The song came to mind while reading an article about SUV sales – “High Prices can’t stifle SUV sales.”

The article focuses on GM’s Arlington, Texas plant:

“Despite gas prices that guarantee $95 fill-ups on the SUVs, the plant — GM’s only manufacturer of full-size sport utility vehicles — works overtime every week and expects extra hours for at least the next two months.”

Even though gas prices have risen 80% since 2009 and 25% this year alone AND food prices have risen almost 7% since January,  auto sales are still rising according to autoinformed.com. Auto sales are off to a strong start during the first two weeks of April and are expected to hit 950,000.  The industry is 16% ahead of last year’s pace and might sell 13 million vehicles this year.  Autoinformed devotes  almost 700 words to the story and the word “gas” is never mentioned.

The good news reminds me of NY Fed Chief Bill Dudley’s speech in March in which he wisely reminded us that in the face of rising prices at the grocery store we need to look at the bigger picture—for instance, iPad prices have not risen this year and the current model is more powerful than the last.  Although a listener in the audience needlessly reminded Mr. Dudley that he couldn’t eat an iPad, maybe Mr. Dudley is right. The economy is getting stronger, prices are stable and auto sales will continue to rise as homo consumerous spends us all back to the happy days.

Governor Rick Snyder campaigned on "reinventing" Michigan. (photo Bill Rice)

The plot of the program was Governor Snyder’s tax cutting strategy—will it work?  Graham asked two local experts for their opinion—Lou Glazer of  Michigan Future think tank fame and Don Grimes, an economist at the University of Michigan.  Both men are mostly positive on Snyder’s program, though Glazer questions the wisdom of Snyder’s tax cuts.  He claims there is no correlation between economic prosperity and tax rates.  I will leave that debate to smarter folks like Glazer and Grimes, but I doubt that Glazer would be so sanguine if his business experienced a 400% tax increase like mine did when Granholm got rid of the old Single Business Tax. It’s always easier to say things don’t matter when they don’t happen to you.

But I digress… some years ago I actually met Mr. Glazer at a meeting in Detroit when he was just starting to wind up Michigan Future. After hearing Glazer’s pitch, I had other ideas for Michigan’s future and actually tried to start a foundation—Michigan 22nd Century—to drive them. But being a man of no great prominence, the Michigan 22nd Century never took off.

I had three core ideas for reinventing Michigan:

1. we need to build the world’s first water based economy (a word that isn’t mentioned in Graham’s program),
2. we need to build a post peak oil infrastructure, and
3. we need to create a state bank to get us out of debt.

I find it curious that so many smart people never mention our state’s debt load when they talk about reinvention.  Here’s an example: last year the Detroit Water and Sewerage Department earned $285 million from its water sales to about four million Michiganders, but it paid $145 million in principal and interest on its debt. 

Think about it!  50% of your water bill to Detroit goes to debt and interest … and people wonder why their water rates are going up! Memo to our thought leaders and politicians—if you don’t do anything about the debt, it will not matter how many taxes you cut (which is why Engler’s tax cutting program didn’t work in a era of ever rising leverage throughout our state).

I also find it curious that politicians and economists have been talking about replacing the auto industry for 50 years and they ignore the state’s only unique resource—its water.  We have it. The world is going to want it. It’s time we make a sustainable Blue Economy out of it.

And finally, any plan to reinvent Michigan is doomed to a repeat-a-vention, unless it confronts the challenge of Peak Oil.  Maybe I missed the email, but how is Michigan supposed to reinvent itself with $4 gas. Make no mistake about it—Libya is not a one off.

It is the beginning of mammoth and monstrous change for us and we better start the real reinvention. Now.

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.

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.

Memo to our economics professors: these riders don’t stand for pestilence, war, famine, and death – we already have a surplus of these biblical ills.  No, the horsemen of tomorrow’s apocalypse stand for delusion (as in the leaders of the West), bankruptcy (as in global), depletion (as in oil) and terrorism (as in Times Square).

For months, the Obama mouthpieces have been telling us that the worst is over; then the stock market falls a thousand points in one day and wipes out the market’s ill gotten 2010 gains.  Greece is functionally bankrupt and will topple many of the banks that have collectively loaned 11 million Greeks over  $300 billion dollars.  The demographic math on Greece’s debt proves that we made a profound mistake by placing our nation in the hands of the Federal Reserve.  After the ancient pillar of democracy falls,  Spain, Portugal, the UK and then finally us will soon follow.  BP’s petroleum engineers, the real gods of our civilization, can’t figure out how to stop the oil spill in the Gulf of Mexico, and oil prices which have mysteriously crashed in the last week will begin to climb and kill off any green shoots that survive the next down leg. And then there is Terrorism, which has been circling the globe alone since 9/11.

If you could hear the horses, they would certainly say: “The blood- dimmed tide is loosed.”  This line is from the “The Second Coming,”  a poem written by William Butler Yeats almost a century ago, after World War One consumed the flower of a European generation.  As for what comes after these horsemen flying this way, who knows?  Unfortunately, Jesus has been showing up only at Christmas, usually in the malls.

THE SECOND COMING

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.
The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

Up to now, national leaders have viewed water scarcity as a regional problem. Business leaders have viewed it as a limitless resource. But after a decade of global warming, leaders are becoming aware of an oncoming water shortage, giving Michigan, whose borders touch 20% of the world’s remaining fresh water, an extraordinary opportunity to create a water-based economy, a Blue Economy.

A Blue Economy is the logical successor to Michigan’s auto-centric economy, which is collapsing after a hundred year run. A Blue Economy could fill vacant factories with manufacturers of water conservation and treatment equipment. It could erect new factories for water hungry food and beverage processors and semi conductor companies, like Intel and Texas Instruments. These industries will need skilled knowledge workers and Michigan public universities can develop the necessary curriculum and operational training programs. It could build the world’s center of water expertise and technological development.

Michigan has more than an abundant supply of clean fresh water to recommend itself for this daunting task. It has a surplus of engineering/manufacturing talent, and it has a largely unemployed auto based workforce hungry for jobs. It is a signatory to the Great Lakes Compact, guaranteeing a secure supply of water for the foreseeable future. Other states have expressed an interest in Michigan’s water, but Michigan can bring thirsty people and businesses to its “water wonderland.”

There are three big roadblocks in the way of Michigan’s Blue future: its reputation for high taxes and high cost labor, a lack of proactive thought leadership, and a lack of capital. But, Michigan shouldn’t wait for someone to move these roadblocks – the time is now.

With the sponsorship of the Engineering Society of Detroit Institute (ESDI) and the Detroit Water and Sewerage Department (DWSD), a “Blue Economy” Steering Committee has formed and it includes important state and regional stakeholders. Now, it is time to move beyond dialogue. A practical first step is funding and launching NextWater, a non-profit 501(c)(3) to organize and lead the effort. Its first task is to create a detailed blueprint for a Blue Economy and Michigan’s renaissance.