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Author Archives: Roland Van der Meer

Creating Sustainable Economic Growth

Written on April 10, 2012 by Roland Van der Meer in Economics, investing, sustainability

The big issue facing the US economy and its government is lack of financial competence. An over levered, bloated government, cannot seem to face the reality of its own solvency?

How does a government run without a budget for the past four years, a budget which is required by law? The solution that our political leadership is pursuing is to inflate and grow our way out of this economic mess, while simultaneously taxing those who already pay the majority of the taxes. One has to ask, “Can a very mature, leveraged society grow without a fundamental engine (reason) to grow?” We can’t possibly consume more at this point; we have everything in the world that anyone would desire. So where and how do we go from here?

Economic growth comes from two sources: Employment gains and productivity. The riddle of productivity versus employment is still debated in academic circles (see the paper on the negative correlation between productivity and employment) and is not very well understood in the political ranks. A productivity gain is another way of saying innovating a process or function to create more with less. But if you add a twist in our resource-constrained society and focus on quality over quantity, you can build a much more robust solution.

Quality over Quantity
As my mother used to say, “When you buy something you want or need, first ask yourself if you really need it and then buy the highest quality, it will preform better and last longer.” That is the voice of someone who lived in Europe for part of its depression and World War II. She always had the most beautiful clothes — very few but beautiful. She had great classic furniture and art, again not many but always the best. We ate only good food, never junk. We went out to eat sparingly, but when we did it was the finest we could afford, not junk fast food. It is how we live, not what we have, that makes life worthwhile. These are the values that are long-term and sustainable.

Unilever, like the good Dutch company they are, has embarked on a big sustainability campaign. It is thoughtful and admirable. It is worth noting that in the conflict of growth versus sustainability, building a better consumer products company with the right objects and environmental impact should enable it to take market share and win business because it is doing it right. The more value and impact you can produce, the more successful you will be if the consumer (i.e. all of us) cares and buys the quality product.

Patagonia also has a program that carries a mantra of Reduce, Reuse, Repair, Recycle, something we all should consider.

These companies demonstrate the essence of a sustainable society, and yet, this seems in conflict with our government ideas about growth of the consumer to carry us out of recession or under-employment. But these values will be the ones that will not only sustain us but will force innovation and productivity around reuse and will influence manufacturers to build lasting high quality products. We may pay a slight premium at the cash register, but the long-term value for ourselves and for a sustainable society will far out weigh the short-term discomfort.

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Can we find a better place to park?

Written on March 15, 2012 by Roland Van der Meer in Community, investing, stewardship

As you drive around town, you notice that the suburbs are covered in parking lots. In every mall, city or town, you will see black top lots, mandated and designed for the drivers’ convenience — you do not have to walk more that a couple hundred feet from your car to your destination. The malls have gotten so huge, however, you end up getting back in your car, driving a couple hundred yards and re-parking to walk into the next store. This is life in America.

Can we find a better way? What can we do about these giant environmentally destructive heat sinks? How can we make this blight on our malls and towns become a welcome and beneficial place? Yes, a “place”.

In the New York Times article, “Paved but still alive,” Micheal Kimmelman discusses how the dead mall is becoming a new center for activity. He also touches on many new design ideas, which begin to open up the possibilities.

But lets start at the beginning. Do mall parking lots have to be black? We know asphalt is cheap, but what about a better material, one that reflects light and is cool in the heat, that is porous and can absorb water? Just these two things would go a long way to minimizing environmental damage. Then in the dryer areas we could use the parking structure as a water catch all, a storage solution where needed.

Open parking lots are an awful eyesore. Why not provide shading for the cars and people with solar panels above? That could create power for the tenants of the buildings or the charge stations for our future electric cars. As the price of solar panels comes down, especially in the south and south west, this solution is really becoming a no-brainer.

What about design and layout? We can get much more creative here. The parking lot doesn’t have to be a square grid, especially when you consider options for greening up the parking lot. Why not make parking structures parks with beautiful trees and grass and plants? You could add small pads of grass with play structures for kids to play on. Why not create a small community open theater in a parking lot? Most developers would argue those options are, “not efficient, not cost effective.” Really? Wouldn’t a nicer environment drive more people to the mall and make the shopping experience that much better?

Why not create small urban gardens in the median or the perimeter of these parking lots? Then you could create the ultimate local farmers market growing foods people want to buy and eat! The possibilities are endless.

And for those mega lots, why not create a transport system so people can get to their destination and not think about re-parking their cars.

There are many possibilities here. It takes thoughtful design and thinking beyond what is normal and expected. We know that creating value for people will ultimately create more value for the community and the developer. So, lets get our town design review boards to open up and reconsider what a parking lot can be.

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A Kid Defines the Issues of Our Food System

Written on March 7, 2012 by Roland Van der Meer in Community, Organic, agriculture, stewardship

If I told you that the health of you and your children is directly related to the food you eat would it make a difference? Maybe not. But if you saw that your family was degrading in health would you change your position? The answer is really interesting: Most people would change their eating behavior if their own life or their child’s life was on the line. But, because poor health causes a slow, almost invisible, decaying it is hard to see or realize the damage in order to motivate change (think cigarette smoking). Think it’s too late to change? Here is an amazing example of an 11 year old who became passionate about the food system, and who can talk the talk and probably walks it as well.

If more kids were taught how food is really made, where it comes from and what goes in the food, they might think twice about what they eat. The media is a very powerful educator. The issue is that the food industry has the power and the dollars to spend to make their point and cloud the message. While the Internet is powerful, it is still not the answer because the solutions lie on the fringe of the acceptable.

We are working on using more organic (no pun intended) solutions to getting the message across as “Farm to Fork” food delivery solutions become much more popular in the coming years. We expect that around major cities the local food movement will become more mainstream. As this occurs, we can expect an acceleration of acceptance, and creation of jobs and a general sense of improved health. The more people engage with the land and the food, the more we will develop a sense of responsibility and accountability for the impact we are having.

The messages that we hear from media about most food products are a far cry from the truth. Chipotle has done a good job showing how industrial our food has gotten in their amazing animated video on the food system. It is sad to say that this is all true, and we have a lot of work to do.

There is good news out there, too. The organic food movement is growing over 20% per year. The closer the farmer gets to the end customer the better the economics for both. Retailers are actually part of the problem as they mark up organic much higher than commercially-produced food. They say it is the extra handling costs when really it is what they think the market can bear. The farmer is not benefiting from any of this mark up. We need to find better ways to include the farmer so they can participate in (and benefit from) the growing demand for good and great food.

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A Darwinian Workplace and Economy

Written on March 3, 2012 by Roland Van der Meer in marketing

Nature is the ultimate sustainable system because at its very essence, it is dynamic. Every species of plant or animal finds its way to survive in cooperation with or in competition with everything else. Every species must adapt to survive continuously. This is how the world works.

Our economy is the same whether we realize it or not. Every company is in this system. The laws of the marketplace are completely dynamic and Darwinistic. Just as people crave stability and consistency to understand the world, companies do as well. A business is built with a model that fits a view of the world and works for awhile, then some aspect of their environment shifts. Whether it is a declining customer demand, diminished supply of raw materials, challenging labor availability, fluctuating government policy, increasing environment issues, or other pressures, business must adapt, change course or die. Sadly, very few businesses can make the shift and survive. (For a really deep understanding, try reading the Origin of Wealth by Eric Beinhocker. He discusses classic economic theory and suggests modeling economies based primarily on biological evolutionary patterns.)

Welcome to our new Economy.
Unemployment is at an all time high. The job pool is shifting drastically. People are not equipped or trained for this shift. Even in Silicon Valley, the techies can’t find jobs. The social media savvy technical young generation of engineers and marketers are doing ok, but their 40 year old and above counterparts in the Semiconductor, Fiber Optic, and Communications industries are struggling. It’s like we’re back in the 90’s: Trained professionals cannot find work, and the tech world has passed them by. They must reinvent and market themselves intentionally or perish.

The Valley represents the essence of creative destruction. What worked before is over, and it’s time to move on to the new. The old way is as commoditized as the workforce that built it.

To make it in today’s workforce, we must think of ourselves as a product that needs to be marketed and sold into the marketplace (i.e. the competitive workforce). We need to retool and continually adapt to remain current. We need to position ourselves with intention and strategy to be relevant, authentic, and branded to our target audience. In order to remain competitive, we must make sure we are poised and ready adapt to the next shift because it is coming whether we like it or not.

I know this sounds harsh, and it is. This global marketplace is not what many of us envisioned. Change is faster than ever. The fluidness of information, creativity and capital are speeding up the system, and there is no turning back. The path we are on is here to stay. It is nature. It is Darwin. It is life as we know it and will know it into the future.

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Urban Farming Is Catching On Fast

Written on September 18, 2011 by Roland Van der Meer in Community, Economics, agriculture, marketing, sustainability

San Francisco is getting smart and ahead of the urban farming game. The city recently passed a law allowing people to sell the produce they grow in their own yard. Urban farming has been accelerating and under the radar for a while now. Approving this practice makes sense, especially in these difficult economic times. The San Francisco Urban Agricultural Alliance can help people get started with advice on how to farm and even how to find land.

This is in sharp contrast to the issues that I discussed in a prior entry about Novella Carpenter, and the challenges she faced in the city of Oakland that was trying to shut her down.

A great piece to read, “Farming the Concrete Jungle,” goes deep into the movement that is sweeping the economy not only for financial reasons, but health and even environmental. The article points out how it’s better to have a pretty garden then a overgrown, littered and abandoned lot next door, and a little extra cash and good food makes life a whole lot better.

Creating a product to sell (and in this case growing a product) is the first step of any business, but then you have to know how to sell it. Most urban farming is not your average lemonade stand, unless you have the property in a major walkway. You need to think about the whole business. Growing the product is one skill set you need, but knowing what to grow and finding buyers for your product is actually more important. Farming is a business like any other and it is a tremendously entrepreneurial.

For most people, you start out by growing only for your family and friends. Then as you succeed, you can expand your ambitions and hopefully your wallet.

I do think there is an opportunity to band together a set of growers for products then identify the customers and the produce they would like and sign a deal. But then you have to deliver the goods. Customers need consistency, so they know they can count on your product. If you think urban farming is for you, think carefully and do your homework, talk to a lot of people and customers to get the lay of the land before you venture too far.

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Are We Running Out of Natural Capital?

Written on September 13, 2011 by Roland Van der Meer in Economics, investing, stewardship, sustainability

This is not a trick question but an honest ask. We are dependent upon nature. We can not live if the earth that hosts us is being expended, used up, exhausted.

This weekend in the New York Times, Nicholas Kristof writes “We’re Rich! (In Nature). The US has fantastic natural resources that we seem to be indifferent towards. He says that we need to get out there to enjoy and walk in nature: It is why we are all here and what we need to center ourselves. Even the US Forest Service has gotten into the act with a fund website and this great video. Yes, we work hard so we can go to the beach, swim, snorkel with fish, watch dolphins, whales, or we go to the mountains and hike in nature, see the wildlife, or go ski and enjoy the beauty and excitement. Or, for some of us we go out to eat fabulous food (food that has to come from a healthy environment.) Nature is what supports us and lets us thrive. If we take it for granted, waste it, pollute it, or destroy it, we will not be here any more.

At the Earth Policy Institute, Lester Brown saw this issue coming decades ago. He describes it best in the Eco-Economy when he discusses that we are now at the point that the Ecological Capital is being depleted and used faster than it can be restored. This is because our economic capital does not value this in its equation, in fact micro economics accerlate the destruction of a limited natural resource.

When a natural resource is starting to be scarce, its value goes up and this drives the push to extract the resource faster until the resource is exhausted. We have to watch out for any natural resource that is being harnessed past its sustainable level or we will all suffer the loss.

For example, the fisheries of the world are in serious decline. Every time we can stop the over fishing we should. In Greece, there are many islands where the fish do not exist as they were all dynamited until their eco systems collapsed. In Scotland, there is a well s tudied fishery, where in the 1890′s the community banned trawling within 3 miles of shore because of over fishing. This worked and the fish returned. Then in the 1980′s, the economic interests put political pressure to reverse this law, and within two decades the fishery was exhausted and not recoverable; and with that, the local industry died. This has played out time and time again all over the world.

In Kristof’s article, he writes about how our national forests are again under pressure where certain industries are pushing for legislation to open up 50 million acres to logging and unsustainable grazing. We have seen this motion before and this is not a good direction.

Lester Brown is urging us to head toward an eco-economy, which is an environmentally sustainable economy that requires that the principles of ecology establish the framework for the formulation of economic policy. Having the two studies integrated is imperative as the differences are fundamental. Ecologists worry about nature’s limits, while economists tend not to recognize any such constraints. Economists have a great faith in the market, while ecologists often fail to appreciate the market adequately. Ecologists see the world as interlinked network of natural systems that cannot exist without one another. Economists see the world as a set of micro economies that can substituted for each other.

There is much to do and so little time, but we do have some very good ideas about how to evolve our economy with the environment. It will just need a lot of political will to get there.

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Good Food Is The Answer To Many Issues

Written on August 30, 2011 by Roland Van der Meer in Economics, Organic, agriculture, stewardship, sustainability

What is good food? First and foremost, Good Food is food that tastes great!

But it is also real food, grown right, prepared right. It is healthy for your body and healthy for the environment. If we grow real food the right way we heal our environment. We create great soil that nourishes the food that nourishes us. This same soil rich with biology will be rich with minerals and store gases and hold water. It is fundamental to a healthy environment.

Good soil does not run off in the rain. Good soil is rich in its biology that for every 1% increase in biological mater in soil will hold water like a sponge, 20,000 gallons per acre.

A friend of mine recently, cited that we need to appeal to people’s greed. Greed for sugar. A carrot grown in a rich healthy soil can have a Brix count(amount of sugars present) of 30, while a industrial grown carrot, 5 to 10. Ask yourself or anyone, “Do you want to eat this sweet delicious carrot or this cardboard rendition?” One costs 25 cents the other 10 cents, but which would you eat?

In a wonderful interview of Alice Waters in a United Airlines Magazine, She said,” We need to pay for it. We need to pay for the food and pay the people who produce it. That’s profound and terribly important. We still think we can get it for free. And you know, it’s that idea that we have been indoctrinated to believe that food should be fast, cheap and easy. And it’s really that kind of thinking that is destroying the world.”

She is talking about the environment and our health. The environmental damage from our industrial agriculture damage is undisputed. The damage to our health is dramatic. Our processed food industry is not about real food or health. It is about tricking our bodies to eat more of a bad thing. Our bodies also have to eat more to get anywhere near the nutrients that we require. The rest we store as fat and then comes Diabetes.

The chart above that summarizes what has happen to us as we journeyed down the industrial agriculture road. Our costs of food fell from 17% of our household budget to 6%. Inversely our healthcare budget has gone form 7% to 17% of our budget. There is almost a direct correlation. This is not entirely due to food, but a very direct correlation to the food industry and diabetes with all its co-morbidities is the major driver of cost in our health system.

Industrial agriculture is also the major driver of our environmental issues, from the methane released by our industrial livestock systems to our releasing of fertilizers and pesticides into our ground, water and air. This culprit needs to be fixed.

Amazingly this is in our control. This is the one area we can tackle if we focus. We need to understand cheap food is not good for anyone nor is it really cheap. The true costs to us as people and our environment is huge. We just lost track of what is really important.

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Keeping What We Have Maybe Harder Then We Thought

Written on August 18, 2011 by Roland Van der Meer in Community, Economics, Uncategorized, sustainability

Any real estate agent will tell you, “If you can’t invest and maintain your own property then it degrades, and so does the neighborhood.”

For the past few years, I have been flying small planes over parts of the country. It is amazing to see the how we have built out our country. It is piece meal and an unplanned hodge podge of suburbs, malls, industry and farms and roads that go all around them. No real thought or care for the land or nature and how we can best use them.

Compare this to flying over Europe and you see mid density towns separated by open space and farms with rail and road network connecting the towns. It is beautifully laid out and planned. European towns have worked for a couple of millennium and will continue to work thousands of years more.

What’s distressing is that the USA’s suburban sprawl is so costly to build out and support, as compared to most of Europe which is cost effective and has lots of resilience in its design.

Now add the problem of the U.S. government’s continual under investment into infrastructure (even with the Stimulus package) compared to other parts of the world. Europe is currently investing a robust 5% of its GDP in infrastructure — more than double the paltry 2% spent by the U.S. And this is not a new trend. Infrastructure investment in the U.S. hasn’t risen above 2% of GDP for more than 30 years.

How can we maintain our standard of living and keep a viable economic engine, if we let our basic infrastructure crumble? Given the financial crisis we have, how are we going to find more to invest into the basic needs of our physical plant? We are going to have to dig deep to figure out what we really want as citizens of this nation in need. I hope we have it in us.

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Recognizing the Changes We Need to Make

Written on August 14, 2011 by Roland Van der Meer in Economics, Energy, Uncategorized, investing, stewardship

Whether we like it or not the world continually changes. It is never standing still and we continually have to learn to adjust. Our planet is an island and we have reached, or maybe even over reached, its limits. Even with all its beauty and vastness it is still finite, and the changes we will see in the coming decades may be severe. Not just in the climate, but in the way we live as we begin to recognize its resources are running low. The commodities we took for granted will begin to be valued dearly.

A very important piece by Jeremy Grantham, “Time to wake up”, was summarized well here. This research dives into the value of commodities and how the pricing will now begin a climbing ascent into the future. It is well thought out and documented and probably as succinct as I have seen. It is alarming for investors and mankind to read through and begin to understand the trends that have been set in motion.

If you really would like to scare yourself, an Article this week in the Times on Grantham, clearly walks through the scenarios that are pending. It is not for the faint of heart. We have a lot of work to do and need to put our economic and political efforts in motion to stop the draining of precious resources and start investing in their proper care. This is probably the biggest opportunity for investors in the century.

So lets pay attention and start to treat our earthly assets with the value and care they deserve.

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Rethinking How We Govern and Invest

Written on August 9, 2011 by Roland Van der Meer in Economics, Uncategorized, sustainability

Tom Friedman wrote a great piece in the Sunday Times this past weekend, “Win Together or Lose Together.” In it, he states we as a nation must invest in the 5 elements that are critical to long term success: Education, infrastructure, immigration of the bright and motivated, policies and laws that encourage the creating of new business, and fundamental science and technology. This is the only way we can keep being in the top performing countries.

The belief that we are the top and we will stay there is long expired. There are hungry nations and people that will compete. The paralysis we have as a nation of politicians and lawyers regulating and arguing is reducing our ability to execute on a model of success we have had for a century or more. Maybe, as many have said, it is analogous to the fall of the Roman empire, maybe this is all inevitable and our time has come; but this does not mean that we need to lay down and give up.

We have the tools and knowledge to rebuild what we know works. We also have the intelligence to adapt and adjust as needed. We need the best of our capitalist systems with the best policies that enable its success without its abuse. If we take a cue from nature, we know no system that is stable survives; systems must be dynamic and adapt. Capitalism self adjusts and adapts as fast as needed, it is like nature always striving to live and competing to survive. Laws and policies almost by definition do not adapt quick enough; but we have to try and create a more fluid method to adjust our policies. We will never prevent the cycles of commerce just like the cycles of nature. We need to learn that this is part of life. We need to define a government that does provide the laws to live by, the basic services, and a safety net for those who need it. And we need to establish a government that is accountable to itself and to the people it serves.

Living within its own means seems like a basic tenet. The new wrinkle is that government can not afford to expand in a non expansive economy. Balancing the budget based on realistic assumptions seems like a very rational thing to do. If our elected officials can not get this done then the system is broken and needs adjustments(for another time).

Let’s step up and reinvest it what matters most, ourselves.

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