Why Ohio has lost its Mojo!
Entrepreneurship in Ohio is dead and how can we revive it.
Ohio is a death spiral State that is now in an accelerated decline. This decline started way before COVID-19 and as such, cannot be used as an excuse for its exceptionally poor performance.
Ohio did not bounce back like other states during the Trump administration because of the way the state is managed. Like it or not this is the fault of Republicans acting like Democrats.
Ohio’s response to the COVID-19 epidemic has caused irreparable harm to the economy…. and when economic dynamism is tallied in with other economic factors - Ohio went from having the 35th worst economy before the pandemic to ranking 47th by the end of 2021. Ohio is considered a death spiral state because it has more takers (those on the public doles) than makers, its multiple retirement systems aren’t sustainable, its healthcare spending is unsustainable, it is not growing (economic expansion) at a rate to sustain (its spending) itself, its taxes are too high, and the number of laws are pernicious.
Ohio is playing a dangerous game of kick the can down the road in hopes of future economic expansion - that is likely to never come without implementing some fundamental conservative policies. Prosperity never grows in socialism.
Ohio’s government has not been making good decisions and has been out-of-control since the late 1980’s. It is now all about maintaining the illusion of a good economy.
Since the 1980’s Ohio Republicans have dominated the political landscape in Ohio. Needless to say, Republican leadership has been less than stellar with the Ohio Republican Party putting up robustly purple (big government) Republicans unwilling to implement the reforms Ohio desperately needs. Conservative policies that could have led to greater prosperity have been ignored, marginalized, and criticized by moderate Republicans. Make no mistake, we don’t need to make friends with the left, like former Governor Kasich would have us do. We need to educate the left of the dire circumstances we are in and why liberal policies are ineffective - we need them to reach across the aisle - not us. We know this can be accomplished as the labor vote that is traditionally a Democrat vote turned out in large numbers for Donald Trump.
ECONOMIC DYNAMISM
The term economic dynamism refers to the rate and direction of change in an economy. It traditionally encompasses activities like the rate of new business formation, the frequency of labor market turnover, and the geographic mobility of the workforce.
Economic Dynamism has been on both a steady, yet rapid decline in Ohio. Eight of the country’s 10 least dynamic states are located east of the Mississippi River, and six of the 10 are clustered around the Great Lakes. Dynamism runs lowest in the Ohio-Pennsylvania-West Virginia triangle—states still struggling against the weight of deindustrialization that have failed to reinvent themselves despite promising turn-arounds in metro areas like Columbus. This turnaround can likely never occur because Democrats and liberal/socialist policies dominate Ohio’s major cities.
Astoundingly, Ohio has over 14,000 fewer companies in 2020 than it did in 1992 even as its population increased by nearly 690,000 people over the period and real GDP rose by roughly one-quarter.
Crucially, this decline is not due to Ohio having unusually high rates of firm closures; rather, it is due to the state having unusually few new firm starts. To put it quite simply “Ohio is not shrinking - but it is not growing either.” The rate of firm closures in the state stood below the national average every year. Most of the rest of the United States is moving forward and is having tremendous growth in the South and the West.
The sheer number of firms of course reveals nothing about their quality, but it does provide an important metric of how vibrant the marketplace is in a state. Compare Ohio’s performance to Massachusetts’ and New Jersey’s, two states that demonstrated much more resiliency and climbed the ranks of the index over time: Both states added roughly as many firms as Ohio lost. Such measures matter because firms are the fundamental unit of our market economy. At its most muted, low levels of dynamism can lead to an outright erosion in the number of companies in a state over time—a clear indication of economic sclerosis. High levels of dynamism, on the other hand, are associated with a proliferation of firms and employment providers and much more economic opportunity.
WAIT! WHAT ABOUT THE THIRD FRONTIER PROJECT?
The Third Frontier Project was created in 2002 under Republican Governor Bob Taft and was billed as an unprecedented commitment to create new technology-based products, companies, industries and jobs in Ohio. The Ohio Third Frontier was initially funded with $1.6 billion from Ohio’s Tobacco Settlement funds, Capital Funds, Revolving Loan funds, and with the Issuance of newly created Technology Bonds. The current $2.3 billion Kasich initiative that was passed in 2015 was financed solely through bond issuance and, as was the case under Taft, the impetus was to attract and retain technology companies in Ohio. Both initiatives, as we can tell from economic data from the census, have been complete and utter failures that have left Ohioans on the hook for nearly $4.4 billion (less the tobacco settlement money).
Ohio history is replete with Ohio State University economists and professors producing reports of how effective the Third Frontier program has been. Using metrics and language created under the Obama administration such as “Jobs saved or retained” one could tell that these funds were mishandled and misused from the outset. Without knowing that Republicans were in charge a conservative would guess with all the Democrat utopian ideals that were pursued with Third Frontier Funds that a Democrat were in charge. The vast amount of money was spent on research and developing renewable energy technologies (wind and solar) - with huge give aways to Democrat donors (which helped to re-elect Barack Obama.) There were huge give aways in the bio-tech and medical fields with Ohio State University and the Cleveland Clinic being tremendous recipients of these technology dollars. Most companies either went bankrupt or the companies once successful moved out of state.
WAIT! WHAT ABOUT JOBSOHIO?
As abysmal as the Third Frontier Project has been - JobsOhio has been a magnitude worse. JobsOhio is a private organization that is funded with Ohio’s tax on alcohol. JobsOhio spends north of $7 billion (with a “b”) every year. Every year, JobsOhio comes out with preposterous numbers of jobs saved or retained. We all know that these reports that were produced are not worth the paper they were printed on. If these reports were the least bit accurate - Ohio would be growing and there would not be a net migration out of the State of Ohio.
Ohioans are leaving Ohio much faster than what either the Third Frontier Project and JobsOhio can attract them. If the reports by Ohio State University and JobsOhio were even close to being accurate Ohio would not be losing another Congressional seat. We are not growing nearly as fast as the rest of the country and our spending per capita is far outpacing much more successful states Like Texas, Florida, Utah, and South Dakota.
Keep in mind, the only reason why Ohio is not worse off is due to the Oil and Gas industry discovering the Marcellus and Utica shale formations which have greatly benefitted Ohioans.
THE SPECIAL INTERESTS
The Ohio Republican Party is controlled by special interests that push Ohio legislators to make poor decisions. These organizations own the Ohio Republican Party.
The Ohio State University.
The Cleveland Clinic, University Hospital, Mercy Healthcare System, Public Health Partners.
Several large retirement homes and nursing/elder care facilities.
Several large road construction and excavation companies.
Engineering firms that design green buildings for schools and prepare master plans for cities and smaller communities.
Law firms and lobbyists firms.
The Cleveland Browns.
The Mob (organized crime).
These are the organizations that make large donations to the Republican Party and help to get “Big Government” advocates elected to the board of directors (State Central Committee) of the Republican Party. This Board of Directors does not represent the best interest of Republicans - many of its members are political appointees and benefit from an ever-growing state government. The Ohio State University gets all kind of research dollars from the State - these grants come from multiple state sources but a tremendous amount come from JobsOhio and the Third Frontier. The hospitals consume the largest chunk of Ohio’s budget through Medicare and Medicaid spending. Road construction companies get awarded State dollars through State contracts. Ohio requires all school buildings and State funded buildings to meet green building codes as well as require cities that apply for grants to have detailed Master plans. Law firms make money off of more laws being created. The Cleveland Browns…. well let’s just say they are not too bright in these types of decisions.
Ohio is one of the few States in the nation that does not require State Central Committee members to disclose where their campaign donations come from.
That means there is no way of knowing who influences the Republican Party. It is legal for Ohio State Central Committee candidates to take money from all source Corporate and foreign and none of it has to be disclosed to anyone. The Ohio State Central Committees of the Democrat and Republican parties are the ultimate dark money organizations in Ohio.
HOW OHIO CAN GET ITS MOJO BACK
Ohio was a growing State until the 1970’s. The last time that the people had a visionary Governor was Jim Rhodes - and although he was far from perfect (with a Donald Trump demeanor that despised the establishment) - Ohio was growing. All of the “Wizards of Smart” since Governor Rhodes (small businessman/restaurant owner/inventor have not been able to match his success. Governor Rhodes strategy was to spend money directly on projects that would allow the Ohio economy to expand. His administration built road, bridges, ports, and airports - and expanded utilities water, gas, electric, and sewer utilities. He greatly improved Ohio’s education systems while greatly reducing the size of State government. He rolled back almost all of the previous two governor’s expansion of the State government.
Also, this era was the last time the Republican Party (State Central Committee) was really engaged and took an active part in managing the destiny of Ohio. They had a vision and a platform for the state of Ohio and actually held politicians accountable to getting things done that were for the benefit of Ohioans and not just the special interests.
The special interests had been gaining traction within the party for years sine the last Republican revolution in the 1950’s and by the 1980’s they were able to pass a change to Ohio law that made the State Republican Convention optional.
What many Ohioans didn’t realize at the time is that the State Convention was a vital check and balance on the State Central Committee so it could not be taken over unilaterally by special interests. Ohio is one of the few States that has no law on political appointees or lobbyists serving on the State Central Committee.
So here is how it works : The special interests decide on a candidate for governor, then they run enough State Central Committee candidates to have a majority vote on the State Central Committee. They normally get these people by promising them a cushy appointment to a State Job or have a lobbyist run and win a State Central Committee seat so that they can have access and influence. When Bob Taft ran, he took over the State Central Committee. When John Kasich ran he took over the State Central Committee. When Mike DeWine ran he took over the State Central Committee. This type of bribery should be illegal.
The State Convention serves three purposes: 1) To make endorsements. 2) To change the bylaws of the State Central Committee as necessary. 3) To draft a platform to give the State Central Committee guidance. The State Convention is largely a gathering of County Central Committee members. The thought was is that volume of representation of county leaders would mute the influence of the special interests - as it would be nearly impossible to buy off enough people at the County level. Currently, the special interests have it made. There are only 66 members of the Ohio Republican State Central Committee and you only need 34 votes (33 + 1) to make things happen.
WHAT CAN YOU DO?
BEFORE OHIO CAN MOVE AHEAD, IT NEEDS TO REST ON THE SOLID AND ETHICAL FOUNDATIONS OF POLITICAL PARTIES THAT REPRESENT THE WILL OF THE PEOPLE AND NOT THE SPECIAL INTERESTS. We need to restore the check and balance of the State Convention to the State Central Committee. We also need several other reforms within the Republican State Central Committee. These needed reforms are listed at the Ohio Promise Keepers website.
Find out who your County and State Central Committee persons are and ask them to take the Ohio Promise Keeper’s pledge.
If your Committee persons will not take the pledge consider running for office or helping find someone to run for office.
Volunteer to help Ohio Promise Keeper candidates for State Central Committee.
Remember, together, and with God, all things are possible even if the political establishment tells you it is not.