To Make Money . . .

I hate stories about numbers. Numbers make my eyes glaze over and my brain swell. Most of the time, I can understand what the numbers mean, if they are explained slowly and carefully. Writing about them is even worse. My fingers feel like they have advanced arthritis and I get more frequent urges to get up and go to the bathroom. Plus, I know my ignorance of economics (I spent more time reading Prufrock than Samuelson) will get me in trouble. I will not try to keep it simple, it will be simple because that is all I am capable of.

Ohio voters have just approved adding funding its forward thinking development program, called Third Frontier (TF). They said yes to adding $700 million to the program. TF was started with $1,350 million. So the program’s total funding will be $2,050,000,000, or as numbers people like to abbreviate, $2.05 billion.

According to its March press release, TF has spent $548 million since it began in 2002. What has it purchased? It says it has created 55,000 jobs and 637 companies, up to December 31, 2009. That is a commendable achievement. They say the creation of those jobs and companies is worth $4,800 million. So they spent $548 million and got back $4,800 million. Pretty good; we would all take that return on our savings.

Now, look at these numbers, from the Bureau of Labor Statistics (BLS), the federal agency that gives us the unemployment figures we all care about. Ohio’s unemployment rate is (until Friday’s release of the April figures) 11 percent. The amount of people employed in Ohio went down by nearly 37,000 people in the first three months of this year and over 60,000 in one year, since March 2009. The numbers of unemployed went up by over 14,000 in three months and by over 77,000 in one year, since March 2009.

Many people believe “unemployment” should also count the “total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.” That definition is called U6 by the BLS and that figure for Ohio is 17.6 percent. So 11 percent of the people in Ohio are actively looking for work and the real share of Ohioans not working or not working enough may be 17.6 percent.

Without searching for all the actual numbers, in order to get to where Ohio is today, you have to at least count what it has spent on these items:

• Third Frontier
• Unemployment benefits since the great recession began
• The interest on the bonds that were sold to fund Third Frontier
• All the other government programs the unemployed have availed themselves of
• The savings and retirement accounts the unemployed have used to keep afloat
• The money the unemployed have borrowed that they may never be able to pay back and the interest on the credit cards the unemployed have maxed out
• Whatever equity people may have had in the homes they have lost
• Do not forget the spending that was lost from the people who are out of work, or the negative “leverage” effect of the destruction of their earning power (those restaurants, for example, that no longer have those unemployed people as customers)
• The loss of tax revenue caused by all the people thrown out of work
• And make sure you include all the unemployed, the ones defined as U6, too

If I thought about it all day, I am sure I can add to this list. Feel free to let me know what I have left out.

I only am picking on Ohio since its voters yesterday approved the referendum that asked the state to add money to its absolutely necessary economic development program. Those jobs that left Ohio are gone. It can only hope that as the great recession recedes, if it recedes, Third Frontier will help it to grow its economy to include all of its people who want work.

Creating jobs is not a magical trick. It takes a lot of money and hard work. Losing jobs, that is letting our industrial, manufacturing jobs slip away to other countries, was not a natural event, like the migration of birds. We decided as a country to let them go. At least the people who knew better and could have fashioned a national policy to keep those jobs here decided.

Ohio's spending half a billion dollars to create jobs, which could not slow the torrent of jobs lost in this recession, is not a lesson about spending too much, but too little. Had it spent more to create and retain jobs, it might be now a state ahead of the curve instead of one lagging behind.

What this country has lost in the great recession adds up to far more than all the costs we can calculate, the extra benefits spending, the lost savings, the lost tax revenue, and on and on. The longer people stay out of work, the more we lose the incalculable personal value of having a job. That is the foundation of our civilization.