Sunday, February 7, 2016

Smart Infrastructure – INVEST PLEASE - AVOID SPENDING

Are you concerned about how infrastructure spending is going to get done - I am. Please read this and let the government know how you feel. 


There are three elements to smart infrastructure, the infrastructure has to serve to improve commerce so that is PAYS for itself in time, government should seek to partner the costs wherever possible (or avoid them altogether) and it should be financed creatively and to the extent possible domestically.  Infrastructure is agreeable to politicians because it normally results in a ribbon cutting and public gratitude; but it should be remembered that the real infrastructure of society is human capital, build human capital and it propagates itself. Governments are good at counting traffic flow or assessing the value of transporting goods; the entire western accounting complex is very poor at valuing human capital. Infrastructure is more nebulous than ever, perhaps the most nebulous after human capital is infrastructure that facilitates technology – little things floating in the sky that no one sees.

Recent press coverage of the feds meeting with municipal and provincial governments has me quacking in my boots, I was hearing a lot about arenas, recreations centers; Canada, toys are what we buy when the budget is balanced, government is a little like the single parent that invests in hockey gear only to have no milk for the month. It is a question of priority, it is a question of putting pencil to paper and choosing to spend on things that result is a sustained improvement in living standards, invest money in infrastructure and avoid spending on things that just end up costing more when the loan is paid.

Intellectual Infrastructure

The language that emerges in the form of buzzwords often serves to give insight into to the head-space that is feeding human action, when I hear “shovel ready”, it gags me – one realizes this is only a metaphor, but to many when you say “infrastructure” they think railroad. So here are some suggestions for some “intellectual” infrastructure.

Bigger Pipes & Satellites Please

The CRTC sometime ago in effect sanctioned throttling by granting companies the “right” to choose who’s data travels quicker than others over the internet, this was offered as a solution to “burdened” infrastructure – granted it was infrastructure specific to “private” companies, companies it should be noted that enjoy a privileged operating circumstance relative to most other countries. There are two key factors creating a problem, firstly, the regulatory environment in Canada related to telecom is anti-competitive and secondly, the term “information highway” has relevance in communication policy; that is to say, government has a role to play in ensuring there is optimal infrastructure to maximize it’s tax base and to promote regional advantage. We are failing in Canada on this score, mainly due to the regulatory environment we’ve created. A minimal investment in satellite technology and encouragement to the telecom industry to build out capacity would serve to facilitate commerce and human interaction in general, but also take industrial opportunity to all corners of the country.  Satellites could be P3 financed and “private” information transmission infrastructure is able to be addressed through more generous Capital Cost Allowances. 

Please See Link Below:

CRTC - We need reform

Note: there have been some changes at the CRTC, but the fundamental structure remains the same. 

Converting Knowledge to Action

Government has a responsibility to provision fort bias or politcal Education and coming in on Business activity. That is the MATH, and the joy of  the collection and distribution of knowledge and to make the services it provides efficient as possible. Examine the budgets of governments in Canada and you will see that money is going out on Medical Care and Education and coming in on Business activity. That is the MATH, and the joy of math is that it informs without bias or political distortion. One of the greatest impediments to facilitating trimming cost and enhancing services by government in Canada is a gross under estimation of people to read, think and care for themselves that emanates from the collective paternalism of interested service providers. Give people the information they need to make manage their life and they will – the largest element of intellectual infrastructure is knowledge and the largest benefit to government is the self-reliance that comes with having it.

Job one, free web based education programs, this is almost unrepresented now. The government is wed to big buildings, big institutions and big money, when the internet opportunities for free education lay wasting. Trades theory could be web based and free, and supplemented with very little self-financed one on one tutelage. There are a vast number of professions that could be facilitated on line – most learning can be done online – certainly a larger percentage than is now available.

Job two, give people the tools they need to take care of themselves so government services are targeted to high value use. Medical service delivery, even under the “single payer” model we have in Canada could be made much less costly, if the government would only give people the means to care for themselves. There is plenty of space to support this through government provided infrastructure, self-directed medical assessment for example – the vast majority of Canadians can plug a basket of symptoms into a computer and make an assessment of their medical status – self-directed medical assessment could be developed an expanded. Canadians can enter the medications they are taking into a computer and have a the computer scan a database for contraindications and print out complete reports on other risks like food interactions – the computer will do a better job than people. 

Governments in Canada run massive organizations delivering health care to Canadians and they fail to track medical outcomes, in Canada we have no database that explains the 10,000 or more deaths from preventable medical accidents each year; this is analogous to a farmer failing to measure yields – people surviving a hospital stay is the key metric in health care – we should be tracking it so people can decide how best to manage the risk.

ess costtly livery, even under the "igernment is wed to big building, big instituti
See Link Below: 


Converting Knowledge to Action

The vast majority of the world’s knowledge lays in a latent state along with untold wealth now, in large measure because as a society we are absent the absorptive capacity to put it to work.  There are two components to converting existing knowledge to actionable goods or services, firstly there is knowledge required and secondly there is capital required.  There are several ways government can contribute to a infrastructure for a “capital deployment”; it can provide the platform for favorable capital distribution from the mass of wealth that is also latent in the form of conservatively invested “boomer” wealth, by engaging in a form of quantitative easing that would subsidize capital.

Please see links below:



Converting the bank of latent knowledge that is present in the world today to action requires a process called innovation – we hear the word – we see it as the creative use of knowledge to generate something new and or improved to sell to a market. Innovation is also, as often as not, an exercise in heuristics; patient capital is required here.  

Please see Link:


Funding

Money used to pay for infrastructure can justifiably come from the liquidation of raw resource assets – sell one asset, create another; we have failed in the past in converting raw resource assets into actuating human capital – we have frittered it away paying to operate government institutions, which cost more than the tax base can pay for. We have hitherto spent much of our resource wealth rather than invest it.

Please see links below:


The municipal governments need to be able to issue bonds for infrastructure improvements, this is a place where the cities can garner funding from their respective citizens and the federal government can augment returns to bond holders. In doing so, a healthy outcome emerges, in that cities initiate the spending at their discretion, the local citizens choose to support it and the federal government engages in a populous driven quantitative easing program.

Human capital is the most important asset of any society; the second most important is the financial wherewithal to actuate human capital. Infrastructure spending is INVESTING in a manner that facilitates the human endeavor. The government needs to play the role of the facilitator of facilitation; that starts with providing access to relevant information and then promoting access to capital.





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