Advertisement
  1. Florida Politics

Donald Trump blames Jeb Bush for the recession in Florida

Observers told us that it is foolhardy to pin the meltdown on any single state official, let alone Jeb Bush. The downturn was a nationwide phenomenon, not just a problem in Florida. [AP photo]
Published Sep. 20, 2015

Billionaire businessman Donald Trump blamed former Florida Gov. Jeb Bush for the Sunshine State's recession woes, saying Bush's policies were the catalyst for financial disaster.

"Jeb's policies in Florida helped lead to its almost total collapse," Trump tweeted on Sept. 8. "Right after he left he went to work for Lehman Brothers — wow!"

There's no question that Bush oversaw a booming economic climate in Florida while he was governor. Between January 1999 and January 2007, the state's population grew by 3.5 million people, a legacy that is now a cornerstone of Bush's presidential campaign.

He has made repeated boasts about spikes in job growth and cuts in taxation and spending. But he also was fortunate to leave office just as the economy was starting to falter.

The state's housing market, which had skyrocketed even more than the rest of the nation, cratered in the aftermath. Florida eventually lost 1 million of the 1.33 million new jobs that were created during Bush's tenure. Many critics, like Trump, have said Bush can't take credit for the party without accepting the blame for the hangover.

So what caused the financial crisis? It was a mix of factors, leading to a perfect storm as home sales peaked in 2005 and 2006. The combination included untested financial regulations, lax lending, overzealous bankers and traders, poor risk assessment, greedy investors, compliant governments on all levels and a global economy looking for easy money. When the bubble burst, Florida was among the hardest hit because it had gained so much during the boom.

But observers told us that it is foolhardy to pin the meltdown on any single state official, let alone Bush. The downturn was a nationwide phenomenon, not just a problem in Florida.

"During a time when the global financial system was pumping cheap money into housing, mortgage credit rationally flowed to the fastest growing states," said Kwame Donaldson, an economist at Moody's Analytics. "This system inflated prices in these states to unsustainable levels, and created the boom-and-bust cycle that seems so obvious in retrospect. None of this is Jeb Bush's fault."

That's not to say Bush escapes all culpability. Some economists and experts told us that Bush's actions surely encouraged overbuilding during the boom, and state officials became addicted to the increase in tax revenue it brought, especially for schools. Many of those results were based on Florida's growth management policies, however, which had been in place long before Bush took office.

Under Bush, the state did loosen construction regulations by weakening the Department of Community Affairs, said University of Florida Bureau of Economic and Business Research economist David Denslow, but easing rules on building happened at all levels of government.

It also was a combination of what Bush didn't do that helped fuel the bubble.

"With hindsight, Bush could have discouraged excessive development through more regulation of the mortgage industry, … with speeches saying house prices were too high, and by strongly fighting for higher impact fees," Denslow wrote in an email. "That said, there were similar housing booms in other places that had pretty much avoided them since the early 1970s."

Some states managed to avoid the worst of the recession with policies that controlled growth and borrowing. Texas, for example, did not suffer as badly because the state restricted how much equity homeowners could pull out of their homes.

But other states like Arizona and Nevada joined Florida in disproportionately enjoying the boom and suffering more during the bust. Florida State University economics professor Randall Holcombe added that Florida had the double whammy of losing tourists during the recession, weakening another cornerstone of the state economy.

But none of this nuance is apparent in Trump's accusation, Holcombe said, because the billionaire doesn't give any specifics. (We asked Trump's campaign for evidence but didn't hear back.)

"Only somebody who is very uninformed would blame that downturn on Jeb, or on economic policy at the state level in Florida," Holcombe said.

We rate Trump's statement Mostly False.

Read more rulings at PolitiFact.com/florida.

ALSO IN THIS SECTION

  1. The Capitol is seen in Washington on. Impeachment hearings for President Donald Trump come at the very time that Capitol Hill usually tends to its mound of unfinished business. J. SCOTT APPLEWHITE  |  AP
  2. This March 7, 2016, file photo shows the Trump National Doral clubhouse in Doral. WILFREDO LEE  |  AP
    A party spokeswoman confirmed to the Miami Herald Thursday that the annual event, to be held over several days in late January, will take place at Trump National Doral Miami, located near Miami...
  3. Ross Spano serving in the Florida Legislature in 2017. The Dover Republicans 2018 campaign for Congress is now under federal investigation. SCOTT KEELER  |  Times
    The House Ethics Committee revealed the Dover Republican is under federal investigation for possibly violating campaign finance law.
  4. Student activists with the March For Our Lives group, founded after the Feb. 2018 Parkland shooting, hold a banner that promotes their new "peace plan" to prevent gun violence, while demonstrating in the rotunda of the state capitol building in Tallahassee. Emily L. Mahoney | Times
    The 18-year-old student director of March for Our Lives Florida said school shootings are so common they are “not shocking” anymore.
  5. Gov. Ron DeSantis greets local officials at Dunedin High School on Oct. 7, 2019, part of a swing around the state to announce his plan to boost starting teacher pay in Florida to $47,500. He revealed a related teacher bonus plan on Nov. 14 in Vero Beach. MEGAN REEVES  |  Tampa Bay Times
    The new plan would replace the controversial Best and Brightest model that DeSantis had called confusing.
  6. Florida Senator Darryl Rouson on the floor of the Florida Senate. [SCOTT KEELER   |   Times]
    His office said he had been considering filing the bill, but a Times/Herald investigation published Wednesday prompted them to move more quickly.
  7. Sen. Rick Scott, R-Fla., questions FBI Director Christopher Wray during a Senate Homeland Security Committee hearing on Capitol Hill in Washington, Tuesday, Nov. 5, 2019. Also pictured is Sen. Rick Scott, R-Fla., left. (AP Photo/Andrew Harnik) ANDREW HARNIK  |  AP
    Scott is co-sponsoring a bill to overturn a 1950s Supreme Court ruling.
  8. Tiffany Carr — shown during a 2004 visit to a Hollywood nail salon, where she spoke on domestic violence — was paid $761,560 annual salary as head of the Florida Coalition Against Domestic Violence. MIAMI HERALD  |  [Bob Eighmie Miami Herald file photo]
    Former state Sen. Denise Grimsley, a friend of Carr’s, is stepping in as interim president and CEO of the Florida Coalition Against Domestic Violence.
  9. In this 2017 photo, then-Gov. Rick Scott, left, speaks with then-Florida Speaker of the House Richard Corcoran in Tampa. The two were instrumental in refusing to expand Medicaid in Florida. [CHRIS URSO   |   Times]
    According to a report by the Center on Budget and Policy Priorities, Florida likely suffered the second-highest total of deaths in that time period — 2,776 — attributed to not expanding Medicaid,...
  10. Democratic presidential candidate South Bend, Ind. Mayor Pete Buttigieg delivers a Veterans Day address at a campaign event, Monday, Nov. 11, 2019, in Rochester, N.H. (AP Photo/Elise Amendola) ELISE AMENDOLA  |  AP
    State rep. Ben Diamond: Mayor Pete is ‘the type of leader that can really bring our country together’
Advertisement
Advertisement
Advertisement