BuckeyeBlog

Ohio’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.

As you may have noticed on our website, the Buckeye Institute today released a report authored by former Congressional Budget Office Director Douglas Holtz-Eakin and Cameron Smith. It discusses the effect of the estate tax on small businesses and finds that permanently eliminating the estate tax could create roughly 1.5 million jobs. In Ohio, over 58,000 jobs would be created. President Obama’s “stimulus” plans will ostensibly create 3 million jobs. An estate tax repeal would be a far cheaper alternative.

This study does not discuss state estate taxes. Ohio’s estate tax was the subject of a 2001 Buckeye Institute report which, while somewhat dated, still offers a grat analysis of the tax and recommendations for reform. The tax is also mentioned in the policy brief Ohio’s Dumb Taxes. Needless to say, the research suggests that if Ohio were to eliminate its estate tax, it would be better off economically.

At a time when Ohioans need most to build and maintain their financial security, the “cap and trade” measure spear-headed by US Rep. Henry Waxman of California, chairman of the House Energy and Commerce Committee, will do nothing but provide further hurtles for Ohioans to realize such security. This bill, which calls for restrictions on the amount of greenhouse gas emissions such as those produced by coal, would result in higher energy costs for consumers. Furthermore, the job security of those in high-manufacturing areas would be in jeopardy, leading those affected to tighten their budgets at a time when spending is most needed to stimulate our economy. The pending consequences to this bill are evidence to show that regulation does not help our economy but cripples the very workers and families upon whom it depends.

For more information on the effects of this bill visit the Heritage Foundation website.

For information on how this bill would impact Ohio directly, visit the Sandusky Register at this site.

Listen here to a BuckeyeVoices podcast with Dr. Tom Woods, author of “Meltdown: A Free Market Look at Why the Stock Market Crashed, the Economy Tanked, and Government Bailouts Will Make Things Worse.”

Dr. Woods is speaking on the Ohio State Campus tomorrow evening, a learning opportunity you wouldn’t want to miss.

Judging by the product it passed yesterday, the US House Committee on Commerce and Energy would that we in Ohio have neither commerce nor energy. In a WSJ op-ed last week, Indiana’s Gov. Mitch Daniels weighed in on the politics behind this bill from a Hoosier perspective that applies just as well from here in Ohio.

Quite simply, it looks like imperialism. This bill would impose enormous taxes and restrictions on free commerce by wealthy but faltering powers — California, Massachusetts and New York — seeking to exploit politically weaker colonies in order to prop up their own decaying economies. Because proceeds from their new taxes, levied mostly on us, will be spent on their social programs while negatively impacting our economy, we Hoosiers decline to submit meekly.

Add one dose of flawed thinking on taxes, another dose of misplaced outrage at “outsourcing,” some nifty Presidential rhetoric about “tax havens,” and what do you get? A Presidential tax plan that, as the Cato Institute’s Dan Miller observes, will hurt American businesses and provide a boon to foreign companies:

Jackson

The government’s take-over of large parts of the American auto industry is a vital Ohio issue. Close to 6.5% of Ohio’s non-government gross state product comes from automotive manufacturing and related industries. While GM and Chrysler have very significant manufacturing investments in Ohio, so does Honda of America Manufacturing.  Ohio auto parts manufacturers supply the Big Three and other “transplants” throughout the country including Toyota, Hyundai and BMW and others. And there are over 10 million motor vehicles of all kinds owned and operated by Ohioans.

So when the federal politicians weigh in on automotive issues, they are directly impacting the wealth and prosperity of Ohio.

And here is what the Obama Administration is thinking in regard to the America’s, and Ohio’s, automotive industry:

What this country needs is a single national road map that tells automakers who are trying to become solvent again what kind of car it is they need to be designing and building for the American people.

Lisa P. Jackson, US EPA Administrator

Remember: Socialism is a centrally plannedeconomy in which the government controls all means of production and economic freedom is severely limited, if not totally abrogated by government. By subjecting Ohioans, both as consumers and producers of cars and trucks, to market choices defined by the governmental elites and where many of those choices permitted us directly involve the interests of government, socialist tendencies grow and economic freedom diminishes in our state.

HT to Manhattan Institute’s Steve Malanga who further offers a good, concise lesson on the teachings of Smith and Hayek.

In a recent Hamilton Journal-News editorial, U.S. House Minority Leader John Boehner cited our study about the dangers of the federal stimulus plan: “The Economic Impact of Federal Spending on State Economic Performance: An Ohio Perspective.” In his editorial, Boehner laments our return to the era of big government and the negative consequences of doing so. Job losses, slower economic growth, higher taxes, and a big burden passed on to our children and our children’s children. When will it end? And when will certain policymakers pick up history books and learn from our past mistakes?

UPDATE OF “WE’RE NOT MAKING THIS UP”:

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Intertwining humor and his opposition to the stimulus bill, Minority leader of the House John Boehner brought out the immense stimulus bill and pointed out that not one member of the House had read it. “I don’t know you could read 1,100 pages between midnight and now.” He then dropped the massive heap of government excess on the floor, creating a thud so loud even the White House could hear it.