We finally got around to seeing The Big Short.
It was not only a great movie: entertaining, funny in spots, creatively directed and wonderfully written, it’s an important movie as well.
When the credits rolled the movie hit you with stats about the damage the housing collapse took on America–$5 trillion in wealth erased, 8 million jobs lost, pensions and 401k plans devastated, families losing homes etc. It was gut wrenching to read and we in Florida lived it. We got hit and hit hard.
As the stats wash over you, Led Zeppelin’s “When the Levee Breaks” blasts out of the speakers. A perfect song for a movie that essentially indicted our financial markets, banks, regulators and government as a giant fraud.
For a comedy, we left the theater feeling pretty lousy. Like the movie “Spotlight”– which chronicled sexual abuse in the church– you felt like screaming and crying. Yes, The Big Short is quite a movie.
Parts of the movie talked about how the housing crisis impacted South Florida with a few characters venturing down south to see first hand some of the craziness we all experienced as a result of wild price increases and rampant speculation.
It’s a must see.
The world economy crashed and the results were devastating. In our community, we witnessed foreclosures and economic pain.
Not much changed though.
The banks were bailed out and many executives took the taxpayer money and gave themselves bonuses. Financial “reforms” enacted by Congress were flawed and then whittled away by lobbyists armed with special interest money. Exactly one banker went to jail. One.
But even if the movie surmises that we learned nothing from the experience, what are some of the lessons? And how can we protect ourselves and our communities from these devastating economic events fueled by fraud and foolishness?
2016 is certainly off to a strange start. Many of the assumptions we have based trillions of dollars of investments on seem to be questionable. Examples: China has an inexhaustible appetite for natural resources, home prices never go down, Saudi Arabia will never let the price of oil crash, Eurozone countries will never default on their debt.
As an optimist, I hate to be doom and gloom.
But my dad taught me a lesson in life and in business. It was a lesson I was very conscious of during my days as a policymaker in Delray Beach. He said every day–even when things were going well–you should wake up just a little bit scared. He warned against complacency and smugness. Even if you were succeeding, never take your eye off the ball.
If we apply that thinking to Delray Beach and Boca Raton, it means that we can feel good about what has been achieved: vibrant commercial centers, rising property values, wonderful and diverse amenities, culture, art, events, strong recreational opportunities, parks, beaches, tourism, good hospitals etc.
But we should never declare victory and take our eyes off the ball.
The housing crash resulted from a myriad of fraudulent beliefs and irrational behavior. But smart communities seek to become as resilient as possible. So you dig in and work hard to improve schools, create jobs, fight crime and blight and develop amenities that create value. You support assets like Old School Square and the Boca Museum, you bring the Festival of the Arts to Mizner Park and you work hard to land corporate headquarters and new investment. It does not mean you sacrifice standards or allow unfettered poor quality development, but it does mean you develop a vision and you have the political will to get things done.
Value creation is your primary responsibility as a policymaker–it helps you endure the inevitable downturns and fraud we experience in a turbulent and unpredictable world.
While we suffered real and enduring pain during the great recession, Boca survived and downtown Delray Beach weathered the storm without major vacancies. In fact, sales data from the Florida Department of Revenue said sales grew and far outpaced neighboring communities during the crisis. The central business district survived because it was well-planned, the vision was sound, the value created was real. When it’s real, you’re the last to suffer and the first to recover.
It’s an election year, go see the movie. It’s a good one.