December 29, 2011
An ill-advised toss of the dice
By Bob Graham, Special to the Times
Yogi Berra said “if you come to a fork in the road, take it.”
There are those who feel we can follow Yogi’s advice on the casinos proposal for Florida. We can have casinos and expand our economy beyond its traditional bases. But in my judgment, if we accept this siren call we are not taking the fork in the road; we will be selecting a path that will foreclose the far wiser one we have pursued for the past half-century.
A quick economic history of Florida:
In the 1880s Florida declined to participate in the Industrial Revolution, directly leading to an economy today that rests on a three-legged stool of agriculture, tourism and services.
Since 1960, those services have met the needs of the 3 million new Floridians who moved to the state each decade. Transformations including mosquito control, air conditioning, Social Security and other defined benefit retirement systems, the commercial jet airplane and Fidel Castro stimulated this growth.
During this period there was a growing recognition that Florida needed to add a fourth leg to its economy – ideally a high-tech, knowledge-based industry. The effort began paying off in the 1970s and 1980s, fueled by developments such as the Cape Kennedy space program; pharmaceuticals and electronics in South Florida; and military industries in Central and North Florida.
Florida had been one of the poorest states in the South. It was a signal achievement when in the 1980s, for the first time, Floridians exceeded the national average in per capita income, not once but in five years of the decade. Jobs increased annually more than 210,000.
Economic growth declined slightly during the 1990s and hit the wall in the middle of the last decade: From 2005 to 2010 the state lost almost 220,000 jobs. By the end of the decade, per capital income was 95.7 percent of the national average, about what it had been 35 years earlier.
I cite those statistics to illustrate that in 25 of the last 30 years the state had robust economic expansion. We should not be seduced into embracing casino gambling with its long-term economic and social consequences based on a five-year out-of-the-norm economic slump.
This is not a decision just for two South Florida counties. When parimutuel gambling was authorized in the midst of the Great Depression, it, too, was to be confined to a corner of the state. Today there are parimutuel facilities in every section of Florida. Already leaders in Lee, Duval, Orange and Pinellas counties are asserting that to be a competitive tourist destination, they must have casinos.
Let me ask a few questions:
Has anyone seen a substantial high-tech industry in Biloxi, Miss.; Atlantic City, N.J.; or Las Vegas? Would you like to be the CEO of a high-tech startup attempting to convince your board of directors that the place to locate was Las Vegas? The answer to all these questions is no.
Why is fairly obvious: Knowledge-based industry is attracted to places that offer a high quality of life for families, superior education, an ample workforce with a strong work ethic, and access to capital with a high risk tolerance. The ethic of high tech is incompatible with the “high roller success by chance” culture of a community that has bet its future on casinos. Like oil and water, they don’t mix.
Our success in the 1970s and ’80s shows it is realistic for Florida to aspire to diversify its economy through knowledge-based enterprises. But aspiration will not become reality just because casinos are rejected. Their rejection is necessary but not sufficient to achieve that goal.
What else is required? Florida can learn a lesson from one of its own: Jeff Bezos.
Bezos is the stepson of Miguel Bezos, a Cuban-American who came to the United States as an adolescent. While Jeff was a young teenager the family moved to Florida. He graduated from Miami Palmetto Senior High School in 1982, the same year in which he received a Silver Knight award for academic excellence. Four years later, Jeff graduated from Princeton with honors in electrical engineering. After about five years on Wall Street he decided to strike out on his own. In 1994 after surveying the country, Jeff Bezos decided to locate his startup in Seattle.
Thus, Amazon was born.
Why didn’t Bezos come home to Florida to start his knowledge-based company, which in 2010 employed 33,700 people? And almost 18 years later, what could we learn from him? Some of the reasons he settled in Seattle answer the question:
. A high quality of life. But doesn’t Florida have that also? Yes, but. The 2011 Legislature rolled back 40 years of bipartisan commitment to protecting one of the most blessed patches on Earth. It vacated decades of smart environmental and growth management policies.
. Education. In Seattle, Bezos found a well-trained workforce and institutions that would assure a consistent flow of talented people to meet expanding employment needs and would collaborate in research and development. How about Florida? In 2011, the Legislature accelerated a declining commitment to education, spending almost 10 percent less per student in public schools and transferring even more of the cost of higher education to students and their families.
. Available capital that encourages and fuels entrepreneurship. Most venture capitalists invest in firms within driving distance of their home to keep an eye on their investments. There is a symbiotic relationship between entrepreneurs and those with the risk capital to make them successful. The qualities which attract the latter, lure the former.
It doesn’t seem we have learned much from Jeff Bezos.
When the destructive casino proposal is behind us, these are the topics that should be the subject for serious thought and action. Gov. Rick Scott has indicated a willingness to reverse the damage which was done to Florida’s capacity to protect its environment and he has proposed a billion more dollars for the elementary-secondary school budget. He should add to those initiatives by convening Floridians to consider and recommend steps to achieve enhanced opportunity and prosperity for our people through knowledge industries.
And just maybe that next Jeff Bezos studying in a Florida school today will come home.
Bob Graham was Florida’s governor from 1979-1987 and represented the state as a U.S. senator from 1987-2005. His most recent book is Keys to the Kingdom.
