It's All About the Pie or Tera's View from Madison

I live in Madison, WI.  For the past week people I know around the country has been asking me whether these protests are as real as they appear on TV.  They ask me what I think about them; what would be ‘tera’s way’ of solving this.   Would I raise taxes on everyone? Cut spending?  Cut salaries?  Aren’t we just squeezing one side of the balloon only to have it pop out somewhere else? Isn’t this all just inevitable?

I think that all of this -the labor protests and the tea party counter protests and the anti-intellectual animosity, and the anti-science belief system, and the increasingly bellicose values system -  are just symptoms of a much, much bigger economic problem that we’ve been denying for years: our country’s economic competitiveness is eroding at an accelerated pace.   If we use the typical pie analogy, we live in a country where the pie is no longer getting appreciably bigger every year.  In fact, we’ve come out of a period where the pie actually shrank quite considerably and at the slow rates of growth we are going to be lucky to produce in the future, the pie may take years to get back to where it was, never mind get bigger.

So what happened when the pie was getting bigger?  It used to be that people in the highest income brackets could look forward to their wealth increasing every year at an accelerated pace.  Thanks to financial engineering, they could actually troll for investment deals that yielded 50% annual return.  They came to expect at least 30%.  Meanwhile the investor class in places in Asia were still entrepreneurs who were thrilled to see a 5% return and would work their hands to the bone to see these businesses succeed.  There were still entrepreneurial people like that in the US, but they had a hard time justifying the risk when they could work for someone else and make decent money and they had a hard time finding people to invest in their businesses.  The companies that started tended to be those with low upfront investment and high potential for leverage. Even the poor did better as a rising tide did in fact raise all boats.  Governments had increasing tax revenues without increasing tax rates and everyone seemed somewhat happy.

Then came the great unraveling.  Suddenly investor returns dropped for everyone.  The banks were in trouble.  The institutions that guaranteed the banks were in trouble.  The stock market – where most of the middle class had their 401k’s – fell.  The layoffs began.  The pay freezes and pay cuts began.  Meanwhile our population got older, used more expensive medical care.  The pie shrank.

What is happening in Madison is a fight for the crumbs that are left as we race to the bottom.  We won’t hit the bottom overnight, but it will happen, because we are spending all of our energy fighting over our shares of a shrinking pie instead of grappling with the things that are causing the pie to shrink in the first place. 

We cannot do things the same way we’ve always done them when the rest of the world is doing them cheaper and better than we are.  We have to be innovative and create opportunities in emerging economic sectors, things like green energy and biotechnology.  So how have we done at this?  Our manufacturers of solar panels are moving to China.  The largest wind turbine companies in the world are not in the US.  China is pushing capital into the sector with the goal of becoming the global leader in a decade; we can’t even manage to create a predictable enough incentive system to encourage investment in the sector.  In biotechnology, places like Korea have made advances in biomedical research that cause our ethical stomachs to roil.  But instead of advancing our ability to drive the ethics of how the technologies are developing by being the technical leaders in the field, we refuse to allow the research here and surrender both the economic promise and ethical leadership to countries we already know we don’t feel comfortable with.  China and India will soon become the largest consumer markets in the world, the largest manufacturers.  When that happens, they will own us.  And you think the pie is shrinking now…

Meanwhile our leaders punish the most vulnerable among us.  Medicare and Medicaid benefits are set to be cut.  Already doctors are refusing to see more Medicare and Medicaid patients, so the most vulnerable among us are going with no medical care.  Our global competitors, not just in Europe but also the so-called developing world, have governments that cover basic care for all of their citizens.  The result is that US companies are less competitive because they have to cover expenses that governments cover elsewhere.  Why business leaders are so resistant to government-funded health care is beyond me. 

And why the rich are so angry is also beyond me.  The Gini coefficient in the US, which measures the distribution of income across income groups, shows that incomes in the US are more unequal and skewed toward the wealthiest among us than at any time in our entire history.  We look like a South American dictatorship. Private sector ideology about the role of government is as much at fault as government’s failures to do what’s right.

No one seems to be doing anything to help grow the pie.  In its zeal to fix the financial crisis, the SEC has imposed the same regulations on small community banks as it did on the big banks.  The only problem is that most of the lending that creates jobs in the US comes from smaller banks and they didn’t cause the problem in the first place.  Small banks are now disappearing at an alarming rate because they can’t recapitalize fast enough, taking their small business lending with them. 

Even the SBA, supposed to be an institution that supports entrepreneurs and entrepreneurship, now has such onerous clauses buried in the unlimited personal guarantees they require of entrepreneurs that no one in their right mind would sign up for them.  Banks that have survived have added the same language.  Basically, the only way an entrepreneur can get a lender is to sign up for unlimited personal guarantees that now continue even if the entrepreneur no longer runs or even works in the company.  The bank can change the amount, term, interest rate of the loans without even consulting the guarantor as long as there is someone in the company that is authorized to sign for the company. 

Finally, investors are still more interested in chasing 50% returns even if they come from overseas rather than investing in companies that will create the jobs of the future at home. With all of this going on, what entrepreneur in their right mind would start a business in the US? The best and the brightest graduating from places like MIT are voting with their feet and moving overseas. 

It didn’t used to be this way and it doesn’t have to be this way now.

So what would I do in Madison?  It’s actually quite simple: equitably share the pain and address the real problem.  As long as the pie is shrinking, government will have to shrink with it.  We have to cut spending and raise taxes.  And if we want to stop this death march, we need to use every means at our disposal to create a climate that encourages innovation and entrepreneurship. 

We need to grow the pie again.

Dear Dode

Dear Dode,

I often do think of you.  You are my ex husband’s mother, one of the most truly generous, profoundly happy, and most courageous people I’ve ever met.  I’ve been truly blessed to have you in my life and in the lives of my children as a role model and grandma.

Last year (I think it was last year, time has blended into oblivion over the past few years) my kids told me you were having trouble swallowing.  You had half of your neck removed when you were a young, poor, single mom with thyroid cancer.  In those days they removed your entire thyroid and half your neck, then bombarded you with radiation.  You just wanted to live long enough to see your kids graduate from high school.  In fact you’ve lived long enough to see many of your grandchildren graduate from high school.  True to form, you refused to have the tests for throat cancer done because you didn’t want to have to survive the treatments.  Once is enough.  So you’ve stopped eating solid food unless you can, started living on a liquid diet, and lost a lot of weight.

When my kids told me about you, we agreed that you had to have teraswhey.  I hear you like it, and even saw me last week on the Dairy Heiresses show that featured me among other women leaders in the dairy industry in Wisconsin.  I hear you have stopped losing weight and that the predictions of imminent serious problems have not materialized.  You have a boyfriend and still inspire everyone who meets you.

All the evidence says that it is your completely infectious positive attitude and joy in the face of all of life’s adversities that is keeping you with us.  I like to think that teraswhey is playing a small part as well.  All of that protein, in a highly bioavailable liquid form, is feeding your muscles and bones, so while you can’t always eat solid food, you are feeding your cells in a really positive way.  Cancer, aging, malnutrition, wasting have been associated with glutathione deficiencies that can be addressed by eating whey protein. Your body is busy converting cysteine to glutathione, and the glutathione is using a process known as conjugation to detoxify your body. Research has shown that the lactoferrin that is in whey can inhibit esophagus, lung, bladder, and tongue cancer in rats; it has not been tested in humans.

I’ve written this before in a letter to my Mom, but I’ll say it again to you. I wish there was a way for all of the women like you who face similar struggles in their later years to make teraswhey® part of their lives.  It says on my can that I created teraswhey® to cause extraordinary change.  That change happens one person, one shake at a time, and it starts with the people we love.

With love from your ex-daughter-in-law,

Tera

Dear Mom

Dear Mom,

It probably won’t surprise you that when I created teraswhey®, I wasn’t thinking of you specifically.  You were my mother at a distance, a person suffering from the isolation, economic deprivation, and health effects of decades of alcoholism and mental illness.  Now you are a functional, old, poor, beautiful, smart, and diabetic Mom, and one of a huge number of older people who are working hard to live out your years independently and with dignity in a country with a broken healthcare system, frayed social safety net, and a food system that’s making us all sick.

You and thousands of older women like you are struggling to live on social security checks that are $750 per month.  You qualify for $17/month in food stamps. After you pay your rent, you don’t have a lot of money left for food.  So you buy things that are cheap, most of which contain sugar and starches and carbohydrates and high fructose corn syrup that exacerbate your blood sugar problems.  You feel full until your blood sugar level collapses, and then you feel faint.  Your health care covers insulin testing supplies, but you can’t get in to see a doctor to help you figure out how much insulin you should be taking because physicians in the area cannot afford to take on new Medicare patients.  So you guess.

Many of the women who live in your building drink Ensure or Boost for a meal.  Its cheap, even recommended as a meal replacement by doctors and pharmacists.  The only problem is it contains several variations of sugar and high fructose corn syrup:  high carbs and low protein, exactly the opposite of what a diabetic should be eating.  I’ve always suspected that you drank alcohol because it was a way to self medicate your manic depressive mental states.  Now that your liver function has been damaged over the years, your body suffers from even more oxidative damage than most because it can’t efficiently detoxify.  So you suffer from a poor diet, diabetes, mental illness, and the inability to get adequate medical care.

You started using teraswhey® because I am your daughter and I gave it to you and told you it was good for you.  You like to look at my cans in your kitchen.  What you still don’t fully grasp is that my products have the power to not just feed you but also transform your life.  We talk about how the high protein, low carb, low glycemic index whey protein I give you has no fillers, additives, hormones, melamine, whatsoever.  Your eyes glaze over when I tell you that whey protein is one of the best dietary sources of cysteine and other precursors that your body converts to glutathione. Low levels of glutathione and high levels of oxidative stress have been associated with bipolar disorder, major depressive disorder, liver disorders.  Sound familiar? As a diabetic, eating a high quality, high protein whey protein shake with low carbs and low glycemic index in the morning helps you regulate your blood sugar. With more work on your diet to take out sugar, I bet you would have a shot at getting off your insulin shots entirely, or at least maintain the low dosage you are currently taking. Your shakes are also feeding your body’s muscles and helping maintain and even build bone density.  All of these things are working to improve your underlying physical and mental health, which is now your only line of defense in the absence of access to adequate medical care. 

I wish there was a way for all of the women who face similar struggles in their later years to make teraswhey® part of their lives.  It says on my can that I created teraswhey® to cause extraordinary change.  That change happens one person, one shake at a time, and it starts with the people we love.

With love from your daughter,

Tera

Why I started teraswhey

teraswhey has always been a personal thing for me.  When my kids grew up and took flight to other parts of the country, I did the only sensible thing and started a company.  Now teraswhey is another teenager for me, and it too has grown and changed and become more and more independent from me.  I remember when it was a dream in my head; now I've got a management team and 25 people in the company and teraswhey cans on the shelves all over the country.  

I feel that empty nest gaping hole creeping into my life again. I stop to reflect. Why did I start teraswhey?  Over the next few weeks I'll be writing letters to the people around me and posting them, because I find that is the best way to capture why I did this.  These are the personal stories at the root of all of this. It is my hope that they will inspire others to create extraordinary change.  We live in a world that needs it.

A teraplace

I spent this past weekend at The Clearing in Door County, WI. The Clearing is a teraplace for me – one of those places that is beautiful and earthy and authentic and thoughtful.  A place to linger and draw strength from.

I was in a writer’s workshop.  Our instructor was Jerry Apps, a prolific writer who became even more prolific after he retired from the University of Wisconsin.  He writes historical books with titles like The Barns of Wisconsin, and fiction, historical or otherwise, with titles like Cranberry Red.  Jerry is one of those wise people with a gift for making everyone feel acknowledged in his class.  Many of the people in the class were also retired or retiring, and intend to write about their lives.  They told stories of romantic trysts 50 years prior, the Normandie landing, going to the barn to milk cows because the cow's udders kept them warmer than they were in the house.

Jerry and his class got me thinking about how this generation of retirees is changing how we all see retirement.  Gone are the days (we hope) when people retire to a rocking chair at 65.  Jerry has probably written at least 10 books since he retired.  Jimmy Carter is still tromping around the world for his Carter Foundation overseeing elections or building Habitat for Humanity houses.  My own grandfather lived to be 100 and was still doing sales calls for his former business when he was 75.

The one thing that could in fact make this generation the last to live longer than its predecessor, despite all of the medical advances, is, paradoxically, nutrition.  Until now, we were living longer because we had better nutrition.  But theirs is the last generation to grow up on pre-industrialized, pre-chemical laden food. My generation had cheetos and twinkies from the get-go, which means that not only is my generation more likely to be obese, it is also more likely to face health problems that result from obesity and the chemical adulteration that has accumulated in our bodies.

One of the things I’m most proud of in creating teraswhey is that I am contributing, in my small way, to making a better option available to us as we age.  Pub Med is constantly publishing the results of new scientific research that is showing a myriad of benefits for older people of drinking whey protein.  We all know that whey protein helps muscle protein synthesis.  This is as important for the elderly as it is for athletes because as our bodies age, they begin to breakdown muscle protein faster than they synthesize it.  (It’s why grandma shrank as she got older).  Whey protein also helps enhance the body’s immune system.  In trials with the elderly with broken hips, whey protein after the surgery helped increase their IGF-1 levels in 1 week.  Had they used whey protein before hand, the bone deterioration could have been markedly different.

Sometimes we just need people like Jerry to remind us what is possible, and products like teraswhey to help us make it real.

What We Eat and How We Feel

I remember when the Internet first started, people were speculating that things like trade shows would go away completely.  Who needs to be in one place physically when you could do it virtually?  I do think that the role of trade shows is different these days, but I learn things there that I would never have known otherwise.  Here’s a smattering of what I learned at the Natural Products Expo this week.

Teraswhey is going to be featured in an upcoming book written by a psychiatrist who is using nutrition as part of how he treats his mentally ill patients.  When you think about it, that he anticipates that his book will be controversial in the psychiatric community says a lot about the dysfunction of our medical system.  Imagine someone who is bipolar who doesn’t work on regulating his or her blood sugar, for example.  He likes our whey specifically because it has the clean functionality he is looking for.  He uses it in a protein diet he recommends as part of a treatment regimen for treating depression.

An epidemiologist working with an HIV positive patient population told me that the side effects of the drugs and secondary illnesses experienced by his patients cause their absorption of protein to be severely limited.  It may take a patient consuming 120g of protein a day for their bodies to absorb half of that.  Since they are also likely to have stomach problems, the only way they can get enough protein is by supplementing with highly bio-available whey protein.  He likes teraswhey for his population because we have a range of flavors and our products aren’t chalky and taste great.

This is the year of the gluten-free cracker.  Lots of new brands and products were there.  I think it’s interesting that so many people are finding that they can’t digest gluten these days.  I also think it is interesting that people ask me whether my whey is gluten free.  I suppose its possible that people might add wheat gluten to a whey protein powder, but this is really more an issue that people have no idea where whey comes from.  I gather the average consumer doesn’t know that hamburger doesn’t come from anything other than a supermarket either so maybe this isn’t so odd.

All of this makes it clear to me that even the scientific world is starting to embrace the notion that what we eat really does impact how we feel.  That is a huge step forward.

The Future of Food isn't What it Seems

Another wrinkle in the global intrigue of potash.  It turns out that a single marketing organization called Canpotex markets 100% of the potash produced in Saskatchewan.  It’s made up of 3 of the largest producers of potash  - the Potash corp., Mosaic (i.e. Cargill), and Agrium.  That makes Canpotex the OPEC of Potash.  When food prices rose in 2007 and 2008, prompting mass protests in the developing world and a recurrence of talk of a Malthusian dilemma, Canpotex resisted production increases and allowed the world price of potash to go from $200 per ton to $1000/ton.  In 2009, farmers across the world cut back on their use of potash to save money, depleting their soil in the process.  The price of Potash fell to $350/ton.  This year it is rising again as farmers cannot continue to mine their soil indefinitely.

Free markets can be volatile, but they clear quickly and don’t produce huge boom and bust cycles.  However, where market consolidation creates pricing power in the hands of a few players, it magnifies volatility.  This has happened in all our global food commodity markets.   Worse in the case of Potash, market consolidation and power led to the mining of one of humanity’s most valuable long term assets: soil. 

In most cartels, there is an incentive for a member of a cartel like Canpotex to cheat.  When prices get high enough, one of the players can sell for a little less and lure customers away from the other members.  Or, one can increase production and sell more than their quota.  It turns out that one of the companies bidding to buy the Potash Corp, BHP, has already indicated its intention to leave the cartel. China’s Sinochem Corp. is also working on acquiring sufficient ownership to block a change in ownership if it means it will go to BHP Billiton, an Anglo-Australian mining company. This has prompted the Canadian government to indicate that it could block the transaction, saying that the cartel has provided beneficial royalties and jobs for Canadians. 

So here we have a situation where government, the one stakeholder that is usually viewed as intervening in cases of extraordinary market power, is actively supporting it.  All of which means that it may actually be the case that farmers and people around the world would be better off if The Potash Group was purchased by an Australian Company or a Chinese company instead of being a public Canadian company.

How many times these days are we faced with choices that are nothing more than the lesser of two evils?  This is what happens when we view the world within the box of how it currently exists.  The only way we can extract ourselves from this prisoner’s dilemma approach to economic activity in general and our food system in particular is innovation, disruptive innovation that creates meaningful and viable alternatives to a status quo that’s locked up by a few enormously powerful stakeholders.

Seaweed.  The solution to the potash dilemma is actually not more potash, or changing who owns the companies or how it is marketed, it’s seaweed.