Hypothetically Speaking

With all the focus on the various political scandals and pay-to-play debacles in Ohio, it's easy to overlook a more fundamental effect that the Republican's one-party-rule in state government has had: economic stagnation.

The sorry state of Ohio's economy isn't news to hundreds of thousands of Ohioans who continue to struggle to full-time, decent paying jobs. But every once in a while there is a story like this, from Columbus's Business First magazine:

Ohio is on pace to again break its dubious record of annual bankruptcy filings, largely a reflection that economic gains enjoyed elsewhere around America remain in short supply in the Buckeye State. For five consecutive years an increasing number of individuals and companies in Ohio have gone bankrupt. Last year's increase in bankruptcy filings was slight from the year before, which gave hope that the state's economic fortunes were improving. But the level of filings in Ohio over the first six months of 2005 has dashed those hopes, and experts expect the pace of filings will pick up in the last half of the year.

[. . .]

Bankruptcy filings in Ohio edged up 0.2 percent last year, from 89,659 filings in 2003 to 89,913 in 2004. In the first six months of 2005, however, 47,764 individuals and companies filed for bankruptcy. If that pace continues, 2005 would be marked by a 6.2 percent increase in bankruptcies.

In the interest of full disclosure, it's important to acknowledge that the some of the high bankruptcy numbers may be an effect from businesses and individual trying to file before the change in bankruptcy laws goes into effect this fall. But no one is willing to attribute all of the high bankruptcy numbers to these last-minute filers.

And, Ohio's rate of increase in bankruptcies is greater than elsewhere, according to Thomas Allen, a partner in the bankruptcy boutique firm Allen Kuehlne & Stovall LLP.

'While bankruptcies have been increasing across the country, Ohio is among the hardest hit of all states. According to the U.S. Bankruptcy Court for the Southern District of Ohio, the state's two bankruptcy courts found themselves ranked among the top 10 bankruptcy courts in the nation last year for bankruptcy filings. The Northern District bankruptcy court ranked fourth and the Southern District ranked seventh.

The report also shatters the myth that the greater Columbus area is "recession-proof":

Despite a jobless picture in Central Ohio that is brighter than in other parts of the state, U.S. Bankruptcy Court in Columbus recorded more bankruptcy filings than any other court in Ohio over the first six months of the year.

According to preliminary reports, 9,339 individuals and businesses filed for bankruptcy in Columbus, compared with 7,508 in Cleveland and 4,617 in Cincinnati - metro areas that are larger than Columbus. The Dayton office recorded 5,669 bankruptcy filings.

The Columbus region also experienced the most business bankruptcy filings in the state in the last six months with 24 Chapter 11 reorganization filings. Cleveland had 21 Chapter 11 filings and Cincinnati recorded 11. Last year, the Columbus region recorded 50 Chapter 11 filings, which allow businesses to operate while they come up with a plan to repay their debts.

And, the "no-shit Sherlock" award goes to the Columbus Chamber of Commerce:

"I think what's going on is the lack of job growth in Ohio," said Bill LaFayette, vice president of economic analysis at the Columbus Chamber. "Over the last six months, (Ohio has) only gained 25,000 jobs out of a base of 5.4 million."

Seems like this issue would be good fodder for someone's gubernatorial campaign.

[UPDATED to add Thomas Allen quote]