Friday, March 23, 2012

The Case for High Gas Prices

Once again, gas prices are up — more than 30 cents over the past month. Some forecasters are predicting a price of $4.25 per gallon at the pump next month; others see it going up to $5 per gallon this summer.

And once again, the response is predictable, if not comical. The Republicans blame President Obama. They say that he blocked the Keystone XL pipeline and that he's secretly in favor of higher gas prices as a social engineering strategy designed to punish Americans into accepting alternative energy.

Obama blames Iran for disrupting oil supplies, sees growth in China and India as driving up oil consumption and, when asked whether he secretly favors price hikes, resorts to sarcasm to dismiss the accusation.

Me, I'm not running for office. I blame feckless politicians from both parties for the lack of a sane energy policy over the past 40 years. And unlike Obama or his Republican challengers, I want higher gas prices. At least for a while. Long enough for us to get the market signals right and to continue to wean ourselves off our fossil fuel addiction. The way I see it, every time we've been confronted by an energy crisis, Americans have done the right thing. Faced with the cold hard economic facts of life when it comes to oil availability and price, we've figured out for ourselves how to be innovative, resilient and sensible. Having plentiful cheap resources can make us wasteful; scarcity and high prices can make us smart.

If that's what it takes, I'm all for it. And if it can drag business and the government along behind us, I'm for that, too.

Take the auto companies. For years, General Motors resisted doing what everybody knew it needed to do to adapt to global competition and a changing market. Finally, the crushing financial crisis and rising gas prices pushed the hubris-haunted company into Chapter 11. Today, GM can claim record profits and its Volt electric vehicle, though struggling in the U.S., was chosen car of the year in Europe. The whole auto industry, which resisted the suggestion of government-mandated fuel economy standards back in the 1970s, today has demonstrated a new sense of responsibility for more ambitious requirements. Why? Because the automakers can read the writing of the gas prices on the wall.

Today, while politicians do their comedy acts about energy prices and Obama promises Americans he's doing all he can to keep gas costs at the pump from rising, pragmatic business people are doing what they know they should. Architects and developers are calculating the lifetime costs of the buildings they put up, with the knowledge that oil-based energy will only get more expensive over time. More and more Americans are looking to alternative energy sources for their homes; companies and communities want to kick the oil habit; the rise of car-sharing and increase in public transit use demonstrate how expensive gasoline can create new economic opportunities and spawn new habits. Last year, Americans took 200 million more rides on subways, commuter trains, light rail and public buses than we did the year before, the American Public Transportation Association reports.

And it's not just in the private sector or our private lives. One of the leading areas of change is in the military, which is going green for more than just environmental reasons. The Navy has figured out that the "all-in" price of oil means that it's cheaper, safer and smarter to switch our war-fighting operations from fossil fuel to renewable resources. They're doing it because they have calculated the real cost of oil and figured out that embracing renewable energy makes sound economic and military sense.

All that has been happening before the latest price spike. Now it's time to think seriously about what comes next. Beyond fuel efficiency in transportation and buildings, beyond alternative energy sources is the next big thing: the switch to local economic development.

As the late House speaker Tip O'Neill once observed, "All politics is local." It turns out that for a better, smarter, more sustainable future, all economic development is local, too. If we want to embrace a future with more and better jobs, more local autonomy and more sustainable communities, we need to look at this oil price rise as another market signal: It's time to focus on local economic development.

It's just plain smarter to produce and buy local products and services. Whether products come from local farms or local shops, local factories or local vendors, when we support community-based businesses we contribute to more home-grown jobs, stronger communities and a sustainable future.

It's the next stage of an evolutionary process that has been unfolding below the radar screen for the past 40 years. It's a simple enough equation to grasp: The more we see oil prices rise globally, the more we'll see the emergence of economic development locally.

Change happens when the cost of the status quo is greater than the risk of change. Right now, rising oil prices are driving up the cost of the status quo. That means it's time for all of us to embrace the risk of change. Once again. Because that's what we've done every time in the past when we've been challenged with higher prices and lower availability. It turns out, we're at our best, our most innovative and our most pragmatic when times get a little bit tougher.

(My column this week from USA Today)

Thursday, March 1, 2012

Leave Bad Enough Alone

A few days ago the Santa Fe school board summoned its courage and did the right thing: it voted (narrowly, 3-2) to buy out the contract of school superintendent Bobbie Gutierrez.

The actual vote was a long time coming, although to be honest, the last school board election which voted in three new reform-minded candidates was clearly intended as something of a referendum on the public schools and the leadership.

Voters, it seemed, were upset at the performance of the school system--poor graduation rates, overwhelmingly failing efforts to meet annual improvement goals--and the way the outgoing board did its business--a lack of transparency and very poor communications with the broader community.

In a remarkable piece of political theater, the outgoing board even voted to extend Ms. Gutierrez's contract as one of their last pieces of business, right before they were replaced by a board that clearly had serious reservations with the adequacy of her performance. The schools-as-theater got even more absurd when the in-coming board learned that one of Ms. Gutierrez's employees had doctored the numbers given to the old board before they voted--actually omitting data that showed areas of failure by the administration. She didn't think the board was looking for bad news, the employee explained.

So now the reformers have voted to buy out Ms. Gutierrez's contract--and surprise, surprise, the editorial writers at The New Mexican, Santa Fe's home-grown daily, are outraged! (No surprise there; The New Mexican has been an apologist for the superintendent and her poor performance for some time. Students don't test well in annual yearly progress exams? Must be the fault of the exams! The numbers were fudged on that memo to the out-going board? Don't make too much of it; let's move on!)

The New Mexican writes a mean editorial: There was no warning of this vote! It happened late at night! The people who voted to buy out her contract didn't campaign on that platform!

Lame arguments, but at least they're arguments

But then the editorial writer at The New Mexican veers from the lame to the inane.

There are two problems, says The New Mexican, with terminating Ms. Gutierrez's services.

First, the three school board members who voted to buy out the contract weren't born in Santa Fe.

That's right, The New Mexican is now in the camp of the "birthers."
If you weren't born here, you don't belong here!

In a state that still approves of giving undocumented immigrants a driver's license, the newspaper of record wants to revoke the voting rights of school board members who weren't born in Santa Fe.

But wait. It gets weirder.

The real reason not to buy out Ms. Gutierrez's contract?

Efforts at school reform in the past didn't produce great results. In fact, some were failures. Some superintendents brought in from outside didn't stick. Others didn't click. And others were okay, but not exceptional.

In other words, leave bad enough alone.

If the schools in Santa Fe aren't graduating students, aren't meeting mandated improvement levels, aren't teaching kids the skills they need to go on to college and get good jobs--well, at least life in Santa Fe is good. We've got a lot of artists. And Richard Florida says that's good. And we've got great festivals. World-class, in fact.

So if the schools are terrible, and the educational opportunities offered to Santa Fe's children rank at the bottom of the nation, well, what can you do?

Why bother trying? Why get rid of an ineffective leader who hasn't produced? Why try to improve the status quo?

After all, a truly ambitious new superintendent probably wouldn't have been born in Santa Fe either.

So here's Santa Fe's new motto, courtesy of The New Mexican: Santa Fe--We're mediocre, and that's great!

All Rights Reserved 2009 (c) Alan Webber, Rules Of Thumb