“He’ll do for Michigan what he’s done for Ohio. Create jobs,” a pro-John Kasich TV ad is telling Michigan voters in advance of next Tuesday’s primary.
Plunderbund has repeatedly reported how much Gov. Kasich has under-performed, so much so that some urban centers may not recover their pre-Great Recession job levels for years to come, as Ohio has lagged the national average for most of Kasich’s five years as governor.
JobsOhio reported on Tuesday that year-over year Ohio has 23,602 new jobs, a record, due to its efforts, and corporate investment rose $6.7 billion at the same time. For the uninformed, JobsOhio is exempted from the state’s public-records law and require a private, rather than public, financial audit. It represents the governor’s successful “Lehmanization” of Ohio’s formerly public job creation agency. It’s likely unconstitutional, but lives and breathes on leveraged liquor profits, which last year was more than $1 billion statewide, according to the department of commerce.
Reports say that JobsOhio raised money by issuing bonds and paid approximately $1.5 billion in 2013 to acquire Ohio’s liquor business for 25 years. One thing Gov. Kasich learned while working at Lehman Brothers was how to leverage or borrow money, a fact that helped tank the storied Wall Street investment banking firm, that then led to the economic meltdown Ohio has yet to recover from even at the hands of Ohio’s miracle-worker governor.
Mr. Kasich’s success with JobsOhio was only possible because of the great gift he got in 2010, when Republicans took control of the Ohio House after a short two-year period Democrats controlled it from 2008-2010. That gift enabled John Kasich to privatize or “Lehmanize” what was once a transparent, accountable process to one that lives in the shadows, out of the view of public eyes.
Kasich Spinning Straw Into Gold
The private group John Kasich campaigned on in 2010 to set up, that he also said he would serve as board chairman of until the Ohio Constitution denied him his desire, said jobs and facility investments are up ten percent.
If Gov. Kasich were an honest leader, he’d acknowledge the rebounding economy he inherited from Ted Strickland, who weathered the worst of the Great Recession and set Ohio back on a roaring road of recovery. In Ohio’s recover, Strickland routinely out performed the national average for job creation, while Kasich has routinely has under performed.
One of Ohio’s preeminent job-data analysts has reported on a nearly monthly basis that the Kasich Administration continues to create job too slowly. George Zeller, out of Cleveland, says Ohio has not yet fully recovered from the Great Recession, or even the 2000 recession. Mr. Zeller’s own words paint a different picture compared to Gov. Kasich’s positive, upbeat claim of why his Ohio model can work as a national model.
Based on job growth and payroll earnings, very large job losses were suffered by Cleveland and Ohio during the 2000s recession. Those losses, he said, have “lingered longer in Ohio than it did elsewhere in the United States. In Cleveland the recession has been horribly catastrophic, with Cuyahoga County losing a staggering 16.5% of all its jobs, a job loss of 132,712 jobs. The most recent income measures in Ohio show that the damage from this recession has been severe among both low income communities and affluent communities on a statewide basis.”
More recently, Zeller notes that Ohio gained only 100 jobs in January 2016. “The main cause of Ohio’s too slow job growth in January 2016 was once again in government, where Ohio lost 7,600 jobs,” he says. “Most of that was a 5,500 job loss in local government, but state government also lost 1,200 jobs and federal government jobs in Ohio declined by 900 jobs.” Cutting government spending and employment as public policy, he says, “is still having the predictable impact of slowing down Ohio’s job growth rate to a point below the USA national average.”
Private good, public bad
Kasich likes to count only private sector jobs, while Zeller counts all jobs, including public sector jobs. Kasich is down many thousands in that category, where more education is generally required and pay and benefits are commensurate. Gov. Kasich’s sales pitch is that reducing government payrolls is good management; he subordinates public jobs to private jobs, then sells it as lowering overhead when it stunts growth by reducing economic activity from a key segment of the economy, personal spending. He sells it as good medicine for taxpayers, when it actually drives up public safety net spending, and John Kasich isn’t generous there because, then, you’d be “dependent on government” and we want you to be innovative, entrepreneurial, a smart risk taker.
The former congressman and Fox New Channel political celebrity inherited tens of thousands of jobs from his predecessor as well as about $1 billion in revenue. Kasich actually admitted on national TV that the Ohio economy was stalled, blaming his inability to “move the needle” on job creation on “head winds from Washington.”
It’s safe to predict that no reporter will ask Gov. Kasich to square his view of the facts with the view of the facts by a new report on distressed cities that breaks down America by zip code with measurements in various categories.
Ohio’s Three Distressed Cities
The Economic Innovation Group released its 2016 American Distressed Communities Report, that shows, sadly, that among the top ten distressed cities in the nation, three of them—Cleveland, Toledo and Cincinnati—rank in the top ten.
The Distressed Communities Index (DCI) is a customized dataset created by EIG examining economic distress throughout the country and made up of interactive maps, infographics, and a report. It captures data from more than 25,000 zip codes (those with populations over 500 people). The report covers 99 percent—312 million—of Americans.
The report uses seven different analytic metrics:
- No High School Degree: Percent of the population 25 years and over without a high school degree
- Housing vacancy: Percent of habitable housing that is unoccupied, excluding properties that are for seasonal, recreational, or occasional use
- Adults not working: Share of the population 16 years and over that is not currently employed
- Poverty: Percent of population living under the poverty line
- Median income relative to state: Ratio of the geography’s median income to the state’s median income
- Change in employment: Percent change in the number of individuals employed between 2010 and 2013
- Change in business establishments: Percent change in the number of business establishments between 2010 and 2013
Gov. Kasich has made it to the final four Republicans in the race for president. He will be in another televised debate Thursday night with his challengers, Donald Trump, Marco Rubio and Ted Cruz. Since the governor has escaped having to explain any of his many missteps and awaiting scandals back home, for ten debates, it’s likely the 11th debate won’t have moderators probing why his Ohio miracle isn’t what he says it is.
Lower taxes, less regulation, balanced budgets, limited government have not produced for Ohio what he claims it has. The findings in this report demand an explanation from Gov. Kasich. Voters in Michigan can benefit by better understanding what he’d do in Washington, which he says is obsolete and returned to the states, based on his five-year record in Columbus. Almost always off-beat, maybe John Kasich would say whether he’s even live in the White House, since one of his first idiosyncratic reforms was the decision to not live in the Governors Mansion, opting instead to stay in his private residence, where millions were spent to secure it.
The governor created a private group run by a former Lehman Brothers buddy, John F. Minor Jr, that has billions to give away lucrative incentives to create jobs. What JobsOhio has been good at, though, is spending on salaries and benefits. The group reported that its employees expanded to $2.3 million to $8.25 million, a 39 percent increase over last year. The reported reason for the increase was the addition of 13 employees. JobsOhio now employs a total of 62.