New Yorker: The Ponzi state of Florida
Feb. 9 & 16 issue of The New Yorker features a scathing view of Florida's real estate bust gone wrong entitled, "The Ponzi State, Florida's Foreclosure Disaster," by George Packer.
Packer interviews CFO Alex Sink, Congresswoman Kathy Castor, Tampa Mayor Pam Iorio, all Democrats, dozens of real estate, banking and housing professionals and many of the unfortunate souls caught in the crosshairs of the crisis. He cites the in-depth series of articles by both the Miami Herald and the St. Petersburg Times that exposed the factors that contributed to the crisis and he tries to talk to Gov. Charlie Crist but "the governor's office did not respond to requests for comment.''
"This is one of the places where the financial crisis began,'' Packer writes, after vividly describing the ghost subdivisions surrounding Tampa Bay. "Florida has epitomized the boom-and-bust cycle of American business ever since a land rush in the nineteen-twenties ended with the devasting hurricane of 1926. The state’s economy depends almost entirely on growth – that is, on new arrivals and the wealthy the generated in construction and real estate."
The pivot quote of of the story comes from Gary Mormino, professor of history at the University of South Florida St. Petersburg: “Florida, in some way, resembles a modern Ponzi scheme. Everything is fine for me if a thousand newcomers come tomorrow. The problem is, except for a few roadbumps – ‘73, ’90, and they were really minor – no one knew what would happen if they stopped coming.”
The story is classic New Yorker: rich in anedotal detail and you-are-there description, way too long but a must read.