Dance of the Reptiles (20 page)

February 15, 2009

Reaping the Fruit Planted by Greed

It wasn’t surprising that President Barack Obama came to Florida to push his economic stimulus package, because no place in the United States has fallen so hard, so fast.

And when the mega-recession finally ends, Florida will be one of the last places in the country to turn itself around. That’s because other states have actual industry, while our employment base depends fatally on double-digit population growth and, to a lesser extent, tourism.

Everything was going gangbusters when a thousand people a day were moving here, but now the stampede is over, and the jig’s up. Without fresh meat for the housing market, Florida basically hasn’t got an economy. Developers have controlled state and county governments for so long that no Plan B exists. Lost and clueless, lawmakers desperately hack away at public budgets while clinging to the hope that boom times will return.

For good reason, Florida has become the poster child for America’s fiscal disintegration. We stand at the top of the leaderboard in rising unemployment, foreclosures, and, of course, mortgage fraud. Where else could a man step out of prison and straight into a job peddling adjustable-rate home loans to buyers with virtually no credit?

As has been documented, more than 10,000 convicted felons were welcomed into the mortgage business under the unwatchful eye of the state’s Office of Financial Regulation. Believe it or not, many of those felons went on to perpetrate dishonest deeds and victimize gullible citizens.

The banks grabbed their piece of the action, too. Every major institution now standing in line for a taxpayer handout was an eager player in Florida’s real-estate frenzy, throwing money at just about anybody who asked for a loan. If you had a pulse and a checking account, you could find a mortgage.

For a while it seemed like everyone caught the fever. Couples who could barely afford one house rushed out and bought two or three more, planning to flip the properties for a quick windfall. Rabid speculation warped the market, and by 2005, the price of most homes bore no credible relation to their true value.

A few experts voiced alarm, but nobody listened. The history of Florida is that of greed run amok, and old habits die hard.

The most recent issue of
The New Yorker
features a scathingly accurate article about Florida called “The Ponzi State.” As one investment fund operator explained to journalist George Packer: “The Florida economy has been based on selling Florida. Our growth is all about population growth. When you take that away, what have you got?”

Today there’s a new wave of growth in the Sunshine State: Ghost suburbs. They’re springing up from one coast to the other—block after block of vacant, foreclosed homes, or houses that were built but never sold.

Obama’s visit to Fort Myers was meaningful for many who attended the town rally, but the president didn’t address the unique uphill challenges facing Florida’s path to recovery. For a state with 18 million residents, there are relatively few
large factories or assembly plants and not much high-tech enterprise. Agriculture—the one major sector that’s not tied to population growth—has been waning for years, as vast tracts of groves and farm fields have been bought up by developers.

Yet besides orange juice, veggies, and cattle, we don’t produce much of anything that the rest of the country wants. The state never made an effort to diversify because it didn’t have to. As long as people kept pouring in, nobody worried. For the most part, those who migrated here wound up with jobs that directly or indirectly depended on more people coming.

It was, in fact, a Ponzi scheme of phenomenal proportions.

Now, lacking that daily fix of a thousand new warm bodies, Florida’s in deep trouble. This is inevitable when the mechanism of your economy is modeled on that of a cancer cell.

Who knows when, or if, all those ghost suburbs will become neighborhoods again, all those empty condo towers and boarded-up shopping centers will bustle to life. One thing is certain: Government can’t make it happen.

The state stands to receive billions in recovery funds from Uncle Sam, some of which might actually trickle down to people who need it. Still, the money will do nothing for the long-range dead-end plight of a place where growth isn’t the product of prosperous industry; it
is
the industry.

Nothing about Florida’s frantic real-estate boom turned out to be enduring or real, except the suffering of those now losing their homes and their jobs.

They bought in to a dream and wound up in a nightmare.

February 21, 2010

“All the Free Speech Big Money Can Buy”

Despite the public’s epidemic disgust with politicians, now would be a splendid time to run for office in this country.

That’s because the U.S. Supreme Court has made it infinitely easier for candidates to sell themselves to special interests, who in return will peddle those candidates to voters.

The court’s controversial decision allowing unions and corporations to spend as much as they want on political races essentially trashed a century of campaign-finance laws, saying they violated the constitutional right to free speech.

Of course, the five justices who signed the majority ruling have lifetime appointments to the high court and will never have to run for office. That means they won’t get to experience the challenge of trying to campaign against an opponent whose media attacks are anonymously funded by the telecommunications industry or the banking lobby or the AFL-CIO.

Here in Florida, where oil companies are pushing hard for offshore drilling, the Supreme Court’s decision opens bountiful opportunities to incumbent officeholders and newcomers alike. Although coastal drilling remains an unpopular concept in most beachside communities, any candidate for federal office who supports it could probably count on ExxonMobil or Shell to come up with some slick and persuasive commercials, which would be blared over and over and over …

The old campaign-finance laws had holes as wide as the Holland Tunnel, but there were limits. Now it’s a free-for-all.

Candidates who take a stand in favor of industry regulation are certain to become targets of those industries in election years. More significantly, special interests will be
able to pick their own candidates and spend whatever their shareholders can afford.

For instance, now would be a great year to run as a pro–Wall Street candidate. Think about it. The whole nation is fuming about the federal bailouts, and the Obama administration is seeking to reinstate tough regulations on big banks and trading firms. Just last week, a group of senior and well-respected figures from the financial industry told
The New York Times
that strict reforms were necessary to prevent another crippling economic crisis.

Firms like Goldman Sachs, whose executives don’t like the idea, are eager to kill it. They have literally a fortune at their disposal during this election cycle, and would surely embrace any candidate who had nice, positive things to say about Wall Street.

A number of Republicans have already spoken out against the proposed banking regulations and are well positioned to receive boundless gobs of campaign money from Goldman and other “toobigtofail” companies. The only possible hurdle is public sentiment.

A new
Washington Post
–ABC News survey reports that a lopsided majority of Americans are seriously ticked off by the Supreme Court’s decision on election financing. The opposition cuts almost evenly across party lines. Of those polled, 85 percent of Democrats, 81 percent of independents, and 76 percent of Republicans think it was a bad move to remove campaign spending restrictions for companies and unions.

That’s an impressive consensus for a nation that’s supposedly divided.

Interestingly, on the issue of election funding, the Republican leadership appears to be orbiting a different planet than its conservative base. Senate Minority Leader Mitch McConnell of Kentucky and other GOP big shots have cheered the
Supreme Court ruling, and they’ve made it clear that they would try to block any new legislation that would curtail corporate donations to political candidates. The reason is no mystery—the Republicans have traditionally been the party that snuggles up to Big Business, and they stand to gain the most from this opening of the floodgates.

Two Democrats, Sen. Charles Schumer of New York and Rep. Chris Van Hollen of Maryland, are leading an effort to pass a new campaign-finance law in advance of the November elections. They want to make corporations tell shareholders what they’re spending on political races, and they also want top executives to appear in campaign ads being funded by their companies.

Knowing who paid for political commercials would definitely make them more informative, but neither the corporations nor their stooge candidates will be eager to advertise the cozy relationship.

Neutralizing the Supreme Court decision is practically impossible without bipartisan cooperation, which no longer exists in Congress. If nothing happens soon, special-interest windfalls will shape the upcoming elections as never before.

If you thought the airwaves were polluted during the 2008 campaign, just wait until the fall. Political ads will be even more deceptive, nasty, insulting, and abundant—all the free speech that big money can buy.

That’s dreary news for voters but good news for a certain breed of politician.

September 26, 2010

Someone Give These Guys Memory Pills

The myth of Republican frugality is graphically exemplified by an ornate new state courthouse, about six miles from downtown Tallahassee.

It will soon house the First District Court of Appeal, and it was financed primarily with a $35 million bond issue that was slipped into the 2007–2008 budget at the last minute.

Originally (before a splatter of bad publicity), plans called for the new courthouse to provide each of the 15 appellate judges with their own 60-inch mahogany-trimmed flat-screen televisions. Architectural features included individual bathrooms and kitchens, as well as a fitness room. A grand dome was installed, modeled on a Michigan courthouse that some of the Florida judges had toured, traveling there on a private jet paid for by the builder.

The $48 million judicial palace—now derisively dubbed the “Taj Mahal”—was constructed at $425 per square foot, compared with $250 per square foot for most state buildings.

To make matters worse, the new First DCA courthouse will cost the badly strapped state court system about $1.7 million a year in rent. The old court building was rent-free.

How could this happen?

It started with now–Chief Judge Paul Hawkes, a former GOP House member, and Judge Brad Thomas, who worked for years as a Senate staffer. Both men, who were appointed to the First DCA by then-Governor Jeb Bush, aggressively worked the halls of the Capitol, lobbying former colleagues to build them a swanky new courthouse.

The boondoggle was a Republican operation from start to finish, and election-year amnesia has afflicted almost everyone involved.

Marco Rubio, for example, was the House speaker at the time the courthouse bond issue got tacked on to a 142-page transportation bill. For such a young fellow, Rubio has frequent memory lapses. Just as he supposedly couldn’t remember all those personal expenses he put on his GOP American Express card, he now says he can’t remember the hefty courthouse appropriation. Rubio insists the project was a state Senate priority and that he had nothing to do with it.

Unfortunately, his version of events is disputed by his old buddy and former House budget chief, Ray Sansom, now awaiting trial for allegedly steering $6 million in public funds to build a jet hangar for a rich crony (another suspect budget item that Rubio cannot recall). Sansom says Rubio personally assured him that the new First DCA courthouse was a top priority, and that Hawkes repeatedly reminded him of Rubio’s interest.