Take all the economic lessons of 2008, and they boil down to one we all heard growing up (but many of us apparently forgot):
Don't bite off more than you can chew.
This was a year of watching so many parts of the economy choke with their more-than-a-mouthful approaches. Our eyes clearly became bigger than our stomachs, and certainly larger than our wallets.
Now we must pause to digest and hopefully reconsider our consumption habits.
In all the years I've worked as a business writer, editor and columnist — and we're going back to the Jimmy Carter years — 2008 proved a record year for hard lessons. Given our short attention spans, I'm not sure we've learned those lessons, but they have been delivered to us with a hard ruler in hand and at high cost. And we will very likely be taught some of those lessons again in 2009 if we don't get them the first time. Let's review six of them:
It's time to reinvent Florida for the better. You've heard this before, but 2008 delivered the message with a megaphone and a hard kick in our collective derriere. Waving suntan lotion at Northerners in the winter like some warm-weather aphrodisiac is fine, but it can no longer be a mainstay of Florida's future. Retiring to Florida to enjoy sunshine on the cheap is no longer a formula that works. It may be less pricey here than in some other regions of the country, but it's getting too expensive to market ourselves in this fashion.
Look at the migration statistics that came out last week from the U.S. Census Bureau. For Florida, it should serve as a "Hello, McFly" wake-up moment. While Florida has attracted retirees and "try again" job seekers for decades from the North, times are changing. Over the 12 months ending July 1, the census said Florida saw 9,300 more people leave than move here. Florida's population grew only because of births and immigration.
So will this reverse-migration pattern endure once the recession eases (and folks in states like Michigan can sell their homes without getting soaked)? No. People still want to come to Florida, but it's highly unlikely they will come in the droves of yesteryear. Let's get over it and find smarter, more competitive reasons to consider living in Florida.
Florida's deflating housing bubble still has a ways to go. The decline in housing prices has been relentless in the state and in the Tampa Bay market. In the past year (measured from Sept. 30 to Sept. 30), Florida home values declined a whopping 16 percent, ranking Florida 49th among the states and Washington, D.C. Only California (down 20.8 percent) and Nevada (down 20.9 percent) had steeper declines in home prices in the past year, according to the Federal Housing Finance Agency.
Ranked nationally among metro areas, Tampa Bay's 15.09 percent drop in home prices over the last year put it at No. 258. Still, over the past five years, Tampa Bay home prices appreciated a respectable 37.6 percent. One painful lesson: Florida's housing market is rebalancing and becoming more affordable for a state with modest wages. That's a good thing but serves as little consolation for many whose mortgages are bigger than their home values these days.
Florida's other bubble burst this year: jobs. We don't call it an employment bubble, but how else can you explain it? We're like the Tampa Bay Rays' "worst to first" baseball season, but in reverse. The state went from first to worst in employment, losing more jobs in the past year than any other state. You can't have that kind of violent swing in employment and not call it a bubble. The lesson? Network, hone job skills and anticipate your own job prospects during the good times so you can minimize the impact of a lost job in bad times. Better to get hired anew with in-demand job skills than depend solely on getting rehired when the recession turns. That's an iffy strategy at best in such a turbulent time.
The great deleveraging, or "Where did all my credit go?" When your house is losing value, when your job (if you still have one) is demanding more of you and paying less, when benefits are getting more expensive, when basics like electricity and water are going up, what do you do? You spend less on other stuff that's not critical. Banks are making it easier because they're not lending much these days, anyway. But the outcome of becoming less leveraged (less debt-dependent) is ugly. Fewer houses are sold, empty showrooms abound at car dealerships and we all just saw a sharply leaner holiday shopping season. The lesson? Be smarter money managers and don't be so eager to take on more debt without a good reason. If only Wall Street had taken this advice.
Florida's now part of a dramatic redefining of our free-market system. In Florida's heyday, I routinely received e-mails from readers scorning any suggestions that obscene corporate profits or stratospheric CEO pay would come back to haunt us. Let the free markets operate, the e-mails roared, and let Darwin's survival of the fittest decide winners and losers. Funny, I don't get those chest-puffing messages much anymore. The emergence in 2008 of massive, repeated and seemingly ubiquitous mega-bailouts from the federal government — using taxpayer funds that we may not see again — sent a striking message: Capitalism talks a good game, but in times of true economic calamity, we are not willing to let big companies or even big industries fail, even when it's clear they deserve to. Wall Street? Rescued. Big banks? Recapitalized with federal money. AIG? Does this company have incriminating photos of federal officials? A wheezing auto industry? Bailed out, for now, though not without theatrical reluctance.
The final lesson of 2008 we clearly have not learned: humility. It's not really America's style. Just remember: When the next big cry for bailout comes next year, don't travel to Washington by private jet. Take the limo, for heaven's sake.
Robert Trigaux can be reached at firstname.lastname@example.org.