Interesting article.

However, what are the practical answers to the question, "How do we develop a high-wage, highly productive economy?"

Les Rudd
Invited Member
NZMEA

Answer: improve our education standards (achieving an increase in the school leaving age / literacy / numeracy / higher education graduates).

What I find interesting is a 'economic summit' that has any other take home message... dont you?

Les, here's a couple:

- Re-introduce, or improve on Labour's planned tax incentives for R&D expenditure.
- Charge no fees to New Zealand students studying in their third and fourth years of science, engineering and IT degrees.

Luke - hear what you say, yes we need to do that, and keep doing that. As I think many would agree, we do produce some well educated and motivated people, and notwithstanding the Kiwi penchant for OE, they leave, for too long, or don't come back at all. Yes, we have L&N issues, but, see Walter K's input re. his 'Team NZ' analogy.

So why is this?

How can we avoid this happening?

(Above is similar to my original 'how' question.)

How, is still the question.

All the big expenditure projects and university graduates wont save the country from a growingly impoverished underclass.

Pushing few forward while leaving the majority of our school leavers below OECD literacy and numeracy averages wont be the answer. Front runners will take care of themselves just as they always have done! The masses need the help.

Who will ride your trains if the public does not feel safe at the station, on the train, or walking home? The costs of losing significant public rights such as safety will outweight the benefits of any tax or study incentives.

How about no kids leaving school before the age of 15? How is that for a New Zealand vision!

Les
Currently I am on my OE. For all the selfish reasons Johnny C Live would point out of course. But the fact remains: I can pay off my $45k student loan in less than 2 years working abroad, or in 5 years if I stayed in NZ.

Its not the brain drain that worries me Les. Its what happens when we all come back with our skills, money, desire for good hospitality service etc that worries me most! Back to the same position of fighting over professional work and over-inflated houseing prices. And where will that leave those without the OE benefits?

Not all roses and daiseys in the Irish example.

Luke - I was online drafting my input after your 2nd, as you were no doubt drafting your 3rd - mate, I know pal, hence the question..... if you are up in N.hemi - have a warm one for me - can't beat it, eh....

The capital is not cheap for NZ tourism. Overseas visitors often find NZ expensive (restaurants, motels etc). Tourism workers do not earn much either. The problem lies with the fact that most tourism ventures take huge debt, and service the loan at high cost. The situation will change only if property speculation ends. The housing and farm price speculation also pushes up the overall business cost of financing, including tourism.

Solution to all, international equality brought about by international reform of the international monetary system.

Lets not stand by and allow New Zealand to be reduced to a low wage economy based on servicing the leisure activities and food production of only wealthy elite.

http://www.multinationalmonitor.org/mm2003/072003/

John Key;
"In the right conditions you could attract 200 banks to register here - each with a CEO and staff. You could attract insurance companies. Bring back lots of Kiwi accountants and lawyers. Single out clusters - such as high-class yachts - or other special sectors as the Irish did."
http://www.nzherald.co.nz/company-taxation/news/article.cfm?c_id=691&obj...

Urry, John (1995) Consuming Places Book Review:

" By the year 2000 this will be the largest industry in the world, in terms of employment and trade, and it is already having profound environmental consequences. These stem, first, from the fact that much tourism is concerned with, in a sense, visually consuming that very environment; second, from the enormous flow of people carried on many forms of transport which enable tourists to gaze upon often geographically distant environments; and third, from the various transformations of the environment which follow from the widespread construction of tourist attractions and from the incredible concentrations of people into particular places. (Urry: 173)

We consume, devour and digest places so finally there is nothing left it seems. Beauty spots are nothing more than a commodity. And indeed the commodification of landscape is the phenomenon that has brought the most significant changes to our lifestyles.

So what about the future of our planet if all places of natural beauty, all those lovely beaches and tropical forests are to be 'consumed' or spoilt by crowds of tourists? Is it inevitable that while they escape from the monotony and drudgery of their lives in crowded and polluted cities they will change forever the tropical island paradises or quaint villages in remote parts of the world?"

http://elt.britcoun.org.pl/elt/rev3.htm

Roger - re:

"Any-one who can wait-table or bar-keep in a thriving business is NOT low skilled !"

They are not low-value.

However, in terms of aggregate econonic outcomes, how would it be if said people you speak of could find career avenues in higher value (income) sectors? Would they want that? Would it be good for NZ? How could we go about making that happen?

Re. your other points about accepting our lot, do we need to? Will we need to?

sam.p - you say:

"The situation will change only if property speculation ends. The housing and farm price speculation also pushes up the overall business cost of financing, including tourism."

So how should we go about resolving this issue?

(Be quick mate before we are flooded with well run arguements that have traversed most blogs on this site - I say again, be quick!)

We need to establish a 'tipping' culture that encourages 'good service' in NZ to make-up for the income shortfall. The US is second-to-none for service in Hospo and Tourism, mainly due to the tax-free 'tip' driver - and the good ones do very well. As with all tourism around the world, more and more bookings are made through foreign interests (eg. booking agents and foreign owned chains), meaning the tourism dollar doesn't actually arrive in NZ. We've got to find ways to get the money into the pockets of the people 'on the cold face' dealing with tourists, giving them the NZ experience.

As for higher value / higher income industries, New Zealanders have got to take their hands out of their pockets and support some of the great entrepreneurial ideas being generated every day in this country, and stop their fascination with the imploding domestic property industry - it does none of us any good!

@ Carl - the last thing we need is an american tipping culture. My experience has not been of great service because of tipping but rather the same service all round. If the job is of value then it should be paid as such, with the price up front. Tipping in the US does not always get good service, but failure to tip will produce extremly negative service..rather different to bad service as such.

And I fail to see why Tourism is neccessarliy a low wage, low skill enterprise. If all that is invovled is showing people around the sites, that may be the case, but tourism and tourists expect more. And please NZ can accomodate way more tourists than now with minimal impact. It's all about how its controled and managed.

Income aside, it used to be that NZ's society and property market was a safety net to poorer workers who could retire somewhere nice and live cheaply with a roof over their head, vegetables in the garden, fishing rod and book to read. The goal shouldn't be to earn more income but to not need income?

Quite right Andrew. But look on the bright side. Where else would BA graduates get jobs?

Les - A very interesting article by Michael Hudson re how Social Credit very nearly prevailed in USA in 1932;
The Goldsborough bill

No, there is no need for new parties; only the education of the people is necessary. Once the pressure from the public is strong enough, all the parties will agree with it. A fine example of this can be found in the Goldsborough bill of 1932, which was described by an author as a "Social Credit bill" and "the closest near-miss monetary reform for the establishment of a real sound money system in the United States":

"An overwhelming majority of the U.S. Congress (289 to 60) favored it as early as 1932, and in one form or another it has persisted since. Only the futile hope that a confident new President (Roosevelt) could restore prosperity without abandoning the credit-money system America had inherited kept Social Credit from becoming the law of the land. By 1936, when the New Deal (Roosevelt's solution) had proved incapable of dealing effectively with the Depression, the proponents of Social Credit were back again in strength. The last significant effort to gain its adoption came in 1938." (W.E. Turner, Stable Money, p. 167.)
http://www.michaeljournal.org/plenty50.htm

http://www.scoop.co.nz/stories/PO0812/S00283.htm

Some ideas on how we achieve a high wage, high productivity economy.

Number 1 "“ Reintroduce the R&D tax credit. Government should do what they have tried to do with the RMA "“ de-bureaucratise the system. Other countries can get this to work, why can't we? Not long after it was introduced I started to develop concerns on this aspect and I believe it comes down to the seemingly higher "˜bureaucracy factor' in New Zealand. It was always going to risk prone with the restrictive Frascatti definition of research probably being pumped down the throat of IRD by FRST. New Zealand companies need this as little r, bigger D, and the system should reflect this and the culture of small medium enterprise firms in New Zealand - not Northern Hemisphere sme cultures.

Number 2 "“ Tax credit 3rd party investment in private sector R&D. You might have different rates for start-ups. Oaks come from accorns.

Number 3 "“ First year full rate depreciation on plant and patent expenditure.

Number 4 "“ Tax credit firm sponsored training and education focused on management, leadership development and new product development.

Number 5 "“ Reduce corporate and income tax "“ by ditching the "˜Intent Rule' and introduce a "˜capital gains tax'. (Family home/s exempt.) Do so in a way that leaves the tax take neutral, so income and corporate tax can be reduced. Along with other measures this would have an impact on inflation drivers such as housing/land inflation*, however another important impact would be re-balance investment flows to productive activity "“ maybe prospering "˜New Zealand Investment Trusts', firms/exporters I refer to in Number 6. The money flow diversion would help with property inflation but the *other measures that could also help are "˜ring-fencing' investment property losses and appropriate de-constraining of land supply.

Number 6 - Control inflation using a fiscal method. Singapore use such an approach with a compulsory savings scheme and varying contributions with inflation. However, I suggest the use of a non-complusory complementary tool to the OCR called the Reserve Capital Rate (RCR). This rate would also be set by RBNZ and it's purpose would be to direct (save) money to a "˜reserve capital account' associated with any loan, even credit cards. The RCR would apply to both domestic and commercial borrowers. Funds in these accounts (or one aggregate account per person or business) would be owned by the borrower and be held in reserve until released at some future point on the inflation curve.

This kind of thing is easy to implement and the terms tax, compulsory or remove are nowhere to be seen. (These are not great motivational terms!) At worst, it's the less nasty "˜delay' word. It need not restrain choice any more than choice is restrained now and it's no more compulsory than having to pay all the interest component to a bank/lender. With this mechanism you'd get some of it back, that is, the RCR component. It's you money why lose it to overseas lenders, off-shore bank shareholders "“ keep it here in New Zealand.

Consider the following, From early 2004 RBNZ started to ramp up the OCR in particular due to the effect of house price inflation. Let's suppose RBNZ had access to the RCR as they started their tightening. Let's pick an arbitrary point to tighten with the RCR, rather than just the OCR, say April 2004, when RBNZ increased the OCR to 5.50% with a 0.25% increase. Say that 0.25% of interest load was directed to any loan's associated "˜reserve capital account'. By October of that year RBNZ had increased the OCR to 6.50%, but had they used only the RCR for these increases that 1% of interest load would be in "˜reserve capital accounts' - not heading offshore to foreign lenders and their shareholders, never to be seen again. (Fixed rate mortgagees, read on.)

The aggregate effect of OCR and RCR would have meant inflation was controlled as intended with the OCR, but better than it was. This is because the OCR would have remained lower thereby not allowing the banks to so easily attract foreign loan capital, in excess of our real needs, as off-shore money could see the OCR going ever higher as our banks insulated borrowers from it's effects with ever increasing use of fixed rate mortgages. (Nearly 80% of mortgages are fixed rate.)This became a self-exacerbating loop and the irony in this situation is that it actually served to increase inflation, not reduce it. With the RCR this loop is effectively broken and the negative effects on inflation control moderated, not just because of the throttling of money supply, but because of the immediacy associated with the RCR's application. believe the net effect would have meant lower and less rapidly rising inflation, with all that entails, eg. better priced housing, an exchange rate more reflective of real trade flows than speculative money flows; not reaching 8.25% on just an OCR based system, with all what that entails - paying more in interest load - which you'd never see again don't forget. (Fixed rate mortgagees would be ok "“ there'd be no hefty break fees!)

Let's think about what is happening now. Essentially we are experiencing an external economic shock not of our own making. (Notwithstanding the fact that we were well into a recession of our own making because the application of monetary policy was less and less effective.) Anyway, as the OCR is reducing the banks are struggling (Hmm?) to pass the benefit on in retail rates, because they are filling holes, building risk-reserves and money is harder to come by out there. However, if RBNZ had an RCR to play with too, most of the loosening we need could come in the main from a reduction in the RCR. Again it's the benefit of immediacy with this tool. (Fixed rate mortgagees, this is the upside for you guys.) Plus we have funds in the associated "˜reserve capital accounts' that could be released as appropriate.

Conditions for release in more benign times would need to be looked at in detail, but the release point would be controlled by RBNZ according to the existing "˜Policy Targets Agreement'. Perhaps you might give a degree of tax credit for transfer into a retirement savings account/plan/Kiwisaver to encourage longer term saving for individuals "“ if that is their choice. Or, they might put it in something like a range of "˜New Zealand Investment Trusts' which aim to invest in good Kiwi businesses - simple as that, it don't matter what they are focused on in terms of type of business, but they'd be Kiwi businesses. Government could help set up these trusts and maybe retain a stake, BUT, they'd be run by non-Government managers.

Legislation would be required making it illegal to lend for profit without arranging facility for deposits to be directed to a borrower's "˜reserve capital account'. The location of "˜reserve capital accounts' could be regulated by RBNZ and I'd suggest held only with institutions of highest repute and credit rating, or maybe RBNZ. This would stop profligate issue of funds against the intention of the RCR mechanism.

For savers disappointed with perceived lower interest rates, it should be noted that after the actuation point of the RCR in a tightening cycle, inflation would be under better control meaning purchasing power is retained. In the long run other avenues of sustainable investment would emerge, like those prospering "˜New Zealand Investment Trusts' and firms/exporters in the productive sector and maybe more diverse finance companies not prone to going bust because we get a wobble in the property market, because there would be less wobbles and more sustainable diverse investment opportunities in the productive sector. In addition savers deposits should increase as general wealth increases with what that implies for those living on savings.

As for importers who might complain about a lower exchange rate, it would be more reflective of real trades flows and we'd actually get wealthier based on our productive sector being more competitive and so we'd still be able to pay for our LCD TV's and flashier cars, but in the main with a lower net debt component. (All good.) The macro net effect would be a reducing current account deficit, which would lower the risk premium off-shore lenders seek from us as a deficit nation, which is of no small proportion as you well know, thereby delivering lower cost loan capital in the long run. Hence a virtuous cycle for increasing national wealth, and all that implies.

Domestic inflation could be more precisely targeted by RBNZ while leaving the OCR relatively lower therefore not leading to an over-valued exchange rate reflecting speculative money flows rather than real trade flows, thereby weakening our export sectors with all that entails.

The aggregate payment load of the two rates would be less than with just the OCR, as inflation would be more effectively controlled.

It'd be useful in that it more directly opposes our innate inability to delay gratification, and with it in application at any time, people might be more inclined to think if they actually do need that great looking LCD TV or flashier car. However, if you can't wait you'll get the RCR component back eventually - use of your money is simply delayed, not lost down the gurgler forever. It's your money, so why should you give it away unnecessarily to bankers, credit card companies and their shareholders?

Number 6a - Isn't it about time we had a committee like BOJ, BOE and FOMC, setting rates, not just one individual? As good a person as an RBNZ Governor is, and I know they take advice before making the final calls, a committee would be seen to be less influenced by outside interference?

This would all hopefully help diversify and boost exports across all sectors that can get the market pull to make a buck, because more of that buck would be their's to keep and help keep doing the same "“ make a buck. Notice there is no picking winning sectors, firms or size or types of firms here - let the markets do that, and they will if sectors and firms exhibit "˜winning behaviours'. So this is about supporting those behaviours, which are most critical to the productive sector in generating wealth for the nation. (Stopping us going bankrupt!) It doesn't favour exporters over non-exporters either, as some non-exporters are directly in the supply-chains of exporters and should not be discriminated against on this basis, (as they are in the grants system)and nor should any business that only supply to the domestic sector, as what they supply can substitute imports and/or support exporters and their employees "“ if they do it well.

Also I'd not as yet simply lower corporation tax as the sole solution as Maggie T and Ronnie R did because of the context difference. In that their economies, although while munted when they came on watch, they had more dimensions than the likes of NZ and so re-investment occurred over a broader range of activity/sectors, which in time led to adjustment of shape and growth. Although the lucky blighters had a larger domestic sector and also pharma and defence, those economies, even in the shrinking sectors, still had a broad capability to systematically innovate across a wider range of activity, than I believe is possible here in NZ at the present time. Once the wider innovation system has legs in both the private, and public sector, then we could remove some of the "˜winning behaviour' incentives (maybe) and reduce corporation tax, without fear that the benefit would all simply go to wages and dividends (ever greater portion going offshore at present) "“ once the habit of investment in innovation is formed, a sustainable portion should end up being recycled into the supporting the "˜winning behaviours' of enterprises producing anything from wool, wood, whey, widgets, washing-machines, wirelesses or websites.

Much of this thinking existed in NZMEA when I joined it as Canterbury Manufacturers' Assocation in 2003. That is because it has been derived by smart business people who know this formula works and could work better for them, with more of the right levers in place. My main inputs have been 1) the RCR idea, which came after closure of the Select Committee Review of Monetary Policy, and I don't think it would have made any difference to the latest outcome of their work, sadly. And 2) to utilise a couple of books about 'complex adaptive economics' that helped give more language and thinking to use in supporting the policy advocation. I completed reviews of these books for the association newsletter and they are now on the top part of this page on the MEA website:

http://www.mea.org.nz/events.aspx

Culture and Prosperity: the truth about markets "“ why some nations are rich but most remain poor. John Kay, 2003, Harper Business. Just briefly, clipping from the review:

John Kay is a professor of economics with London School of Economics and Oxford University, and writes columns for The Financial Times. I got interested in this work because he sees an economy as a "˜complex adaptive system'; that generation and maintenance of a nation's wealth is more dependent on the quality of and inter-relation between the social, political and cultural institutions of a nation's markets, and the central role of pluralism in economic advancement is essential. Plus, it really got me that he cites and analyses Argentina and New Zealand(!) as examples of countries that were onces rich but are now in the "intermediate-rich list" - not far off being considered poor!

The Origin of Wealth - Evolution, Complexity, and the Radical Remaking of Economics. Eric D. Beinhocker, 2006, Harvard Business School Press. Again just briefly:

Beinhocker is a practical thinking McKinsey man. His work, is copiously referenced and John Kay endorses the work on the front cover of his book as, "˜Unquestionably the most important business book of the year.' This is no surprise as he clinically, elegantly, but very respectfully, challenges many areas of Traditional Economic theory and replaces some with complex adaptive approaches, while refuting views that economies are like closed equilibrium systems characterised by predictable cause and effect relations tending toward stability. He shows that a characteristic of complex adaptive systems (economies) is that they run on an evolutionary algorithm, from the bottom up, and that gives a logical theoretical substrate to the pluralistic support of "˜winning behaviours' approach. Finally he does a useful chapter called "˜Politics and Policy "“ The End of Left versus Right' that includes a very interesting section entitled "˜Left-wing Utopias and Free Market Fantasies'. It's not a promotion of Tony Blair's "˜The Third Way' and therefore not simply about profit fuelled socialism and gravitation toward centre politics in the first world. From a complexity point of view, the critique of the left is quite obvious "“ you cannot centrally plan evolution. (Unless your name is God perhaps!) For the right, free markets are not as free, fair and efficient as theory predicts and so dogmatic assertions of "˜leave it to the markets' are as flawed as central planning. Rather the role of the state is to create an institutional framework that supports the evolutionary mechanisms that underpin markets, striking a balance between cooperation and competition while best shaping their character to serve the needs of society. The video of Prof. Paul Callaghan's Royal Society lecture that I referred to in the full book review is available here:

"˜Beyond the Farm and the Theme Park'

http://www.hotscience.co.nz/video_detail.php?videoid=169

Firstly, it is good to see Prof. Paul Callaghan's great lectures "Beyond the farm and Theme Park" getting posted by more than one contributor here - you guys all beat me to it.

Secondly, and Les Rudd has picked this up, this guy hit the nail on the head:

# sam.p Says:
April 15th, 2009 at 6:35 pm

"The capital is not cheap for NZ tourism. Overseas visitors often find NZ expensive (restaurants, motels etc). Tourism workers do not earn much either. The problem lies with the fact that most tourism ventures take huge debt, and service the loan at high cost. The situation will change only if property speculation ends. The housing and farm price speculation also pushes up the overall business cost of financing, including tourism."

EXACTLY what I have been saying. The returns (temporary) from property speculation have been greater than any normal business could offer, therefore business has been starved of investment. Interest rates that would slow property speculation would kill business off long before.

As Les said:

"....Essentially we are experiencing an external economic shock not of our own making. (Notwithstanding the fact that we were well into a recession of our own making because the application of monetary policy was less and less effective.)...."

And that is because the prices of houses ceased to be DRIVEN BY the fundamentals, and ended up driving THEM; interest rates should be set by the fundamentals and house prices should be set by the fundamentals. A housing price bubble interposes itself over the entire "rest of the economy".

Les, you have a lot of good ideas, but I think you need to put the freedom of utilisation of land and resources a lot higher in importance than you do. I think that is our main problem regarding economic recovery now. Directly related, is the abundant good that would result from housing being able to be supplied at a land cost component of "value in alternative use" plus development costs (plus a fair profit). You are already familiar with my arguments. I do think that all the fancy monetary and fiscal policies anyone designs to cope with property speculation are of "finessing" significance only, compared to the land supply issue. The whole point is to prevent the problem, not collect taxes; which is about all that resulted from CGT's and loss ring-fencing and all the rest of it in nations that had those things and still had housing price bubbles develop. As long as a bubble can develop, taxes will just be "costed in"; and investment money will seek its way into the bubble by whatever means (black market finance, even).

Everything that costs money has to have been paid for by the utilisation of resources somewhere back down the economic process. The trouble is, politically we are trying to have our cake and eat it too. We think we are at the stage where we will get better and better education and better and better health and better and better neighbourhoods and environments and we just need to divide up the economic cake more fairly, and all the rest of it; all the while reducing our utilisation of resources....?

Sure, we need to utilise resources more efficiently; but doing so requires CAPITAL. We cannot utilise resources more efficiently without an increased accumulation of capital, and clearly we have been heading the wrong way there.

So as I have said before, we need a fundamental attitude shift back to that of our grandparents generation where progress was regarded as a good for which resources must be utilised in the first place. I don't know how much worse things have to get before that attitude shift will occur. Along with removing the RMA and LGA obstacles to resource utilisation, we need to simply make it less hassle and more worthwhile to be in business and hiring staff. We need to be more grateful for jobs and less ungrateful about environmental and working conditions that 90% of the world's population would kill to be able to get.

Les, you say:

"....Also I'd not as yet simply lower corporation tax as the sole solution as Maggie T and Ronnie R did because of the context difference.....etc

....... Once the wider innovation system has legs in both the private, and public sector, then we could remove some of the "˜winning behaviour' incentives (maybe) and reduce corporation tax, without fear that the benefit would all simply go to wages and dividends (ever greater portion going offshore at present) "“ once the habit of investment in innovation is formed, a sustainable portion should end up being recycled into the supporting the "˜winning behaviours' of enterprises producing anything from wool, wood, whey, widgets, washing-machines, wirelesses or websites...."

I simply do not believe that political picking of winners is ever the way to go. I think we just need to remove the corporate taxes and the regulatory barriers and just let every ingenious person do the rest. The trouble with picking winners is that malinvestment is the inevitable result. We should not build "light rail" and wind turbines and things that are fashionable but that need subsidies to be viable. We need a level playing field with a minimum of "brakes" on anything and everything, and see what prospers. If it prospers, it doesn't need subsidy, and if it need subsidy it is almost certainly a malinvestment.

I think that we are in the situation today where we actually need to at least temporarily remove 90% of the obstacles to resource utilisation if we want our economy to recover at all. It is not a case of sacrificing the environment and workers and so on to "a right wing bonfire"; it is a case of coaxing economic embers back into life by allowing them oxygen again.

There is a fabulous book by George Reisman called "Freedom of Opportunity, Not Equality of Opportunity", that explains just how much regulatory restrictions actually hamper social mobility and increase inequality over time. I am fond of saying that James Wattie would never have got his cannery business going today. It just happens that existing large businesses love regulatory restrictions because they are the only ones who can meet the costs - which keeps new competitors from ever getting off the ground.

Iain "“ Having the ability to 'beg for money' is a very admirable skill, we can learn a lot from the Americans... There's no shame in begging for money if you're a highly competent and skilled operator, or have an idea with huge potential. Most New Zealander's squirm when it comes to asking for money, whether it be a tip, or a grant or an investment from family or friends to cashflow a business venture.

The majority of New Zealand's small start-up businesses lack the negotiation skills to broker a good deal, as well as the marketing material (or confidence) to present it in a good light.

I don't know how many great ideas have landed on my desk in the form of DIY power point presentations. It's not through a lack of funding they can't get their communication right, more a lack of understanding.

I agree that lowing barriers, clearing compliance obstacles and issuing tax incentives will grease the wheels of capitalism here - great. But what are the obstacles in the way of going to 'flush' Uncle John with a business idea and asking him for fifty grand? Cultural cringe over asking (or begging!) for money? or maybe at the other end, a cultural cringe over giving money on the basis of merit?

We've seen what NZ finance companies have done to investor's money and we're seeing speculative property investments evaporate into thin air "“ not exactly sound investments for the risk averse!?

I wonder where we'd be if these NZer's had the confidence to invest some capital directly into good businesses?

The Disproportionate Costs of Resort Developments

A new report out of Oregon suggests that the fiscal costs of successful resort developments significantly outweigh their benefits -- and taxpayers are burdened with the tab. Erik Kancler of Central Oregon LandWatch explains.
Photo: Erik Kancler

All development comes at a cost. Even the smartest infill development requires dedicated infrastructure capacity and public services. Low density urban sprawl is, of course, more expensive to serve than high density infill, and by extension exurban residential sprawl "“ especially when located well outside of established urban areas "“ is even more costly.

How much more costly has always been a matter of debate.

And while a new report on the fiscal impacts of destination resorts in Oregon (pdf), commissioned by the nonprofit land use group Central Oregon LandWatch and performed by Fodor & Associates, won't end that debate, it lends real credibility to the argument that these large exurban subdivision-oriented developments are not the fiscal boon that their proponents have claimed and that they, in fact, leave local taxpayers with significant costs.

http://www.planetizen.com/node/38348

Les - you ask if a Debt Free BASED Monetary System is the answer to removing the "Icebergs" from the water. I believe history has proven that it has far more potential than the current Debt Based Monetary System.
The way that money/credit is delivered into circulation is exactly like fuel being delivered to a motor. If the mainjet in the carburetor is out of tune the motor will never run like anything but a lemon no matter what is done past that point in the system. The mainjet is currently a Debt Based Monetary one that has seen the motor clunk along over revving and under revving, clunking and smoking on a sure path to premature demise. Returning a Debt Free BASED Monetary System mainjet has been proven in the past to make the motor run far more in tune and in balance. We could even advance it to a hydrogen water pump injection system with environmentally friendly exhaust.

Les - I will have to have a look at your links on Thurs night. Have to get on the hamster wheel early in morn.
I hear what you are saying on engagement, it is a mammoth task, but we would not have even the very imperfect freedom we have now if it were not for a determined few who stuck to their guns throughout history.
It quite simply comes down to the decency of who ever controls the credit creation mechanism and the means for which they use it and the heinous impact of compounding interest as opposed to simple interest.
Have a good evening.