6:04PM Jul 21, 2019
Mark "Puck" Mykleby
Welcome to the campus energy and sustainability podcast. In each episode, we'll talk with leading campus professionals thought leaders, engineers and innovators addressing the unique challenges and opportunities facing higher ed and corporate campuses. Our discussions will range from energy conservation and efficiency to planning and finance, from building science to social science, from energy systems to food systems. We hope you're ready to learn, share and ultimately accelerate your institution towards solutions. I'm your host, Dave Karlsgodt, I'm a principal at Fovea, an energy, carbon and business planning firm. In this December 2017 interview, I'll talk with retired Marine Colonel Mark Mykleby, who goes by the nickname of Puck. He recently co authored a book with Patrick Doherty and Joel Makower called the New Grand Strategy: Restoring America's Prosperity, Security and Sustainability in the 21st Century. Our discussion covers a wide range of topics, including the history of grand strategy in the United States, he talks about how our current systems are based on a now obsolete grand strategy goes on to outline a vision for how America can reinvent itself, using sustainability as a core organizing concept. Bunch of the interview certainly veers off my normal focus of higher education and corporate campuses. However, I hope you'll find Puck's thoughts on strategy and sustainability at a national scale, a source of inspiration for how we can rethink our work at the campus scale. Well, Puck it's great to have you on the show today.
Yeah, thanks for having me.
So the first time we met was at the second nature Leadership Summit in Tempe, Arizona earlier this year. And at the time, I'd been vaguely aware of the work the military had been doing around renewable energy and energy efficiency. But at your session, it was the first time I'd ever heard anybody say the words military strategy and sustainability in the same sentence. I've read your book and excited to dig into that a little bit. It was fascinated to learn about the work you've done under Admiral Mike Mullen. So I'd like to dig into a few themes from the book. But perhaps you can start us off just by giving us a little more background on how you found yourself in this assignment, coming up with a grand strategy for the United States.
But, sure, and I guess the first thing that I just want to foot stop is that the work that I did at the end of my military career wasn't a military strategy. It was not a military strategy. It was a grand strategy was a strategy a comprehensive strategy for the nation and how to converge domestic and foreign policy to pursue our our enduring interest. I mean, so it's completely different than then just really want to underscore that. And how did it all come to be? Well, I was doing strategy for Special Operations Command from 2007, to 2009. But that was really pretty much a catalytic experience for me, was really transformative. Because in 2007, we sat down was tasked with, first of all, standing up the first strategy division that special operations commanded ever had, they never had a strategy division and as 20 year history at that point, then 2007. And it never had a comprehensive strategy for all the Special Operations Forces. And it was a sense of the commander of Special Operations Command at the time, Admiral Eric Olson, that that was something that was required, given the nature of the but that was called the Global War on Terrorism, and special operations forces, you know, key role in that type of fight. And the general sense at the time was, these my read from Admiral Olson was that needed to have a different type of approach, that we were doing a lot of killing, doing a lot of fighting, but we really were not shifting the needle in a positive way, in the only guidance he gave, our strategy team was really small team was figure out how to get out in front of the sound of the guns. And I just want to say that again, figure out how to get out in front of the sound of the guns, ie How can Special Operations Forces, how can they reshape the security environment, so we can be smarter about how we fight in a large way, by making sure that we don't have to fight. That doesn't mean that special operations is moving away from doing the hard work that special ops does. But Special Operations does a lot of different things, and not just fighting. And so we were just trying to figure out how to be smarter about it. So we really took a different approach. And we really started looking at different things like urban design and regenerative agriculture and female health and education issues, anything that we could engage in the security environment to have a systemic shift in how that environment unfolded. Interesting stuff. It was really very much a systems approach. And I'm not going to get into all the geeky stuff on how we've philosophically conceptually, and functionally framed it strategy out. But it was pretty cool. Anyways, Admiral Mullen, who is the relatively new chairman of the Joint Chiefs of Staff underneath the Bush administration, in 2008. And by the way, he continued as the chairman of Joint Chiefs of Staff under President Obama. But in 2008, I think October 2008, he heard what we gave him a brief about what we were doing in terms of strategy, Special Operations Command, and he really liked it. And next thing I know, in July, about nine, I was pulled up to the Pentagon, which was supposed to be a two month gig end up being a two year fun in the puzzle palace there. But the basic tasking he gave me and this other guy that had longtime friend on his staff, a Navy Captain named Wayne Porter, we were tasked with writing a new grant strategy for the nation. And if you could just get your brain around that, you know, how are we going to write a whole new strategy for the for the country, just to get to the gist of that when I got there in July of 09 Admiral Mullen gave us the guy and said, hey, go figure it out, boys. So we went back to our little office. And we went and I looked at each other said, How the hell are we going to do this? And the first thing we decided was that we were not going to write a strategy, because that's the last thing that American needed was another strategies tumbling out of Washington, DC that had no context happening, it was just a wish list about the things that we would like to see happen, and not a really pragmatic, actionable strategy that makes hard resources and prioritization decisions. And so what we thought that American needed was more was a story about not all the things that were against all the threatened risks that we think we have to, you know, keep away, we thought that American probably needed a story about opportunity, and a strategy, a strategic mindset and a framework for opportunity. After all, we're the land of opportunity, we're not the frickin land threatened risk. And so Wayne and I set for to write this thing called a national strategic narrative. And in that narrative, we took the stock of the global trend lines, big huge movements in the in the global security environment. And we recognize that the world doesn't operate as a closed system, as we would like it to be where we can have a sense of control. Our last grand strategy was containment, you know, take on the Soviet Union and the Cold War. Well, it was a control strategy and leverage force and power in order to have some level level of control. It worked, because mostly because of the nature of information at the time, we were able to outlast the Soviet Union, you know, political and economic context. And we contain and militarily, but we just have lasted a minute work that Soviet Union collapsed, based on its own internal contradictions. Just like George Kennan said it would in 1946. But the problem is, we never wanted the Soviet Union that full up its flags, we never did a strategic reset. It didn't come to grips with the fact that the world is really operates more today in the 21st century as an open system, more along the lines of any college. And that was a big epiphany for Wayne and me that we said that, you know, the strategic ecology, as we called it, in open system, maybe just maybe we have to take more of a kind of a Darwinian approach to things and not about survival of the fittest, but how are you the best contributor and the best competitor in a global ecology. And if we're really wanted to pursue our enduring interests of prosperity and security, you know, what would be that coalescing concepts that would converge our domestic and foreign policy To that end, within this strategic ecology, that was a big deal for us to have that, I guess that epiphany, because it really started making us think, in more systemic terms, rather than systematic terms, and not deterministic terms. And when we looked at that, and trying to figure out what concept would apply, one scientific concept coming up, it was the idea of sustainability. You know, and the definition that we use was in organisms ability to remain diverse and productive over time it directly ties directly relates to our enduring national interests of prosperity and security. I mean, diversity means depth, that means redundancy, it means resilience. I mean, that's national security, 21st century style. It's not about wrapping every Americans head and frickin bubble wrap, trying to protect them from all the bad stuff, keep all the bad stuff from our shores outward away. I mean, that's national defense. That's why God made the Marine Corps and all the other services to support Marines to go do the hard stuff that we do. But that's national defense, National Security has more to do with the vibrancy, and the resilience, and the interactions, and the complementarity of all our functioning systems of food, water, energy built environment, transportation, education, industry, all these things coming together towards a positive, more enduring, more vibrant, national system. And when it comes to prosperity, we really had to come to grips with the fact that we live in a resource constrained environment, that we can't keep running down this path, that everything's about GDP or about the doubt, because there are limited number of resources. I mean, the Limits to Growth actually does apply. It's a scientific treatise, you know, and so we really said that, you know, we probably need to start looking at prosperity more along the lines of what does it mean for growth, and not quantitative growth, but qualitative growth. And when we really looked at that grand strategy in that context about our enduring national interests, the nature of the environment, a strategic ecology, and this concept of sustainability, it really became powerful, because then we could start saying, Hey, this is where our domestic and foreign policy can converge towards a common design and a common goal, where our smart growth at home becomes our smart power abroad, because if as we walk the talk, we gain strength and credibility, not by what we say about what we do. And credibility is the important part of talking, you know, can we have credible influence in the world? When I talk about influence, I'm talking about influence that now not influenced the verb? It's by walking the talk, right?
So you know, as I was reading the book, the new grand strategy, restoring America's prosperity, security and sustainability in the 21st century, which you co authored, it was really striking to me on what you landed on. So you were talking earlier about, you know, certainly moving away from the sense of control and more of opportunity. And the three major opportunities you identify are walkable communities, regenerative agriculture, and resource productivity. You know, it was surprising coming out, I guess you've clarified this was a grand strategy, not a military strategy. But given the fact this was from a military perspective, those were surprising. So maybe you can unpack those a little bit for us why those three? What about walkable communities, regenerative agriculture and resource productivity? What how does that set the stage for American the 21st century?
Well, sure. And it comes down to an operating framework for us grand strategy. And then we've got the basically, when we've done grad strategy, well, we've kind of had a quintessential unique American design and unique American way of doing grand strategy. And it's basically the elite stand on our economy, we allow our economy to do the heavy lifting. And then we align our governing institutions or our foreign policy to take on whatever big global challenges facing us. You know, we did that World War Two, you know, we're the arsenal democracy, we built up the industrial capacity to arm equip our allies fight a two front global war against global fascism, you know, Cold War, basically the same design, we, you know, set up a contest of political and economic systems to take on the Soviet Union, like I said before, yeah, we contain them militarily. But the real power behind it was our economy. And Eisenhower knew that better than anybody. So it's about the economic foundation. And so in the book, we really hammer home the economics of gratitude, because that is the first Foundation, but it also has to include how we do our foreign policy, how do we, and then how do we organize ourselves in terms of our governing institutions to be able to implement this grand strategy over time, but the economic side of it is the critical part. And that is what is so powerful about sustainability, to strap on your sustainability goggles. I mean, we've got all the gloom and doom out there, you know, we're bringing our hands over climate change, we're bringing our hand over, you know, the state of our waterways, or our soils are just the health of our citizens, the incoherent design and the built environment, etc, etc, etc. Got it got the problem, what are we going to frickin do about it. And so this is why we really focused in on the economic sustainability. I mean, they're not ironclad nothing is. But these are powerful, powerful market forces that are played a big huge pools of demand, that we're just not tapping into it as a grand strategic scale that could really fundamentally revitalize, reinvigorate and have a whole new economic Renaissance for the United States that not only would change the direction of our country, would also change global market forces towards a more sustainable global design, given the fact that we have still approximately 25% of the global economy under our belt, we have a could have a really great positive distorting effect on the global economy. And so if you want me to I can dive into those three big pools of demand. I just want to put that that the reason why we focus on that demand is because it creates the foundation for a new economy
for the United ya know that that helps. So maybe walk us through just give us a brief description of what you mean by walkable Sure.
Right. And so when we looked at, he'll look at what's going on with global trend lines, both domestic and global trend lines, a couple of big things that demand come together. And you talked about walkable communities regenerative agriculture, and resource productivity. All total, they are calculations are there about a $1.3 trillion annual opportunity that that's just left on the table every year because we're not focused on it. But walkable communities. This is this is a big deal. Korean national association realtors, roughly about 60% of Americans seek the attributes of smart growth, walkable communities and the next housing purchase, you know, mixed use mixed income, service rich transit oriented, walkable communities. And that's because we're experienced the largest demographic convergence in the marketplace for a specific type of housing product. We haven't seen it since the end of World War Two. And it's mostly because baby boomers and Millennials are colliding in the marketplace. You know, baby boomers are downsizing. And you know, they don't want to be stuck in the suburbs anymore. You know, kids take away the keys, they get shoved in a home somewhere. It's just not where they want to live. AARP is all over this about aging in place. And so baby boomers are looking to be in a place where they can still be connected, still contribute, a lot of them have to because they have to continue working, which were what they used to consider their retirement years just be based on economics that are going on right now. But they want to live in more walkable communities. And the same thing is for millennials, they don't they left the suburbs, they don't want to go back what 70% of them only want to own a car if they don't have to. So they want to live in a more connected walkable types of communities, whether they are in the urban core, or whether we were experiencing walkability or walkable designs in the suburbs, but they seek those attributes as well. And just to put it in historical context, that that convergence, demographically, as it translates into market forces is three times a level of demand for housing than what we experienced World War Two when the returning GIS came home and started buying homes in the form of suburban sprawl. I mean, this is historic, it's huge. It's an economic opportunity. It's just staring us right in the face. It's it's very frustrating, because right now, federal policy still incentivizes legacy 20th century housing policy that stood still incentivizes drive to qualify design. So to continue selling out the suburban model, it just doesn't work. We can't afford the infrastructure, the public health issues in terms of people having a drive, people are spending upwards of 40% of our household income just on transportation costs just to get to work. No wonder the middle class is getting stuck in right. You know, so that's just bad design. Second, been a demand about regenerative agriculture is a huge deal. I mean, in terms of economic opportunity, regenerative agriculture, right now, the OECD estimates that we need to increase food production, but 60 to 70%, by the middle of the century, the handle load growing demographics, but 100% of that has to be regenerative and major regenerative by that means that it is restoring our waterways, it's replenishing our soils is fixing fixing our phosphorus and nitrogen cycle. So we cannot continue to do us the same what I would call industrial ag techniques that we currently do today that are depleted in nature, you know, so we've got to go to this regenerative agriculture model. And the cool thing about it is that the technologies that we have developed today that we can have an incredible, incredible amount of profit just by changing the way we do our food system. So according to Rodale Institute, regenerative techniques, per acre, number one are equivalent in yields 30%, greater impact times of times of drought, which climate change coming away, it's kind of interesting. But when you consider full externalities, per acre, regenerative techniques could be as three times as profitable. And when you consider that global food prices are pretty much at an all time high. It's a huge opportunity to really become a new farmer entrepreneur. And we start looking at from again, from the United States perspective, the average age of your farmers 59 years old, our farming population is aging out number one. Number two, Millennials are looking for new types of jobs. And when we're talking about regenerative Baggett techniques, these are high tech, high paying long term jobs that they can get into an incredible industry that is just an opportunity waiting to waiting to grab onto. And again, I want to just point out from a national security side of it, it scares the hell out of me the way that we are depleting our soils on our waters. I mean, upwards of 50% of Iowa's topsoil is gone. 50% according the University of Michigan, upwards of 75%, of the breadbasket of the US estates, some places 75% of the topsoil is gone. I mean, we're, we're mucking around with Mother Nature, and she's going to kick us to the curb, and you know, she'll be fine with it. I mean, the world's gonna be fine without us. But when a food system collapses, because we haven't been good stewards of our soils and our waterways, we're having problems. And so for national security wise, it's
Let me stop you there. And I have a couple of questions just to follow up with so sure you had you alluded to the fact that regenerative agriculture is actually more productive, even in that it sounds like in the short term when you consider all externalities. Can you tell me a little bit more about that? I know, a lot of times people will say, well, we need fertilizers, we need these, you know, biogenic seeds, we need all these things that may be counter to this
I would just point to Wes Jackson in the Land Institute, the Land Institute in Salina, Kansas, you know, I mean, the technologies are there terms of perennial agriculture models, there's plenty of opportunity around controlled environment, ag. And when I start talking about regenerative agriculture, it's also with the and things like mirror culture and aquaculture as well, in terms of developing proteins and farming, you know, fish based proteins and things like that. In that book, we go into some exhaustive detail about all the different possibilities that are out there. And it is just this huge opportunity. And I just want to point out just to put a little historical context, you know, it works as well. Yeah, but the food system, so bill, you know, how are you ever going to change it? And so well, you know, what you change things by changing, you know, he make the shift, you know, is particularly when you start looking at the technologies that are available, that economic opportunities available, the market forces that are available, And to say that you can't get to a scale, a national scale or on your food system that will never change. It, quite frankly, is bullshit. But just like a World War Two, you know, Victory Garden, it was a point of national pride. But believe it or not, the food industry is pushing against Victory Gardens until Eleanor Roosevelt, the planet one and in the White House. At the end of the world war two victory gardens were directly response reproducing 40% of our nation's fruits and vegetables, 40%. And those are just people growing crap in their own yard, we have to get over this. This, what I call this urban legend that we just can't do big things anymore. We can do big things. It may be a small started at a small scale, but they we can do big things. If we have the right kind of design, we have the right kind of investments, we have the right kind of policies in place. But most importantly, we just have the frickin grit to be Americans again, in nowhere do we see that more eyes think, in the field of agriculture? And maybe it's because I'm a Minnesota boy, I don't know. But I just have a soft spot for it. And it's just a huge opportunity.
Great. Okay. No, I, I appreciate that. I just like to take the devil's advocate just to sort of unpack it sometimes. Because I think, you know, people are have this vision of just we're all going to have, you know, only small organic farms out in the country where it's this idealistic, and I think sometimes people under don't understand the scale of agriculture and just the amount of land that's used for it, as well as how, where most of the food goes, right. It's not necessarily that we're using it all for human consumption. A lot of man for other reasons. Yeah, well, yeah.
You know, I mean, we look at the ethanol production, we're really, really, we really need to do that. 50%...Oh, great.
Well, Puck, welcome back. We started this last week, and then we got interrupted by a rogue fire alarm. So I'm glad that your building didn't burn down in the meantime, but it's good to talk to you again. Yeah, sorry. No worries, it's a real life. We were in the middle of talking through the three pillars in your book, I think we've gotten through the first one, which was walkable communities. And I expect we'll come back to that one in a bit. We were a little in the weeds on regenerative agriculture. And then I think the last one was resource productivity that we hadn't gotten into. So let's start there today. And keep going.
Yeah, you know, on the resource, project activity good. tying back to the big challenge of global and sustainability. When I talk about that, you know, that burgeoning global middle class of 3 billion middle class aspirants that are coming in all systems as normal, they arrive in a global economy, their resource consumption goes up 300%. I mean, that's where you get from. Right now, the human species is using one and a half planets worth the resources to sustain itself will middle of century we're looking at about four and a half planets required to support the human condition. And you know, it's just untenable. So that's why resource productivity is. So revolution, a resource productivity is so critical, because we still want to be able to provide that middle class lifestyle, we just going to have to do it at a resource intensity, that's about 10 times less than what it currently is. And the good news on that is that we have the technologies and the capacities today, to be able to do that, if we could recalibrate our industrial ecosystem to that. And also we're talking about Yeah, we're talking about renewing energy, that has got to be the primary driver for how we power our future and the hydrocarbon based energy design of it's just, it's just untenable, not just from a climate change, which obviously is the biggest driver climate change perspective. But also you just look at the condition of China, they don't have the water, to be able to use a high regard hydrocarbon, particularly coal based energy resources, it takes a lot of water to process the coal to be able to power their economy, and they just can't do it, they are making a fundamental decision right now. between water potable water for their citizens, and having to produce produce energy, just doesn't work, you know, the system's broken. And so there's far better, far more effective, far more renewable and cleaner energy options out there, when we look at it as a system rather than series of one oz. Is it solar? Is it is the geothermal is it, you know, whatever. It's about aggregating and creating a diverse and distributed energy production and distribution system at a global scale. But it happens right here in you know, the United States. And that's what we're focused on. Renewable Energy is a big part of that. But also, we're talking about advanced manufacturing, and advanced materials and advanced materials is the place that I think is really exciting. Where that intersects with the energy side of the equation, when you start looking at Can you do a feedstock shift at a at a large scale and national scale, economic engine type of view, and what we're basically talking about this, this beautiful thing of the hydrocarbon hydrocarbon molecule. Now, right now we use the hydrocarbon molecule in the most efficient way possible, we burn it, you know, so we send all its value up to smokestack. When you know, right now, if we just consider that 18% of hydrocarbons today that we use, we use them for making materials. Why can't we flip that equation? Why can't we say 80% hydrocarbons will be used for materials 20% be used for other purposes. And when you start talking about composite materials, we're talking about polymers, we start talking about what are the materials to build the future, consider just in the United States alone, roughly about 40% of the housing stock for the United States is spot on population hasn't even been built yet. For the next 25 years. Are we really going to use high carbon based lumber, concrete, steel, conventional materials for the future, and the answers should be no. And it's a huge, huge opportunity for the United States, and particularly, particularly northeastern Ohio, which is basically the the polymer capital of the world with over 1200 polymer companies there to fundamentally revitalize an industrial base for United States that create the materials that are number one, they capture the carbon number two, they're recyclable reusable materials. Number three, they're far superior in terms of their material attributes, not only in terms of strength, endurance, but also in terms of energy efficiency. So you get this great double debt, if we take that hydrocarbon molecule and push it over into the material side, rather than burning this stuff. And my dream of dreams is that, you know, you can go to the Koch brothers who I mean, they can really give a rat's ass about whether I think whether it's burned, or whether it's used for another purpose, or just want to preserve the value of their asset. Well, here's a way a win win situation where you can preserve the value the hydrocarbon asset, but you're just using it for a sustainable end. And my dream of dreams is that Greenpeace and the Koch brothers are converging on Capitol Hill lobby for the same thing, when that be a wonderful world.
So let me come there for just a second. While I like the kumbaya sort of aspect of that, do you have a good sense of what kind of scale is the opportunity? Is there? I mean, is that possible that we could switch that much of our hydrocarbons from today to just polymers or just to materials? Like I just don't have any sense of that?
Yeah, sure. It's, it's, it's absolutely possible, in terms of meeting a demand in the market, and the demand is there. I mean, just consider, again, China. So let's look at the global demand scale. China's got to put about 252 million people in the the urban environment in the next 20 years is 252 million people. I mean, that's almost the population in the United States almost Well, you know, two thirds of it, whatever. But that's, that's enormous. I mean, how are you going to do that? I can't do with conventional materials. And so they're already looking at how other other other ways to be able to meet those housing needs. India's the same thing? Africa, same thing. So the market demand is there for the material me they're going to use something to build homes and market materials, it was just a matter of, can you re wicker, the industrial base to make it happen? I'd say, yeah, you can't I mean, if we can fundamentally transform our national industrial base in World War Two in a matter of about, you know, no bill notes and started in about 1940. And we were up and running, right after Pearl Harbor. I mean, that's pretty impressive. We can do that again. And the cool thing is, is that, you know, well, it's not the cool thing. I mean, it's maybe it's an unfortunate thing, we already have the technologies that are pulling the hydrocarbons out of the ground. And this is something that's going to be really problematic from an environmental community standpoint, as you know, the answer that is that the hydrocarbons have to stay in the ground. Well, in a perfect world, the I suppose that would be, but that's not our reality. And I'm a marine at heart and you get us okay, what is the What's our reality? How do we get to where we need to get to, in the fact of the matter is that there's way too much momentum to get that stuff out of the ground. So if you can accept that, that reality, instead of trying to fight that reality? And how can you then it's kind of like Chinese strategy. Strategic philosophy is like, Okay, how do I create the right kind of potential out of situation where the situation is trending the way I want to? Or Not right now, saturating the directional one? So how do I shift the trend line in a direction I want? To me, that's the approach. So can we do it? Well, yeah, we can do anything, we just have to have the political will and the industrial grid to make it happen. But we already have the system in place to get the core feedstock out of the ground. When we already have the end industrial base and the technologies to do it. It's just a matter of scaling at this point and deploying capital to me to market demand that already exists. So can we do it now the
That would make sense, I've heard other people talk about, you know, not just using for materials, but the idea that there are some industrial processes, where you really do need hydrocarbons, just because of the energy density. And, you know, we're burning natural gas to heat our homes, when you can use a heat pump or something like that. I mean, simplistically speaking, certain industrial processes, you need that heat at that level, using electricity to do that is not very efficient. So for burning it today, we don't we don't have it for the future. So there's, there's a lot of ad play there, I suppose with the keep it in the ground, there's many reasons to do that. It's not just the carbon, but it's also we're going to need it in the future. You know, but I take your point, there is a lot of momentum. And if we can figure out a way to harness that in a direction that's promotes our economy, then you're much more likely to have success at that and everybody just to grow not to do something bad, you know, quote unquote, bad?
Well, yeah, I mean, that it'll be excessively Machiavellian about it. It's just that we're running at a time and having the argument when you don't have any leverage, it's just to me, it doesn't make any sense. So can you figure out the win win situation, because right now, we've got a massive win lose situation going on. And I don't see that needle moving in any real appreciable way, at least in the United States. I mean, it's interesting, what's going on in Paris right now, you know, noticeably absent, as formerly the United States. But all that aside, you know, we're running out of time. And so we better start coming up with some real pragmatic solutions to get us to where we need to be in terms of climate change real quick. And, you know, to me, the the economic argument is the best case of doing it.
So let's move into that. Because you get into that your book a little bit, I liked your format of demand plus capital minus stranded assets equals the new grand strategy. So talk, talk to me a little bit more about that. I mean, you go into the book, also, as you alluded to a second ago, just the fact that we've done this transition a couple of times, you know, before World War Two, after World War Two, during the Cold War. How does this work for the 21st? century?
Yeah, yeah. And I just want make it clear, when we looked at that formula, demand plus capital minus stranded assets, since the economic foundation of a new grand strategy, remember, grand strategy is going to be the entire system, the entire show in terms of foreign policy, domestic policy, converging and grading the governing institutions to so we could take on whatever the big challenge is of the day. But this is that this formula is a thing that forms the core of a new economic foundation for a grand strategy. But so just to get back into, you know, the history of it. And this is where, you know, you got to think big to do big, I guess I'll let me go off on the just for a second is, I've had it up to well, you can see me, but I'm pointing my head by hand pretty high in my head, headed up here, with this horseshit about, you know, it'll never happen, it can't possibly happen. Well, we have done this in our past, in terms of doing a grand strategy, it's always based on our economy is always driven on our economy. So in World War Two, it is demand plus capital minus stranded assets, thing. I mean, this will go when we were in World War Two, you know, 1940, nobody wanted even think about the war, you know, that was coming, you know, not even the military was really prepared for it. And politicians definitely weren't business community was so against the New Deal. And Roosevelt's policies, you know, we just couldn't get it going. So, Roosevelt pointed to a couple of key people, Bill Newton, number one, who was the CEO, General Motors, and then Bernard Baruch, who was a finance guy out of Manhattan. So we got to figure this thing out. And so they did they, Roosevelt turned to business leadership to figure out how we are going to get the industrial base to get this country ready for war. And so that's really where you see this first time when there's this big idea of demand plus capital minus stranded assets. And so this business leadership recognize that getting the country ready for the war, business wasn't going to do it just out of their good graces, you know, that there had to be a business logic to it. And so they saw that there's this big huge demand signal for war materials, you know, 1914, but they also recognize it, you know, whenever United States entered this war, that we were going to need this, that that industrial base to crank out our own stuff. So, but there was this huge demand for for war material, mostly coming from Great Britain, but also, you know, certain extent, other European allies at the time, but they needed to have a mechanism in order to get the capital flowing to it couldn't just be, they weren't going to be self financed, they had to figure out a way to get the capital, they're mostly going to be around government funding. So that's when they started thinking about a cost plus contract, you know, it had to be on commercial terms. So how to get them money flowing to business to get the the industrial base moving and start creating the materials that were required. So we looked at the cost plus contract that did lead to land lease, you know, that was the brilliant thing about you know, we're going to be able to crank this stuff out, we're pay for it, cost plus contract, get this stuff to where it needed to go and be able to take on at the time, obviously Nazi Germany and Japan was starting to bubble up to. And the interesting thing, when you start looking at that there's this demand for war material, then we had a way to get the capital going in the form of land lease, it answered a big problem that the United States had is that we had these big huge stranded assets, mostly in the form of idle labor, and under producing factories, and all of a sudden, we kicked into gear, those stranded assets, we solved those stranded assets by directing towards new demand signal and a new way of pushing capital towards that demand. it solved a big problem returns of our stranded assets. Big deal. And so by going from having probably one of the weakest military is 458 thousand men military going into World War Two, we came out with a big, huge juggernaut of roughly 20 million folks in uniform. And by the end of the war, 70% of all the war material that the Allies used to fight the war 70% of it came out of an American factory. It was a huge success story, you know, a huge and it was that formula. It works, right. And so we just started looking at Okay, well, what did we do it again, we did it again in Rio at the end of the Cold War. And starting in 19. This is the difference between now. And then we had public officials that really thought in strategic terms. So as early as 1943 said, Hey, the war's going a little bit better. You know, we haven't even landed on the shores of Normandy yet, but you know, Guadalcanal happen. That was a turning point, Stalingrad happened, that was a turning point. In 1943, we had public officials that had the pressure to say, Okay, we have got to start reengineering our economy for a peacetime economy, you know, and they started as early 1943 is planning and how that transition was going to occur. And so by the time Cold War, or the end of World War Two, when the Cold War started kicking in, they already had the ideas of beginning tapping into that formula demand plus capital minus stranded assets. And so the demand signal that we saw was that after years of austerity, coming through the depression, and then through World War Two, it was time to kind of pay back the American citizen. And so it really started crafting out if at the time, it probably made sense. And now we're going to deal with it now. But when you started looking at the suburban dream, you know, suburban sprawl, can everyone get a home, get all these returning g eyes, you know, we had the GI Bill, we're setting them up for success, can we get them into a home and start living the American dream, and yet they had purposeful policies to make that happen, you know, and it also kind of fitted to the security reality, the day when we started looking at distributing out of out of the urban core because of this new phone, massive weapons of destruction in the form of atomic weapons. So there was actually overt policy coming out of the White House, to actually move people out into the suburban fringe, right? Somebody, everyone, you got a house here, that's a Berber dream. And then they had, you know, the other part of that demand signal, not only for housing was around the consumer goods to fill those houses. Right. And then the third Big Ben of that demands for post World War Two going into the Cold War was reconstruction materials for Europe and Japan, recognizing that our biggest enemies, particularly Germany, and Japan, we needed to rebuild them and make them our allies and reshare, that we had the capacity to think in those terms. Instead of punishing them, we were going to get them back on their feet. Because we recognize that the next challenge, we already focused on the Cold War, Soviet Union, in this long term Twilight struggle, as it's called political and economic systems against the Soviet Union. You know, that was the, you know, the beauty of George cannons concept of containment. Yeah, we contain them militarily. But we would focus on building up our economy and leveraging our political system, to outlast the Soviets and let the Soviet Union collapsed based on its own internal contradictions, it was huge. And so we had these big demand sales, post World War Two Cold War, the suburban dream consumer group to fill those houses, and then the reconstruction materials. And then so we, in order to fuel that, we leverage the fact that our economy was booming out of world war two was huge capacity. And so we started pushing federal investment and subsidies into things like infrastructure. This is where Eisenhower came, and he clearly recognized we needed to invest in our infrastructure, and that we were going to subsidize certain things, whether that was ranging from industrial outputs to agriculture, that cetera. But we're going to make those types of investments. In the process of doing that we were going to be able to absorb the veterans coming home from World War Two, and be able to transition our war industries, from making tanks to making cars again, to making washers and dryers to be able to make the materials to rebuild Germany, it was a brilliant, brilliant design. And it worked. The problem is, is after the, you know, the hammer and circle was lowered over the Soviet Union 1991, we never recalibrated. We didn't even think about how to recalibrate, we just have a system where the system's just going to keep working ad infinitum. And we really needed to recalibrate and particularly look at this formula of demand plus capital minus stranded assets to create a new grand strategic foundation for the 21st century. And we just haven't ever done it. And that was kind of the gist of why we even wrote the book on it. So
that was no, it's it's fascinating to kind of see it. And there's a little bit of irony there that the core of all of what you just described, which I think is a great example of how America has recalibrated itself and, and worked within a previous grant strategy, but at the core of it was was fossil fuels, and many of the things that we're facing right now, which are causing some of our new new challenges that we have to face. So, yes, so kind of take me now looking forward, which of those have become our stranded assets? I mean, you've alluded to some, like our suburban sprawl and some of the other things that were kind of driving our growth in the past.
Yeah, I mean, now, how does the formula look today? Well, we already know the big demand signals are around walkable communities, regenerative ag, and resource productivity. Again, you can only see those if you're good enough your sustainability goggles, and not look at how do we keep this old economy alive, which is what we're doing now. The only way to keep the old system alive is to feed, you know, that's dead, written is defeated more debt. I mean, that's a stupid design. But we know we have these big demand sales, walkable communities, regenerative ag, resource productivity, just sitting that we know we have all sorts of excess liquidity in form of whether it's corporate cash, hedge funds, massive amounts of wealth that's being transferred from baby boomers to you know, Gen Xers and so on. Huge amounts of capital, let's assume they're looking for a home for a reasonable return. But to your point, so what are the what are the big stranded assets that we got to get away from? Well, number one are hydrocarbons. That's again, why we just talked about you know, being able to do this feedstock ship the hydrocarbon right now, by burning it by its main purpose just being you know, using it is energy, which is hyper inefficient, particularly how our centralized energy production and distribution system is so ineffective, so inefficient, and just so deleterious. for a lot of reasons. That is a big vexing problem. So how do you solve for that you solve it, because you push hydrocarbons towards the demand signal, which again, is can you do that feedstock shift, use it for a different purpose, you can still have value, I can have enhanced value, if you push it towards where the actual demand is. The second thing is around labor, this whole idea that we're going to get these old manufacturing jobs, we're going to save the coal industry. Well, that's just totally disregarding the reality that renewable energy sector is creating far more enduring jobs than what the coal industry did, you know, and then, you know, maybe Hillary Clinton should have said it the way she said it, but she was right. You know, and that can bring back coal jobs. It's stupid, you know, we don't need more coal jobs, there aren't many coal jobs, more coal jobs have been from automation, then from, you know, policies that are not our anti coal. So we have to figure out how do we start investing in education, and training for new types of manufacturing jobs, which are actually clean jobs there in the urban core kind of jobs, or people want to live? These are the things that we need to do. And then lastly, our infrastructure, are we really going to keep doubling down on a massive highway system and deny the fact that, you know, most millennials aren't looking to own a car in the future, and we really going to start doubling, you know, see, we're going to pay for it by more vehicle miles traveled when we know that there's 10, new technologies emerge with perfectly automated vehicles, electric vehicles, rail systems, vehicle mile travels are going to go down. basic infrastructure bridges, the basic infrastructure of how we move water, how we move energy, all those things have to be redesigned to match to our 21st century reality, those are all stranded assets. But what's great right now is that we have the demand signal that will address addresses those things, walkable communities, or general bag resource productivity, we have the capital to start engaging those demand signals by engaging those demands. So us we can address that those those stranded assets by moving the hydrocarbons into the material side, by taking a new type of labor, instead of trying to preserve an old labor construct, and you know, doing old jobs, move those into new jobs. In particularly in the agriculture sector. It's a whole it's a burgeoning place. market that could generate all sorts of new types of jobs for millennials, it's high tech will be high paying, be exciting type of work, rather, you know, and then on the infrastructure side, it's just a matter of transitioning to a new idea of what infrastructure means. And this goes to idea away from doing big centralized stuff, doing stuff like district infrastructure, energy, water mobility, both, or I'm sorry, connectivity, both in terms of, you know, last mile mobility to digital types of connectivity. You know, it's just exciting stuff. It's all there, it's ready to go. And so we have the opportunity to to, to use that formula, right now, if we can get the right kinds of policies in place, number one, which would be nice. But we don't have to wait on Washington do it because the private sector, if they can just see these opportunities, and start constructing or figuring out how to be able to push capital towards these ads and start changing the business models of how we currently do business. I think the opportunity is limitless right now. It's great. And right now we're looking at $1.3 trillion a year, that's just sitting on the table waiting to be grabbed by myself, you know, by any number of any number of folks. Excellent. If that makes no,
that makes perfect sense. And you know, I'm a small business owner, I'm definitely left of center, but believe in the power of entrepreneurship and believe in the power of, you know, people wanting to do better for themselves. So that does make a lot of sense to me. I mean, you want to motivate people to build a better future for themselves, not just make things less bad. I think that's been a pretty common theme in this podcast. So I want to I want to take you on a upside trip back. And I know you've, you've corrected me probably at least two or three times already, but I'm pulling you back there anyway. And that the grand strategy is not a military strategy, it is a strategy for the entire US. But I want to take you back just to the military, because I know you've had a lot of experience in the military. And can you just give us kind of an overview of how is the military thinking about sustainability today? Because I know, you're not the first person I've heard this from I've had many conversations. And it's always surprised me on, on on the depth to which the military thinks about sustainability, for reasons that people may not, at first blush understand.
Well, yeah, I mean, I'm trying to say this, I guess I'll just be really blunt, I would say, you know, the military doesn't look at things in terms of sustainability in terms of this is their their mission. It's not a you know, where to find a military guy that says that you don't hear me say that that's not our mission. We do recognize and recognized for a long time it's been a core planning factor is what are we going to be the effects of climate change on the security environment. Lot of the work particularly for the Marine Corps side, but I mean, just military, in general, a lot of the flash points that we're gonna see around the world happening in the urban materials, you know, right there along the coastlines. And that, you know, those obviously, the though that urban environment is going to feel the greatest effects of sea level rise, etc. But we also look at places particularly like in Africa, Central Asia stuff, the effects of climate change on the ability to produce food, access to water, the issue is security environment. But in terms of the actual systems and stuff, you know, whether, you know, the military wants to use renewable energy, you know, we can get into the fact that, you know, just from an operational standpoint, it's just about how can we be most efficient, and most effective, so that we can be the most lethal force anywhere, you know, you can cut down your logistics tail is something we want to do anything that allows you to be quicker, more agile, so that you can be more lethal is something we want to do. You know, and I mean, it's often quoted stat, you know, from Afghanistan experiences, you know, we were losing roughly about one true for every 24 convoys, and was kind of was your want to 24 hours a day, you know, so just to haul fuel. Oh, and it's a you know, that's a that's a pretty big toll for your logistics, your logistics tails,
motivation for energy efficiency, as opposed, right.
Well, well, yeah, you know, and I mean, even the logistics, you know, we, you know, there's a lot of things, you know, you have to consider logistically, but the big three, military is, you know, you gotta haul bulk fuel, you got to haul bulk munitions, and you gotta haul bulk water, you know, if you can't get them, you know, source locally, so it makes a lot of sense to start sourcing things locally, you know, and energy is one of those things, it's a freebie, you know, so that in, and I gotta tell you, I'll tell you one little frickin story when I was in the Pentagon, and, you know, some smart ass staffer was telling me, you know, you're going to Department of at Department of Energy, why, you know, so well, you know, what, once you sit behind one of the frickin wheels, and one of those fields, rocks, just dried, just do one trip, and see how that feels. Or better yet, once you strap on a rucksack and have to hump the batteries up a mountain, you know, you know, chasing after, you know, the Taliban, in the Hindu Kush. One trip up that mountain, you're going to realize that helping batteries all over the place isn't any fun. So you know, you know, get over the the emotion of it, and just recognize that the military is doing it, because of, again, want to be more legal on the operational side, in a more strategic sense. Just think about the amount of assets particularly on the Navy, that they have to deploy, just to preserve the oil pipeline, you know, to get back to the United States. Now, it's just shifted now, because we're producing more from inside the, you know, from the United States, so that it's been reduced a bit. But it's still a huge security concern, it requires a lot of assets. And I just want to also point out the fact that, you know, nothing pisses me off once in a while, we're, we're just going to be energy independent, everything's gonna be better. You know, we'll never know who that way. We don't have to worry about the Middle East, and we can just ignore it. Well, there's no ignoring anything. And it's a global system. Globalization is real, everything is connected systemically. So that's a bullshit argument, number one. Number two, is are you really energy independent when you're still dependent on fossil fuels? Yeah, it's just, I mean, it's just a ridiculous argument. It is a failing system, you know, and a bad system that has bad design will create bad results. And so if you can start looking at that, from from that standpoint, that a car dependent culture, what's the point of security security is supposed to keep Americans safe to keep them alive, keep them prosperous, keep them, you know, vibrant society? Well, right now, your average American Standard one to 20 million chance of getting killed in a terrorist related event? Look at the resources, we're expanding to that at preventing that stuff. I mean, that's building a wall now. I mean, give me a break. But yet one in five Americans are your average American stands a one in five chance of dying from an obesity related cause? Right, you know, yeah. And, you know, as suddenly we start looking at our car dependent culture that is dependent on a hydrocarbon based fuels, where people are, you know, eating like one third of their meals in their car, you know, they're losing time with their families basically lose two weeks, which is a family vacation because they're sitting in their cars, you know, one third of our nation's clinically obese, you know, these are real vexing national security issues. They're not national defense issues, but the national security issues, and they're all you know, they're all kind of manifested around and dependency on hydrocarbon based fuels.
No, I appreciate that perspective. In it, like you said, it's maybe our are big threats these days have changed shape quite a bit since World War Two. Alright, well, let me Okay.
Well, I just want to underscore the idea that, you know, our military or folks are still citizens, you know, we do think about these things. But I just wanted to like just foot stop the fact that, you know, from a military perspective, again, is about efficiency, and that as it translates into brutality, but I also just want to play one more point, just because it does think it needs to be said, we've got to as a nation, stop turning to the military to check and see what's okay. For us to grab on to as a society and the culture. The military says this climate change, you know, climate changes reality, okay, as climate change is real look at the military says, or, you know, the military said, you know, my case working, you know, doing this grand strategy where it looks sustainability military says it's good, therefore, it's good. Everyone should embrace it. We got to stop doing that. You know, and that scares the hell out of me right now, is that for this country, you know, with our current administration, that everyone takes a big sigh of relief, because we've got some of the, you know, these phenomenal people that I really respect, former generals and current General, they're sitting in these key positions, hoping that, okay, they can keep a lid on anything bad happened. That is not what this government's about that with this nation's about, we've got to be very careful careful about this thing, okay. The military is going to keep because there's a lot of countries out there that that is how they keep a lid on thing, bad things happening. That's how Pakistan operates. We don't want to be Pakistan, we the United States, we need to have our citizen, civilian leadership, in the forefront, making the right decisions and having the being able to make decisions based on the logic being able to make the decisions based on moral courage on the economic logic of it, but quit using the military as the way to say, hey, see, the military says it's okay. Therefore, it's okay. That's not our role. You know, it's the role of a citizen to recognize what's best for their society, and have the gumption, the grit, the will to be able to make the case on their own, and take a leadership role in that and not turn to the military to hope that the military will lead in a direction this country's gotta go.
I appreciate that. And that this leads well into my next question. You have a decorated military career in your rearview mirror. And I think you've laid out a plan for transforming our entire economy. So how are you actually doing that now that you're a civilian again,
your spend time in a think tank, you know, just to start with Patrick Doherty, and just working on Okay, we wrote the narrative, which was clearly not prescriptive, because sitting in the Pentagon, you don't want the military prescribing what the grand strategy the nation on a beat. So we just want an idea out there. But once I retired, 2011 became a senior fellow with was a New America Foundation. Now just you know, America, to be able to flush out the ideas, particularly one of the economics of it, then ended up going to the business school at Case Western Reserve University, whether it's the School of Management at the power center, to be able to really go deeper on not only the business models that are required, and how business could take a lead, in the absence of leadership from Washington, how business community can take a lead and making this large, grand strategic transformation, but also take some of those ideas and put them in play at a regional, I would say, the municipal and a regional scale. So I played with that. And then finally, we decided, you know what, instead of standing around generating these ideas, hoping somebody would do something with it. We said, you know, you gotta go where the meat meets the metal. So we, me and Patrick, jumped out of Case Western in February this year, and launched long haul Capital Group, with a specific mission of financing walkable communities, because we see walkable communities as being the most catalytic demand signal that could have systemic impact across what we call an entire new industrial ecosystem, but specifically to their grand strategic thesis of what's important. And so we will oblige long haul Capital Group that would not only figure out how we could get folks into more walkable communities, you know, we're 60% of Americans want to be in a more walkable community, but only 1% of the urban Metropolitan landmass can be considered walkable, therefore, there's a price premium, and folks just can't afford to get into particular with existing policy that incentivizes drive to qualify. So we're, we're figuring out a new type of mortgage product to help folks get in there, and I'll be able to afford their living in a walkable community. And also, how do we create walkable communities with federal dollars being reduced in investments in the key infrastructure that we need things like interest, city rail, you know, light rail system and streetcar systems, we are figuring out how to get capital to build out those kind of systems because those systems create the new walkable places around the transit stops. And they connect walkable places together so that people can get to their jobs and not be dependent on a car. And so it's a systemic in nature, not only we want to help people get into the communities, we're going to help invest in the systems that create those communities to meet that, man.
So that's what we're doing right now. So putting, try to put our money where our mouth is. And that's what we're Excellent. Well, I like that well. So coming back to where my work comes into play. And I guess the whole purpose of this podcast is really focused on campuses, primarily higher education campuses, but also corporate campuses. Can you help bring back what we've been talking about today? I mean, I have the luxury of talking about whatever I want. This is really fascinating. Just to try to bring it back home to the theme of the podcast, what, and I met you originally at a higher edge education institution. So I assume you have some thoughts?
Yeah. Well, yeah, well, first of all, I really appreciate the the level of leadership that university and college presidents and their administration's are showing and the, you know, the face of United States pulling out of Paris, you know, and with large percentage of academic institutions that have committed to certain, you know, climate goals, but then also participating, and you know, we're still in it, campaign. So that kind of leadership is just great. But I will also say that on the my experience, with academic institutions, once you get into the actual operational side, like the facility side, it's like, okay, the percentage of those that have made a commitment, what have you really committed to in terms of action? Because it's going to be a difficult thing? Can you transition to it efficiency and put your money where your mouth is higher efficiency and energy systems? You know, there's creating new types of financial models, you know, a lot of folks are worried about their balance sheet, okay, well figure it out. You know, I got that types of, you know, goals that we set, whether it's around, you know, the food service systems, you know, a lot of universities have got aggressive goal to say we're gonna use 20 to 20% 25%, sustainable local food, why isn't it 100%? Right? You know, why don't you go 100%? Why don't you just make that happen? instead of like doing one off projects, research projects, why don't you systemic with look across your entire campus? And how are you going to convert all the different stuff that you got going on your campus towards a large, purpose driven mission? You know, you don't want to stifle creativity or anything, but you also want to make a difference. And I mean, I would just challenge for, you know, just to, like, think strategically and strategically, you have to think of what is my mission, what is my purpose, and then to that purpose, how do I can like really take my the assets that I have, and put up to the towards that. And it's just very frustrated me, because these are anchor institutions that need to take a leadership role. And so just to kind of recap that it's closer say do gap, you're going to make a commitment, we better get on it right now, you know, in terms of the types of systems you use just to operate your institution. Second thing is what you're currently doing, can it be more effective in terms of integrating all the capacities that you have intellectual financial, research and development towards some big thing, a big idea, a couple big ideas, and not just be so just doing a bunch of frickin one offs, the world doesn't need more widgets, the world needs strategic impact. And really put your money where your mouth is, Time's running out, you know, and the, you know, the ivory towers of academia, you can't hide in that tower anymore, and think that somebody else is going to do it. I would say it's time for an activist academic community and not about I gotta be here what I say because I get fired up about it. But it you know, it's about doing real things and not getting, at the end of day you got to get on with the doing. And it might feel good to stomp your feet and yell and scream about what you're against. But eventually, you got to be for something. And can you really, as an institution, commit your resources towards making something happen.
I like that as a place to end, I did want to give you a chance to say if there's a way for people to get in touch with you sort of the proforma, the end of a podcast.
Oh, sure. Maybe get a hold of me at Mykleby, just mykleby@ fullcirclestrat.com. And if you want to learn more about the new grand strategy of our book, we've got a website. It's just www.thenewgrandstrategy.com.
Excellent. And I will include links to your contact info and a link to the book in the podcast notes for sure. Sure, yeah. Pocket any closing thoughts before we let you go?
Just a closing thought we're doing a lot of hand wringing right now. I got it. I mean, I do, I guess my fair share of hand wringing too. But we can do this, whatever this is to find this on however you want to define it. But we can do this. I mean, we are the land of opportunity. I firmly believe that. And we just have to have the will the grit and look in the mirror and say, yeah, this is this is my fight. So step in the ring and punch above your weight. And don't worry about what anybody else is doing. Don't try to worry about the things you can't control. focus on the things that you can control in your own life. And I'm telling you, we will turn the dial look, and it's going to turn in a really good direction.
That's right, very, very good. Well, I'm glad we made it through fire alarm at all. But thanks again for being on the show.
Thanks for the patience. I apologize for that.
That's it for this episode. As always, you'll find show notes on the website at campusenergypodcast.com. Please keep those show ideas coming and perhaps take a moment to read a review on iTunes to help us get the word out about the show. Thanks for listening