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Tuesday, March 4, 2014

Cities: Think Before You Vote

Years ago, I was watching a super-important college football game on TV between the Nebraska Cornhuskers and the Miami Hurricanes. My friends and I are insane Husker fans, and we were so tense, we could hardly breathe.

Suddenly, Miami scores -- and my wife cheers. She didn’t know it, but she was cheering for the enemy. We forgave her, because she really didn’t know which team was which. My wife doesn’t follow football, and way down deep, she secretly wishes they’d ban it, but she has come to accept the game as a necessary evil in an otherwise great society.

Here’s my question: Would you pick my wife to coach your favorite football team?

This question seems crazy given the story I just shared, but somehow, in the political arena, it’s not. We routinely elect people to city and state leadership who have very little knowledge of the job and who, in many cases, aren’t particularly fond of business and free enterprise -- the power behind our economy. Maybe they see business as a necessary evil in an otherwise great society. Whatever the case, they don’t understand or appreciate free enterprise any more than my wife understands or appreciates football.

Here’s one big example: New York City just said goodbye to one of the greatest mayors of any city in history, Michael Bloomberg. Using his decades of executive and hands-on business experience from building Bloomberg LP, Mayor Mike steered New York out of its post-9/11 panic and made it once again a world-class city: safe, welcoming to businesses and tourists, and economically and culturally thriving.

I’m not that familiar yet with his successor, Bill de Blasio. But I do know that the biggest operation he’d ever run prior to being elected mayor last fall was the city’s office of the public advocate -- which has just over a $2 million budget. The budget for the entire city: more than $70 billion. That’s a pretty big leap. And his campaign to run one of the greatest cities in the world was built around reducing income inequality, making the police more sensitive to local communities, and taxing people earning more than $500,000 a year to pay for universal pre-kindergarten. I don’t recall him saying much, if anything, in his campaign about keeping New York’s world-class economic engine roaring, building on the amazing success of his predecessor, or about creating more good jobs. In fact, he ran his campaign as the anti-Bloomberg.

I’m not picking on New York or de Blasio. The point is, when it comes to creating economic growth and good jobs for America, effective city leadership all around the country is essential. It trumps national leadership. For instance, Austin and Albany are both capital cities in big American states. Neither city is located by a port or a natural tourist attraction with beaches or mountains. They’re pretty much alike, except that Austin wins big and Albany loses big.

The difference, in my view, is that Austin has deeply caring, highly engaged business, political, and philanthropic leaders with policies, beliefs, and values about human nature that work. They understand the critical importance of building a thriving, growing economy -- one that welcomes business and creates a culture of entrepreneurship. Albany has the opposite, as I see it: leaders with policies and beliefs that discourage business and entrepreneurship, if not outright scare them away.

Great city leadership has never been so valuable and so desperately needed -- we need way more Austins and way fewer Albanys -- because on core economic metrics, America is failing. GDP grew only 1.9% in 2013, which was even worse than the 2.8% growth in 2012. And the percentage of U.S. adults with full-time jobs right now is 42% -- the lowest monthly average since Gallup started our Payroll to Population (P2P) metric in March of 2011.

Most deadly of all for long-term prospects, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began, according to the U.S. Census Bureau. (Here, I am referring to employer businesses, those with one or more employees.) Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually -- we are at minus 70,000 business survival per year.

This matters because small businesses are the main source of new good jobs and new economic energy. Up to 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Without thriving small businesses, America’s economy and our standing in the world will fall into permanent decline.

To rebuild the American economy, shouldn’t we elect local leaders who love small businesspeople and their endeavors, rather than discount them? Shouldn’t we also elect leaders with at least some experience at managing something?

This isn’t a Democratic or Republican issue. Bloomberg was a Democrat for years, but for the sake of expediency, ran as both a Republican and as an independent. The newly elected Republican mayor of San Diego, Kevin Faulconer, won on a pro-business platform of government reform. And Colorado’s Democratic governor, John Hickenlooper, has been a dynamite entrepreneur. Thanks to his leadership for the past three years, Denver now has a world-class business culture.

No, this isn’t about partisanship -- it’s about electing local leaders who have experience and who understand and appreciate business.

Here’s a suggested rule for deciding which candidate should get your vote, regardless of your party affiliation: Considering that America will go broke if we don’t revive small business fast, if a candidate has never started a business, worked in a startup, or at least worked at a Holiday Inn or in any job where they had five to 10 people working for them, they are not qualified to lead your city or state.


Anonymous said...
March 12, 2014 at 1:02 PM  

I totally agree about the importance of entrepreneurship and small business. But one of the biggest killers of small business is big business, which seems to like to spend big money to influence the electorate to favor policies that allow big business to garner special advantages, and suppress startups, entrepreneurs and small business competition. Candidates beholden to big business at the expense of entrepreneurship are equally unqualified to lead in our cities and states.

Rudy Garza said...
March 17, 2014 at 8:02 PM  

Thank you for the Austin shout out! The community here is commited to sharing and collaborating with the rest of the nation and the world to speed up the network effect to create startups and more jobs. When you come visit, I would like share your perspectives with other friends in our business commnunity.

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