Archive for November, 2011

The Descendants is a Winner

November 30th, 2011
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ThinkTech Hawaii

The “Descendants” with George Clooney gets a “thumbs up.” For me, it accurately depicts life in modern Hawaii, at least in one sector in the socio-economic landscape. With all respect to Hawaii 5-0, there aren't many movies that do that and frankly we should drill down on this. This movie deals with the white-shoe kamaaina crowd, and for me it does a pretty good job of it.

George Clooney does a great job. He seems to understand how things go in that crowd, even though his aloha shirts don’t look quite right on him. Clooney plays a lawyer and trustee and beneficiary of a trust holding huge acreage on Kauai, distracted from his family. His wife was a country club girl injured in a speed boat accident off Waikiki. We find her in a coma and dying.

When he learns his wife will not recover, he goes to the Big Island and pulls his wise-guy teenage daughter out of school to come back. He finds out from his kids that his wife was having an affair, and that throws a wrench into everything. The movie turns out to be a search in which George and his daughters set out to find this guy in Kauai and face him down. You do wonder why he is compelled to do this while his wife is dying (at Queens) in Honolulu.

We get to meet the kamaaina crowd around Clooney and learn that this crowd will realize enormous cash through the sale of the Kauai property. As sole trustee, George gets to decide whether to sell. Given the events he experiences, he ultimately decides not to sell, to the consternation of his family, particularly his cousin in Kauai played by Beau Bridges.

George decides that although none of his relatives did anything to acquire the land it is their legacy they should hold on to it despite the Rule against Perpetuities, reminding us of the Campbell Estate. His predicament with the land raises the problem of too few people owning too much land, and the need for land reform. You’re sympathetic with Clooney, but in some ways you’re not. I love movies about the Rule against Perpetuities and Land Reform.

There is noticeable character development. Everyone in the movie seems to be changing. Clooney himself goes through a metamorphosis of forgiveness. His teenage daughter grows up, and her boyfriend is more than he seems to be. George’s younger daughter is charming and changes in the context of the movie. In that regard, the characters and acting are well done.

The film takes an unflappable life of leisure and it throws some curves balls into it - the affair, the injury, the expiring trust, and then shows us how these characters would react under those circumstances. We get to be a fly on the wall of their crisis and we get to watch their reactions. It’s Zola-esque, a human experiment involving gentry in Hawaii, and it seems to ring true.

I thought the production values were first class. The music was well selected, especially some of the slack key from Jeff Peterson. You had a strange disconnect when Hawaiian music was playing during a difficult time for the characters. But that must have been intended and it worked well, perhaps to signify how controlled they would be even in stressful circumstances.

There are lots of local icons. The houses and clubs, the neighborhoods (a number of scenes were in Nuuanu), the street scenes, all here. It’s a movie you have to see more than once because it gives such attention to detail that you can't catch it all the first time around. You have to give the producer credit for this. This makes it interesting, of course, for anyone living in Hawaii.

I did see some people I knew playing bit roles in the movie, but I was disappointed that there weren't many more local people in the movie. There were not many Asian faces in the movie and that didn't seem entirely accurate. The movie takes us into the lane of the landed, the life of the Hawaiian Raj. But it also shows that that life in that lane is not so carefree as we may think. It’s not the first time that Hollywood has made that point, but perhaps it is the first time we saw it in a movie about Hawaii.

So I think everybody should see this movie, for the story, the acting and the genre we hope will be repeated. Although there was sharp language in many places in the movie, somehow it rang true because kids do talk that way. This is a window into them even in their private schools. But, as always, you look at the kids in this movie and wonder how long they will stay in Hawaii.

The Descendants is a worthy statement of modern day Hawaii, and for me the first good effort at that. I’d like to see more movies about life in today’s Hawaii, and I think the world would too. We have a million great stories, but not enough of them are getting out. If Hollywood could make the Descendants, maybe they’ll make movies of more of those stories. But it would be better if the local movie industry could learn to tell these stories. After all, there’s gold in these hills.

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Coming to grips with our geographical diversity

November 22nd, 2011
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ThinkTech Hawaii

There are several myths some people have come to accept about renewable energy. These myths stand in the way of our clean energy initiative and it is very important that we dispel them. One of these myths is the one that denies our geographical diversity, the one that holds that every island can have its own independent system and does not need to share its resources with other islands.

We know that our state is geographically diverse, and although each island has some measure of renewables, there is a great diversity among the islands. Some islands are very well endowed with renewable resources and others, like Oahu, are population centers that are not so well endowed.

There is a diversity, for example, among the islands on wind, OTEC and geothermal. Some islands have more of these renewables, some have less, and some have none. The myth is that the islands need not and should not share these renewables with other islands and that there is no need for a state wide grid or an interisland cable.

That runs against the notion, in Mayor Billy Kenoi’s words, that “we are an island state not a state of islands,” that we are one state bound together by aw and legacy, that we have historically worked together for the common good. That notion has been deeply ingrained in Hawaii since Kamehameha.

It’s a notion of sharing, that we share resources among the islands, just as we share other things. We need a state wide grid connecting our renewables just as we have a telecom grid connecting our telecommunications. We should be linked by power cables just as we are linked by telecom cables. It's not rocket science.

Given our geography, it seems rudimentary that we have to move the energy from the islands that have it to those that have the need for it. It’s not just a matter of togetherness (which is itself a good reason to share among the islands) but it’s also a matter of efficiency and meeting the needs of our energy market. To deny the notion of sharing is destructive to the state and its economy as a whole.

If we share, each island will have the benefit of the state’s resources in general and will be more secure in energy and especially clean energy. If we don’t share, if we don’t build a state wide grid, each island will be at greater risk because if the system on that island goes down it will have no backup to draw from.

Some ask, “am I my brother’s keeper?” and argue that each island should fend for itself, and that PV will be enough. It won’t; we can’t live by PV alone. PV is not firm power. We need to have a statewide portfolio of renewables, especially firm renewables, and share them among the people of all islands for statewide balance.

Regrettably, we have been lost in divisiveness on this issue. That divisiveness is distracting us and obstructing our clean energy initiative. The drifting apart of the islands is the most extreme form of NIMBY, that is, “not on my island.” We need to move beyond that. We need to develop our renewables now or oil will soon undo our economy and darken our horizons.

Sharing will become even more important when we develop geothermal (on the Big Island and on Maui) and OTEC (mostly on the Big Island where the shelf drops off sharply, accentuating the variation between cold and warm water, and possibly on Oahu). Both geothermal and OTEC are firm and unlimited, but both are years off.

In the meantime, we have to share what we have and not get stuck on myths that will take us nowhere.

There are other myths too, and we’ll discuss them later.

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How healthy is health care in Hawaii?

November 14th, 2011
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ThinkTech Hawaii

We have two hospitals in bankruptcy and playing tag with closing. Everyone knows the neighbor islands are in distress about finding and keeping doctors. Obama Care is going to change things that were once top of the line in Hawaii, and maybe not for the better. At the same time health insurance rates our going up, health insurance executive salaries are also going up. Health care in Hawaii may not be so healthy anymore.

In the middle of the Pacific, we worry and should worry about the health of our health care system because our personal health is dependent on that industry’s health. Although most people are concerned only about rates and how things go in the doctor’s office, we can’t afford not to know what’s going on outside our personal health experience, in the health care industry around our state.

How can we avoid repetition of the recent hospital bankruptcies? What do the repeated rate hikes at Kaiser and HMSA mean, and will rates continue to increase? Can doctors earn acceptable compensation in Hawaii? How can we incentivize them to stay and practice on neighbor islands? Are doctors and hospitals getting a fair shake? Are patients getting a fair shake? Is it possible for hospitals to earn an acceptable profit, and can they provide acceptable care at that profit? What do we need to fix? What will happen if we don’t fix anything?

How could technology help? Will tort reform help? What effect does the cost of care have on the standard of care? Why do we have such great longevity - is it because of our health care? Why do we have such a disparity in the availability and quality of care between rich and poor? Are the hospitals absorbing too much of the cost of ER care for the uninsured? How can we ameliorate that? How has this changed the role of the doctor and hospital with the patient? How will the current threats to the continuation of Medicare and Medicaid affect our senior citizens?

ThinkTech and the Hawaii Venture Capital Association are going to tackle this subject with two blue-ribbon panels from 11:30 a.m. to 2:00 p.m. on Tuesday, December 6th. After a buffet lunch, the first of our two panels will start at noon, and the second will start at 1:00 p.m. We'll be pau at 2:00 p.m.

The First Panel will cover the Economic Transformation of Health Care in Hawaii, and will be moderated by Ginny Pressler of Hawaii Pacific Health. It will include Coral Andrews of the Health Insurance Exchange; Beth Giesting of the Governor’s Office on Health Care Transformation; Thomas Tsang of the Office of the National Coordinator for Health IT; and Hank Wuh, physician, surgeon and health care entrepreneur.

The Second Panel will cover Current changes in the Delivery of Health Care in Hawaii, and will be moderated by Josh Green, chair of the Senate Health Committee. It will include Jerris Hedges, dean of the John A. Burns School of Medicine; Hilton Raethel of HMSA; Nadine Tenn Salle of the Hawaii Independent Physicians Associations; and Art Ushijima, CEO of the Queens Medical Center.

What an incredible cast for this important discussion! Do you care about health in Hawaii, including your own? Then you might want to come down on December 6th, enjoy our luncheon, meet like-minded people, network with ThinkTech and the Hawaii Venture Capital Association, and hear from these great panelists on this critical topic in these critical and foreboding times. Sign up on hvca.org. We’ll see you there.

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Hawaii bound debris could be our greatest challenge

November 7th, 2011
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ThinkTech Hawaii

While we expand the environmental laws and obligations at every turn, we’re now watching what could be the biggest environmental threat Hawaii has ever had. The debris - a thousand miles of it - wafting across the ocean in our direction, either to hit us head on or to bounce off the west coast and hit us later. What was swept away from Japan, rotted and pulverized, could be our next disaster.

Will we just wait until it happens? The problem is that this hasn’t happened before, so we don’t know what to do. None of the government agencies established to deal with earlier calamities is prepared to deal with this one, and we seem to be locked in the headlights.

Is it a state or National Guard problem? Is it a NOAA problem? Is it a Coast Guard and Homeland Security problem? Is it a Corps of Engineers or a Navy problem? Is it a problem of the United States, as principal victim, or of Japan, where it originated? Perhaps it needs to be shared by many agencies, and countries, even the United Nations, but if so exactly who’s in charge and who should be doing what?

Right now, everybody’s watching and no one is doing much. We talk about and we start to worry about it but only in the nature of global warming; it’s just too distant for real public or governmental concern. It isn’t here yet, and gee it might never get here. It might go somewhere else or dissolve or sink or who knows what before it gets to our shores. Problem is it’s pointing at us and the great likelihood is that soon enough it may be here, right on our fishing grounds, reefs and shores and surrounding our islands.

Our efforts against this threat are likely to be as tentative as our efforts to deal with global warming, with the result that emissions and climate change are coming to Hawaii, inexorably, and without any sign of diminution. It’s everybody’s fault, but it’s nobody’s fault, and we will still all suffer for it. The difference is that the havoc the debris pile will wreck in Hawaii a lot sooner than global warming.

If we just keep watching the headlights, we could have a terrible time. Remember we’re a tourist destination and having debris slime all over us isn’t going to help. That makes it all the more amazing is that nobody seems to be doing anything but watch. Certainly, there must be satellite photos that show exactly how big it is and where it is and its exact trajectory. Shouldn’t we see them already? e need a leader to rally the troops and galvanize an effort to deal with this problem before the damage is done.

Can our local marine industry scoop up a thousand miles of trash? They’ve never had to do this before, and they don’t have money for a sustained effort now. Can our state government help? This is going to cost billions. As between the state and the fed, only the fed can afford it. But the fed shouldn’t go it alone. Maybe we should ask Japan to help. And since this is also likely to affect western Canada and Latin America, maybe they should help too. It’s a time for cooperation, but who will step out in front?

There are two huge ironies here. For years, we’ve been building a bureaucracy to protect the environment, often at the expense of progress. But now when this huge threat comes along, we have no way to deal with it. The other irony is that the agencies we might expect to step in worry that that to take ownership makes them responsible. Given the stakes, this is not a time for shrinking violets.

Some say it’s really an opportunity in disguise, and that there are millions of tons of burnable garbage in the pile, garbage we could use to generate electricity like H-Power. But there are others who wonder what kind of heavy equipment and technology and capital it would take to harness the trash, and what kinds of risks we would incur if we brought the trash ashore for burning. All this is unprecedented, so even though the stakes are high, without strong leadership industry isn’t likely to step forward either.

Sad to say, chances are we’ll stand fast and hope it will somehow pass us by. However we address this, either proactively or après disaster, or by the power of ardent prayer, it could be the most challenging and damaging environmental and governmental test we have ever had. In the end, we’ll be judged by the strength of our collaborative efforts. In that sense, the price of retaining the charm and purity of our islands is not only eternal vigilance but quick and decisive action against exogenous threats.

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Takeaways from from our Hawaii Update on Agriculture

November 1st, 2011
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ThinkTech Hawaii

We had a very good program on agriculture at the Plaza Club on October 27th. We asked attendees to gave us what they thought were takeaway points. Here are some the points they mentioned:

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We need to put a younger face on agriculture, get governmental support on agricultural parks, infrastructure, nearby housing, farmers’ cooperatives. We need to show farmers how to make business plans. All sectors of agriculture should collaborate; no sector is mutually exclusive.

We need to develop a market for grass fed beef, expand land available for ranching and get stopgap government money to help build a slaughterhouse and processing plant.

We need collaboration. All sectors of the industry should collaborate and help each other. We need to develop public-private partnerships in this area. We need to relax the food safety rules to make it easier for famers. We need to integrate agriculture into residential communities.

We need perseverance. We need to find a methodology to enable distribution of small lots to farmers. We need to get government not to stand in the way of agricultural developments or delay the distribution of that land to farmers.

The time is ripe for a renaissance of agriculture in Hawaii, but we need to be realistic about our goals. Local agriculture is essential to our future. We need the reasonable and creative application of our laws to permit it to happen.

I’m bullish on Hawaii agriculture. The potential is there, but we need to make a strategic agriculture plan. We should integrate them with an energy plan. We need to diversify our crops, including forestry. We need to increase the number of farmers. We need to get the sectors to work together.

We need to take advantage of existing incentives and opportunities. We need to use Title III money to help bio-refineries.

Hawaii should look to solve global issues in agriculture. Agriculture companies in Hawaii should give back to the community, including public education and sharing and providing land and support to small farmers.

The magic word/words are Growth-Diversification-Innovation-Land. We should take advantage of Hawaii’s special brand for agriculture. Land is the biggest bottleneck, and land use policies have skewed the market. We must provide land and improve these policies. We should work together to identify important agricultural lands.

We must invest in the next generation of farmers and farm workers. We will need 3,500 new workers yearly, and we must invest in educating that workforce. It’s becoming more difficult to run a farm, and we have to invest in agricultural, infrastructure, education and R&D. We have to educate the workforce on all those new things. We need to do strategic planning for each of the diverse sectors of the industry.

* * * *

I am an MBA student at UH and an experienced Food Scientist. I recently had the opportunity to work on a collaborative project with CTAHR to determine the market feasibility of developing a global Specialty Tea industry here in Hawaii. See the report: http://www.ctahr.hawaii.edu/oc/freepubs/pdf/tea_2011.pdf

We found that there is growing demand for tea that Hawaii can supply. Tea grows well in agro-forestry systems and can grow in marginal agriculture land. There is opportunity for many farmers to grow tea which can be processed and marketed at centralized processing facilities. This will encourage farmers to diversify their land and the additional profits can help farmers focus on their core competency of enriching the state's food supply.

* * * *

So, do you think we panels answered the question "is Hawaii agriculture in a renaissance"? In my view, yes and no. I thought it was overly orchestrated and scripted to gloss over any dialog for real impediments and real improvements. The panels also seemed to confirm that all Ag segments have opportunity for growth: bio fuels, research, GMO seed, flowers, all except food.

* * * *

It seems to me people are ignoring the elephant in the room. Local food sounds great, and would be great, but is not economically viable. I think all the folks in this discussion would be well served by reading Charles Rappun's essay (UH Press) on agriculture in Hawaii. He had a piece in “The Value of Hawaii Book.” This Harvard educated farmer from Waihole valley makes the case that if the community wants fresh food we need to start a backyard gardening movement.

When the Lieutenant Governor says lets grow food not houses, someone needs to ask for the business plan to do that. There is no way to grow a tomato in Hawaii that can compete with one grown in California and shipped here. So we have a mom that pays $2,000 in rent and has a choice of a foreign tomato that costs a $1 or a locally grown one for $2. To bring the price down to $1.50, are we going to go back to the bad old days of importing contract slave labor to farm?

Making this whole thing even more complex is the anti-housing/growth folks along with the NIMBY people making the case that we can't have more housing because we need this productive farm land. They're using this feel good issue because their other arguments have no traction with the community. The irony is that if there were an economic model to grow food it would be on the outer islands.

So please ask your guests: with Hawaii's high cost of living, transportation, land, and union labor costs (and our lack of farm labor), will growing food For local consumption ever be viable outside the high-end boutique market?

* * * *

Do we really want food security? Is it more important than fuel security? Can we have both? People are doing fine with vegetables from South America. There are formidable barriers to local agriculture. We have big labor and immigration problems. We have big land cost, land use and water problems. We have malicious mischief problems about GMO’s. We have theft problems resulting in huge water loss here on Oahu, just last week on TV. Anthony Aalto of the Sierra Club would like us to save Oahu farmlands by redirecting housing to urban core. But save them for what? Is anyone lined up to farm them?

Farming is like running for office – you really got to want it, and when you get it you find out maybe you shouldn’t have wanted it so much. It’s not clear who does want it. Does your child want to be a farmer? Do you want him to be a farmer?

Sure there’s lots of talk about agriculture, but like so many things we have trouble getting together, staying focused and following through, not unlike Geothermal, SuperFerry, Rail, Big Wind and most recently Biofuel. Will we do better in agriculture? Or will paranoia, self-interest and divisiveness rule?

We need more than restaurant boutique food. We need to feed everyone everything, from soup to nuts, from fish to meat to milk, all the way up and down the food chain. We need excellent quality. In fact, we need to export excellent products, we need to be the Breadbasket of the Pacific. But we’re a long way from that. We don’t even have a ferry for Neighbor Island farmers to ship their produce.

How about getting together in a perfect universal focus on this critical issue? What’s the plan, the incentive and the timeline? Will there be a renaissance of the once great world class agricultural industry in Hawaii or will it go in the let’s-take-another-look-in-30-years category.

Can local agriculture build our economy? Can it provide decent jobs and middle-class careers when we are competing with cheap labor from around the world? Or should we just continue to rely on tourism as the better bet? If we are determined to rebuild agriculture, what do we need to do to get it to critical mass? Legislation, regulation, litigation, parades in the street, pitchforks at the gates, what?

* * * *

Here are my takeaways and comments based on my experience with aquaculture. The important themes and messages of the program were: Land, Water, and Parks; More Financing Options; Cooperative Formation; More Farmer Assistance; and Marketing.

Land, Water and Parks - Agriculture needs greater access to land (acceptable sites). Inherent in this is available and affordable land and water.

Government is not doing enough to actively facilitate this need, so the private sector has taken the initiative, but that is not nearly enough. The initiatives are having trouble with overcoming bureaucratic obstacles and financing issues caused in large part by the complicated permit/regulatory process. There is ample good land around.

Fred Lau suggested Agriculture Parks as a partial solution. Inherent in this suggestion is finding appropriate sites, crops, and financing; and building infrastructure so a reasonable return can be expected.

Government, that is DOA, is set up to do this, but some comments here: (a) existing Park sites were leftovers after all the good land went to private leases. This needs to change. There is an effort underway to move Agricultural land under DLNR to DOA, and this should be expedited; (b) Government, that is DOA, staffing and budgets for park development and management have been devastated by the previous administration and would need strengthening to play a greater role; (c) my understanding is the State Ag Park law can be used for joint ventures between the State and the private sector could be used to facilitate development if parks are a priority.

Not enough was said about water issues, e.g., access, cost, etc. Of course, the water discussion goes hand in glove with Agricultural food production. Repairing and using the dilapidated sugar water infrastructure is a big issue, and that must be front and center. These discussions can be centralized with DLNR and the Water Commission. Nobody knows more about the water issue than Bill Tam, the new Deputy for Water.

Ray Iwamoto discussed changes in the law (Act 271) that allow parks to be developed without adhering to subdivision requirements. It was not clear whether this was for a single project or could be a process for everyone. If the latter, then it should be publicized so others can use it. Being able to de-register from the Land Court sounded odd to me and should be explained further. Does one need an attorney?

Regarding the statements from Ka’eo Duarte of Kamehameha Schools, it sounds like they are on board and have identified 90,000 acres if I heard right. Everything should be done to facilitate and push them along to implement their plans.

More Financing Options - DOA staffing and budgets for the loan program have been hammered and could be strengthened to be more usable if demand is there. Looking at the Special Loan programs at DOA would be advisable; like young/new farmer loans, administratively approved loans, and the basic loan limits for agriculture and aquaculture. Look at them to see if they fit today's needs. The process for the Lender of Last Resort requirement, i.e., two rejections from commercial lenders, could be examined for improvements in today's market. Participation loans with private lenders could be used more, and we need to find ways to make them attractive.

I am not all that familiar with Federal, USDA, loan programs, but I feel that they can provide more money, longer term and lower interest. These are all good things. Diane Ley is very supportive of Hawaii agriculture as a former deputy of DOA. Getting the word out on these opportunities should be emphasized.

Cooperative Formation - Cooperatives are of course a good idea, when they work. They help small farmers band together and take advantage of economies of scale, among other things. My impression based on my experience with this issue is that getting professional management is the key to success. The Feds can help set up Co-ops too.

More Farmer Assistance - Farmers in Hawaii need development and technical assistance (extension). This has been the basis for successful U.S. agriculture. (a) Setting up mentoring programs is a great idea, if farmers are willing to create competition for themselves; (b) Generally I have found that technical assistance (e.g., production improvement) is different from development assistance (finding a site, marketing and helping with the permit process). The Aquaculture Program did both. Extension agents generally don't do development assistance, but are essential at suggesting crops and technology. I suggest DOA staff, given the resources, could be of greater help with development assistance. The hand-holding function by the State lead agency can be very valuable and sends a message; (c) Looking at UH Extension capabilities in light of present and future needs would be a good idea. My understanding is UH Extension is understaffed for the demands; (d) If there is "good will" to be harvested from the seed companies, then everything should be done to partner with them for whatever they are willing to do to help the industry develop to make Hawaii more food self-sufficient.

Market Help - If more of certain crops are grown and more kinds of crops are grown, then the small farmer will need help in marketing locally and exporting. Generally small farmers don't have the expertise. The State should help build on the successes of Farmers Markets. The State could, given the resources, do more with generic marketing and buying local campaigns. Also, making more funds available to local commodity associations for marketing programs could help the situation.

Conclusions - Hawaii is one of a few states with an entire department devoted to agriculture. So it’s a priority, although most of the functions are regulatory and not development.

I was in Washington D.C. last week and saw a friend in USDA who was there. He is fairly high up in NCRS and I noted that he frequently used the word "customer” when he spoke of the services they provided to farmers. This reminded me that during the Waihee Administration we were told the public were customers and we should treat them like that. The concept needs to return to State government for developing food self-sufficiency.

Someone reading this may think I am advocating a greater role for State government. I am. State government needs to be a leader and facilitator in implementing these actions. Government agencies were formed and empowered because the challenges were bigger and more complex than what collections of individuals or organizations could resolve. Clearly, the greater food self-sufficiency issue fits this definition.

To spur rapid progress and achieve this important goal, I believe government needs to lead, as well as collaborate and partner (according to Lee Iacocca: lead, follow or get out of the way). The goal is too complicated for a collection of individual companies pursuing self-interest to make the progress required.

* * * *

Want to know who wrote any of these remarks and takeaways? First try to guess. Then contact me at fidell@lava.net and I’ll let you know.

Don’t forget ThinkTech on OC16. We’re making a movie of this program and will play it at 10:30 p.m. on November 13, 2011 and throughout the week to follow. Tune in then.

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