If the COVID-19 crisis has brought anything to the forefront of our collective consciousness, it is the concept of a “black swan” event.
First popularized in the early 2000s by professor-investor Nassim Nicholas Taleb, a black swan is an unpredictable event beyond what is ordinarily predictable, with potentially severe consequences.
Black swan events can cause catastrophic damage to an economy and, because they are not often specifically predicted, can only be prepared for by building systems designed to address them from multiple angles.
In addition, reliance on standard forecasting tools can both fail to predict and potentially increase vulnerability to black swans by propagating risk and offering false security.
While the degree of foresight/hindsight regarding COVID-19 is a matter for debate, we now find ourselves — as a state and a nation — in a position to begin examining the impacts and planning for the path ahead.
Until the virus hit, Florida had become a more than $1 trillion economic superpower with a jobless rate of 2.8%. Our economy at the time was ranked as roughly the 17th largest in the world. As we effectively shut down the economy for a period, and hundreds of thousands of Floridians found themselves unable to work, much of that momentum has been lost.
There is no question that our economy is not a light switch — and individuals will take time to get back to a place where they are comfortable in larger crowds or proximity to strangers. With our tourism economy generating $6 billion of tax revenue a year, there is also the question of how our state’s financial picture adjusts to a new reality.
Make no mistake — we have been challenged before as a state, and we rallied to recovery like no other place in the country.
In the 2008/2009 financial crisis, our unemployment rate reached more than 12%. We went from that to 2.8% under steady leadership and the strength of our governing approach — limited government, a positive business climate, and a commitment to economic opportunity for all.
It is for those reasons that our state became a beacon for prosperity, realizing more population and income migration than any other state. Florida was the pinnacle of economic success, and we will collectively become that again — if we remember what got us there.
Gov. Ron DeSantis, the Cabinet, and the Legislature have done a great deal to address both the health and economic impacts of the COVID-19 crisis. While expecting perfection would be beyond unrealistic, their actions have helped make the overall toll of the pandemic less than it might otherwise have been.
The Governor has taken the first step in establishing the Recovery Task Force executive committee to begin the journey back to economic health.
We are honored that James Madison Institute Board Member and AT&T Florida President Joe York is a member of that group.
As the task force commences, the policy team at JMI would like to propose the following five principles that we hope will guide discussions and frame decision-making for the best possible future for our great state.
Principle 1 — Empower free markets and private enterprise
The fundamentals of Florida’s economy are no different than they were before the pandemic.
We generate prosperity through the power of free markets, free enterprise and capitalism. Whether health care, education or tourism, our economic recovery will be stronger and faster through empowering free markets and private enterprise.
Principle 2 — Embrace deregulation wherever practical
Overregulation, particularly by the federal government, has had terrible effects on the virus response. Shortages of equipment are a direct byproduct of overbearing and onerous regulations that stifled production.
Never stop asking the question — if a regulation has been waived for the crisis, was it truly necessary in the first place?
Principle 3 — Protect Floridians’ rights — both civil and property
This crisis exposed heavy-handed edicts from state and local officials outside Florida that serve no purpose other than blatant power grabs. We should ensure a balance of health and societal needs with the need to protect civil and property rights.
Principle 4 — Unleash and enable the power of innovation
Technology — social media, tablets, internet video conferencing, virtual learning, viral campaigns to keep small businesses afloat, and other innovative efforts have made social distancing more bearable. These advances come about not at the directive of government, but through the power of entrepreneurs.
Foster innovation. We will reap the rewards.
Principle 5 — Respect the proper roles of the Executive, Legislative and Judicial branches
The wisdom of the founders in establishing checks and balances is a hallmark of our success as a Republic. State leaders should seek to ensure that we continue to respect and build up the proper roles of the executive branch, the legislature, and our courts in setting agendas, articulating policy, and interpreting laws and the constitution.
As we begin the long journey ahead, there will be no shortage of ideas, proposals, and policy suggestions to bring about the dynamic recovery we all want.
By filtering those ideas through the five principles articulated above, we’re confident that the Florida to come will be even more significant than the Florida we enjoyed before.
Dr. Robert McClure is CEO of The James Madison Institute (JMI); Sal Nuzzo is JMI’s vice president; Bill Mattox is Policy Director of the Marshall Center for Educational Options at JMI, and Logan Padgett is JMI Director of Communications and Public Affairs.