state bank could give Michigan citizens a backstop to privatization.  For one thing, it’s getting tougher and tougher for Michigan cities to get credit as they face downgrades from rating agencies and interest rate hikes. For example, in April, Romulus was downgraded by Fitch and given a negative credit outlook.

The core idea of a state bank is that citizens empower the government to create money. States have that power but they don’t use it because private corporations and their political accomplices have convinced us that money creation is too dangerous to put in the hands of the citizens. Only the smartest and wisest people should have that power and needless to say, these are business people (and don’t be confused, the Federal Reserve is federal in name only).  Never mind the conflict between civic duty and maximizing shareholder value. Our regulations will solve this problem. Yep. It’s worked pretty good so far, but tell this to the half a million Michiganders whose homes are worth less than their mortgage.

It’s time for the people to take back their power given to them by the Founding Fathers and the Constitution. It is helpful to recall that Thomas Jefferson opposed the creation of the First Bank of the United States (which was privately funded by the way) as unconstitutional. Here is what he had to say about  allowing private corporations to control the power of making public money:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

The scheduled key note speaker was former Housing and Urban Development Secretary, Henry Cisneros.  As the former mayor and rescuer of San Antonio, one would have hoped he could work his magic in Detroit. But not this year. According to the Detroit News, his $258 million project to build 3,000 houses  on Detroit’s border with Grosse Pointe Park has fallen through. The city spent millions tearing down houses and rebuilding roads for the project, but the land has become a dumping ground for trash.

On Saturday, thousands of Christians walked through Detroit, praying for heavenly rescue.  One of the faithful captured the essence of the exercise: “This city is God’s city. We will see God turn this city around. He is the only one who can do it.”

Presumably the policy wonks at the Westin don’t share the same faith in God or else they would have abandoned their fine wine and cheese for the prayer circle on Woodward.

At the turn of the month, a group of students from Minnesota (Normandale Community College) left for Detroit on a mission to renew the city.  Filled with passion from a class exercise on urban renewal, they wanted an audience with Mayor Bing to tell him about their central idea:  expand Wayne State to fill the territory between downtown and midtown and create an education epicenter.

Ironically, the parents of the young missionaries insisted they stay in Farmington Hills, for obvious reasons.  Although they didn’t get to meet the Mayor, they did talk with a deputy mayor, Wayne State officials and an emergency financial manager.  Good job, kids!

Only God knows whether or not the students were welcomed into the American Assembly Policy Forum.

And finally, Glenn Beck, the 21st Century’s ultimate Man of the New Apocalpyse, ran a show in late February comparing Detroit to Hiroshima.  Needless to say, the Detroit team loses in the comparison.  Bombed to oblivion, the Japanese rebuilt their city on the backs of their entrepreneurial, cooperative spirit, whilst Detroit squandered its Motor City domination: the fault of labor unions, the too big to fail automakers who had to be rescued by the government, corrupt politicians, and pointy-headed progressives like the attendees at the American Assembly Policy Forum.

Both the Free Press and the News believe that Bing is not going far enough fix the budget.  In an editorial entitled “No Time to Tinker,” the Freep suggests that Bing “take a cue” from Gov. Rick Snyder and “build radical change into Detroit’s budget plan.” And the News says that “the real savings will come by privatizing many of the services now provided by the city.”

I couldn’t agree more with our local rags.  Radical change is needed, but not the phony radical change they are promoting.  Since when is cutting benefits, laying off workers and privatizing municipal services a radical idea?  The Indiana Turnpike was leased for $3.8 Billion by an Australian/Spanish partnership. Now, that’s radical!

Seriously, read the articles and look for the word “debt.”  The article are seasoned with the ugliest of words, “deficit,” but I don’t think you will find any talk about “debt.”  I wonder why?

Ignoring the debt is certainly not related to the amount of debt.  According to Detroit’s 2010 Finanical Audit, citizens of Detroit are currently responsible for $9.3 Billion dollars of long term debt. (This amount includes the school system’s $1.5 Billion debt.)  If you divide  $9.3 Billion by 730,000 souls you get a per capita debt of almost $13,000. According to the audit, the per capita income for Detroit is only $15,042!  And, the city’s debt has increased three-fold from 2001, adding over six billion dollars in debt, while the population was falling by 200,000.

For contrast, the city of Farmington Hills, a middle class suburb located about 10 miles northwest of Detroit, has $24 Million in long term debt. With a population of 78,000, the per capita debt is $305.

Do you see the problem?  $305 versus $15,042.  How can Detroit cut its way to positive cash flow, with a such a debt burden?  But it is not surprising that the major mass media in this region doesn’t want to address this challenge, because the solutions would be TRULY radical: either restructure the debt or open a state bank to relieve the debt.

The MSF intends to award a total of $13 Million to non-profit organizations that invest seed money in companies that need support to transition from the research phase to commercialization. Obviously, the MSF goal is to diversify the economy and increase jobs by hopefully finding a pony in the barn of the Michigan hi-tech start-ups. And true to the Governor’s word, the state won’t be picking the winners and losers—some non-profits with will be the Great Deciders. Unfortunately, the state has rigged the game by restricting the choices to four sectors: Advanced Automotive, Manufacturing, and Materials Technology; Alternative Energy Technology; Homeland Security and Defense Technology; and Life Sciences Technology.

The MSF Water Technology Sector, which has supported a series of projects, will be shut out. Recently, I attended a conference on water technology projects that had been created in partnership with Israel and was pleased to hear of the progress. As a Michigan business owner, optimally I would like to attend a conference featuring Michigan water technology businesses, but we have to start somewhere. Snyder’s decision will make it much more difficult for water technology start ups to get important support.

Let the Michigan Strategic Fund know how you feel about this proposal at 21stCenturyJobs@michigan.org.

We have to get a little creative.  Southeastern Michigan has one of the largest municipal water systems in the United States, the Detroit Water and Sewerage Department (DWSD).  DWSD is uniquely positioned to support Blue Economy technology innovation. It certainly has the funding.  In the next five years, DWSD plans to invest $1 billion in its water system and $700 million in its wastewater system.

That’s a lot of money and a lot of new Blue Economy jobs. Investments could be strategically targeted at budding Blue Economy technologies and using the department’s vast system for pilots. DWSD is currently participating with Israeli water companies on several new technologies including Miya, for leak detection.  While building a reputation for innovation and prudent risk taking, DWSD could benefit directly from federal and state grants for new technology applications. This is especially true of new technology that needs evaluation in real world conditions on a pilot scale in order to measure performance and build business cases. This contribution to Detroit’s economic growth has the added benefit of building the water knowledge, technology and manufacturing base in Southeast Michigan.

Other Michigan cities, big and small, are planning water and wastewater investments:

• Grand Rapids is planning to issue $136 million in water and sewer bonds in the next four years.
• Mt. Pleasant is budgeting almost $70 million for the next five years.
• And White Lake Township in Oakland County (population 28,000)  is planning on investing about $8 million in the next five years.

Overall, U.S. municipal water systems will spend $1.5 trillion on infrastructure capital investment projects by 2020. Most large municipal operators face regulatory, business and system challenges resulting from aging infrastructure, system design deficiencies and traditional utility solutions. These challenges provide abundant opportunities for innovation and application of new technology. I am not sure how much Michigan will spend but as you can see from the limited data that I have presented, it has to be billions.  Much of this money will be spent on water efficiency, especially in times of rapidly increasing rates.

Why couldn’t our water and sewer leaders collaborate under a Blue Economy banner and fund the foundation of our next economy?

The Clinton River Watershed

Located northeast of Detroit, the Clinton River covers 760 square miles and includes over 1,000 miles of streams in addition to the 80-mile-long main branch. In the 50’s and 60’s, fish couldn’t survive in the Clinton, but today, thanks to big investments in pollution control, the river supports an extensive fish population as well as canoeing and boating.

I wonder if Mr. Hackel envisions any collaboration with the Alliance of Rouge Communities, which “encourage watershed-wide cooperation and mutual support to meet water quality permit requirements and to restore beneficial uses of the Rouge River to the area residents?” Or if he sees any collaboration between his effort on the Clinton River and the Michigan Economic Development Corporation’s “Green Jobs for Blue Waters” initiative, which claims to support eco-tourism amongst its efforts to expand water technology industries related to water conservation, quality and transport technologies, wind energy production, and pollution remediation?

Although admirable for its energy, go-it-alone approach on the Blue Economy will not be nearly as successful as a collaborative approach.

The global challenges of population growth, industrial expansion, infrastructure deterioration, dependency on fossil fuels, climate change, pollution and depletion of ground water will continue to drive sustainable water innovation.

Since the Great Lakes represent 18% of the world’s potable surface water, Michigan has a vested interest in improving watershed and lake quality and we have the skilled workforce and design, engineering and manufacturing expertise to create a global water hub.

Few would argue that Silicon Valley is known as the world’s hub for information technology. What are its salient characteristics as a global hub? Large information system companies have their headquarters in Silicon Valley: Apple, Intel, Google, Hewlett-Packard, etc. Silicon Valley companies produce a significant number of patents—almost 100,000 from 2000 to 2008, and more than 10% of the total U.S. patents in 2008. Silicon Valley draws large amounts of venture capital—$5 billion in 2009 and over $80 billion since 2000. And of course, Stanford University is located in Silicon Valley and has been an innovation engine for almost three decades.

Currently, the water industry is localized and has organized itself around the world’s cities and towns, providing discrete design, engineering and operations services (mainly for water and wastewater treatment) to government, utilities and industry. According to Goldman Sachs, of the world’s top 40 water companies, four are located in New York, and two each in Boston, Chicago, Dallas, Los Angeles and Philadelphia. Measured by locations of offices and plants, the top players in the U.S. water industry are Houston and Boston, neither of which is located near a large source of fresh water.

Clearly, Michigan has an opportunity to seize the moment and begin the process of aggregating this fragmented industry.  The last hundred years Michigan built its economy around the combustion engine; the next hundred years, it must build its economy around sustainable development of its water resources to create a water innovation hub.

According to the local shopper gazette, the kid protested that marijuana should be legalized, but the officer hauled him off, and returned the girl to her parents, where presumably she can smoke her weed in peace.

First, I hope that kid goes into politics someday.  At least he was willing to state an obvious truth.  And second,  I would love some proof that this insane criminalization of marijuana is going to end before I die. Why is it insane?  Well, my friends, take a ride on the 8 Mile Line and gaze at the new billboard that offers a six week education at the MedGrow Cannabis College “Find a new career in six weeks!” (ironically enough, in front of that billboard is another one promoting the cable series “Weeds”) or better yet, apply  to the state to become a “caregiver” and get the right to grow plants for your patients.

Yes, the medical marijuana industry is one of the only bright lights in Michigan’s firmament—we have doctors writing scrips, growers tending plants, consultants selling grow lights, ‘dispensaries’ selling weed, over 1,000 users in a compassion club in Genesee County (friend them on Facebook!)—and in the light of this, we still have cops arresting kids for pot paraphernalia.  It’s no wonder that so many kids smoke grass.

If you could hear their smoke talk, it would say: the adults in charge of this run-down country club must be in the blank stage of their lives.  They can’t give us any jobs; they force us into colleges and shackle us with debt; they tell us over and over again not to “do drugs,” and then they legalize it for the health care profession … yeah… someone took the doobie from their doobie ashtray … that’s for sure.

p.s. Who says tradeshows/expos are on the way out? Save the date for Halloween weekend.

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?