Episode 38: Southern Company Executive Vice President Stan Connally

“The Challenges of Leadership in Our Times” Former CIA Director and Defense Secretary Leon Panetta discusses the growing challenges and turmoil facing the United States before a February 6, 2024 meeting of The Economic Club of Florida.

Show Notes (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Leon Panetta briefly told the Club about his background including reminiscences of Floridians he had worked with in Congress in the late 1970’s and 80’s, Senator Lawton Chiles and Congressman Claude Pepper.  He recounted how his parents were immigrants from Italy in the 1930s and how they believed they could give their children a better life in the United States.  His father instilled in him the idea of service.

“I really felt it was important to give something back to the country.  And frankly, what I'm trying to do here with the Panetta Institute is trying to develop a new generation of leaders for our country. And man, do we need a new a younger generation of leaders in this country,” he said.  “The rewards in public service are not money or power, or having a name on the door.  The purpose of public service is to improve the life of people in this country.  And I felt that I could help improve the lives of the people.”

The former military Intelligence officer pointed to how recruitment across the military services is down.  “The reward in public service is a reward that goes to the heart of what our democracy is all about, which is that all of us owe a duty to country. But one of the things I'm sensing in young people is that they don't have that same drive that same sense of duty to country.”

Mr. Panetta deplores the lack of public service in young people today, and throughout his discussion, he suggested ways to get them more interested and working on improving lives.

“Looking to the future, what we really need to do with young people is establish a national service system that requires young people to serve this country, in some capacity, whether it's in education or conservation, or health care, or the military.  It would be a hell of a lot better for them to pay for college, working for this country than simply borrowing the money to go to college like they do now.”  That suggestion drew a big round of applause from the audience.

He added, “If we don't build a good future generation of leaders, we will continue to have problems with our democracy.” 
(for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/) 

“Driving Florida’s Sports Economy” Angela Adams Suggs, President and CEO of the Florida Sports Foundation shares the growing $70 billion economic impact of Florida’s sports industry before a November 7, 2023 meeting of The Economic Club of Florida.

Show Notes (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Angela Adams Suggs told the Club that Florida is where the world comes to play.

“Florida's economic impact is $70 billion dollars plus annually through amateur, recreational, professional and leisure sport,” she said.

While major professional sports teams are important with three NFL teams, two NHL teams, two NBA teams, and two MLS teams, most of that number comes from non-major league activities, such as:

• Jump rope competitions
• Horseshoe events
• Softball tournaments
• Dance competitions
• Pickleball tournaments
• Shuffleboard tournaments

In addition, Orlando will be hosting thousands of volleyball players for a tournament in July 2024.

She added, “More than sixteen-million people come to eleven-hundred golf courses.  Twelve percent of the United States golf economy is right here in the state of Florida.”

Plus, the state’s thousand miles of coastline, more than twelve-thousand miles of rivers and streams, and eight-thousand lakes attract fishermen year-round.

Fifteen major league baseball teams hold their spring training in Florida’s Grapefruit League.  Suggs said many of them have renewed contracts, and many of the stadiums and facilities have recently undergone renovations.  The state hosts the Governor’s Baseball Dinner annually at various spring training sites.

In all, sporting activities provide nearly a million jobs statewide.  

“We need traffic control.  We need for people to come out and keep these parks clean.  We need ticket takers.  We need folks that are going to come in and print up all of the great signage that you see.  For our road races, you need people that are going to put barricades out.  You need people on our softball diamonds that are going to drag the fields,” Suggs said.

While hurricane season means the Summer Olympics probably will not be hosted in the state, there are openings in other areas.

“While we may not host the Games in Florida, we definitely are primed and ready to create opportunities for preparation to have a huge impact through the games,” she said.  She pointed out that a lot of nations have their Olympic teams train in various Florida communities....  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/) 

“Energy of the Future” Armando Pimentel, President and CEO of Florida Power and Light Company, discusses the challenges of providing customers reliable, affordable power with less emissions before an October 5, 2023 meeting of The Economic Club of Florida.

Show Notes (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Florida’s economy is growing significantly, and Florida Power and Light President and CEO Armando Pimentel told the Club that whatever happens in the Florida economy affects its largest utility.  The company serves more than 12-million people – over half the population of Florida – making it the biggest electric utility in the nation, too. 

Mr. Pimentel said the company is working to solve the riddle of how to provide customers reliable power that is affordable.  He said generating it with less emissions is hard to do.

“We have one of the lowest bills in the nation, roughly 25% to 30% lower on a national average than everyone else again.  And that's because we provide clean, affordable and reliable power,” he said.

One of the ways FPL will accomplish that is by the use of solar power.  He said that solar energy is now cheaper than natural gas over a 30-year investment.  By early next year the company’s 66 solar projects will expand to more than 100.

“It makes sense for our customers to reduce the amount of natural gas that we're burning at Florida Power and Light and increase the amount of energy that we're getting from solar.  Texas and Oklahoma take their gas somewhere else, and we get free energy from the sun here in Florida.“

He says the federal Inflation Reduction Act provided production tax credits that save money for customers.

To back up the solar and wind generation, its affiliated company NextEra Energy Resources also has more battery storage than anyone in the nation.  But resources are not limited to renewable energy.  The company also drills for oil and natural gas and owns pipelines.  Over the past 20-years, they have torn down old, inefficient natural gas plants and replaced them with modern ones that have saved $15-billion in fuel costs.  They are also experimenting with using solar power to separate hydrogen gas from water to use as a fuel in what are now natural gas plants.

Mr. Pimentel said battery technology is critical to renewables and that reduction in cost will lead to more electric vehicles.  

“Battery technology is going to get very cheap, very, very cheap.  And once it does, it's no longer going to be economical to buy gasoline powered cars.”

Mr. Pimentel said the company has increased customer reliability by replacing 94% of old transmission line structures with concrete and steel ones which are much more resistant to hurricanes and other storms.  He said that during Hurricane Idalia less than 0.3% of their solar panels were affected.

FP&L also operates an innovation hub called 35 Mules to give entrepreneurs, many of them with energy or power projects, an opportunity to grow their ideas.  The program helps build jobs across Florida and makes it an even better to grow and innovate.  FP&L receives hundreds of applications a year and chooses only a few for the program.

“We provide them not only senior leadership, we provide them a little bit of money,  guide them in the right direction to make sure that they can understand how to raise money for their venture and allow them to think much broader in terms of bringing a product out to the market. It's been very successful.“

He concluded by...

“The Economics of Culture” Bill Yeargin, President and CEO of Correct Craft, shares the lessons he’s learned running a successful Florida business and how corporate culture impacts the bottom line and the lives of employees, before a September 12, 2023 meeting of The Economic Club of Florida.

Show Notes (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Since 1925 Correct Craft has operated as the world’s leader in tournament inboard, freshwater fish and utility and recreational boats, as well as marine propulsion and watersports parks.  The company is headquartered in Florida but has manufacturing plants across the country, and it operates in more that 70-countries worldwide.

Bill Yeargin has served as CEO since 2006 – he was the fifth CEO in five years.  He realized the company needed a culture of service.

“One of the things that we needed was a culture, and a culture of service, a culture of something bigger than us,” said Yeargin. He promoted a culture of making life better.  “When you have employees that are engaged, employees that are part of something that's bigger than themselves, they perform really well.”

“You can’t think of culture as an expense.  You have to think of culture as an investment,” said the CEO.  “There’s no investment you can make, that’s better for your organization, that’s got a higher return than investing in culture.”  He said Correct Craft has grown from a $40 million company in 2009 to more than $1 billion last year.  

Yeargin said part of the culture is becoming a learner.  He said most people conversely are knowers – people who use data only to confirm what they already know.

“If you’re a learner, you get an endorphin rush when somebody changes your mind,” said Yeargin.  He said he wants to be the least judgmental guy anyone meets.

He said the way we frame things in our minds make a big difference in how successful we are.  We should see obstacles, or challenges, as opportunities and the way to our success.

“And so when we have a big challenge, we say the obstacle is the way. We’re going to figure out a way to turn this to our advantage.”

Yeargin and part of his team recently spent a week in Silicon Valley.  Their concentration was on the huge increase in computational power seen in the past few decades, in items such as the smart phone – and its implications for change and transformational growth.

“That technological change is transforming business models and transforming the world.  Whatever you’re doing now, if you’re doing the same thing in ten years, you’re likely to be out of business,” he told the Club.

Yeargin emphasized that looking ahead is part of his company’s culture.  He points to the need to drive culture and says it is simple if these four steps are followed.

• Identify what is important in your organization
• Create a clear way to present it
• Communicate over and over
• Model it

As for the last point, Yeargin said leaders have to follow the cultural steps themselves.

“As CEO of Correct Craft. I talk about this stuff all the time.  But if people see me talking one way and acting another, they're always going to make their determination of what your values are based on what they see you do, not what they hear you say.  Always.  So you have to model it,” he said.....

“It All Starts with Dredging” Lasse Petterson, President and CEO of Great Lakes Dredge and Dock Company outlines the economic impact of its Florida port deepening and beach restoration projects and why the company is diversifying to offshore wind projects, before an August 24, 2023 meeting of The Economic Club of Florida.

Show Notes  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

The Great Lakes Dredge and Dock Company is the largest provider of dredging services in the country and the only U.S. company with significant international dredging operations.  It’s also responsible for many of the major beach restoration and dredging projects in Florida.  Some of the biggest construction projects in the Sunshine State wouldn’t have happened without dredging.

“It all starts with dredging because we find that every major deepening project has an economic impact that occurs of a magnitude greater than estimated,” said Lasse Petterson, the company’s President and CEO.   He said port and shipping channel deepening typically average a 7-to-1 or 8-to-1 benefit to cost ratio in federal spending, but are actually much higher when you take into account supply chain benefits “because the ports and the shippers always find more innovative and inventive ways of utilizing that deeper channel and port.”  Deepening the ports allows larger vessels access, bringing in more goods.

Likewise he said for beach renourishment projects, noting “there’s nothing more important to Florida than its beaches.”  Although the benefit to cost ratio for beach projects is lower at 4-to-1, “the feds are not allowed to include recreational or tourism benefits in their calculations.  We have heard presentations that estimated it in the range of 20-to-1.

Among the company’s significant Florida projects have been a large deepening of Port Miami, another one at the Jacksonville port, and a third at the Tampa port that was finished ahead of time and under budget.  There are ongoing beach restoration projects in Boca Raton and Panama City.  “And we are doing the maintenance work in the Tampa Harbor while we are rebuilding the beach on Egmont Key with the material that is dug out of the harbor channel,” Petterson said.

The company was one of the first to utilize advanced methods for beach renourishment in South Florida to replace the old method of rebuilding eroded beaches with chunks of old concrete and other debris.  Along the way, the company has become increasingly eco-conscious with marine wildlife.  They have special precautions in place to protect wayward sea turtles during dredging operations and have partnered with the Florida Aquarium to help grow coral. 

The company employs more than 1,000 dedicated engineering, operations, and support personnel.  It has a rich 129-year history of developing and executing successful dredging and marine construction projects, operating the largest and most diverse dredging fleet in the U.S. comprised of over 200 specialized vessels.  It is listed on the NASDAQ stock exchange with annual revenue that ranges between $650 million to $750 million.  Its operations, in part, are funded by hundreds of millions of dollars of federal and state taxpayer money.

Petterson said that it’s part of that reliance on government money that...

“What’s in a Name? Perspectives on Name, Image, and Likeness” A panel that includes a student athlete, a lawyer, and a sports agent shares the evolving rules allowing college athletes to be paid by marketing their name, image, and likeness, before a July 27, 2023 meeting of The Economic Club of Florida.

Show Notes  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Previous to an NCAA rule change in 2021, student athletes were not able to profit or receive compensation for their participation in collegiate sports.  Today, they are allowed to do so through product endorsements, autograph signings, and social media posts under name, image, and likeness (NIL) laws and regulations.  Florida recently amended its NIL law, removing restrictions that prohibited schools from facilitating NIL deals and now allowing compensation from booster clubs and other third parties affiliated with an athlete’s school.

While technically not being paid to play, “somewhat like the pro athletes, they’re able to be entrepreneurial and benefit and provide support for themselves and earn some income as they go through college,” said Hugh Tomlinson, Director of Development and Gift Planning for the Florida State University Seminole Boosters Club.  He moderated the panel discussion that included a college athlete, a sports agent, a lawyer, and the head of an NIL “collective” that helps put together these deals.

“A collective pools resources in a given community to maximize a student athlete’s exposure.  Otherwise, you would end up with the athletes all kind of fending for themselves,” said Will Cowen, Chief Operating Officer of Rising Spear, based in Tallahassee, Florida.  Rising Spear is a third-party NIL collective that develops NIL opportunities for FSU student athletes and collects donations from donors.  “Collectively we can raise more money and we’ve done over 1,500 hours of athletes giving back to the community,” he said.  The donations are tax deductible and can be allocated per sport.  Collectives also work with local businesses to solicit NIL deals.

Will Hall, an attorney at the Dean Mead law firm, serves as outside counsel to Rising Spear and explained that collectives come in two varieties: nonprofit and for-profit.  “The NIL rules require athletes spend a portion of their time in community service.  What Rising Spear Garnet does is buy that time and essentially donate it to the local schools and the Boys and Girls Club.  On the for-profit side, Rising Spear Gold harnesses opportunities for local businesses, especially for those athletes who may not be able to afford to have a sports agent,” said Hall. 

One of those athletes is Michaela Edenfield, catcher for the FSU Seminoles Softball team.  The team most recently went all the way to the 2023 Women's College World Series championship finals.

“I'll never make a living from softball, but I can have softball help me make a living.  And I think the idea of that has been able to change and grow due to NIL,” said the incoming junior, who has amassed a social media following for her makeup tutorials.  “NIL has definitely been able to help me provide for myself and pay for my education here alongside of my softball scholarship,” which she noted is among the sports that don’t offer full scholarships.  The Sneads, Florida native is majoring in Business with the dream of becoming a media marketing manager for either a sports team or sportswear company.  

Ben Chase, Director of NIL Strategy for the University of Florida, acknowledged the....

“Making Florida the Safest, Healthiest, and Sustainable State in America” Katie Yeutter, President of the Florida Chamber Leadership Cabinet and its Safety Council outlines a new effort to improve mental health and substance abuse issues in the workplace and beyond, before a June 6, 2023 meeting of The Economic Club of Florida.

Show Notes  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Katie Yeutter leads the team that created the Florida Chamber Leadership Cabinet on Safety, Health, and Sustainability, which consists of global leaders who practice in these three areas.  The Safety Council focuses on tactical safety training and compliance, the Health Council addresses long-term systemic issues such as mental well-being and preventative health programs, and the Sustainability Council focuses on cleaner air, water, and land.  One goal is to make Florida one of the top five states in the nation for well-being.

Yeutter said that despite opioid prescription rates being at an all-time low, unintentional drug overdoses are on a dramatic upswing, many happening in the workplace.  In addition, one in five US adults experience mental illness, with depression and anxiety disorders costing the global economy a trillion dollars each year in lost productivity.

“So if we're going to accomplish being the safest, we can go into organizations, we can teach OSHA, we can teach training…but if we don't address the long term systemic issues of mental well-being, opioids, and preventative health programs, we can never get to safest,” Yeutter said.

Florida, she said, ranks 49th in the US for access to mental health care, with 1,343 Floridians currently waiting for help.  She also cited new Census Bureau household pulse surveys, conducted annually since the COVID pandemic.  “If 59% of Floridians are feeling nervous, anxious or on the edge, those are individuals that make up our workforce.  They're coming into our organizations and we're expecting them to have high productivity, be good members of the team focused on what they're doing, and most importantly keeping themselves safe and keeping their team members safe at the same time,” she said. 

Yeutter told the Club that an estimated 1.4 million Florida adults have a major depressive disorder (MDD) causing them to miss almost seven days more work than other employees.  “Depression interferes with a person's ability to complete a physical job task about 20% of the time and reduces cognitive performance about 35% of the time,” she explained.  Addressing that workforce gap created by MDD could potentially add the equivalent of 89,000 full-time employees back into the workforce.  

Although workplace fatalities continue to decrease in Florida (42nd in the US), the state ranks 32nd for lost time, non-fatal workers’ compensation insurance claims, resulting in an estimated GDP loss of $293 million in 2021.  Furthermore, 13% of workers do not return to work after a lost time injury, leading to even higher costs.  Florida reported 52,852 non-COVID worker comp claims in 2022, with an average cost per claim higher than the US median.

 (You can also view the entire Club meeting on YouTube.)

Links and Resources Mentioned in this Episode

Florida Chamber Leadership Cabinet on Safety, Health, and Sustainability

Katie Yeutter Biography

“Kids, Crypto, Banks and Excellence” Tom Grady, Co-Founder of The Freedom Institute of Collier County and CryptoLawyers.org shares his views on investments in changing times, particularly human investment, before a May 23, 2023 meeting of The Economic Club of Florida.

Show Notes  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Tom Grady, a longtime resident of Naples, Florida has a wealth of government experience, having served as a member of the Florida House of Representatives, Commissioner of the Florida Office of Financial Regulation, Interim President & CEO of Citizens Property Insurance, a member of the state Constitution Revision Commission, and an eight-year member of the Florida Board of Education, most recently as Chair.   Along the way, the Duke University-educated lawyer has founded several firms and ventures. 

“I think kids, crypto, banks, and excellence are tied together with one theme and it’s a very important theme for America in 2023 and 2024, and that is economic growth,” Grady said.  “We must have economic growth in America in order to meet our obligations.  And we haven't had economic growth in America for a long time.”

Grady discussed the two types of capital in life – financial and intellectual – and the importance of skepticism in the pursuit of excellence in both.  He blamed the four recent bank failures in the country, including Silicon Valley Bank and Signature Bank, in part on interest rate risk on US Treasury bonds.  “They had a boatload of these long dated treasuries that declined precipitously in value as interest rates increased from 1% to 5%,” due to inflation that the Federal Reserve did not project he said.

The banks also faced “enormous additional burdens” to comply with ESG (Environmental, Social and Governance criteria) requirements and increasing competition from online banks and non-banks.  Grady said that three of the four banks that failed also had involvement in cryptocurrency, some significantly.

“What is cryptocurrency?  It’s software, that’s all it is.  It’s a spreadsheet, a distributed ledger on a Blockchain.  Proponents tell us it’s a wonderful thing because it’s assured, unlike US dollars.  You can never inflate it, you can never make more Bitcoin.  Truth is you can make an endless amount and people have made an endless amount of cryptocurrencies, thousands of them, all of them worth pennies on the dollar from when they were first offered.  But Bitcoin they say is different.  There will never be more Bitcoins.  Well, you can call me a skeptic, but it’s software…and software can be hacked,” Grady said, noting that the United Kingdom is now regulating crypto in the same way it does gambling. 

Like financial capital, intellectual capital is also being disrupted, Grady told the Club.  He pointed to the recent coronavirus pandemic, which forced states to close their schools and transition to online learning.  Florida, he said, was a leader in returning to in-person schooling quickly, with better student testing performance results than any other large state.  “If you look at the large states that shut down the schools in some cases as much as two years, those kids lost so much.  Online learning did nothing for them.  They will never recover, unless they happen to be wealthy…and got a tutor or went to a private school,” he said, calling the situation “tragic.”

Grady warned of efforts to “dumb down educational excellence” in closing certain schools for gifted children and the discontinuing use of SAT scores by some colleges for admission “because they want to discriminate on the basis of race…over the competency and capability of those kids,” he said.

Grady has been an investor in education for many decades preceding his service on the state Board of Education.  Nearly 30 years ago, he helped start the Quest Educational Foundation in Collier County and continues to serve as its CEO and Chairman.  The foundation obtains about $20 million a year in scholarship offers for college-bound high school students.  His newest venture builds on that, as Co-Founder of The Freedom Institute of Collier County, opening this summer of 2023.  Describing it as technically a “homeschool support system” for students, it is physical school building with teachers and administrators that students can choose to attend in-person.  Grady told the Club that it’s geared toward students who are not necessarily college-bound, as he said that 15 out of the top 15 jobs in the US do not require traditional four year college degrees.

“We're creating an environment that's different than many other schools and that we're focusing on five C's: career, counseling, civics, core, and competency.  We want kids to graduate from high school, knowing a lot about their country, knowing a lot about history, learning a lot about consumerism, personal finance, and home economics.  We want kids to graduate fully capable of becoming employees and not having to go to college because they haven't yet learned how to do anything else.  (It’s) not anti-college, but opening up opportunities for kids that they may not have now, and having internships and apprenticeships and real jobs,” Grady told the Club. 

One of the other differences in the curriculum he said, is aptitude testing.  “We're going to regularly test kids, a Myers-Briggs kind of test for aptitude and interest. We want to develop what they're good at.  We want to know what they enjoy.  And we'd like to be able to merge the two.”

Grady stressed the importance of remembering that the US competes in a global economy.  “If you look at learning and skills and the acquisition of skills at a macro level, at a GDP level, at a very top level, if we as workers, as contributors to the economy don't do a good job, we don't get economic growth.  If our kids don't excel, as a country we won't get economic growth.”

(You can also view the entire Club meeting on YouTube.)

Links and Resources Mentioned in this Episode

The Freedom Institute of Collier County

Cryptolawyers.org

Tom Grady Biography

The Economic Club of Florida podcast, provides an extended platform for discussion to educate, engage, and empower citizens on important economic, political, and social issues.  Based in Tallahassee, Florida, the Club has featured distinguished speakers on engaging topics of national importance since 1977.  To learn more, including how to become a member, visit www.Economic-Club.com  or call 850-224-0711 or email mail@economic-club.com.  Date of recording 5/23/2023.  © Copyright 2023 The Economic Club of Florida, All Rights Reserved

“Florida’s Insurance Market: The Decade Ahead” Florida Insurance Commissioner Michael Yaworsky discusses the challenges and solutions to Florida’s insurance marketplace, the ninth-largest in the world, before an April 20, 2023 meeting of The Economic Club of Florida.

Show Notes  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Hurricane Ian’s landfall near Ft. Myers in September of 2022 was the costliest in Florida history, causing an estimated $109.5 billion in damage, including insured and uninsured losses, as well as claiming 156 lives.  For the state’s property insurance market, it’s just the latest in a series of challenges.  In the past 15 months, seven Florida domestic insurance companies have become insolvent and others aren’t writing any new policies.  Insurance carriers collectively have taken huge underwriting losses, despite multiple double-digit rate increases on homeowners insurance policies.  

Commissioner Yaworsky said a combination of three factors are involved: the cost of reinsurance (which is insurance for insurance companies), natural catastrophic events over the past seven years, and social inflation.  “The social inflation includes everything from abusive practices within a litigation environment to vendors that aren’t acting in the best interests of the consumers overall,” he said.  “We’ve seen those three events combine together and accelerate each other causing an unprecedented level of adverse loss reserve development, meaning the cost to insure homes has exceeded all expectations that were represented before it in rate making.”

As a result, Commissioner Yaworsky said the multiple years of billion dollar-plus losses by property insurance companies are “extreme and unsustainable…there is simply not enough capital in this state to accommodate the losses that we've experienced.”

He outlined the series of reforms that the Florida Legislature enacted in two special sessions in 2022 and the supplemental reforms passed in the 2023 regular session.  These include measures to increase insurance claim transparency, crack down on frivolous lawsuits, eliminate one-way attorney fees, strengthen regulatory authority, require carriers to more promptly respond to and pay valid claims, and establish a new optional state reinsurance program.   

“I'm optimistic that eliminating the one-way attorney fee provision over time will increase some rationality in the litigation space to make sure that there are no perverse incentives operating in it to incentivize undo litigation,” Commissioner Yaworsky said, while still preserving access by consumers to litigation in genuine disputes with their insurance companies.  

The most immediate challenge as hurricane season approaches is for insurance companies to find affordable reinsurance.  “It’s become easier for insurance companies to purchase reinsurance above the Florida Hurricane Catastrophe Fund level, but more difficult to find reinsurance below the Cat Fund level,” the Commissioner said. 

As for when property insurance rates might level off, Commissioner Yaworsky said it will probably be 16 months before insurance companies begin to experience relief from the reforms that they can then reflect in their rate filings to his office.  Given that most policies are issued on an annual-basis, consumers won’t likely see the relief reflected in lower homeowners premiums for months beyond that, he said.  “It's going to be a very difficult time for a little bit longer before we come to a place hopefully, where we’re past a lot of the past seven years.”

Calling it “the most complicated property insurance market in the country and possibly the world,” Commissioner Yaworsky also shared with the Club that Florida’s insurance marketplace is the ninth-largest in the world, with a direct written premium of $209 billion.  It employs 213,100 Floridians and represents 3.5% of the state’s Gross Domestic Product.  “Insurance accounts for a tremendous amount of Florida’s economic stability but is also the underpinning of any future growth in Florida,” he said. 

Florida also has the largest federal Affordable Care Act (ACA) market in the country with more than three million consumers and is growing rapidly.  All but one county now have multiple carriers offering ACA policies.  Meanwhile, the small group market has been slowly declining, with less than 500,000 members this year.

 (You can also view the entire Club meeting on YouTube.)

Links and Resources Mentioned in this Episode

Florida Office of Insurance Regulation

Michael Yaworsky Biography

The Economic Club of Florida podcast, provides an extended platform for discussion to educate, engage, and empower citizens on important economic, political, and social issues.  Based in Tallahassee, Florida, the Club has featured distinguished speakers on engaging topics of national importance since 1977.  To learn more, including how to become a member, visit www.Economic-Club.com  or call 850-224-0711 or email mail@economic-club.com.  Date of recording 4/20/2023.  © Copyright 2023 The Economic Club of Florida, All Rights Reserved

“Geopolitics and the Global Economy” Retired four-star US Army General and former CIA Director David Petraeus shares his insights on the geopolitical risks to investments, including actions by China and Russia, before a March 27, 2023 meeting of The Economic Club of Florida.

Show Notes  (for complete Show Notes, please visit https://economic-club.com/podcasts-and-summaries/)

Geopolitics is a method of studying foreign policy to understand, explain, and predict international political behavior through geographical variables.  General Petraeus, in a conversation with moderator Ash Williams, Vice Chair of J.P. Morgan Asset Management, focused on the Russia-Ukraine war and the consequences for the US and European nations, and on the rise of China.  General Petraeus is a Partner at the New York-based global investment firm of KKR and Chairman of the KKR Global Institute, which he established in 2013.  The institute identifies geopolitical risks when evaluating potential investments and then mitigates them.

“During the past decade, the world has truly transformed from an era of benign globalization in which economics largely determined geopolitics to an era of renewed great power rivalries in which geopolitics very much constrains investment, trade, economics, and a variety of other interactions,” he told the Club.  “The continued rise of China, the resurgence of a very aggressive Russia, obviously having invaded Ukraine without provocation in a particularly brutal manner, the continued challenge posed by North Korea, that posed by Iran, a number of cyber threats that exist, and a host of other challenges, all again, make this time very, very challenging for the United States and for our allies around the world.”

On Russia: 

“Vladimir Putin has a very grievance-filled view of the dissolution of the Soviet Union, especially of Ukraine.  He doesn't believe it has a right to exist as a sovereign country believes it should be part of the Russian Federation.  He's really tried to reassemble as much of the Soviet Union as he possibly could.”  Petraeus noted that Russia, as one of the top three natural gas, crude oil, and coal producers in the world, together with its agricultural goods, has the money to pursue Putin’s ambitions. 

“The Ukrainians have been phenomenal.  This is their war of independence and they're fighting it that way.  The Russians completely underestimated how President Volodymyr Zelensky would perform as a wartime president.  To be fair, his first two and a third years in office had not been particularly distinguished, but he has been positively Churchillian.”

“The irony is that no one has done more for the cause of Ukrainian nationalism than Vladimir Putin.  The other irony is that Putin set out to make Russia great again and what he has really done is make NATO great again.  The greatest gift to NATO since the end of the Cold War is Vladimir Putin.”  As a result, Petraeus noted, two historically neutral countries, Sweden and Finland, have applied for NATO membership.

“Vladimir Putin, I think, is still convinced that the Russians can out-suffer the Ukrainians, the Europeans and the Americans, the way that Russians historically out-suffered Napoleon's army, out-suffered Hitler's Nazis, and so forth.”  But despite the differences in the size of the two opposing forces, “Ukraine has fully completely mobilized.  Everybody is committed to this.  The business people are engaged in it, the IT experts, they’re all engaged in this.  And the innovativeness, the entrepreneurship that they're employing is really extraordinary.”

General Petraeus also outlined the principals of strategic leadership, “the contrast of which couldn’t be more clear” in this conflict.  “This is about as cut and dried as a situation can be literally.  On the one hand, a kleptocratic, dictatorial, murderous leader invading a neighboring country without provocation and in a brutal manner.  On the other, a country, a democracy, however flawed to be sure, a free market economy trying to withstand and again fighting for its very independence.”

Petraeus told the Club that he believes the US government is generally providing a sufficient level of weapons and other support to Ukraine and that the current administration and Congress “have done a very, very impressive job.  I think that is hugely important, because it shows the world that we are still the indispensable nation.  We will lead the world.”

On China: 

The US commitment to supporting Ukraine in its war with Russia “translates very importantly into deterrence when it comes to China, because your potential adversary not only has to see your capabilities, but also your willingness to employ them.”

“It's more assertive, more aggressive actions, not just in the Indo-Pacific region, but literally around the world are causing enormous changes in how it is that we invest, because of course, everyone invests with China.”

Noting that labor costs in China are going up as its population is declining, Petraeus said “One of the big questions has always been, ‘Can China get rich before it gets old?’ which is what Japan did, or ‘Does it get old before it gets rich?’  And actually, the answer is not completely clear.”

On how the Ukraine-Russia war might end, General Petraeus said he thinks it is “very unlikely” that Putin would use nuclear weapons in Ukraine.  Noting that Russia “has a culture of committing war crimes,” Petraeus said “We have to convince Putin that this war is not just unwinnable, it’s unsustainable.  And then and only then could you have meaningful negotiations.”  He admitted he doesn’t know how long that might take.

In the meantime, there are winners and losers among other global powers in all these difficulties.  The winners include those who export natural gas, including the US, “which thanks to our ingenuity, deep directional drilling, hydraulic fracturing, seismic big data, our agile capital markets, our legal structure…we're the biggest crude oil producer in the entire world as a result of that.  We're also the biggest natural gas producer in the entire world.”  Other winners he said include India, which has gained important advantages over China.

General Petraeus joked at one point that he was runner-up to Vladimir Putin as Time magazine’s Person of the Year.  The world however, has since changed.  “We currently face the most numerous and challenging array of threats that we have had, arguably, since the end of World War Two, not just the end of the Cold War.  Not more dangerous, perhaps, than certain periods of the Cold War, but much more complex.”

(You can also view the entire Club meeting on YouTube.)

Links and Resources Mentioned in this Episode

KKR

David Petraeus Biography

The Economic Club of Florida podcast, provides an extended platform for discussion to educate, engage, and empower citizens on important economic, political, and social issues.  Based in Tallahassee, Florida, the Club has featured distinguished speakers on engaging topics of national importance since 1977.  To learn more, including how to become a member, visit www.Economic-Club.com  or call 850-224-0711 or email mail@economic-club.com.  Date of recording 3/27/2023.  © Copyright 2023 The Economic Club of Florida, All Rights Reserved