By Alan Farago
August 4 / 5, 2007
Presidential candidates mis-pricing risk to American voters in dismal economy. In the summer of 2000, I looked out this same window in a small house on an island in Maine and, watching the tide emptying and filling the cove, contemplated what it would take for Gore to win the 2000 election.
I had a lot of company in despairing that advisors had prevailed in persuading candidate Gore to stifle the environment as a campaign issue.
At the time, I was spearheading a campaign to stop the Clinton administration from allowing political insiders and powerful campaign contributors in Florida’s largest county, Miami-Dade, from hijacking a former military base at the edge of the Everglades and turning it into a privatized, commercial airport.
Voters were upset enough how Clinton and Gore both were avoiding the environment that the beneficiary in the November 2000 election would be Ralph Nader—as indeed he was in Florida.
To be fair, Gore advisors had a rationale for believing that “the environment’ was on balance negative. The air base fiasco was far from the only mistake made in that respect.
But the lesson is this: insiders, cocooned in political campaigns and preoccupied with the challenge of raising campaign cash from an economic elite, tend to mis-price specific risks that touch ordinary people and ordinary voters.
While the Iraq quagmire is on voters’ minds, the 2008 election will be about the economy.
In this respect, Florida is again instructive to candidates who may be the next president of the United States.
Bloomberg reported (July 20,2007) on the weird manifestation of the housing boom and bust as dozens of construction cranes in Miami edge skyscraper condominiums toward foreclosure. “The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida’s economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody’s Economy.com, who owns a home in Vero Beach, Florida.”
Forget about October: the Florida economy is in a recession today.
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(h/t: Speaking Truth to Power)