Former Federal Reserve official: Call it the Un-Affordable Care Act


Juan del Busto was Miami’s top Fed official in Miami until he retired in 2012. Now he can finally say what he wants. He’s not a fan of Washington.

Juan del Busto, former director of the Miami branch of the Federal Reserve.
Juan del Busto, former director of the Miami branch of the Federal Reserve.

Juan del Busto

Age: 59

Current position: CEO of Del Busto Capital Partners, consulting advisor at MBAF.

Career: Federal Reseve Bank, regional executive in Miami, 2008-2012; vice president and branch manager, 2003-2008; various Fed positions in Miami, 1973-2003.

Corporate board positions: Ocean Bank of Miami, Easy Solutions.

Education: Miami-Dade College, AA degree, Florida International University, BS. in Industrial Technology; Ohio State University, executive development program.

Family: Wife, Maria R. del Busto, chief global human resources officer, Royal Caribbean International; two grown children, Leslie and Justin.

Charity: United Way of Dade County, Florida Bankers Association, Miami-Dade County Public Schools, Superintendent’s Business Advisory Council; Center for Financial Training.


One recent afternoon, former Federal Reserve executive Juan del Busto stopped sharply in front of a jumbo television screen tuned to CNBC.

On a ticker, the financial-news channel was reporting on the latest economic results from the Fed’s Beige Book, a closely watched report del Busto helped write before he retired in 2012. The moment prompted an obvious question for del Busto: How’s the Beige Book looking to you today?

“I’m checking on the market,” del Busto replied. “Not the Beige Book.”

Del Busto can say such things now, about a year after he retired from an organization that is notoriously circumspect in what it tells the public.

His job as the regional director of the Miami branch was to serve as the Fed’s local ambassador, which involved a balancing act of providing insight into the economy without saying anything impolitic or too revealing.

Del Busto, a gregarious world traveler and rum connoisseur, failed at this task a number of times — incidents that generally resulted in a call from the Fed’s public affairs office regarding a quote that hadn’t set well with headquarters.

“Now I can say whatever the hell I want,” he explained.

Del Busto has plenty to say. After doing his best to bite his tongue during the worst financial crisis since the Great Depression, del Busto now is happy to offer his critique of the Fed and Washington’s role in trying to fix it. He got his start at the Fed’s Miami branch, based in a high-security building in Doral, as a clerk in the 1970s. He assumed the top job, regional executive, in 2008.

Part of del Busto’s role during the recession was to defend the Fed’s unprecedented response to the banking crisis, which essentially involved creating billions of dollars of new money to funnel into the struggling economy.

Known as quantitative easing, the response is credited in part for the current stock boom, but is also seen as a major inflation risk in the coming years.

“I think the Fed is what took this country out of the recession,” del Busto said. “We’re the only ones who acted.” Now that the Fed is cutting back on its bond buying, del Busto’s response is: It’s about time.

“If I had been a voting member” of the Fed board, he said, “I would have done this a year earlier.”

Although he spent his career with the Fed, del Busto said he made most of his money investing in outside businesses on his off-hours.

They included a chain of Wendy’s franchises, which helped him call the restaurant’s late founder, Dave Thomas, a good friend. He has joined some corporate boards in retirement, but seems to be spending significant time (and money) traveling the world while his wife, Maria del Busto, continues to work as a senior executive at Royal Caribbean.

“I’m going to 11 countries in Asia, then I’m going to Europe for a month,” he said. “Then, maybe if in the fall, if things work out, I may end up back in Europe.”

While he is not an economist, del Busto helped the Fed’s Miami branch with its economic analyses. One of his primary jobs was to huddle with business executives and owners, including regular conversations with CEOs of the top companies in the Miami district, which stretches from Key West to Jacksonville.

Del Busto recalled a regular intelligence-gathering trip on Florida’s West Coast.

“I would walk in and talk to developers. I would walk in to small businesses. I would walk into chambers of commerce. Sometimes I had appointments. Sometimes I didn’t,” he said. “You would be surprised how people would open up and tell you what was going on.”

In an interview with Business Monday, del Busto shared his grim outlook on the current hiring market, why he thinks grown-ups are rare in Washington, and his displeasure with the Obama administration’s healthcare law.

Q. Do you think a government should stimulate the economy with extra spending, even if it increases the deficit?

A. Absolutely. But do you do it for five years without any real fiscal policy? No.

When you talk to the chairmen and the CEOs of these companies, they have no confidence in Washington whatsoever. They’re holding onto cash. That’s one reason the economy is why it is.

We keep spending way beyond our means. Would you do that as a consumer? Would you do that as a company? There has been no policy to curb spending, per se, except for the sequester, in the last four years .

And we haven’t even touched the Affordable Care Act. Or as I would call it, the Unaffordable Care Act. .

Friends of mine who own Wendy’s franchises have gone from 154 employees to 234. Why? Because they reduced everybody’s hours to 29 hours or less [to avoid having to provide health insurance to them].

A company I talked to — it’s one of the top 10 in Florida — they were talking about selling one of their [smaller] companies, which provides security guards, if they had to provide healthcare. So they sold the company.

Q. Do you feel, in the end, companies should provide their workers healthcare?

A. Hard question. As a human being, I’d say yes. But at what cost? Should it be mandated? I don’t think it should be mandated.

Q. Let’s go to your example. One of the top 10 companies in Florida, and they can’t afford to give security guards healthcare?

A. Can they afford it? Hell yes they can afford it. But they did not believe from a profit standpoint that they could afford to provide healthcare.

Q. How should we look at the recovery?

A. I can say this now. The Fed is looking at a wrong paradigm. The goal of their model was low unemployment and low inflation. That model is an old model. That is not going to happen anymore. I’ve been talking about this for five years. Some reporters, including you, thought I was out of my mind when I said unemployment was going to be an issue for five years.

For uneducated or unprofessional employees, that aren’t in the professional sector, the new paradigm is they’re going to be working two part-time jobs. Nobody is going to insure someone unless they are working [more than] 29 hours.

Q. Locally, what grade would you give South Florida’s recovery?

A. “C.”

I think we’ve done well in the real estate area. Our international visitors still find Florida attractive. The dollar compared to a lot of the currencies is in a good place. And our tax situation is great. That’s why Florida is going to be the third-most-populous state in the country, surpassing New York.

I think a lot of big corporations are still not coming to South Florida. . . Why? I think it’s just the environment. I don’t see us really pushing to attract a lot of big companies down here. I think that might be changing.

Q. What can we do to change that?

A. I don’t know. It’s a great question. I think we need to put a team in place that encompasses everybody. From a city standpoint, we might talk this way. From a county standpoint, we might talk this way. We need to put a coalition together to have one team and one face when we bring in a corporations. Including education, health, housing — all those areas need to be covered at one time. I don’t think we feel we do that well.

Q. How much stock should people put in the Beige Book?

A. I don’t think much. It’s worded in a way that is so conservative. Every word is wordsmithed to make sure you don’t lean one way or the other. I don’t think it’s all that valuable, long-term.

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