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Ohio’s Lost Decade, and Its New Hope

Can John Kasich and Tea Party activists save Ohio?

by
Tom Blumer

Bio

June 27, 2011 - 12:00 am

I first saw John Kasich in person at a county Lincoln Day dinner in early 2007. Though the former congressman was a bit under the weather, his animated, passionate style and strong convictions were still quite evident. When he said, in essence, that “Ohio is circling the drain,” you knew he meant it, even though I doubted it.

I shouldn’t have. With the election of Ted Strickland, I believed that trouble was probably on the way. I didn’t appreciate that it was already here.

A recent USA Today chart compiled from government data reported that from 2001 to 2010, Ohio’s economy contracted. Not by much, mind you — 0.7% — but only auto-overdependent Michigan fared worse (-7.1%), and no other state grew by less than 6%. As a whole, despite the Internet bubble, the 9/11 attacks, and the recession, the country’s gross domestic product (GDP) grew by over 16% during the decade. Meanwhile, the Buckeye State’s economy spent the time mired in mediocrity and worse, and all those who could have done something about it did was damage.

Republicans promote economic growth, low taxes, and minimal regulation, right? If that were the case, 2001 through 2006, with the GOP in firm control of all branches of government, should have been the Buckeye State’s golden years. Instead, Governor Bob Taft, a pliant legislature, and pay-to-play cronies at ORPINO (the Ohio Republican Party In Name Only) increased taxes in 2003 and allowed state government, its headcount, and its workforce costs to grow at alarming rates. Ohio’s economy barely budged during those years, and was second-worst in the country (again, only Michigan trailed). On a per-capita basis, the state’s GDP grew by less than 0.3% per year. During 2003 through 2006, while the U.S. economy as a whole added over 6.1 million jobs, Ohio added a pathetic 6,000, gaining back hardly any of the 191,000 jobs lost during the decade’s first two years. The state’s 2005 revenue-neutral tax restructuring, which included an awful gross-receipts tax, did more harm than good.

As bad as the Taft era was, it was just a warmup. Under Strickland, with the hugging cooperation of Republicans in the legislature, Ohio’s economy tanked well ahead of the recession as normal people define it (July 2008 through June 2009). After losing 7,000 jobs in 2007 while the country gained almost 1.1 million, the state saw over 400,000 jobs — an astonishing 7.7% of the workforce — vanish during 2008 and 2009. Under “Turnaround Ted,” there was no jobs recovery; fewer Ohioans were working during Strickland’s final month than when the recession officially ended 18 months earlier.

If the Strickland administration did anything meaningful to stop the bleeding during its four-year reign, I certainly didn’t see it. Dayton high-tech icon NCR, the home of the original cash register over a century ago, left the state for Georgia; politicians of both parties, who clearly weren’t maintaining their business community contacts, were totally blindsided. The only thing I recall Ted Strickland doing is begging Washington for stimulus money. All that did is enable the state to keep its bloated structure essentially intact for two years while delaying and worsening the ultimate day of reckoning. Strickland, who fortunately became the first incumbent Buckeye State governor since 1974 to fail to win reelection, though by a scary-slim margin, left a state which had shrunk by over 3% during his four-year term — fifth-worst in the nation, beating out only Nevada, Michigan, Florida, and Arizona — and an $8 billion budget hole for Kasich, his successor.

Kasich and legislative leaders first pushed through SB5, a union-limiting cost control measure similar in many ways to Wisconsin’s better-known budget repair law, despite a poor performance by the PR-averse ORPINO, the opposition’s fundamentally dishonest claims, and some opponents’ sickening, Badger State-like childishness. As of this writing, Kasich and the GOP-dominated legislature, which lost the House in 2008 but won it back in 2010, appeared on the verge of meeting the budget challenge without raising taxes.

There’s a new constructive attitude in state government which, despite early stumbles, some by Kasich himself, shows signs of becoming contagious. “A new way, a new day,” and moving “at the speed of business instead of at the speed of a statue” may actually be more than corny slogans.

Most important, though it’s far too early to get overly excited, the state’s workforce is finally growing again. Through May, Ohio added 70,000 seasonally adjusted jobs, the fourth-highest in the country in percentage terms, and easily the best of any industrial state. It’s the best January through May result since 1994, which will not surprise longtime Buckeye State residents, as that is about the time when second-term governor and alleged Republican George Voinovich became just another tax-and-spend politician. The Kasich administration has also scored key corporate saves of companies which were considering leaving the state.

If anything will keep Ohio from legitimately turning around, it’s the state-reliant, business-hostile comfort zone in which too many relatively disengaged Buckeye State voters reside. That’s the only plausible explanation why the 2010 gubernatorial race was as close as it was.

The state’s Tea Party adherents have been among the nation’s most active. To help sustain Kasich’s early momentum, they will need to redouble their efforts in the coming months and years. Fortunately, the movement’s leadership is aggressively acting to meet that challenge. Its “We the People” Convention in Columbus on July 1-2 promises to serve as Activism 101 for sensible conservatives, and to build an effective counter to the Alinsky-driven left. Buckeye State residents and out-of-staters who want to leave a free, solvent state and country to their children and grandchildren should seriously consider attending.

Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.
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