Once known as the Mother of Presidents, the once-great state of Ohio is getting poorer, older and dumber--and making all the wrong moves to reverse the situation.

That's a plus for Barack Obama's electoral prospects in this swing state in November, since lofty but vague promises of change combined with high-spending, high-tax, welfare-statish policies are also how Governor Ted Strickland (whose name keeps surfacing as a possible VP candidate) is steering Ohio. As a political formula, it may even work so well as to swing the state's House of Representatives toward the Democrats for the first time since 1994.

As a formula for economic revival, however, it's madness. Ohio already has the 5th heaviest state/local tax burden in the land. (In 1990, it was 30th.)  Its unemployment rate last month was 6.3 percent. Hundreds of thousands more people are leaving the workforce than entering it. The state's median household income is falling--to $44,500 in 2006--while the national figure is rising (to $48,500). During the closing decades of the 20th century, incomes rose twice as fast across the country as in Ohio.

The state has been de-industrializing for ages--the sprawling GM and NCR plants of my Dayton childhood are long gone. Every metropolitan area in Ohio has seen manufacturing employment plunge. The state lost more than 200,000 non-farm jobs over the past seven years--and those that remain are mostly with struggling firms. Of Ohio's ten largest corporations (including such familiar names as Procter & Gamble), just two have posted positive returns so far this year--and both are insurance companies. A surefire way to have one's portfolio underperform the market these days is to invest in Ohio.

Any sane strategy for turning this around would start by strengthening the state's human capital for a globalized, knowledge-based economy while making Ohio more hospitable to high-tech and brain-powered firms. To its credit, the state has made a few good moves, led by higher education chancellor Eric Fingerhut, to get more young people into and through college. Primary-secondary schooling has seen some earnest efforts, too, such as a new "STEM" initiative to beef up science and technology education. The state's first "KIPP" academy will soon open in Columbus.

But the distance to be covered is vast. Ohio ranks 41st in the percentage of adults with bachelor's degrees. Though it has many fine colleges, young people graduating from them don't stick around. They head for the coasts or for "happening places" in between, none of which (with the partial exception of Columbus) happens to be in the Buckeye State.

Bright Ohio kids aren't even enrolling in nearby colleges. The Cincinnati Enquirer recently reported that almost half the top seniors in local high schools were headed for out-of-state campuses.

As jobs and young people exit, the remaining population ages. The Census projects that Ohioans over 65 will rise from 13 percent to 20 percent between 2000 and 2030.

Even some well-established cultural institutions are faltering. The 57-year-old Columbus Symphony is broke and just canceled its summer "pops" season. There is not a single downtown in Ohio that could be described as "lively" in the evening.

The government sector is still growing, of course, abetted for the time being by those rising taxes on what's left of the private economy, and some big nonprofits are doing well, too, especially major medical institutions such as the acclaimed Cleveland Clinic. But urban public school systems--beset by shrinking enrollments, obdurate teacher unions and an aging workforce facing a gravely under-funded pension system--are stumbling, ever more dependent for revenue on local bond issues that strapped voters are ever likelier to reject.

In both public and private sectors, what one witnesses in Ohio are the most senior employees clinging to what's left of the economy, fending off change, demanding ever more burdensome contracts and costlier benefits. The ship is slowly sinking but as the more agile passengers and crew take to the life boats and sail off, those who remain on board are climbing to the upper decks, determined to grab whatever plunder they can and seemingly confident that the rising waters won't reach them.

Few are paying attention to tomorrow and even those who do often come up with harebrained schemes. Beginning with Governor Strickland, who has yet to unveil an education-reform strategy or any plausible solution to the school-finance conundrum but has been inviting education interest groups to briefings and workshops filled with vague, psycho-babbling talk of creativity and innovation. While demanding greater control over the K-12 system than his predecessors enjoyed, he has also signaled his intent to back away from academic standards, testing and accountability on the one hand and from Ohio's pioneering school-voucher and charter-school programs on the other.

Strickland's approval ratings remain high, perhaps because he isn't inconveniencing anybody (except former state education superintendent Susan Zelman, whom he hounded out). Rather, he's giving the teacher unions and other adult interests what they want--including relief from programs and regimens that they find oppressive.

Yet Ohio needs wrenching change on almost every front, not feel-good policies designed to placate and cosset survivors of the current economic meltdown. Meanwhile, Strickland fiddles, making sweet music while the flames burn.

That approach may work for Obama in Ohio, too, at least in the short run. In the long run, disaster awaits.

by Chester E. Finn, Jr.

Here's a little (of a lot of) reaction:

-- "I am delighted that your editorial was candid and honest. Sad, but true. The WSJ recently compared the economies and business cultures of Texas and Ohio. What a contrast of can do and won't do."

-- "I read your piece. If I can be candid, it strikes me as a polemical rant. Must you be so ideological in your condemnation?"

-- "My wife and I just turned 30 and have 2 beautiful little girls. We constantly talk of "getting out" of Ohio and raising our daughters somewhere where they have the potential for a good education and she and I can make better money. I hold a MBA from Kent State and she a BS from BGSU--I can relate to wanting to take my education and work experience somewhere that it will be put to better use and my earnings will be treated more fairly by a less punitive tax structure."


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