It’s Milken’s Nevada—we just live in it
Reno placed No. 21 this week on a list of 200 “best performing” cities, up from No. 26 in 2004. The list was compiled by the Milken Institute.
The Institute was formed by junk-bond king Michael Milken the same year he went to federal prison. It has turned out many studies that question government regulation (Rethinking Bank Regulation) of the type that led to Milken’s imprisonment for tax and securities fraud. It also issues studies that lionize the business community.
Reno made the list because of growth of jobs, salaries, contributions to the gross domestic product and high technology growth.
Las Vegas made the list at No. 11, down from No. 2 in 2004.
The city touted the Milken ranking, but Sparks Tribune columnist Andrew Barbano observed, “The one-year job growth numbers reflect high demand, especially construction, in a compressed period of time. The five-year job growth numbers and rankings are much lower. Combine that with a low starting point for wages in our service economy, and a short term aberration becomes quite possible if not glaringly apparent. … The big question is what happens when our bubble bursts.”
These rankings are just the tip of Milken’s involvement in Nevada. After serving less than one-fifth of his 10-year prison sentence from 1991 to 1993 (he was released on health grounds) and paying a $200 million fine and $400 million to his victims, he began rehabilitating his image by throwing money at charities and teachers ("Can this junk bond king buy redemption?” Sept. 4, 1996). Milken credits himself with “kickstarting” the Las Vegas economy and has been a critic of state education.
Milken publicity material often mentions Nevada, sometimes in stereotypical terms, as in this press release about a grant to a teacher: “Las Vegas is world-famous as a place where one can gain a large financial sum instantly—and unexpectedly. Typically, however, such windfalls happen in casinos, not in a school auditorium like the one at the newly opened Tony Alamo Elementary School. But that’s precisely where teacher Bonnie Murray got a $25,000 jackpot Wednesday afternoon.”
The personal profile posted on Milken’s own Web page reads, “Another way to look at the impact Milken has had is to consider just one state. Nevada, the fastest-growing state in the nation, saw its economy kick-started by Milken’s financing of its gaming industry, newspapers and homebuilders. The rule of thumb in the gaming industry is that every job created within the industry creates more than three additional jobs in the local economy. By that measure, his financing of MGM Mirage, Mandalay Resorts, Harrah’s Entertainment and Park Place accounts for something like 600,000 jobs.” (Milken’s games with Las Vegas stock shares was one of the crimes for which he was convicted.)
Milken has a home in Incline Village that he built on land previously occupied by three homes that he demolished. One of his neighbors is casino executive Steve Wynn, reportedly a frequent visitor at Milken’s house. Critics have pointed out that association with an ex-felon is usually cause for action by gambling regulators, but the issue has never caused Wynn problems.