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Obama's effect on Florida's economy

Businesspeople are asking how many of President-elect Barack Obama’s economic campaign promises he will be able to deliver on, considering the poor economy. Many observers say he may have to put several plans on hold to deal with existing realities.

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Businesspeople are asking how many of President-elect Barack Obama’s economic campaign promises he will be able to deliver on, considering the poor economy. Many observers say he may have to put several plans on hold to deal with existing realities.

Tearing down free-trade agreements? Hiking taxes for small businesses? Imposing new federal oversight of banks and insurance companies? Charging more for hotel rooms because of higher unskilled labor costs?

Speculation is just heating up over how a Barack Obama presidency will impact area companies and the broader Florida economy.

Obama's sweep into the Oval Office coupled with a strengthened Democratic majority in Congress could usher in an era of heightened regulation. Some economists and local business leaders predict the new administration could put a chill on defense industry spending, crimp international trade and force hotels, restaurants and retailers to pay more for unskilled labor —all issues hitting core industries in Florida.

The overriding question: How much freedom or money will President-elect Obama have to turn campaign rhetoric into reality come January given the ongoing economic crisis?

"We have the potential of a trillion-dollar deficit," University of Central Florida economist Sean Snaith said.

"How many tax rebates can we hand out? And do we really want to be taxing businesses more at a time layoffs and unemployment are rising?... Fiscal constraints are going to orphan a lot of these promises made on the campaign stump."

Indeed, St. Petersburg Chamber of Commerce president John T. Long thinks the new American president will be hard-pressed to do anything that drives up business expenses in this climate.

"Election promises are just that — promises," he said. "Governing is a reality"

One area likely to be addressed early: greater regulation of the financial services industry.

Wendell "Bucky'' Sebastian, president of the 205,000-member, Tampa-based GTE Federal Credit Union, said increased federal oversight would have been the mantra regardless of the winner on Tuesday.

"The agenda of the previous administration was less scrutiny, less supervision, letting the markets go," Sebastian said. "I think this approach will be very different."

Burton Wiand, head of Fowler White Boggs financial services practice group in Tampa, said the makeover could cover the spectrum, affecting banks, insurance companies, credit unions, securities brokers and mortgage lenders.

For a blueprint for reorganization, Wiand harkened to last March when Treasury Secretary Henry Paulson criticized the patchwork of state and federal government oversight of banks and brokerages. Paulson proposed converting the Fed into a banking "supercop" and merging the SEC and the Commodity Futures Trading Commission into a single regulator.

"I don't see that what Obama is proposing is dramatically different than that," Wiand said.

Beyond the financial overhaul, the new administration is expected to make job-creation programs and affordable health care front-burner agenda items.

Snaith, the UCF economist, said an anticipated push toward providing more benefits for unskilled laborers could drive up costs for both tourism and the service industry. And he's on the lookout for such health care changes as price controls on pharmaceuticals.

The hard-strapped real estate industry, even those who supported McCain, saw some positives coming out of the Obama election.

Take Craig Beggins of Century 21 Beggins Enterprises in eastern Hillsborough County. While he dubs many Obama proposals "empty campaign promises," Beggins vouched for the real sense of confidence among the majority that supported the president-elect. More confidence could translate into brisker home sales.

"Sixty percent of the people in the country are happy now. A lot of the problems we had were based on fear. Now we have 60 percent that is hopeful. Hopefully that will trickle down to something good in our industry," Beggins said.

Wayne Wallace, founder and owner of Solar Source in Largo, said he hopes Obama's plans to pump money into renewable energy will kick-start his business and create jobs.

He sees dozens of out-of-work electricians, builders and plumbers desperate to find jobs lost to the housing bust. If Obama pushes new renewable goals and incentives, Wallace said he'd start hiring.

"We could have thousands and thousands of jobs right here in Florida," Wallace said. "This is a big time jobs issue. And the fringe benefit is that we ween off fossil fuels and help stop the climate crisis. It's three birds with one stone. It makes almost too much sense."

Long, the St. Pete chamber chief, said he hadn't heard much postelection grief from members who had opposed Obama. What surfaced more, he said, was a sense of relief that the process was over.

"No matter which side won," he said, "it seems most people were tired."

Times staff writers Asjylyn Loder and James Thorner contributed to this report. Jeff Harrington can be reached at (727) 893-8242 or

Obama's effect on Florida's economy 11/08/08 [Last modified: Monday, November 10, 2008 1:23pm]
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