EPENDENCE ISSUE PAPER [_ Independence Institute « 14142 Denver West Parkway #101 * Golden, CO 80401 + (208) 279.6536 ‘IND January 31, 1986 WHY NOT AN ECONOMIC MIRACLE FOR COLORADO? A Symposium of 35 Western Leaders "Somehow," one of the West's senior newspaper columists wrote recently, “Denver has got to reach for its bootstraps, to lift itself out of its worst recession in decades and its worst fragmentation of leadership and consensus in recent memory." In January 1986 The Denver Post headlined its long-range Colorado economic forecast this way: "25 fTat years ahead; spark lacking to drive growth, jobs, housing, energy, defense.” The same week saw another candidate announce for the governor's race, promising to do Something about the state's "flat, sour" economy and the national image of Colorado as “anti-business." But amid the warnings, some Coloradans are aiming considerably higher than this. They are looking seriously at the ingredients it would take to launch the state on an "economic miracle" -~ a term that has been used in our time to describe various examples of free economies at their best in creating wealth and meeting human needs, Economic miracles have been witnessed in the dynamic growth of West Germany after 1948, in the manufacturing and trading explosion of resource-poor Pacific Rim nations in the 1960s and '70s, in the creation of over 8 million new jobs in the United States in the early 1980s while Europe created almost none, and in the recent surge of prosperity in states like Massachusetts that have encouraged business expansion through tax cuts. It is not unrealistic to ask if the next economic miracle could take place in Colorado and the nearby region in the years 1986-2000. The problem and the opportunity are framed by seven main questions, which form the outline for this paper: 1. Can a state or region realistically aim for an economic miracle on its own, in an era when national and international trends seem increasingly dominant? If so, how well positioned is Colorado in the mid-1980s to set that goal and go after it? (Pages 2-3) 2. What fundamental conditions will make possible a dynamic economy for the state and rising incomes for its people? (Pages 4-5) 3. How do tax rates and government spending figure into the equation? (Pages 6-7) 4. What role is played by the schools and other institutions that spread knowledge and shape attitudes? (Pages 8-9) 5. What are the do's and don'ts for public policy at the state level? (Pages 10-11) 6. What are the do's and don'ts for public policy at the local level? (Page 13) 7. Are Colorado's political and civic decision-making processes up to the task of making (or letting) the miracle happen? (Pages 14-15) Note: The Independence Issue Papers are published for educational purposes only, and the authors speak for themselves. Nothing written here is to be construed as necessarily representing the views of the Independence Institute or as an attempt to influence any election or legislative action.The Independence Institute convened 35 leaders from Colorado and several other states to seek answers to these seven questions about the economic miracle in a two-day conference at Keystone Resort on September 23 and 24, 1985, Diversity of viewpoint, frankness of argument, and depth of practical experience characterized the conferees. A wide spectrum was represented: corporate business, small business, elected and appointed officials, civil service, professors, Journalists, Democrats and Republicans, urban and rural, black and white, conser- vative and liberal, lawyers, accountants, entrepreneurs, politicians, authors. The 15-plus hours of speeches, panels, and discussions produced no definite platform or plan. But out of the diversity, certain themes began to emerge, often with surprising congruence between unlikely allies. This Independence Issue Paper summarizes the themes with brief pieces of “dialogue overheard" during the two-day conference. In the Institute's opinion these points -- reported here substantially as we heard them made in open session -- demonstrate the outlines of a potential consensus among leading Coloradans of many backgrounds, in regard to achieving dynamic economic growth for the state and region. Note: The reader should be aware that: (1) Because the sessions were not taped or stenographically transcribed, most of the statements attributed to various conferees are paraphrases, not verbatim quotations. (2) The specific points cited froma particular individual may not be representative of his overall input to the conference or his settled position on a given issue. (3) Any inaccuracies of either fact or implication are solely the responsibility of the Independence Institute. Question One CITY, STATE, REGION, NATION: WHERE IS THE ACTION? Colorado's destiny is in its own hands. We're in a new era with states taking the lead on more issues, showing Washington the way. Mark Hendrickson Economist, Pennsylvania Senior Fellow, Independence Institute Economically, Colorado has the advantage of being a place where people want to live. It ranks third among the states in attractiveness for new business formation. Howard "Bo" Callaway CEO, Crested Butte Mountain Resort Republican State Chairman What are we doing to maximize the state's number one asset, its natural beauty and attractiveness to visitors? Colorado could and should become a recreation mecca for the world. Let's do it. Bob Sweeney Publisher, Colorado StatesmanCont inued CITY, STATE, REGION, NATION: WHERE IS THE ACTION? National policy sets the pace; Colorado and other states are just the "tail being wagged" from Washington, We should cut federal spending by 10 percent, raise taxes, lighten the regulatory burden, privatize more government services. For business expansion, we need stable government policies, not the kind of sharp currency fluctu- ations recently triggered by the Treasury and the Fed. Steve Leatherman Boettcher and Company Past Democratic Candidate for U.S. Senate Macro-economic policy alone is not enough. MWe must learn to think and act in terms of city economic regions as explained in Jane Jacobs's important new book, Cities and the Wealth of Nations. Don Gevirtz Venture Capitalist and Author, Los Angeles What prediction, what encouragement, what warning can we take from comparing Colorado's current political and economic climate with California's? Is the West, whether Pacific or Mountain, still on the cutting edge nationally? George Mitrovich President, Denver Forum In one sense, all of Colorado's growth has been and will continue to be “too fast" in that human nature resists systematic planning until things start to pinch. The state and the metro area needn't fear more growth. For perspective, note that Hong Kong's economic miracle took place with a population density that would enable all mankind to fit inside Colorado's borders. Obviously, we don't want to go that far; but neither should we adopt a “last one in" mentality and slam the door. Miller Hudson Mountain Bell Trustee, Independence Institute Let's be more chauvinistic about this state of ours. Let's have more fun with it. Let's have the vision to set some goals. Let's find ways to empower people, not just expand institutions. David L. Foote Consultant Alliance for Colorado's Future Followup by the Independence Institute in 1986: Steps taken during the past year to setablion the Thdepenience Tnstieite es 2 pibTic policy center and leadership consensus builder for Colorado indicate the conviction of Independence's trustees, members, and staff that the action is here. Ideas translated into policy at the state, local, and regional level can produce an economic miracle. Each topical section of this report ends with a,preview of Independence's activities on that particular topic in the