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The Giant Ponzi Scheme Called Florida

It’s says something about the state of our state that The New Yorker’s examination of “Florida’s foreclosure disaster,” was written by George Packer, one of the nation’s most acclaimed war correspondents, whose best known work came out of the havoc of Iraq.

Packer merely shifted his attention to the ravage and ruin at the epicenter of the world’s new great crisis. We’ll call it Florida.

His article in the Feb. 9 issue won’t surprise us – we’re living with the economic atrophy brought on by the astounding and reckless and often fraudulent speculation that turned Floridians into crazed real estate junkies, but he appraises our mess with the eye of someone expert in the dissection of catastrophes. He captures our predicament nicely in this paragraph:

Only Nevada has a lower proportion of native residents than Florida. The state’s growth machine did not depend on higher education or high-paying professional jobs; it depended on real estate and sunshine. Tourism and migration allowed Florida to become a low-tax, low-wage state, where living was relatively cheap. “The Florida economy has been based on selling Florida,” David Reed, who runs the Florida operation of an investment fund called CapitalSouth Partners, said. “Our growth is all about population growth. When you take that away, what have you got?”

Well, we now know the unhappy answer to that rhetorical question.

Packer ponders just who ought to be saddled with the moral responsibility for this giant Ponzi scheme that has come tumbling down on our collective heads. He writes:

. . . the diagram of moral responsibility looked like an inverted pyramid, with the lion’s share belonging to the banks, mortgage lenders, regulations, and politicians at the top. And yet anyone buying and selling property in Florida in the middle of the decade must have known that the system was essentially a confidence game, that everyone involved was both being taken and taking someone else. Easy credit and mistrust are two sides of the same economic. . . . A Ponzi scheme succeeds only when enough people are willing to put aside common sense, and on some level they know they are doing it. The result is universal credulousness and universal fear.

The villains here look a lot like us.


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