[Note: To follow is an excerpt of an interview with Aric Krause, PhD, a graduate faculty member at Westminster College in Salt Lake City and RealSource Chief Economist, [www.realsource.net]. To listen to, or download the show archive MP3, go to www.IncomePropertyInvestmentTalk.com.]

Mosca: A recent CNN opinion research poll asked Americans which of the following issues will be most important to you when you decide how to vote for President in 2008? Not surprisingly, the economy overwhelmingly stood out from the others. What do you see are the major economic issues of the campaign?

Krause: We've got to be really concerned with long-term job growth in our country. The major issue is who has the proposals that are likely to result in good permanent jobs. Over the last 15 years we've generated a lot of jobs, but they don't necessarily have incomes that allow the American sort of lifestyle. We also need to bring stability to the energy and financial markets.

Mosca: The Web sites of both Senators McCain and Obama indicate they want to stimulate jobs. Both candidates are combining job growth with energy, advancing technology and innovation for energy independence and climate change. That's good news, right?

Krause: A little part of me is cynical and says of course that would be there because those are some of the buzzwords. More importantly, we have to keep in the back of our minds that job growth is a function of new technology. An economic growth revolution is going to happen somewhere in the world in the next five to 10 years centered around energy replacement. If you go through history, there have been new technologies that come around every X number of years that just cause a huge spurt of growth. Whether or not America can participate in that growth or have a significant portion of that growth is a function of the decisions we make today.

Energy issues aren't going to curtail our lifestyles; it's going to lead to job generation and a reformulation of our overall economy. These types of jobs tend to generate ancillary jobs that are highly skilled, higher income jobs. One of the difficulties is in the last 10 years a significant number of the jobs that have been generated in the United States have been retail, leisure and hospitality.

Those are not typically high-paying jobs that do not generate another wave of jobs. If we are able to get to the front of the line in this energy issue and innovate and have smart workers who are making high incomes, then those jobs generate a lot of secondary jobs.

Mosca: Both Obama and McCain also want to help displaced workers either get training for those types of jobs or create opportunities to move those workers into those types of jobs. I thought that was a big plus?

Krause: We need to think between the two candidates in terms of a short-run and a long-run approach. Long run, we need workers who are smart and are innovators. We need individuals who are trained scientists. We need engineers. We need people who are generating new technologies. If you think about the time it takes to train a scientist -- anywhere from four to 10 years -- we need to intentionally start thinking about that and start training people who can contribute in these ways.

Mosca: Can you comment on opening up the oil fields for drilling. Doesn't that take time to actually reach the consumer?

Krause: To be really smart about this election, we've got to separate trying to give people what they want and what is true growth policy. There are plenty of oil reserves in the United States. About 21 billion barrels is the current estimate. It takes years to develop fields like that. Some of the oil that we have left is not easy to access. We cannot depend on spending the next 10-15 years trying to extract oil that we may not be technologically prepared to drill.

There are communities that have clusters of scientists specifically focused on finding new ways of living with new technologies and alternative energies. Those communities are going to be great investment opportunities. They will be ahead of the curve, and other communities. Jobs will be generated. New companies will be formed. That's the exact process we need for long run efficiency.

Mosca: We're led to believe that there's a significant difference between the two parties concerning tax cuts and long-term growth and job creation. Is there a connection between tax cuts and permanent growth for the commercial real estate investor?

Krause: The multifamily investor needs to be very careful not to vote for tax policy that's going to benefit their wallet in the short run. Thinking of it in terms of which guy is going to give me 30 more dollars in my paycheck is the wrong way to go. Look at both of their proposals and ask which of these two are likely to cause long run, permanent job growth. Creating new technologies that result in new jobs that pay people. Real growth comes from making what we do more efficient. That's what we need to be concentrating on and that's the tax policies that investors should be concerned with.

Mosca: Am I too confident that these two candidates will push us in the right direction?

Krause: Throughout history every leading economy reached some point in its growth where it became insular and protective. The day it became insular and protective was the day that it fell off its leading position. The United States has a choice. We can become insular and protective or we can continue to lead the world in growth. The evidence suggests from other leading economies throughout history that we probably won't make the right choice. I think we can make the right choice and not become insular and protective and continue to drive world growth.

Mosca: The 2008 election is causing a lot of ripples throughout the international community. What is your take on international trade policies as they relate to commercial real estate investment here and in other international areas?

Krause: There are a lot of communities in the United States that are heavily dependent on export markets and there are a lot of companies heavily dependent on imports. We cannot be insular in our approach to the rest of the world. Job loss due to trade is always going to occur. What's important is that we have specific policies in place that are creating new jobs simultaneously, hopefully faster than we're losing jobs. Education, job growth and technology absolutely have to happen.

Look at the two major growth engines in the world right now, China and India. In 1968, India decided it was going to train in high skilled jobs. What does India have now? They have crazy numbers of engineers, doctors, researchers, and they are doing a ton of the world's R & D. They made an intentional movement to do that in 1968. China, on the other hand, has been financing higher education of scientists and theorists and researchers for 50 years. They now have huge numbers of engineers; we don't.

Mosca: Every four years we hear the statement this is the most important election in the history of the country. Based on what you've just told us, it appears as if the winner in November will have a major impact on multifamily and apartment owner investors?

Krause: What we need to be concerned about in this election is who of the two candidates has policies that are not pandering, that are not election getting policies, but policies that are designed to create in the long run, in a global economy, competitive, high paying jobs. As a multifamily investor, one has to be thinking about who is going to give me the improved cap, the appreciation and the cash flow that I want out of a piece of property. That comes down to whose policies are best for creating long-term jobs regardless of what some of the short-term issues are.

Published: July 15, 2008

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Peter L. Mosca is president and founder of BAK Communications, Inc. He has over 22 years of communications and media consulting experience, serving a variety of nonprofit organizations, including the CCIM Institute and the REALTOR Association on all three levels – national, state and local. He is the Spokesperson Trainer for the CCIM's Jay Levine Academy and trains hundreds of residential REALTORS nationwide to be effective industry spokespeople. He is consistently ranked as "excellent" by about 90% of those who attend his presentations. While his principal consulting focuses are public speaking and media relations development and content delivery and management, Peter is also the host of the Voice America Network's weekly radio program, "Income Property Investment Talk," a one-hour program that brings the powerhouses of commercial and residential real estate to property investors every Wednesday at 11 a.m. EST. Peter is married 17 years to his wife Barbara. They have two children: Ashley, 15 and Kelli, 12. Hence, the name BAK Communications, Inc.