It’s hard to believe that anyone who visits Plunderbund on a regular basis is confused about where we stand on Gov. Kasich’s mediocre efforts to crank up Ohio’s economy.

We reported recently that Ohio has entered its 41st straight month of not even breaking even with the national job creation average. Worse still, the Buckeye State is still tens of thousands of jobs short of bringing state workers back to work in the numbers prior to President George W. Bush’s ‘Great Recession’ kicked virtually all states, especially Ohio, in the gut.

Ohio Missing Out

Now that John Kasich has finally come home after winning only one state and losing 46 others, as 17 Republicans competed for top honors, but only one, Donald John Trump, survived the demolition derby of primaries and caucuses in which he beat back all of them even though he was the only un-elected official in the race.

Another report out today on where growth and job creation is happening post-Great Recession shows that Gov. Kasich is a long way from making Ohio great again. The Economic Innovation Group, the same outfit whose report on where America is distressed showed that three of Ohio’s top ten cities are also on the list of top ten distressed cities—Cleveland, Cincinnati and Toledo—maps the 20 counties spread out across the nation that account for half of the growth since 2010.

Called “The New Map of Economic Growth and Recovery,” the 26-page report surveys the economic landscape emerging from the Great Recession and compares it to previous recovery periods. It identifies differences in the strength and geography of county level growth in employment and business establishments — two key markers of economic dynamism — and uncovers three significant
transformations in the economy.

Study methodology was based on the most recent publicly available data from the U.S. Census Bureau’s County Business Patterns program. The data compares the rate and geography of the country’s economic growth on two metrics, the number of jobs and the number of business establishments, over the first five years of the most recent three recoveries (1992 to 1996, or “the 1990s;” 2002 to 2006, or “the 2000s;” and 2010 to 2014.

The first and the clearest marker is a collapse in the number of new firms in the economy. Over the 1990s and 2000s recoveries, on average 1.27 firms were born for every firm that closed each year, the report says. Moreover, over the first four years of the 2010s recovery, “that average fell to exactly 1.00 — barely replacement rate.”

The second is the increasing geographic concentration of recovery-era businesses and jobs into a smaller number of more populous counties. The majority of U.S. counties had fewer business establishments in 2014 than in 2010, despite five years of national recovery. Meanwhile, when the share of state population living in counties where establishment growth matched or exceeded the national rate (2010-2014) was looked at, only four percent of Ohioans live in good performing counties. Of the top 20 best counties in this category, not one was in Ohio. All fell into states like California, Florida, Texas, Arizona, New York and Illinois. Back in the roaring 1990s when President Bill Clinton was setting records for job creation, Summit County, whose county seat is Akron, joined Milwaukee, WI, and St. Louis, MO as counties with the highest-volume generators of new business establishments in the country.

Not today, sadly. When the share of state population living in counties where job growth matched or exceeded the national rate (2010-2014), only 24 percent of Ohioans are lucky enough to live in a well-performing county.

The third factor cited in the report is the shift in the counties driving the nation’s economic recoveries from smaller to larger ones. How far Ohio has fallen from then until now is glaring. In the 1990s, Rust Belt states like Ohio did well. In fact, the report notes, when it came to employment expansion, “the counties containing Akron, Cleveland, Cincinnati, Columbus, and Dayton, Ohio, all joined a large national network of peers to deliver half of the economy’s new jobs.”

“Together, the findings capture an economy veering towards a less broadly dynamic, less entrepreneurial, and more geographically concentrated equilibrium — more reliant than ever on a few high-performing geographies abundant in talent and capital to carry national rates of growth. Even in the relatively short period of time analyzed here, patterns have reversed. Large urban counties dominate where they once lagged, while small counties have nearly disappeared from the map of recovery altogether,” the report notes.

Reflecting on Ohio’s leadership today—where Republicans like John Kasich and a legislature dominated by like-minded conservative thinkers boast with pride about reducing income tax rates by $5 billion or more—Ohio’s moribund population growth shows population movement passing it over for greener pastures out west and down south. The correlation between population growth and job growth is strong and undeniable. Texas is growing by leaps and bounds, creation jobs and gaining new congressional seats, four in the last census alone, in the process. Ohio stagnates in population growth and loses congressional seats, two more in the last census. Ohio today has about as many Electoral College votes as it did in the 1830s, when it was the opportunity state.

Gov. Kasich once enjoyed talking about his “Ohio miracle” during his first term, but that PR narrative was quickly dropped when the so-called “headwinds from Washington” excuse didn’t get track as the real reason Ohio continued to perform in the bottom half of states. Another reason was the miracle was easily debunked, and it slept with the fishes throughout his long and ultimately unsuccessful second run for the White House.

Stuck in a state where population growth is barely positive, among the lowest in the nation, Gov. Kasich still believes lower taxes, less regulation and balanced budgets is the formula that works. History shows, quite clearly, just how wrong he is. But others know better.

Krugman Pokes Kasich

Noble prize winner in economics, Paul Krugman, blasted Gov. Kasich for being wrong in the 1990s and now on the topic of what it takes to get an economy moving again. Mr. Krugman wrote Monday in his New York Times column on lessons from booms past.

“And it’s worth remembering that in 1993, when Mr. Clinton raised taxes on the wealthy, Republicans uniformly predicted disaster. It will ‘kill the recovery and put us back in a recession,’ predicted Newt Gingrich. It will put the economy ‘in the gutter,’ declared John Kasich. None of that happened, which didn’t stop the same people from making the same predictions when President Obama raised taxes in 2013 – a move followed by the best job growth since the 1990s.”

If he can’t do it in Ohio, what makes him or anyone else, for that matter, think his recipe for not making Ohio great again would make America Great again?

 

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