Restoring Prosperity to Ohio

Bruce Katz
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University

June 8, 2009

Editor’s Note: At a “Restoring Prosperity” gathering at Cleveland State University, Bruce Katz called upon Ohio’s leaders to take bold measures to stabilize the state’s economy by focusing on core communities—home to the assets that are key to recovery.

I want to thank Ned Hill of Cleveland State, Lavea Brachman of Greater Ohio, and Randell McShepard of Policy Bridge for hosting this important forum today.

Last Thursday I attended a keynote speech by Ban Ki Moon, the Secretary General of the United Nations.

The Secretary General provided a sober analysis of the stark challenges facing the global community:

  • The worst economic and financial crisis since the Great Depression;
  • the acquisition and testing of nuclear weapons by rogue states like North Korea and Iran;
  • the existential threat of climate change; and
  • the continued instability in the Middle East and other regions of the world.

The Secretary General ended his talk with a clarion call for new international frameworks and structures to govern our troubled world.

“This is not a time for tinkering,” he said, “but a time for transformation.”

Ban Ki Moon’s call for transformative thinking and action frames my talk today.

A housing crisis—fueled by reckless lending and regulatory abdication—has evolved into a full blown economic collapse, here and abroad.

In the last year, the US unemployment rate rose almost 4 percentage points, and now stands at 9.4 percent. In March, 13.2 million people were unemployed—the highest number since records started being kept in 1948.

On a whole series of indicators, in fact, we are at the worst levels since the government started tallying this information 40, 50, 60 years ago:

  • continued unemployment claims
  • consumer confidence index
  • housing starts
  • new home sales
  • new home completions

Ohio doesn’t look any better, and on many indicators it is faring worse than the nation as a whole. The state’s unemployment rate is currently over 10 percent. Ohio is one of the four states whose metros were hit hardest in terms of employment figures over the last year (with Michigan, California, and Florida).