Baldrick's Development Plan

Leaders in the Legislature have come up with a cunning plan for economic development-

The patron saint of cunning plans.

-with a graphic out of the 1950s junior high civics text:

This is a long post that tries to explain why they are on the right track strategically but will probably bollocks it all up in the execution because they are motivated by the wrong reasons and afraid to tackle the hard bits that will give it a chance to work.

From a political perspective, it's an interesting concept: it leaves the Old Economy work (manufacturing, distribution, service, tourism, film) to the executive branch (where it is already done relatively badly), and puts the sexy, New Economy stuff under the control of the Legislature via the state-chartered South Carolina Research Authority via a volunteer Knowledge Sector Council made up of the Usual Suspects: big business, big education, and legislators.

As The Herald put it, the Council would "brainstorm ways to foster young companies with good ideas and attract high-tech firms."

Neither Governor Mark Sanford nor his commerce secretary, Joe Taylor, were invited to the press conference announcing the plan yesterday. The legislative leaders- House Speaker Bobby Harrell, R-Charleston; Rep. Dan Cooper, R-Anderson; Senate President Pro Tem Glenn McConnell, R-Charleston; and Senate Finance Chairman Hugh Leatherman, R-Florence- say the governor has vetoed money bills that would have fostered economic development while wages and growth in South Carolina stagnate.

Sanford and Taylor vigorously rebutted the charges. The governor's spokesman, Joel Sawyer, pointedly remarked, "“The criticism today is largely a fiction...I can’t think of anyone less qualified to pick the industry of tomorrow than the South Carolina Legislature.”

There does seem to be more than a whiff of politics about the venture. For one thing, one might suppose economic development is a non, or at least bi-partisan, affair. But there's not a Democratic name to be found involved with this, just the four powerful legislators who move bills and fund them. For another, the legislature cut the budget of the commerce and tourism departments this year. For still another, while all the big state papers have the story today- as well as several TV outlets' websites, nobody has posted a link to the actual plan, which House Speaker Harrell said, in his own press release,

...[is] detailed in a letter sent to Economic Development Contributors all over our state by House Speaker Bobby Harrell, Senate President Pro Tempore Glenn McConnell, House Ways & Means Chairman Dan Cooper and Senate Finance Chairman Hugh Leatherman – combin[ing] past legislative efforts with an outline of future collaborative execution to help us accomplish our overall goal of creating more high-paying jobs in South Carolina.

The next paragraph of Harrell's announcement ties the plan to the US presidential election:

Speaker Bobby Harrell – who has been a State and National Co-Chair for the McCain Campaign since February 2008 – echoed Presidential candidate John McCain’s recent statement that “Jobs are the most important thing our economy creates.”

To the extent the plan is discernable, it is only through a cloud of political bomfoggery:

The plan for South Carolina’s future economic success breaks down our state’s current economic structure and identifies the primary forces driving each sector. The strategy for economic growth and job creation relies on a mutual effort to expand those current sectors with a focus on growing our budding Knowledge-Based Economy.

With each independent sector related and dependent on the others for its own success and growth, the expansion of our Knowledge-Based Economy will act as the best catalyst, spurring accelerated growth and job creation across the board.

Senate President Pro Tempore Glenn McConnell said, “In laying out this vision for job creation and future economic success, we are trying to send a message to the private sector that the South Carolina Legislature is fully dedicated to this effort.”

Senator McConnell added, “These initiatives will require an intensely unified working partnership to produce our intended result of creating a large number of high-paying jobs. With our continued commitment to the private sector and a strong collaborative effort in the execution of this plan, we are confident that our state and our citizens will see huge successes in the future.”

One of the initial steps the plan calls for, is for the SCRA to act as a facilitator and guide in expanding our Knowledge-Based Economy by creating a “Knowledge Sector Council”. This more structured public/private consortium will help us ensure that our collective efforts are focused, coordinated and maximized. And most importantly, show us where our successes are and how we can improve.

By building on the recent – and future – actions of the General Assembly, we will help foster innovations and advancements that will enable all of our economic sectors to grow and produce the targeted jobs we are trying to bring to South Carolina.

“These plans encompass all aspects of industry and all sectors of our economy,” Speaker Harrell said. “While some areas of this plan are detailed and will require a huge collaborative undertaking, we must never lose sight of our intended goal – creating more high-paying jobs for South Carolinians.”

Harrell continued, “The ground work for this success has already been laid by the many efforts of the General Assembly and other involved parties. We only need the leadership and framework to combine those efforts and take that next step forward.”

The Greenville News attempted a translation:

The plan, which its backers describe as more of a blueprint, contains few other specific details, other than to borrow the concept of dividing the state into economic clusters and to explain that focusing on knowledge-based jobs would be the key to the state’s overall future success.

The legislators said they had no specific timeline or specific markers to indicate success, other than surpassing the national average for per-capita income and attracting more knowledge-based jobs.

They were joined by House Ways and Means Committee Chairman Dan Cooper and newly selected University of South Carolina President Harris Pastides, as well as William Mahoney, CEO of the South Carolina Research Authority. They held their press conference in front of the Employment Security Commission offices in Columbia to draw attention to the state’s high unemployment rate.

CNN got a little more out of Mahoney:

The council's role will be to help companies find the money and connections they need to be successful, said Bill Mahoney, the chief executive of the South Carolina Research Authority.

...Politics aside, Mahoney said the Commerce Department's mission primarily is to bring manufacturing jobs to the state, while the council, which will include Commerce, will promote a "knowledge-based" economy through research, much as North Carolina did after creating The Research Triangle Park in 1959.

South Carolina may be decades behind that effort, but through coordination, "we'll catch up," perhaps within a decade, Mahoney said.

Money and connections. Music to a legislator's ears.

The trouble is, what they're proposing probably won't work. At least, not as fast, or in the manner, they think.

Knowledge-based companies hire people who know things. To get the right people with the right knowledge, they scour the globe. To get a lot of use from such people, they hire young. To get them to stay, they locate in places with attractive amenities.

What the Knowledge Sector Council will try to do is bolt together a Frankenstein economic development plan based on the post WW2 attract a factory model: offer a workforce that's nonunion, disinclined to be otherwise, who'll work hard for less than in the Northeast, throw in a bunch of tax incentives residents will pay for over decades to come, and you get a big factory.

That worked well enough in the pre-globalization economy. Mobility was harder for companies. Workforce access was more limited. Back then companies didn't rove the world buying up the entire creative teams from startups and moving them to Redmond, like Microsoft has been doing for years.

Now companies can move their offices and plants virtually anywhere circumstances point to as a better deal. Companies with old factories are increasingly finding it cheaper to build new facilities from scratch than to remodel and update old ones.

Having a Google server plant and a Starbucks coffee roastery in South Carolina sounds sexy, like in the 1980s when smaller cities and towns saw malls with some national chain stores in them as proof they'd arrived. A data server plant doesn't hire many people: it is a huge box filled with racks of computers that process information requests. Companies like Google and Microsoft put them in places where there's cheap land and lots of it, cheap electricity,and, yes, tax breaks. Microsoft and Yahoo stopped work on massive data centers in Quincy, Washington in February after the state attorney general ruled they were subject to a state sales tax. Yahoo's cofounder posted a strongly worded letter:

"An unexpected requirement to pay sales tax will destroy the competitive advantage that led Yahoo to select Quincy as the location for our latest facility, and in fact swings the decision strongly in favor of freezing construction in Washington, and building instead in Oregon (which has no sales tax), as some of our competitors are already doing," Filo said in the letter to Senate Ways and Means Committee Chairwoman Margarita Prentice.

Since Oregon is on the other side of the Columbia River and the power would come from the same Bonneville Power Administration dams, the threat was not an idle one.

The blog Server Specs, writing about Google's plans in the Pacific Northwest, put it this way:

[T]here are some, such as Ginger Strand at Harper’s, who question whether the Google construction-mania is such a good thing. The blueprint for The Dalles data center is shown above.

The title of Strand’s little article, “Google’s addiction to cheap electricity,” had some at Slashdot a little nonplussed. “News at 11,” one poster sarcastically wrote, and another agreed:

Well, yes, and it’s a strange point of view to say that a company is “addicted” to one of its inputs. One may as well say that Google is addicted to CPUS, or to buildings, or to fiber optic cables, or to people.

Google and others addicted to people? Not so much

It was that last bullet item that caught my eye, because from reading Strand’s article, it seemed like Google wasn’t addicted to people as much as previous employers. While Google is promising to bring 100-200 employees to the region around The Dalles, two former aluminum smelters in the area employed 1,100. Now don’t get me wrong. A job at Google is probably a lot nicer than a job smelting aluminum. But if you’re one of the 1,000 or so local residents that once worked at the aluminum smelter but couldn’t land a job at Google, that doesn’t mean much.

(As a quick aside, another poster said if you’re looking for cheap electricity, look for aluminum smelters. As a second aside, while Google is addicted to cheap electricity, I think I’m addicted to the word “smelt.”)

Give us our tax breaks or else

Well so what, right? If Google wants to build their data center on the banks of the Columbia, and they meet local and state building codes to do so, they can employ as many people as they want. This is true, but Google and others also come looking for other breaks.

We did a recent story about how central Washington has become a hot data center location, in part because of dirt-cheap electricity rates. Sabey Corp., a Seattle-based commercial development company specializing in data center construction and leasing, said it would be paying 1.85 cents per kilowatt hour. The average industrial electric rate in the U.S. was 6.37 cents per kilowatt hour in November, according to the U.S. Department of Energy’s Electric Power Monthly report.

Still, so what? If the electric utility is willing to grant them that bargain, they’re in their right to do that. But in addition, the Seattle Post-Intelligencer published a recent story saying that tech behemoths like Microsoft and Yahoo are on the verge of winning a $1 billion tax break from the state of Washington for building their data centers there. And they’re threatening to stop building in the state if they don’t get them. From the Post-Intelligencer story:

“States such as Iowa and others have come on board with very attractive tax incentive packages to get data centers to locate in their communities,” said DeLee Shoemaker, Microsoft’s state government affairs director. “These other states that are in tough economic times and are looking to attract new business and new investments … Washington state is no longer competitive for this type of business.”

Microsoft and Yahoo already have server farms in Eastern Washington and had planned to build more. But when the state Department of Revenue recently determined that the server farms aren’t eligible for an existing tax exemption for rural manufacturers, both companies halted new construction and began pushing for a new tax break.

Now there’s no doubt that the building of these facilities brings jobs and can help the local economy; according to the story, the “server farms generate many temporary construction jobs and a small number of full-time positions. They also reduce the tax burden on local communities by expanding the property tax base.”

At the same time, once the construction is done, you’re not going to have nearly as many permanent full-time jobs as you would if there was an aluminum smelter in town. In addition to that, Michael Mazerov of the Washington, D.C.-based Center on Budget and Policy Priorities told the P-I that giving these companies millions of dollars in tax breaks could take funds away from education and economic improvement. Washington state Sen. Eric Oemig agreed:

“Right now we attract business because we have an excellent business climate,” Oemig said. “Part of doing business in the state is paying rent. These server farms kind of want to come in here and have a reduced rent and I fail to see what the extraordinary value is that they are creating for Washington state that we should discount their rent.”

Now, Governor Sanford's press release about the Google facility near Charleston:

Google Inc. applied for the state's Job Development Credits (JDC) and was approved by the Coordinating Council for Economic Development. The JDC program is a performance-based incentive directly related to new job creation and new capital investment. The first million dollars of JDCs may be advanced if Google elects from the Governor's closing fund, which is a fund approved by the state legislature for economic development efforts. This funding will reimburse the company partially for site preparation and infrastructure. In addition, the state legislature updated the state tax code to exempt the electricity and the capital investment in equipment necessary for this kind of a facility used in the web search portal and internet service provider industries from sales tax, just like what is done for the manufacturing sector.

The data center will be constructed on a 520 acre site, which was purchased from Mt. Holly Commerce Park, LLC., an innovative economic development joint venture between Alcoa and Berkeley County, by a Google subsidiary last year.

...Google Inc. will pay an estimated $1.96 million annually in property tax to Berkeley County. This revenue is the equivalent of the property tax collected annually from 1000 homeowners with homes valued at $200,000. Google also will pay millions in sales taxes on construction and numerous other purchases.

The facility, which will cost six hundred million dollars, will employ 200 people.

And it's close to Charleston.

Similarly, when Starbucks chose the site for its roasting plant (about a hundred sixty jobs), the governor's office said,

Starbucks chose the Calhoun County site based on several factors, including workforce availability, transportation access, quality of life, and strong support from local and state leaders.

And it's close to Columbia.

Well, you can hear the Knowledge Sector Council harrumphing, the whole state has a great quality of life.

It does, true; depending on whom you ask. In the context of New Economy economic development, the kinds of people Starbucks and Google will hire- from inside or outside South Carolina- have different notions of quality of life than, say, the workers displaced by the collapse of the localized textile industry.

This Seattle Times column by John Talton sums up the challenge of playing catchup in the Knowledge Economy:

Advice from author:

Choose where you live carefully

By Jon Talton

Special to The Seattle Times

Seattle already has the ingredients of what author Richard Florida calls a superstar city: an abundance of talent, knowledge industries, tolerance and the kind of dense, urban fabric that encourages the creative class to thrive.

Florida coined that term in his 2002 book, "The Rise of the Creative Class," and added the cautionary work, "The Flight of the Creative Class," in 2005, which warned that the United States after the Sept. 11 attacks risked closing itself off to some of the world's most talented people, with serious economic consequences.

Some of Florida's ideas were misunderstood and criticized. But he never, as some would have it, saw an economy of latte-sipping poets living in gay neighborhoods.

Rather, he argued that for advanced nations in the 21st century, most wealth in the economy would come from the work of creative professions, from designers and architects to software engineers and financial-service innovators. And those highly mobile workers would be more drawn to places that valued talent, innovation and open-mindedness.

Nor was Florida a cheerleader. He consistently warned that the creative economy would bring significant challenges, including big disparities in income and potential roadblocks to low-skilled workers rising on the economic ladder. Events have borne him out.

In his new book, "Who's Your City: How the Creative Economy is Making Where You Live the Most Important Decision of Your Life," Florida goes further. Part of the book provides help for people in deciding what place fits their personality, values and goals.

But he also examines how a globalized, talent-based economy is changing the calculus of competition. It's something that top corporations already understand, but it's slow to penetrate the parochial concerns of government policymakers.

Simply put, competition is less between states or even countries, but between cities, or, as he calls them, mega-regions. This is where human capital is clustering.

Looking at author and columnist Thomas Friedman's argument that technology has made the world flat, Florida writes, "It's a compelling notion, but it's wrong. Today's key economic factors — talent, innovation and creativity — are not distributed evenly across the global economy. They concentrate in specific locations."

Cascadia powerhouse

Among the powerhouses are Boston-New York-Washington, D.C.; Southern California; Northern California, and what he calls Cascadia, the region including Seattle and Portland. But competitors range worldwide, especially in Europe and Asia.

Florida has found his personal superstar cities in Washington, D.C., and Toronto, where he is a professor at the University of Toronto and founder of a think tank, the Creative Class Group. It's quite a rise for a working-class kid from New Jersey.

When I caught up with him, he was quick to praise Seattle.

"Mega-regions are going to be super successful and Cascadia is one that is poised to be the most successful," he said in a telephone interview.

"This is the Pacific century, and when we look to the future, the Pacific regions are going to do very well. Seattle has a concentration of technology. It has fantastic universities. And there's the value of proximity to the Canadian border."

Our main competitors: California; Sydney, Australia; and Singapore.

Florida's work is based on extensive research, including a fascinating new study that uses satellite images of the world at night as a starting point to correlate light emissions with various measures of economic activity. The light output clearly delineates the mega-regions and Florida's team has come up with the yardstick of "light-based regional product" or LRP.

The world's 10 biggest "megas" house approximately 416 million people, or 6.5 percent of the world's population, but account for 43 percent of the planet's economic activity, 57 percent of patented innovations and 53 percent of the most-cited scientists.

Take the top 40 megas, with 18 percent of the world's population, and the numbers are even more staggering: 66 percent of economic activity, 86 percent of patented innovations and 83 percent of the most cited scientists.

The world is not flat, but spiky.

By Florida's calculations, Cascadia generates $260 billion annually in LRP. (That compares with $2.2 trillion in output for the much more populous Northeastern U.S. mega).

Florida also found interesting data on housing prices, with good news for owners and sellers and challenging implications for buyers. Some of it will rekindle Florida's controversial nature for some social conservatives.

"Bohemian-gay index"

The cities that sustained the best prices also came out high on Florida's "Bohemian-gay index," which combines the concentration of artists, musicians and designers with concentration of gays and lesbians. These populations not only meant strong housing values but also high incomes.

Why? The groups tend to be attracted to places with abundant amenities and openness; as historically marginalized populations, they tend to be self-reliant and entrepreneurial. Their clustering in specific locales adds a powerful entrepreneurial spirit.

Now Florida is drilling down to individuals, writing to help them decide what cities and regions will mesh with them.

"No one has ever written a book on how much place matters to you," he said.

Some 40 million Americans move each year and 15 million make significant moves. "This is about how important place is to your happiness," he said.

Florida finds Seattle appealing not just for its economic assets but for "the personality of the place. In Seattle, it's not just an educated work force but a concentration of particular personalities. They're experience junkies."

In other words, this is not the retirement-and-golf crowd. Seattle's special characteristics draw the talent that feeds those special traits, a continuing cycle of success.

Florida said it has yet to play out how global warming and higher energy prices affect the mega-regions. But he was clear about the dangers that await the regions that Balkanize and indulge in fights between cities and their suburbs.

"Mega-regions are the new organizing economic units of our time," he said.

"Regions, cities and communities are no longer competing against their neighbors. If they expect to compete and thrive in the global creative economy — the spiky world — they will need to collaborate on mega-regional planning and economic development efforts."

Jon Talton is a journalist and author living in Seattle. For more than 20 years he has covered business and finance, specializing in urban economies, energy, real estate and economics and public policy. You may reach Jon Talton at jtalton@seattletimes.com

Copyright 2008 The Seattle Times Company

Given South Carolina's per capita income ranking fell to 47th in 2007 from 45th the year before, you begin to see the hill the state has to climb creating a few hundred jobs a pop (at $3m each in Google's case). There probably isn't enough money to fund all the tax breaks it would take, and, long term, there's still no assurance any given transplant company will stay forever.

Years ago the ex and I were asked to take a gay couple from Chicago to dinner. The ex's employer, Microsoft, wanted one of them really, really badly. He had turned them down twice already. So the company flew them out and I was seconded to John's effort to convince them Seattle was a reasonable substitute for Chicago.

Basically, what the couple wanted was a clone of their Chicago neighborhood: 19th century brick townhomes; an ethnically and racially diverse neighborhood, and a good Polish bakery within walking distance.

Seattle scored zero on all three counts. But they came to Seattle anyway. When a place lacks some things, you play up what you've got and put it in the context of being different but cool in its own way.

Which brings up the biggest hurdle South Carolina will face attracting knowledge economy companies and workers: social attitudes. As I've written about frequently, the "South Carolina is So Gay" tourism flap spawned by Republican blogger Adam Fogle at The Palmetto Scoop has given the state a black eye incalculably greater than the $4900 budget item he decried. To paraphrase the late Oregon Governor Tom McCall, there is now a huge class of well-to-do tourists who aren't even welcome to "come but don't stay" here. There's a wider circle of people who aren't gay but don't see them as threats to civilazation, who also don't like the state's reaction. They take vacations, too.

Think I'm tilting at windmills again? Consider this April news story:

OKC Chamber: Kern spooks big biz relocation consultant

April 16, 2008

OKLAHOMA CITY – A San Francisco Bay-area financial services company has not yet ruled out Oklahoma City for a major office relocation, a vice president of a real estate search firm confirmed. A decision is expected in three to four weeks.

But Tom Maloney, vice president of California-based Staubach Co., would neither confirm nor deny that the 1,000-employee, AAA-rated client company’s top executive is a lesbian who expressed concern over Oklahoma Rep. Sally Kern’s recent anti-homosexual statements, as has been the topic circulating among local business leaders.

Roy Williams, president of the Greater Oklahoma City Chamber, said the issue is a major concern the chamber is trying to address. He confirmed a Staubach consultant was troubled by Kern’s comments during a recent visit to the city.

“He told us straight up … ‘I cannot recommend to any of my clients that they should consider Oklahoma City because of that,’” Williams said. “When you have one of the nation’s premier relocation experts making those statements, you should pay attention to that and not dismiss it.

“And that’s immediately what happened: People said, ‘Well, then tell them not to come here.’ The problem with that is they (relocating firms) represent many of the Fortune 500 companies. And to be so dismissive of something that’s a lot more sincere than people are giving credit, to me, shows a lack of understanding of what’s really going on.”

Kern’s comments in March gained attention nationwide after her screed before a small audience was recorded and posted on the video-sharing Web site YouTube. She called homosexuality a greater threat than terrorism.

“Not everybody’s lifestyle is equal, just like not all religions are equal,” Kern said. “No society that has totally embraced homosexuality has lasted more than, you know, a few decades. So it’s the death knell of this country.”

Williams confirmed a Staubach representative was invited to Oklahoma shortly thereafter, but it was not directly related to Kern. He said the state Department of Commerce was seeking consultants to meet with Gov. Brad Henry’s economic development team to discuss a wide range of issues. Williams did not attend the meeting, but the chamber was one of the sponsors of the dinner event so he received a lot of feedback.

“He was here as a guest, to pick his brain,” Williams said. “It was just an unbelievable coincidence that it happened like that.”

At the Commerce Department, Business Services Deputy Director Sandy Pratt said it’s not unusual to bring business placement consultants such as Staubach to the state for feedback. Of the new businesses looking to come into Oklahoma, 40 percent to 50 percent are represented by site relocation specialists, she said.

But she said Kern’s comments have not been raised as a concern: “It did not come up in any of the governor’s economic development team meetings with consultants or discussions we’ve had with consultants,” Pratt said.

“We really try to focus on the positive attributes of the state. … We work with clients, and from time to time there always challenges and issues related to specific sites or incentives or other things around the state,” she said.

The significance of the Staubach visit to Oklahoma has grown with e-mail rumors. A representative of a national gay-lesbian-bisexual-transgender (GLBT) organization said notes are being circulated that the unidentified company is actually a motorist group – skewing references to the company’s triple-A credit rating – that 6,000 jobs are involved, and that the executive stormed out of the meeting in anger.

When asked about Kern’s recorded statements and their effect on any potential company relocations to Oklahoma City, Maloney said, “I’ve got no comment as to what, if any, impact that they’ve had.”

Maloney had little to say on his current project either, other than to confirm that Oklahoma City is “still on the list” and that a decision about his client’s relocation is expected in three or four weeks.

Jeb Conrad, executive director of the Indianapolis Economic Development agency, confirmed Indianapolis is also a finalist for the same financial services office relocation.

“Their (Staubach’s) reputation and respect, and the fact that we’ve had interaction with them before, gave us a high comfort level that we weren’t just competing for a dog of a company. … We have faith in this company that it’s going to be a quality opportunity,” Conrad said. “Indianapolis and Oklahoma City both have some good insurance and back-office opportunities, and very similar cost factors and real estate, versus the cost element that’s associated with San Francisco.

“From my understanding from the consultant, we’ve both put pretty good deals on the table,” Conrad said.

Williams said business relocations to Oklahoma City have slowed down, as they have nationwide.

“There’s still a fair number of announcements that happen. But it is not the way it was three, four or five years ago,” he said. “It has slowed down a little bit, which generally reflects the economic situation nationally. As a result, we have fewer relocation announcements than what we’ve had. I see that in talking with my colleagues everywhere.”

The downturn in relocations has been counterbalanced by the expansion of existing companies and rise in entrepreneurship, he said, helping the city gain a net 12,000 new jobs in the past year.

Pratt and Williams cited the state’s college work force, low cost of living, financial incentives and high per capita income as attractive elements. The city’s quality of life is improving as well, Williams said, with a wider ranger of leisure activities and creative outlets.

As for Kern’s comments, “They no doubt send a message out there that no city wants to send, and that is one of divisiveness instead of unitedness,” he said. For the last five years, the chamber has made a greater effort “to embrace differences and embrace diversity, to build a community that is open and welcoming to anyone.”

“What we’re trying to do is show people what happens here and the real experience, as opposed to one person’s opinion. Because when we bring a company in, we encourage them to talk with HR (human resources) people and CEOs, to ask them pointed questions about these kinds of issues,” Williams said. “The way the community operates and functions is quite different from what one or two people may wish it were.”

Kern was not immediately available for comment.

Google, Starbucks and other New Economy companies include these considerations in location decisions. Charleston, Columbia and Greenville are university towns with big government and corporate sectors dealing in international trade. Factors like that tend to aid the development of amenities and a degree of tolerance that attracts creative class companies and employees.

South Carolina's "So Gay" PR disaster would have been more embarassing but for the fact it had only a little ways to fall to hit bottom. Three weeks before the Fogle jihad, Eric Ward, in a long, fascinating Columbia Free Times article on South Carolina's institutional homophobia's effect on business, included this:

Another way that an anti-gay culture hurts a community’s and state’s economy on a macro level stems from how that location is perceived.

With tourism the No. 1 industry in South Carolina, the prevailing impression of the state in the GLBT community amounts to a death knell.

“There’s almost a sense of, you could get killed there,” says Ray Drew, director of South Carolina Equality, a group that works to equalize GLBT rights in the state.

The state should give pause to the dynamic, Shaw says. “I think South Carolina ought to think very directly about this economic impact because of our major industry of tourism,” he says.

Fogle's view, as I've quoted before, is that the state can get along just fine without them:

...y’all are all too eager to spend taxpayer money to lure gay tourists who will in turn spend more money so we can spend that on gay festivals to lure more gay tourists who spend more money to use for more gay festivals, ad nauseam.

Another nice irony is that a chunk of the underpaid Soth Carolina workers the Knowledge Sector Council leders want to raise up are, in fact, gay and lesbian South Carolinians. Researchers at the UCLA School of Law's Williams Institute, have found, in a June 2008 report, that South Carolina's 10,500 same-sex couples make significantly less money than married couples even though on average they are comparably educated, and also that markedly fewer same-sex couples are homeowners.

When the "So Gay" flap broke, state senator David Thomas told the press, "South Carolina is a wonderful, family friendly destination not a Southern version of San Francisco. This campaign goes against our core values."

Of coyrse, part of the freewheeling, highly educated culture of places like San Francisco- and Seattle- and Austin- is that they have large concentrations of gays and lesbians. A city at ease with minorities is a city at ease with creativity. The Bay Area, besides being a place abhorrent to Senator Thomas' views, is the home of Silicon Valley, which spawned the very knowledge economy his colleagues want to attract to South Carolina.

South Carolinians who think gays are awful don't have to stop thinking that. Washington State, which has recently enacted employment and hosing nondiscrimination laws as well as a civil unions act, has a robust religious community opposed to gay rights, usually expressed in the sort of ferocity South Carolinians will find familiar. They held up passage of the nondiscrimation laws for thirty-three consecutive legislative sessions. That was democracy at work. Two years ago the bills passed. That was democracy at work, too. Sometimes you win, sometimes you lose. But stacking the deck by law to try and win all the time isn't just unfair, as this post ought to have demonstrated by now, it's bad for business.

Let's hope-however faintly- that the new Knowledge Sector Council will recognize part of any successful strategy for attracting smart, high-wage business to South Carolina will be sitting down with the state's residents over the twenty coming years the Speaker of the House says jobs will be our number one issue, and suggesting ways they can deal a little more constructively with change, and with the realities of a world that is leaving them- and their children- behind.