Aaron Deslatte, Capital Bureau Chief for the Orlando Sentinel, predicts in a recent column that the 2014 Florida gubernatorial race will contrast the economy's management under current Governor Rick Scott and former-Governor Charlie Crist. [The latter being my former boss and the expected candidate now running as a Democrat.] Deslatte is no doubt correct.
This brief entry is neither an endorsement nor criticism of either candidate. Instead, words are offered to argue how silly it is for a gubernatorial election to hinge on such a comparison. My premise? State economies can't be controlled, particularly within the time period of a single term.
It is tempting to view the economy as a machine with levers. At the federal level, the principal levers for impacting the economy are fiscal (government spending) and monetary (money supply and tax policy). On one side of the policy approach, interest rates are lowered to stimulate borrowing as a catalyst for spending. Ironically, this is a demand-side form of trickle down economics. An alternative policy perspective argues for lowering taxes to keep (or replace) money in the tax payer's pockets with the expectation that they save a portion to be used for capital investment (supply-side economics).
Florida Governor's have niether fiscal nor monetary policy levers to adjust. The constitutional requirement for a balanced budget prohibits going into debt (except in the case where the state borrows from the federal government). States can't print more money to spend and states do not have a central bank. So a mid-budget-year decision to increase government spending is not an option.
What can governors do with the economy? In the short term, governors can be powerful cheerleaders. Articulating enthusiasm and vision for a better tomorrow can buffer the negativism that contributes to the downward spiral of recessions. The real impact of the state's executive office is in shining a light on long-term policies that harness the power of innovation and unleash free-enterprise opportunities. If economics is a discussion to be had in the 2014 election cycle, Florida will be better served when both candidates look over the horizon and develop convincing policies to end the polarizing impact created when citizens are given the false choice of either taking care of their families and preserving the environment. We can do both.