COVID-19: Florida’s non-diversified economy is in big trouble. What do our readers think should be next?

I’ve recently been hyper-analyzing future airline schedules and have come to a very unfortunate conclusion – major US airlines are looking to ramp up service to a large percentage pre-pandemic levels everywhere in the nation outside of Florida.  Part of this is to receive bailout money which comes with strings attached (servicing destinations that might lose service otherwise), but much of it is down to economic realities. Additionally, many foreign airlines are ramping service back up to other US points before they resume Florida flights.

Our inability to properly diversify our economy, nor attract the sort of young professional people who travel extensively on business paying premium airfares means service levels will not be restored for some time. Let’s look at this from a macro level today.

Air Canada Rouge planes at Fort Lauderdale-Hollywood International Airport – Orlando and Fort Lauderdale were Air Canada’s 2nd and 3rd largest non-Canadian stations (behind London Heathrow) prior to COVID-19 shutdown
By JTOcchialini – Here They Come FLL JTPI 7084, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=69445782

Florida cannot reasonably expect to restore its economy to pre-pandemic levels. And that economy was deeply flawed.  The state has in the last dozen or more years been far more focused on creating low wage, low skill jobs rather than the type of economic engines and diversity that moved Florida forward in the 1970’s and 1980’s.

While states like New York, Illinois and Washington have been hit harder by COVID-19 than Florida, they will recover MUCH faster than we will. This is because of the diverse economies those places have developed over time as well as the high-end businesses and professionals those states have attracted.

In contrast, Florida is overdependent on tourism and new housing/retail development for most  economic activity. When combined with average infrastructure, a lack of high-wage professional jobs, few Fortune 500 headquarters and little or none of the trappings of successful urban areas (good mass transit, good museums, cultural options, etc) the state is incredibly vulnerable to any economic downturn. 

Also complicating matters is social distancing will end but inevitably some percentage of the population, be it 2% or 5% or 10% will be germaphobes and likely allergic to crowds. This will hurt Florida’s amusement parks and cruise industry into perpetuity. While no one is to blame for this reality, it will have to be addressed by our leaders.

Long gone are the heady days of the Askew and Graham governorships when Florida attracted film makers, a creative class of young professionals, tech startups, defense contractors and large international businesses. In that era, Florida was the envy of the nation and the most successfully progressive Sun Belt state in creating professional jobs, a new urbanism, protecting our natural resources and managing growth. Today by comparison, Florida is a national joke and a model for how not to govern a state.

Florida’s failure is squarely on this generation of Republican elected officials who are so wedded to their ideology and so narrow-minded in their world view, they cannot see the forest from the trees. But not all GOPers were always like this, even in the last twenty years.

As time goes by, I realize the day Florida changed forever was when the group of moderate Republican State Senators were term-limited in 2012. The loss of voices of reason with a relatively non-partisan, Florida-oriented world view like Paula Dockery and Mike Fasano led to a runaway Republican Party. A decade prior to that, former Senate President John McKay’s (R-Bradenton) had good ideas around taxation that could have really helped diversified revenue sources. But McKay’s plans were never taken seriously by most of the GOP and many even so-called liberal Democrats rejected his wise ideas, or even having an open discussion on it.

So as a result the state was left with two competing political forces. The governing party is the GOP that was created by Rick Scott, whose priorities revolve around paying back campaign contributors and adhering to strict ideological doctrines. The minority party is ineffective Democrats, completely unable to properly frame a message that appeals to the state’s citizens on the policies they oppose. The party is also increasingly ideological due to members being largely elected from safe seats in primaries with 10-15% overall turnout, and who therefore cater to a narrow set of interests.

Donald Trump’s economic policies have been a combination of hard-right corporate conservatism and left-wing anti-free trade populism combined with government subsidies to rural areas that support Republicans. As an economic philosophy it’s incoherent and inconsistent. The result is a temporary situation where Florida’s economy looked good before COVID-19 but is now in the tank. The Trump economy was always going to tank, but would have done so in the year or so after he would have otherwise been reelected in November 2020.

Our leaders, however incapable they might be of making independent decisions or being creative with policy MUST find solutions. What should they propose? What ideas do our readers have? Leave all thoughts in the comments section.

7 comments

  1. 1. It isn’t just FL that’s seen the R party fly off the rails. See, e.g., Why we’re polarized, by Ezra Klein.

    2. it’s too soon for macro economic policy recommendations. The implications and consequences of this pandemic will be wide ranging and fairly random. It will take some time for things to shake out.

    3. That said, ANY community can implement micro economic policies that encourage individual action. See, e.g., Nudge, by Richard Thaler. For example, in FL we have abundant sunshine and rain. What can individuals do with that? Well, for starters, how about generating billions of dollars in solar power? How about growing backyard food that’s probably worth a similar amount? You don’t have to risk getting COVID to install solar (or have it installed).

    4. There are lots of activities that can be done by individuals, in their homes. All that’s needed is an economic system that’s created to coordinate those activities.

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  2. Term limits are one of the worst things that’s ever happened in Florida government. Serving in the legislature is now a short term gig used to build a résumé for a high-paying lobbying job. Gone are the days when most people ran in order to serve the public. So my first suggestion would be to educate the public and then run a campaign to repeal legislative term limits.

    My second suggestion would be to scrap the current tax code and write a more progressive one.

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    1. that’s not my understanding – seems to me that many politicians go from house to senate and back to house again. They stay in politics, just playing musical chairs.

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  3. Jeffery · · Reply

    State income tax!

    And yes get rid of term limits.

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  4. Since you mention mass transit let’s not forget High Speed Rail.

    Also eliminate the regressiveness of sales taxes. More exemptions, lower rates.

    Offset it with intangibles taxes, the same ones the legislature eliminated years ago.

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  5. Testing, testing, testing …

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