On June 29, the new mayor of Miami-Dade County will be in an unenviable position; he must immediately get to work and will be facing a series of huge conflicting economic challenges and dilemmas, besides having to balance the budget.
Running an economy is a very complex and complicated job, which requires the understanding of the intertwined economic issues, and considering every economic factor involved. In other words, there is interdependency between all economic factors. Every decision has an impact somewhere else, sometimes small actions have large consequences and some consequences are delayed, making it harder to determine the cause. This is a very large problem and concern. An untrained and inexperienced person, even with good intentions can cause negative ripples to run through the economy and many times a group of negative ripples can hit one segment of the economy causing crippling damage.
Certainly an economy cannot, and should not be run like a business. The goal of a business is to minimize the costs, and maximize the profits, whereas an economy must be run like a household with a balanced budget at the end. However, cutting costs at the expense of rising unemployment is self-defeating.
Just take a look at the economic conditions of our country and our state! This did not have to happen. It is the result of a lot of inept actions happening without a concerted and solid economic plan, followed by knee jerk reactions and a whole lot of deceit. Miami-Dade does not need to be in despair. In fact it can be the shining light of the country, but that will require having a comprehensive and well thought-out economic plan and having that plan expertly implemented.
If Miami-Dade wants to reverse the direction in which the nation and our state are heading, it needs more than a new Mayor; it needs solid answers encompassed in a comprehensive, far-reaching and well thought-out economic plan:
1) The new mayor is coming from a political position and during his tenure in office the economic woes in Miami-Dade County have escalated without those in charge being able to resolve those problems. It is obvious that something different needs to be done than what was done before.
2) During the intensive campaign of the past two months, the mayoral candidates had plenty of opportunities to present their resolutions. It would be devastating if those solutions offered were to be implemented, for they would create more massive unemployment that would cause an increase in foreclosures and bankruptcies. Add shrinking revenues to these woes and Miami-Dade County's economy would be heading towards total meltdown, creating uncontrollable and disastrous economic conditions and social chaos.
3) Even worse, the solutions are ineffective, even in the short-run. One example is to reduce the 60 county departments into 20, which was offered as a potential solution to balancing the budget. Assuming that in 2011 the budget could be balanced by implementing a drastic measure of cutting all the perks, salaries, pensions and even some of the services, what about 2012 when the revenues have eroded due to rising unemployment and home foreclosures? If these contractive measures are implemented there would be about 50,000 more unemployed Miamians by the second half of 2012. Unfortunately, unemployment grows exponentially during the economic meltdown and has a cascading effect, when people are laid off, whereas the creation of a new job grows only linear, when a new job is created. In other words, it is imperative to avoid any loss of job at this point and time.
4) No matter how well a transit system is designed, until we resolve the energy problem, we'll not be able to have an effective transit system. To express it in plain English, Miami-Dade County would not be able to run their vehicles on the rising energy costs. We must deal with the energy issue first.
5) The last thing that Miami-Dade County needs is a growing gambling industry, which will definitely lead to more poverty and social unrest in this county. We can do so much better without it.
6) The new mayor has to bring the manufacturing base back to Miami-Dade County--a necessity for creating jobs and prosperity in this county and connecting to the future. There are a lot of ways to approach this task. One way would be to create a demand for products that can be manufactured here. Another is to create productivity-oriented "Super-Clinics," cutting the healthcare costs drastically, whereby increasing the quality of healthcare delivery tremendously!
7) Expansion of one-way trade is a recipe for long-term chronic unemployment in Miami-Dade County because we do not have a manufacturing base in order to be able to trade something worth mentioning in exchange for goods we would import and distribute.
8) Similarly, the new mayor must have a solid economic plan to resolve issues involving unemployment, rising costs of food and energy, home foreclosures, runaway costs of the Jackson Memorial Hospital, jump-starting the economy, and creating a vibrant economy; balancing the budget will always remain an unreachable goal if these issues are not taken care of simultaneously.
Can we afford to have our economy and standard of living on a continued nosedive? These economic woes will keep getting worse and out of control unless a solid economic plan is developed and implemented; we can make dramatic progress in all these areas and many of them very quickly.
I wish the new mayor great success in these critical times. All 2.4 million residents of Miami-Dade County are relying on his decisions.
Farid A. Khavari, Ph.D., is a noted economist and author of nine books, including the classic Environomics and his latest, Towards a Zero-Cost Economy. You can reach him at Email address removed