Ohio's Lost Decade, and Its New Hope

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.