A new economic iron curtain is falling across America as trillions in wealth flee to the 'Boom Belt'
A new economic iron curtain is falling across America as the "Boom Belt" — an 11-state powerhouse in the U.S. Southeast — shatters records and challenges the traditional financial dominance of New York and Chicago.
Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott joined forces in Miami on Tuesday to celebrate a $9 trillion gross domestic product (GDP) region that is now outpacing every other quadrant of the country in population, jobs and capital investment.
"I often tell people, as Governor of Florida, my job is to closely follow California, Illinois, New York, so I can do precisely the opposite of what they do," DeSantis said during the panel held at the Pérez Art Museum. "Florida's had more adjusted gross income move into our state since I've been governor than has ever moved into any state in the history of the United States."
"Visionary business leaders seek to where not the puck is right now, but to where it is going... while other regions where the puck has been in the past, they're now burdened by high taxes, by restrictive regulations, by policies that are actually hostile to businesses," Abbott added.
The governors spotlighted how Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee and Texas now generate $9 trillion in annual GDP, trailing only the U.S. and China globally, while absorbing 70% of all U.S. population growth in the last five years.
The migration has been fueled by more than just sunshine; it is a tactical retreat from a wave of tax-the-rich proposals sweeping through blue-state legislatures including California, New York and now Washington.
"We're in the 250th anniversary of the founding of the United States. The founding fathers, they wanted a system based on the consent of the government… They wanted to have a rule of law and they wanted some of this stuff, particularly private property, to not just be subjected to those types of whims," DeSantis said.
"Hence, in Texas, even though we have never had a state income tax, we wanted to make sure that future generations would not be able to impose an income tax, so we made income taxes unconstitutional in the state of Texas," Abbott said. "We made a wealth tax unconstitutional. We made a death tax unconstitutional, and as [Citadel’s] Jim Lee pointed out, we made a transactions tax unconstitutional."
"I know that there's been a lot of very healthy competition between states like Florida, Tennessee, Texas, Georgia, some of these. And I think that's really, really good," DeSantis noted. "When Greg's doing stuff, people say, ‘Look [at] what Texas just did.’"
Also in attendance, SEC Chairman Paul Atkins and TXSE CEO Jim Lee warned that the U.S. has lost half of its public companies over the last 30 years because the federal government made it "complicated, expensive and legally treacherous" to go public.
"When capital, companies and people all move in the same direction, with that kind of consistency and at that kind scale, it behooves us to ask why. I believe that the answer, more often than not, is the region's steady adherence to first principles, including those that rigorously protect investors without needlessly paralyzing companies," Atkins said. "So for our part, the SEC is returning to those same principles by renewing the conditions that make our public markets the natural destination for companies to raise capital and for investors to share in their success."
"As Chairman Atkins has remarked repeatedly, it used to be cool to be public, so what happened? The answer is we made it complicated, expensive and legally treacherous to be a public company. Remaining private became the only rational choice. This is not a coincidence. It is a consequence," Lee emphasized.
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As someone who helped lead the firm’s move from Chicago to Miami, Citadel Securities President Jim Esposito highlighted the practical, bottom-line reasons why the "Boom Belt" is winning the war for capital — framing the Southern governing style as an inspiration for the rest of America.
"Across Florida, Texas and other high-growth states, government officials have created environments where businesses can operate, invest. And importantly, grow with confidence," he said. "This type of public and private partnership should be the model for the rest of our country."