It is in the back and forth between theory and practice, conceptualization and field, that the key to understanding economic phenomena is found. This is how my economic analyzes emerge, and not in a constructivism that I refute. The UNITED STATES, where I have lived for many years, where I am active in the real estate sector, have always been my favorite playground for this empirical analysis, despite the vagaries due to Covid in recent months. My recent stay there, in Florida and then New York, was all the more informative as I hadn’t been able to travel to the field in 2021.
For the entrepreneur who travels back to this Continent-State, what strikes you first is the coexistence of very strong growth (but threatened by general opinion) with his typically American optimistic state of mind, and galloping inflation that gangrenes the country and tarnishes the party in a certain way. Restaurants and hotels in tourism, construction companies in real estate, have switched to a consumer – aided by the federal state (Helicopter money) and benefiting from a low unemployment rate – rising commodity prices. The nature of service in general has changed: the phenomenon of the Great Resignations, after the Covid layoffs, has led many Americans to leave these occasional jobs in tourism or catering. They reinvented their lives and never came back. So service companies have to review their schedules, settle most of the time with immigrant labor and, to tell the truth, in New York for example, the quality of service is not what it used to be.
We are also touching the gap between Florida, which during the Covid crisis never really shut down its economy, and New York, which is recovering strongly but remained confined for a long time in 2020: the closures of businesses (accentuated by the transition internet), empty offices, newly convalescent hotels, testify to a slow urban recovery that essentially awaits the return of tourists and the arrival of new generations of graduates, little interested in Covid or in country life like their elders who fled the city in 2020.
Florida, like most of the southern United States, has not known the pangs of confinement and is experiencing an unprecedented real estate boom: however, there we find the excesses of 2006-2007, with indiscriminate purchases, but the key districts of Miami are now at the limit level – and this will be permanent – of large American cities (Los Angeles, New York) because many non-tourist industries (tech, start-ups, biotech, finance) have settled there. Florida’s heliotrope-focused economy has given way to a sort of new diversified (oil-free) and international Texas, due to its openness to Latin America. My Hispanic contacts in Florida have told me that they actually live in an economic zone which is the Gulf of Mexico and the Caribbean Sea, a world economy in the Braudelian sense that goes from Mexico to Florida through the Gulf of Louisiana and includes obviously all the islands of the Caribbean. Ignoring borders, Miami projects itself towards its Mexican counterpart that shares its excesses, Cancun, like its inner suburbs. Thus, this Trumpist state, governed by De Santis, assumes its multiculturalism as long as order and legality are respected (no total immigration).
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New York shares this post-Covid housing boom with Miami, especially its appetite for residential construction. The traditional office is quickly buried, nobody returns to work in the old towers (but new spaces, adapted to environmental standards and the pandemic, are all the rage) and we discover developers who are embarking on the conversion of these office buildings…in the apartments! The new town hall drastically limits new hotel permits after the Covid crisis, except for those, like me and my team, who were able to recover titled sites before the crisis…
But New York, constantly reinventing itself, is discovering resources in the new industry that is sparking passions and dreams in the United States: everything related to cryptocurrencies, DeFi, Web 3.0 and even the metaverse… While Silicon Valley is the cradle of American technology ( many large Bitcoin companies were born there), that many states are fighting to offer a favorable regulatory and tax framework for this industry (Wyoming, Utah, Colorado), or attracting billions of venture capital industry start-ups or congress of this sector (Texas, Florida, Nevada), it is New York that has attracted record levels of venture capital investments in the sector in the last two years. D’abord, New York, depuis dix ans, n’est plus simplement la ville des financiers, des avocats ou des publicitaires : elle est devenue le deuxième foyer tech du pays, avec une vraie culture start ups, qui attire par exemple de nombreux French. But above all crypto or DeFi (decentralized finance), it remains… finance! What better place to develop new financial protocols, trading, lending and attracting investors who know these problems…than New York? The capital of TradFi, without denying its origins, is quite logically moving towards DeFi.
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This joyful entrepreneurial effervescence is naturally threatened by inflation and the started rise in interest rates: a slowdown, or a small recession (with a sharp stock market correction) seems inevitable before the end of the year. But as always, according to the Schumpeterian principle of creative renewal, the next batch of innovations for the decade are well underway in the United States.
