Dispatches from the road: Lake Tahoe, NV

I am finishing up a few days visit with my brother in Nevada. I have mentioned him before in the blog. I have gotten a chance to get to know this state a lot better – this time around.

Here’s a message that we saw on the door of the local bank:

I have determined that Nevada must be one of the places with the least amount of ‘law’ and ‘government’ in the world. In this state, just about anyone can buy and carry around a handgun (provided you leave it in your truck when you go into the bank, please). Ordinary people walk around with a gun on their hip the way you might wear a cell phone. On your own land, you can hunt and fish at your pleasure – any amount – anytime of the year (I am told). Prostitution is legal. Gambling widespread. The spead limit is 70 and 75 miles per hour in some places.

The last frontier. The true wild west.

It’s certainly no nirvana. There are significant drug usage problems and I see the governor is being investigated for corruption.

But it’s a beautiful and fascinating place. We went from a high desert to a deep lush evergreen forest in a 20 minute drive. We drove out of 25 degree weather into snow and great skiiing.

But I, being me, was more interested in the economic development environment and did some considerable poking around in this area.

My brother made an unprompted but interesting comment. He said that he went from living in a ‘culture of entitlement’ (the Miramichi) to a ‘culture of anti-entitlement’. In Nevada, he says, you can make a great life – but you’ll have to earn it. Engrained in the culture is a suspicion of government – even among government officials. Welfare programs are among the least lucrative in the country but at the same time, the area is booming with new wealth and attracting investment and entrepreneurs from the whole southwest region of the USA.

Attracting Entrepreneurs
Another interesting finding for me was that the state is attracting entrepreneurs – primarily from California but other areas as well. This is an interesting economic development issue. In a place like New Brunswick we try to ‘nurture’ local entrepreneurs and attract ‘outside’ investment (existing, mostly large scale firms looking to build another plant or call centre, etc.).

However, here, many of the top entrepreneurs (successful ‘local’ businesses) came to the state from outside. There were examples in the local newspaper of people moving here, setting up successful businesses in a wide variety of industries – serving regional and national markets.

It might be interesting for a place like New Brunswick to try and ‘attract’ entrepreneurs and their ideas and investment. People with great ideas looking to start new businesses. People needing access to R&D support for a great new idea. People looking to locate in a region with a low cost of living (i.e. Nevada relative to California).

I could be wrong but I think many of our ‘entrepreneur’ support programs require the person to first be located in New Brunswick. Even if this is not the case, I don’t think I have ever seen an economic development agency in the Maritimes actually promoting their province/community to external entrepreneurs (i.e. either new start ups or entrepreneurs with a great idea).

I think this could be a great idea. Promote New Brunswick as a great place to start a business – not promoted at New Brunswickers – but at Ontarioians, Americans, immigrants.

Cream skimming
Another interesting economic development trend in this area particularly (Greater Reno) has been the ability of the region to attract industry out of California that California doesn’t particularly want – or at least seem to want. There is a large and growing distribution hub here (Amazon, Dell, etc.) serving California markets from here and attracting firms with specific tax programs. Of course, there is the gambling industry here that does not exist in California. I am no fan of gambling but there is no state income tax or sales tax – because the revenue comes mostly from gambling. The region is also promoting cheaper housing and attracting retirees and business people to move here.

I am convinced that New Brunswick should be able to find a few high growth, good wage industries that it could carve out a niche – and compete and win against larger urban centres in North America. Industries like data centres, animation/games development, e-Learning. I just heard that NSBI is going after ‘legal’ outsourcing. Attracting high paying back office legal jobs – jobs which are getting very expensive to do in the large urban centres.

I’ll close on this issue of ‘entitlement’. As Morrissey says “England is mine and she owes me a living. Ask me why and I’ll spit in your eye”.

I think, in Canada, a key differentiation has been efforts to build a social safety net. A system that takes care of those who are the most needy in society. Trying to ensure that as few people as possible are ‘left behind’ so to speak.

But it is vitally important for government and community efforts not to dampen too much the importance of work ethic. Of ambition. Of the desire to better ones self through education and ongoing learning. And yes, to put disincentives in place that encourage people not to better their ‘lot in life’.

We need to find a better balance, I would think, in New Brunswick. Despite large Equalization and an EI program that is among the most aggressive in the OECD, we still have one of the highest rates of people living below the poverty line. Our population has one of the lowest rates of university education in the 60 US states and Canadian provinces and our standard of living (admittedly measured only in economic terms) has been rated, again in the bottom three of the 60 states and provinces.

You can’t substitute real economic develpment with government spending. As you know, our dependence on Equalization grows every year (and soon will pass PEI on a per capita basis) and we are seeing an accelerated rate of out-migration of our people. I believe that the fact many Acadians want to stay in New Brunswick (read: Moncton/Dieppe) has been a limiting factor on even larger rates of out-migration.

I am certainly not saying we empose a ‘Nevada’ culture and economic/political system on New Brunswick. But we shouldn’t be afraid to learn some lessons from other places. We shouldn’t shy away and hide behind some notion of Canada as a social and economic nirvana. In 2002, the OECD said in a brief that one of the top issues that could imperil Canada’s long term economic health was the lack of successful regional development. The OECD itself realized that centralizing economic development into a few very concentrated regions in Canada – has broad political, economic and increasingly bad social outcomes.

Having said all that, I am not sure Nevada has a lot to teach New Brunswick. Walking through a local sporting goods store and browsing through shelf after shelf of guns and ammunition is a little creepy. Looking at a wall of photographs with young girls (as young as nine years of age) with their prey that they have shot (bears, mountain lions, etc.) is a little creepy. Seeing gambling everywhere – corner stores, grocery stores, gas stations is a bit over the top. I’m not being judgemental here but coming from New Brunswick, it’s a little weird.

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0 Responses to Dispatches from the road: Lake Tahoe, NV

  1. Anonymous says:

    Interesting thoughts, I don’t think you want to ‘go there’ for sure.

    Let’s start with crime. For violent crime we have NB with an average of 937 per 750 thousand people. For Nevada, we have 14,600 per 2.4 million. The equivalant in NB terms would be 3800!! That’s a high price to pay for ‘success’.

    Interesting to note though that Nevada gets the LEAST amount of federal spending of any state even though three quarters of its land is owned by the federal government.

    But no arguments, a good idea is a good idea. The point would be, those are ‘trends’ you are talking about, what are the specific policies which led to them? You don’t just go out and ‘find’ entrepreneurs and give them a postcard. But like I’ve said before, a good idea would be to watch ‘dragons den’ and any good ideas, jot down the names of people and contact them, at least check out their website.

    Keep in mind that the governor being in a ‘scandal’ is relative. In most places with a different media the fact that Lord was the highest paid Premier in the country in next to the poorest province would have been a ‘scandal’. It would be interesting to find out who those really big tory donations came from. You can go to elections canada and see that even huge companies like Moosehead or Irvings only gave very small amounts to federal politicians, so $70,000 for a provincial party to have laying around each year with nothing else to do with it but give it to the leader, would set off alarm bells in any other province.

    What is most interesting to me about Nevada is the ‘entitlement’ issue. I think you are on the right track but with the wrong theme. Where do you first go to deal with entitlement issues? The political system of course. If government rules dictatorially and absolutely, then you can’t expect people not to have a defeatist attitude when dealing with social issues.

    So in Nevada, when people want change, there is a recourse, namely Citizens Initiatives. Nevada is an interesting state on that front because unlike some other states they have a government that is very ‘citizen friendly’. In other words, when citizen groups put forward initiatives, they tend to respond to them quickly, in a case about a decade ago I seem to recall a group got signatures for a referendum, then government responded with a BETTER piece of legislation. The odd result of this was an organization that was lobbying to defeat their own initiative!

    And of course that continues down at the county level. For example, prostitution isn’t legal EVERYWHERE in Nevada, you will have different counties where it is legal, and some where it isn’t, just like you’ll still find ‘dry’ counties in many states, and how you’ll find some counties in Nova Scotia where sunday shopping is illegal or else where they’ve voted on it themselves (like two months ago)

    That’s basic democracy, you make decisions close to where the people are. That ‘distrust’ of government you mention is well founded, Thomas Jefferson fully expected the ‘people’ to have revolutions every hundred years or so simply because of how governments tend to act.

    To bring that point home, when people have NO control of ANY issues, it is hard to change that sense of ‘entitlement’ simply because the government is so dictatorial. In Canada the political answer is always “run for office” or “join a party”, or “vote for X”, all actions that have literally no chance of success. Let people in the decision making process and you get rid of ‘entitlement’s because people are suddenly part of government.

    Again, some people think they are part of government simply because every three or four years they vote. Go to a place like Nevada and you can see how that isn’t so-although keep in mind Maine also has citizens initiatives and they don’t walk around with guns on their belts and their social problems are fairly close to NB’s.

    The fact that the person making decisions wasn’t even elected by the majority of New Brunswickers should dispel the idea that ‘we’ are part of the government.

    To return to Nevada, its strange to note that state officials were surprised that Nevada got the least amount of federal dollars, you’d think that would be common knowledge. So they are now asking for more federal dollars for the big federal programs-social security, medicare, and medicaid.

  2. Wendy Waters says:

    First anonymous — the premier of NB is the highest paid in the country? That’s insane. Not only does the NB economy not warrant such a salary, the cost of living in NB is cheap compared to what some other provincial premiers have to pay (think BC premier Gordon Campbell who has to maintain a home in a pricey Vancouver neighbourhood and an apartment in Victoria; or think of Dalton McGuinty having to maintain a home in Toronto.) Does the Premier of NB receive a pension when he retires?

    Why don’t people of NB object to politicians skimming so much money off of them?

    On Nevada — I agree that there are probably few direct policy lessons for NB. The economic and social history is just too different.

    But there are intriguing contrasting observations: I liked your comment that they don’t worry about how little federal money they receive. People in Nevada and the government go about making their own wealth and creating an atmosphere to allow that.

    So how you get that attitude to NB?

  3. Anonymous says:

    First, I said FORMER Premier of New Brunswick, since you aren’t from NB then the update is that Premier Lord recieved almost as much of a salary from his party as he did from taxpayers. Of course, Irving papers maintained that was fine. However, this is just my opinion, but to state it plain only the Irvings could afford to pony up that much dough.

    However, nobody is FORCING Dalton to live in Toronto, there are many areas outside of Toronto where houses can be found much cheaper, and as we’ve discussed before, utilities are much higher in NB, meaning cost of living isn’t nearly as cheap in New Brunswick as is assumed.

    For Nevada, keep in mind that since discovering they are the lowest federal funded there has been significant pressure to ‘right’ that. In the states it isn’t that much different, states want money, and if they can get more from the feds they will.

    Keep in mind also that two years ago Nevada had a record tax increase. Their budget this year was at a record high because of those taxes, much like the Ontario liberals solved their problems with a massive ‘health premium’.

    Nevada also had real estate tax surpluses that resulted in a “tax surplus that isn’t likely to be repeated”. And for the last few years many business groups have been saying that over the next few years they will be looking at deficits.

    However, for good ideas you can at least look at tourism. A recent study showed that seniors are a very low risk factor for gambling addiction. This is one area that is simply criminal in New Brunswick as gambling revenues go from poor to the middle class.

    Not having a central location or even a spot for tourists to engage in gambling activities is a bad policy move. The province doesn’t have to become Nevada, but it can surely do SOMETHING in this regard. Can you imagine a seniors bus trip, which are quite common, coming into New Brunswick and saying “now we’re going to stop at this bar when we can alternate playing the video lottery terminals”.