Q: Describe your economic plan – something that drives economic development in the City?
A: My economic plan for the city rests on an economic theory that I’ve adapted from my macroeconomics class in college.
That theory states that a country’s total economic output or activity for a certain period of time (let’s call it “GNP”) equals the average number of its physical dollars in circulation during that period multiplied by the average number of times each of those dollars is spent buying something.
The number of times that a physical dollar is spent buying something over a given period of time is called the “velocity” or the “multiplier” of money. For example, assume that I have a one dollar bill and I buy something from you with that one dollar. You then take that dollar I gave you and you buy something else for one dollar from someone else. And again that person spends the one dollar on some good or service from another person. In this instance, for the short period of time provided in the example, the single dollar bill that I started with has a velocity or a multiplier of three.
Given this discussion, the macroeconomic theory can be expressed by a simple formula: GNP = $ * V, where GNP is total economic output or activity, where $ is the total number of dollars in circulation, and where V is the velocity or rate of turn over for those dollars.
Let’s take an example. Assume that during the current year, Country A has, on average, 100,000 one dollar bills in circulation and that during this same year, each dollar in Country A, on average, is exchanged or turns over 10 times. In this instance, at the end of the year, Country A’s total economic output or GNP equals $1,000,000. Based on the simple economic formula, if Country A wants to increase its total economic activity, it needs to do one of three things. It needs (i) to increase the number of its dollars in circulation, (ii) to increase the velocity of each of its dollars in circulation, or (iii) to increase both.
Now, you’re probably asking, “What does this macroeconomic theory have to do with Denver and its economic development?” Well, it has a lot to do with Denver and its economic development, and it will form the basis of every action that I take as Mayor. My duty, my obligation to the people of Denver, as their Mayor, will be to make total economic activity in the City as large as possible. The benefit of this will be increased demand for the goods and services offered by Denver’s residents. Increased demand necessarily leads to job creation and a larger City tax base both good things.
How can I increase total economic activity and development in the City? The economic formula tells me this. I need to make sure that the total number of dollars circulating in Denver is as high as possible and that the rate at which those dollars turn over in Denver is also as high as possible.
How can I be sure that the total number of dollars circulating in Denver is as high as possible? That requires that we, together, attract and keep as many dollars in Denver as possible. How is that accomplished? It is accomplished by making Denver an attractive place to live, work and visit. When Denver’s current residents elect to stay in the City, when Denver’s population increases because new families are moving here, and when visitors come to the City in ever-increasing numbers, the number of dollars circulating in Denver will be increasing.
How do I make Denver an attractive place to live, work and visit? That means ensuring that Denver’s neighborhoods are clean, safe, and well served by parks and recreational facilities. That means promoting the education of all of Denver’s residents, adults and children alike. That means encouraging tourists to visit our city. That means making sure that the City’s various bureaucracies understand that their jobs are to help businesses get started and prosper in Denver. That also means instilling a sense of pride and ownership in the people of Denver with the result that they enthusiastically believe and know that Denver is a great place to be.
On a second front, how can I be sure that the rate at which those dollars circulating in Denver are exchanged at the highest rate possible, that the velocity of dollars in Denver is as high as possible? That comes from the creation of as many opportunities for the residents of and visitors to Denver to exchange their dollars with one another. I describe this as “creating markets.” Opportunities to create markets, to create gathering places for people to buy and sell their goods and services are apparent, for example, through developing safe and attractive neighborhood-based retail and restaurant centers; in making the 16th Street Mall a vibrant commercial hub for the entire Denver metropolitan region; by promoting neighborhood gatherings, parties and recreational activities; by encouraging more festival-oriented activities, such as the Peoples’ Fair and First Friday on Santa Fe Drive, throughout Denver; and in providing business networks where entrepreneurs and business people can meet and exchange their insight in building successful companies and businesses.
Q: What are the most important steps to be undertaken to lure more businesses to Denver?
A: The macroeconomic formula above suggests to me the most important steps to be undertaken to lure more businesses to Denver. That is, the answer to the question of how to lure more businesses to Denver is the same as that to the question of how can we be sure that the total number of dollars circulating in Denver is as high as possible. How is that accomplished? Again, it is accomplished by making Denver an attractive place to live, work and visit. When the total number of dollars circulating in Denver is increasing, businesses will consequently follow, attracted by the increasing pool of available dollars and profit-making opportunities here.
To lure new businesses to Denver from other cities, it is also important that Denver’s residents have the necessary skill sets and education to fill the job positions that those employers will need to fill, that Denver has an efficient and effective world-class airport and mass transit system so that those employers and employees can easily come and go to and from work, that administrative procedures at City Hall are streamlined so that new businesses can rapidly navigate the bureaucratic process of setting up shop in Denver, that Denver has active and vibrant scenes and venues for the arts, food, music, dance, recreation and leisure, that economic incentives for new employers be put in place in those instances where it makes economic sense to do so, and that the City actively promote itself as a city that it is “open for business.”
The promoting of Denver as a city that is open for business also needs to be done at the local level. In considering this idea of promoting Denver locally, we must remember two important things. First, Denver’s unemployment rate is about 10% (8.5 % as of December 2010). Although that rate is unacceptably high, that does suggest that Denver has an employment rate of about 90%. It is also important to remember that people spend the lion’s share of their income within a 30 to 40 mile radius of their homes. Both of these bits of information suggest that Denver can increase the demand for the goods and services offered by its residents by promoting its neighborhoods among its residents and among the residents of the cities and towns surrounding Denver. When the residents of Kennedy and Rosedale have reasons to spend their money in Barnum and Swansea, progress and economic activity will follow.
Promoting Denver locally ties into the concept described in the above macroeconomic formula of increasing the velocity of the dollars that are already here in Denver. Increasing the velocity of the money here in Denver creates demand for the goods and services offered by Denver’s residents, and with that increased demand come jobs…jobs created from within.
When I think about the way Denver currently promotes its neighborhoods, I compare that with what I know about Paris. The neighborhoods of Paris are its “arrondissements.” If you were to ask the average Parisian whether or not he or she had been to every arrondissement in that city, he or she would unequivocally respond, “Yes.” The reason for that is that there is something to do and see in every arrondissement in Paris, and the people of Paris know that.
If you were to ask the average Denverite whether he or she had been to every Denver neighborhood, the answer from him or her would sadly be “No.” Denver is failing its neighborhoods by not promoting them to its residents and to the people living around Denver, by not promoting its neighborhoods to the 90% of us that are employed. The City needs to give us reasons to visit every single neighborhood in the City and to spend our money there. As I’ve said, spending money creates demand and creating demand creates jobs.
How can the City promote its neighborhoods? This necessitates that the City “create markets.” Opportunities to create markets are apparent, for example, through developing safe and attractive neighborhood-based retail and restaurant centers; in making the 16th Street Mall a vibrant commercial hub for the entire Denver metropolitan region; by promoting neighborhood gatherings, parties and recreational activities; and in providing business networks where entrepreneurs and business people can meet and exchange their insight in building successful companies and businesses.
Creating a market also means, for example, shutting down portions of Santa Fe Drive on First Fridays, putting local bands on either end of that art walk, and allowing pedestrians to own that street for one night each month in a celebration, a festival of the City’s local artists and musicians. Creating a market, even a small one, means allowing the growing food truck vendors of Denver to park on City streets downtown to sell their food. Who knows? Perhaps, one of those vendors will become the next Chipotle or Quiznos if given the chance. Creating a market, again even a small one, also means setting up taxi stands throughout downtown so that people wanting to catch a cab know where to stand.
The City must understand that its prosperity lies in the creation of markets and the promotion of commerce throughout the City’s many neighborhoods. And Denver must do this by promoting itself, by promoting its neighborhoods to its own residents and the other people living around Denver. If Denver cannot promote itself even to its own people, how can it possibly think it can successfully promote itself to outside employers…how can it possibly think it can lure more businesses to Denver?
A Denver that fails to promote its neighborhoods, that fails to build a sense of community spirit among its residents will be a city that lacks commitment, lacks vision, and sees only problems. On the other hand, a Denver that does enthusiastically promote its neighborhoods, that builds a strong sense of community spirit among its residents will be a Denver that is proud, is committed, achieves greatness, and finds only solutions.
Q: Why have Dallas, Minneapolis and Atlanta been able to land those major corporate headquarter businesses and not Denver? What could be done to attract those kinds of businesses to the City?
A: Much of the answer to this question is given in the answer of the previous question. For example, to lure new businesses to Denver from other cities, it is important that Denver’s residents have the necessary skill sets and education to fill the job positions that those employers will need to fill, that Denver has an efficient and effective world-class airport and mass transit system so that those employers and employees can easily come and go to and from work, that administrative procedures at City Hall are streamlined so that new businesses can rapidly navigate the bureaucratic process of setting up shop in Denver, that Denver has active and vibrant scenes and venues for the arts, food, music, dance, recreation and leisure, that economic incentives for new employers be put in place in those instances where it makes economic sense to do so, and that the City actively promote itself as a city that it is “open for business.”
Headquarter businesses will also come to Denver when they sense that Denver is the place to be. When will Denver be “the place to be”? That will happen when Denver promotes its neighborhoods and its people, when Denver builds a strong sense of community spirit and civic pride, when Denver displays its confidence as a first-tier city with resources unmatched by any other city.
But Denver must also not lose focus locally. The next headquarter business to come to Denver might already be here. It might be that food truck vendor trying to sell his biscuits downtown at lunch time. It might be that internet advertising company that has recently set up shop in the Platte River Valley. It might be that musician or that artist that just needs to be heard or seen on Santa Fe Drive during First Friday.
Q: What experience in your own life would you bring that would guide you to improving economic development in Denver?
A: The experience, the value in my own life on which I would rely in improving Denver and in promoting its economic development is my unwavering belief in the people of Denver. The people of Denver, their dreams, their hopes, their enthusiasm are its greatest resource. It is the people of Denver and their desire to be part of one whole community that will make this City a city that is proud, that is committed, that achieves greatness, and that finds only solutions.
Q: What role can the mayor play in bringing jobs to Denver?
A: As Mayor, I will play a tremendous role in bringing jobs to Denver and in creating jobs right here, locally. As I said, my duty, my obligation to the people of Denver, as their Mayor, will be to make sure that total economic activity, that total demand in the City is as large as possible. Creating demand creates jobs.
How will I create demand? I will look to the macroeconomic formula I discussed above. I will make sure that Denver is an attractive and safe place to live, work and visit. (This increases the number of dollars circulating in Denver.) I will also “create markets” throughout the City. (This allows the velocity of the dollars circulating in Denver to increase.)
When Denver’s residents feel secure, having a strong sense of community spirit, having healthy bodies, and having educated, productive minds…when Denver’s residents know all the great things that their neighborhoods have to offer, the City will grow and prosper. When I am Mayor, Denverites will feel and know these things. When I am Mayor, Denver will be first in promoting its neighborhoods and in nurturing a strong sense of community spirit. When I am Mayor, Denver will be first in promoting the health of its residents, starting with my “Denver Lose a Million Pounds” campaign, and in building its residents’ sense of living sustainably. And when I am Mayor, Denver will be first in promoting the education of its residents and providing them with a myriad of job opportunities. Together, we can make Denver First.
