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 Response Page - Adams  Interview -      
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These comments are responses to the statements listed below,
which were generated in regard to the
John Adams  Interview of
08-16-2013.
 

Healthiest metro economies employ creativity, entrepreneurship, hard work

                                                                                                    OVERVIEW

States don't have economies; metropolitan regions have economies, says John Adams, Professor Emeritus of Geography, Planning and Public Affairs at the University of Minnesota. States have budgets, not economies, he says, while metropolitan areas are economic building blocks of the national economy.

Adams describes three main ways for a metropolitan economy to support itself: (1) the Bernie Madoff, or theft, model, in which cartels act to curtail competition and to charge prices higher than an authentic free-market price; (2) the Steve Jobs, or innovation and production model, which is based on creativity, entrepreneurship and hard work; and (3) the lottery model, based on luck, in which a region sells its unearned wealth in exchange for products and services imported from elsewhere. He says the healthiest regions support themselves with the innovation and production model. The Madoff and lottery models undermine economic health, promote inequality in society and curtail economic growth.

He points out that businesses have both profit and loss statements and balance sheets each year, while governments look only at whether revenues-in match expenditures-out. Without balance sheets, governments don't account for depreciation or for future liabilities, such as debt or pension obligations.

Adams concludes that a negative trend is that we're moving away from an economy of earning money to an economy of making money. But a positive trend is an increasing attention to thinking in balance sheet terms about what we do today and its implications for tomorrow. 

For the complete interview summary see: Adams interview notes

Response Summary: Average response ratings shown below are simply the mean of all readersí zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

Readers were asked to rank the following on a scale of 0-10 ("not at all important" to "very important").

1. Value of topic. (9.1 average response) How useful to you is today's interview?

2. Value of further study. (8.4 average response) How important is scheduling additional interviews on this topic?

Readers were asked to rate, on a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, the following points made during the discussion.

3. One-sided schemes harmful. (9.1 average response) Schemes allowing people to receive economic benefits for themselves without giving something equal back to the economy are undermining the nation's economic health, promoting social inequality and curtailing economic growth.

4. Narrow interest groups benefit. (9.1 average response) Such schemes occur when narrow interest groups, without any investment on their part, receive subsidies or other special privileges at public expense.

5. Transactions should be balanced. (9.1 average response) By contrast, in a fair and efficient economy parties to any transaction are informed, transactions are voluntary and benefits are equal on both sides.

6. People feel entitled today. (8.3 average response) Today many people feel entitled to what they're receiving, rather than feeling that what they receive needs to be earned.

7. US under-investing in youth. (8.2 average response) The nation is under-investing in young people to create the entrepreneurs, business leaders and productivity needed for the future.

Response Distribution:

Not at all

Slightly

Neutral

Moderately

Very

Total Responses

1. Usefulness of topic.

0%

0%

0%

41%

59%

17

2. Importance of further study.

0%

0%

18%

35%

47%

17

 

Response Distribution:

Strongly disagree

Moderately disagree

Neutral

Moderately agree

Strongly agree

Total Responses

3. One-sided schemes harmful.

0%

0%

6%

44%

50%

18

4. Narrow interest groups benefit.

0%

0%

6%

33%

61%

18

5. Transactions should be balanced.

0%

6%

0%

33%

61%

18

6. People feel entitled today.

0%

0%

6%

61%

33%

18

7. US under-investing in youth.

0%

0%

6%

72%

22%

18

Individual Responses:

Ray Ayotte (10) (5) (10) (10) (10) (7.5) (10)

Kevin Edberg (10) (5) (10) (10) (10) (7.5) (10)

1. Value of topic. The rent seeking/rent capturing concepts are of great value if we/anyone are to re-engage in a different means of public governance. I'm cynical about our ability to collectively achieve that. (The current discussion about stadium construction and rent-seeking are a poster-child). The concept of a state's "balance sheet" in addition to its "income statement" is a powerful concept, probably more accessible to most of us (and the general public) than the topic [of] rent-seeking/rent-capturing. It is very worthwhile for anyone to champion a greater understanding of the forms of wealth, and particularly how wealth has been transferred in our history to create our well-being today. (Think Homestead Act for individuals, westward expansion of railroads paid for by land grants, mining of iron ore/taconite, and harvesting of 100-300 years of white pine growth created fortunes and prosperity (and some very concentrated wealth) for enterprises connected to transportation, mining, and lumber in a previous century. How and whether these forms of wealth transfer still work in the 21st century (mining aquifers, for example) would be a useful public discussion.

2. Value of further study. See comments above.

3. One-sided schemes harmful. Of course the Wilfs and others will suggest that the fans (distinct from the general public) will capture the "full and fair value" of the investment via the watching of a game. Panis et circenses is a more appropriate analogy.

4. Narrow interest groups benefit. And the more we create disparate wealth through policy and action, the more we enable and incent the recipients of that wealth to use more and more of it to protect their station.

5. Transactions should be balanced. True. But the economy that was known to Adam Smith is nowhere close [to] the economy known to us in the 21st century. There is a value in asserting the overall value as the benchmark for what an economy "should" be like. A greater value is in trying to understand how that applies in a global economy with great wealth disparity, instantaneous communication of information and ideas, virtually instantaneous transfer of capital, and not-instantaneous-but-pretty-damn-fast intercontinental movement of goods and people.

7. US under-investing in youth. No question. The folks who hold wealth are old...which is why we spend so much money on health care in the last 6 months of life, and under-invest in pre and post natal health care. The same for pre-K education. This is where the concept of a balance sheet comes in handy, with inter-generational markers for wealth and well-being.

Bruce A. Lundeen (10) (10) (10) (10) (10) (7.5) (7.5)

Don Anderson (7.5) (7.5) (10) (10) (10) (7.5) (7.5)

Dave Broden (7.5) (10) (7.5) (10) (10) (10) (10)

1. Value of topic. A well thought out and expressed view of the workings of the economy and how to view it. A fresh and innovative look that challenges some of the conventional thinking and yet gives new insight.

2. Value of further study. Understanding the economic models or thoughts from differing views is critical to formulating a vision of moving forward for economic and quality of life growth in Minneso.

3. One-sided schemes harmful. This needs more discussion and understanding of the focus of the point. If redistribution without added value (i.e., work) is not included, that is not a plus; if incentives for work and opportunities enable equality, that is another direction. Finding the right balance is the challenge.

4. Narrow interest groups benefit. Subsidies or privileges without added value in some way are often (not always) a misallocation of resources if looked at from a balance sheet.

5. Transactions should be balanced. This is true but in reality we need to find a system that strikes a reasonable balance among multiple approaches of subsidies/special actions and voluntary actions.

6. People feel entitled today. The concept of entitlement has become a base for much of the economy rather than the concept of "earning" the rewards.

7. US under-investing in youth. This question is so broad it is difficult to answer. If the subject is education, the answer is investments are poorly applied and may be lower than required for results. If we add in other investments in various technologies or objectives that support the goals of the question, then that is a question of allocation of resources.

Dennis L. Johnson (10) (10) (10) (10) (10) (10) (7.5)

7. US under-investing in youth. Young people are strongly investing in themselves with massive student loans to achieve their educational goals.

Marina Lyon (10) (10) (7.5) (7.5) (2.5) (5) (7.5)

1. Value of topic. Everything shared was important. I especially appreciated the balance sheet concept for governments. It would be very interesting to see the extent of financial and other issues at all levels of government.

2. Value of further study. I'd love to see a study that [puts] large blocks of business activity in Minnesota into John's categories. It would also be interesting to learn which industries seek and receive the most subsidies from governments, providing a glimpse into how hard this might be to change.

5. Transactions should be balanced. Whether benefits are always equal is questionable. Sometimes people get into transactions out of necessity (foreclosure, short sales, etc.) where equality is not a promised outcome.

6. People feel entitled today. What's the definition of too many? For me to agree, I'd some further definition of this class of people.

Paul and Ruth Hauge (7) (9) (8) (7) (8) (8) (9)

Tom Spitznagle (10) (10) (10) (8) (10) (10) (7)

Chuck Lutz (9) (8) (9) (8) (8) (6) (8)

Fred Zimmerman (10) (10) (10) (10) (10) (10) (8)

Johnís session was both excellent and useful. We should be more detailed, when concluding we are "under-investing" in young people, however. Clearly, we are presently spending a lot of money, but it is doubtful that we are getting what we are paying for. We would all like our young people to be better prepared, so there is sentiment in favor of investment. But we are going to have to redesign the delivery process if we want better results.

Wayne Jennings (6) (7) (9) (9) (9) (7) (8)

This is a hard topic to get a wrench on but very important particularly about unfunded pensions not showing up on public balance sheets, which we don't have.

Lyall Schwarzkopf (10) (9) (9) (10) (9) (9) (9)

When I was City Coordinator, I wish I had known these principles. I would have recommended some very different ideas.

Fred Senn (10) (10) (10) (10) (10) (10) (7)

Can you tell I'm a fan of John Adams?

Bright Dornblaser (8) (5) (10) (10) (8) (8) (10)

Roger A Wacek (na) (na) (5) (5) (10) (10) (5)

Gene Franchett (10) (10) (9) (9) (9) (7) (9)

Tom Swain (9) (8) (9) (10) (10) (9) (7)

    

The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions,
reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   David Broden,  Janis Clay,  Bill Frenzel,  Paul Gilje,   Jan Hively,  Dan Loritz (Chair),  Marina Lyon,  Joe Mansky, 
Tim McDonald,  John Mooty,  Jim Olson,  Wayne Popham  and Bob White


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