David Brim on business, marketing & life.

Will infrastructure projects and tax reductions improve the economy?

Contributor: David Brim January 6, 2017

Over the last seven years, I have had the opportunity to work with and get to know Chris Gibbons, the founder of Economic Gardening. Economic Gardening is an entrepreneurial approach to economic development that focuses on growing second-stage companies within communities across the country, as compared to traditional economic development initiatives that focus on recruiting outside companies to relocate and bring jobs with them.

Chris recently shared his thoughts on the economy as well as the proposed tax reduction and infrastructure improvements with me and several others via email. I always enjoy reading and listening to his perspective on the economy and thought my subscribers and network would find it interesting as well.

With his permission, here is a guest post from Chris Gibbons, the founder of Economic Gardening.

Will infrastructure projects and tax reductions improve the economy?

water-pipesI tend to think of economic systems as closed systems – like a big field of interconnected pipes.  The water (money) is always there, always moving in the system.

So we can’t say the money goes to someone (rich people, government, China) – it always goes through someone on the way to the next place.  Government workers buy clothes, food and cars just like everyone else.  China uses its trade imbalance (accumulated US dollars) to buy U.S. government debt.  Rich people buy mansions and yachts.

Diverting money out of the private sector pipes (via taxes) to build infrastructure does not put more water into the system – it only moves the existing water over into public sector pipes which will dump it back into private sector pipes shortly thereafter (bridge builders buy food that evening).  It’s not new money coming into the economy, it’s just a diversion from the main set of pipes into a side set of pipes and then back into the main set.

In the reverse situation, reducing taxes takes money out of the public sector pipes and funnels it into the private sector pipes. Instead of the policeman or city planner buying groceries that weekend, someone in the private sector takes their tax refund and buys groceries. There is no new wealth; there is no new water in the pipes—only water directed out of the public pipe into the private pipe.  The dollar amount in the economy is exactly the same – the only thing that changes is what it is spent on (a public good like a policeman’s salary or a private good like a new washer and dryer).

The point is  — none of these activities increase the amount of wealth in the economy.  They are zero sum actions.  Add a tax refund in the private sector and subtract the same amount from the public sector.  Take taxes out of the private sector to build infrastructure and add it to the public sector account.  Add them together and the sum is zero.

The discussion should be around innovation.  It is innovation creates new products, new companies, new jobs, new wealth.  Innovation puts new water in the pipes.

Christian Gibbons

Thanks for sharing this Chris.

Though tax cuts and infrastructure improvements will greatly benefit certain individuals and companies (especially the ones getting big contracts); I agree that from a macro level this merely moves money around as compared to growing the top line of the economy (adding new water into the pipes – great analogy!). We can only hope that the individuals and companies that benefit the most from these cuts and projects will reinvest their profits into innovation. When people and companies have more than enough – think Google – they can afford to invest more heavily in R&D and social good initiatives. The question is will they? We’ll have to wait and see.

The Three Main Ways Social Media has Impacted Politics

Contributor: David Brim August 13, 2008

Tomorrow morning I’m participating in a panel discussion on how Social Media has impacted politics. The discussion will be aired on the show Flashpoint produced by Orlando’s Local Six News. The conversation will be facilitated by Lauren Rowe and include the head of students for Barack Obama, the head of students for John McCain, the web director for the Orlando Sentinel and myself.

I posted on this topic a few weeks back here, but thought I would elaborate.

Here is the three main ways I feel Social Media has affected politics:

1) Social Media Makes Creating & Sharing Content Easy (This Can Help or hurt a Canidate)

With Social Media virtually anybody has the power to create and share content. This content can be created via a blog, podcast, social network, Tweet, or video posted on youtube…(The list goes on)

With the ability to create and share content comes great power. A publisher has the ability to portray information in anyway they choose and this can really influence the perceptions of those who consume the content.

For example I came across a site that posted a video with a compilation of clips from Barack Obama and various movie clips. You can see it here. It was actually a video that was put together very well, however it was heavily biased and organized in a way that intentionally makes Barack Obama look very bad. Everyone has their opinions, especially bloggers, and bloggers let their voice be heard. This is also evident when the blogosphere went mad, posting about how John McCain said he hates bloggers.

In Social Media someone can take a small mistake a candidate makes, or even take something out of context, create content and send that content viral and influence thousands of people. Speaking one’s mind is guaranteed to us by the first amendment, freedom of speech. This same freedom is often restricted by many countries, for example Cuba who’s general public doesn’t even have access to the internet, you can find more info here.

We as content consumers really have to evaluate the credibility of the sources the content is coming from. Though there is a bunch of great content online, there is also a bunch of crap, it’s not smart to rely on a simple google search or blog post to form your personal decisions.

2. Social Media Makes it Easy for People to Connect with Others that Share their Passions

Social networking sites such as MySpace and Facebook make it very for people to connect with others who are passionate about a certain candidate. They can join online groups or participate in conversations through a social network or blog about their favorite candidate. Barack Obama’s site http://my.barackobama.com actually is a social network. It allows you to register, create a profile, add friends, post in your personal blog, join groups and more.

3. Social Media is Another Promotional Tool in a Campaign Managers Arsenal

There is no doubt that the majority of Millennials and many other generations live, work and play online. While on the internet a majority of time is often spent on Social Networks. With that said it is not surprising that campaigns try to use social networks and social media as a promotional tool. Though I think this is a viable way to increase visibility amongst potential voters online, I don’t think that Social Media is being used to it’s maximum capability by candidates. Social Media was meant to help genuine people, build genuine relationships and have genuine conversations. It is clear that the candidate is not the one managing their social networking profile or blogs. One might say these candidates don’t have the time and that may be correct, but what if they made the time? Franklin D Roosevelt engaged people through his famous Fire Side Chats in the 1930-40’s and really built great rapport with the American public. What if candidates took that a step further? Social Media can allow them to engage their countries people, listen to what issues are important to them and engage them in conversation.

Some Final Thoughts

Social Media is transforming the way corporations interact with their consumers. Many corporations are no longer hiding behind their corporate identity, they have a face and a personal voice. Political figures can and should follow the same movement. They should not only use Social Media for promotional purposes, but also to build relationships which would help break down the barrier that has existed between them and the American Public for so many years.

Just my $.02’s…Feel free to comment if you’d like

Social Media’s Impact on Political Campaigns – Please comment

Contributor: David Brim July 22, 2008

The emergence of social media, blogging and web 2.0 as a whole has revolutionized the way marketers reach their audience. Today the key in marketing is connecting with your customers, engaging them and building long lasting relationships with them.

This model of marketing based on engagement rather then interruption, often discussed by one of my favorite authors David Meerman Scott, is evident in many different sectors in the world around us. One of the areas I feel social media and new age marketing has revolutionized the most is in political promotions.

Politicians, or the new age marketers that work for them, realize the importance and power that tapping into social media and the blogosphere can do for their popularity & campaign ROI (So to speak).

To my surprise I recently found that Barack Obama is active on twitter (He has about 48,000 followers). In addition to that it has almost become a standard for candidates to have a Myspace and Facebook profile as well as be active on YouTube. The image above is from John McCain’s MySpace Profile where he has nearly 60,000 friends.

Being as busy as a presidential candidate is it’s odd to me that Barack tweets extremely often and John McCain logs into his MySpace profile daily. (I know I find it difficult even posting on my blog consistently). It is clearly someone else that manages these social media properties for them, which brings me to several question I have for my readers…..

With the understanding that social media is about connecting to real people and having real conversations…..

1) Do you think someone posing as a politician (whether they are employed by the candidate or not) on these social networking /Web 2.0 properties is going to have a positive impact on their campaign? Why or why not?

2) What do you feel is the best social media tactic for a politician to use to grow awareness of his views and connect to potential voters?

3)What is the biggest impact social media has had on political campaigns?


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