Growing Government, Shrinking Economies
Thursday, June 18th, 2009 By Greg KendallOhio’s politicians tell us that government involvement will help pull us out of the recession, but real world results seem to indicate otherwise. A report just released by the Brookings Institution ranks the Columbus economy 40th in the nation in a study of 100 cities. The study, which examines economic indicators such as employment rates, wages, Gross Metropolitan Product, housing prices and real estate-owned properties, determines how the economies of the nation’s largest metropolitan areas have improved or declined over the past year. Columbus is doing comparatively well economically, but the city shouldn’t get complacent, or it could end up like Cincinnati (61st place), Cleveland (64th), Dayton (79th), Youngstown (87th) and Toledo (89th).
That’s five of six of Ohio’s largest metropolitan economies in the bottom 50, even though a majority of other Midwestern cities are doing fine, if not excellent. What’s more telling is that not all cities are being hit equally by the recession, with some showing only modest losses. In fact, some are seeing promising improvements in unemployment rates and wages. But the report singles out Dayton and Youngstown as cities that began losing jobs two to three years before the national economy took a dive. Ohio’s Gross Metropolitan Product suffered one of the largest declines in the nation. Ohio’s economic performance is disproportionately poor, indicating that it’s not just an effect of the national recession alone.
It’s probably not shocking to people who live in these cities, but it certainly confirms that Ohio’s economy and the policies behind it are stunningly uncompetitive on the national scale. It also shows that Ohio politicians cannot continue to blame the faltering economy on externalities. We will need some real economic stimulus very soon–in the form of lower taxes and freer markets to attract and keep businesses in Ohio. More government clearly isn’t translating into more growth, and, according to this study, it’s likely having the opposite effect.
June 23rd, 2009 at 12:35 pm
While I agree that Ohio needs to be more competitive, as far as Youngstown goes, it’s been struggling for probably three decades. It’s heavily unionized steel industry faded away and now, with GM’s troubles, the next greatest contributor to the economy, Lordstown, will diminish, if it even exists in a few years.
Unless Youngstown and/or Toledo are given some dramatic advantage — for example, eliminate the state income tax for those living there first (I know, probably unconstitutional) and phase it in elsewhere — or large employers can be enticed to set up shop, they will have a tough time for years to come.