The Sky is Falling! The Sky is Falling!


By Mike Barhorst - Contributing Columnist



As one gains the benefit of the wisdom of years, occasionally some long forgotten memory returns. Such was the case recently when the story of “Chicken Little” came to mind.

If you’ve never read the tale, it details a barnyard chicken (Henny Penny) who is struck in the head by a falling acorn. As a result, Henny Penny draws the conclusion that the sky is falling.

Henny Penny subsequently collects her friends and travels to tell the king the important news. Her friends, including Turkey-lurkey, Goosey-loosey, Cocky-locky and Ducky-daddles proceed on their journey and their ultimate doom.

For some months Governor John Kasich has been engaged in his own version of the Henny Penny story. His version of “the sky is falling” is that the State of Ohio is “headed for a recession.” The acorn that dropped on his head is the fact that tax revenues flowing into the state coffers are lower than expected.

I am certainly not an economic genius. I did take some economics classes as an undergraduate student at Ohio State. I even taught economics at the high school level for several years, so I do have a basic comprehension of the subject. Still, I would never pretend to have even a fraction of the understanding of economics of a Milton Friedman, a John Kenneth Galbraith, or a John Maynard Keynes.

However, I do know that when you take marbles (or anything else for that matter) out of a jar and put them someplace else, there are fewer marbles (i.e., tax dollars) in the jar. It’s really pretty simple.

I’m not at all certain how one could draw the conclusion that fewer marbles in the jar are indicative of anything more than just that. Certainly I would not extrapolate that fewer marbles in the jar was an indication that there was now a shortage of marbles, that the sky was falling or that there was a recession just around the corner.

In his quest to prove that he was worthy of the presidency, Governor Kasich eliminated some taxes and lowered others. He has, simply put, taken marbles out of the jar.

After lowering taxes more than $3 billion per year, the governor is now expressing surprise that tax revenues are lower. Thus, because projections of increased revenues have not offset the projected decline in tax monies, he has drawn the conclusion that less tax revenue indicates that the sky is falling and the State of Ohio is headed toward a recession.

I was in Columbus attending a meeting of the Association of Ohio Mayors some months ago when I first heard the “recession” talk. It frightened me, in no small part because the city of Sidney is still recovering from the Great Recession of 2008.

I will admit that I was not mentally prepared for the news that another recession was eminent — especially one so close on the heels of that which was so devastating to the city of Sidney.

When I returned home, my first call was to a contact at one of Sidney’s largest employers. I made that call for two reasons. They are a source of information I trust because: 1) the corporation is large enough that they have their own economists; and, 2) they had, in 2007, warned me of the pending doom that has become known as the Great Recession.

My trepidation was eased when I was told that slow, but steady growth over the next three to five years was the projection they were seeing. It was the reassurance that I needed.

No one can accurately predict the future. However, continued job growth and lower unemployment certainly make a recession unlikely.

Another good sign is the number of businesses that are expanding locally. Last year saw several of our companies begin major construction projects.

Electro Controls added 16,000 square foot of manufacturing space. Advanced Composites is adding 54,000 square foot of space. SAPA added 17,000 square foot of manufacturing space. Norcold added 25,000 square foot of space. Bensar added 480,000 square foot of space. These five projects with a value totaling more than $19 million are hardly an indication that a recession is looming.

There are few things as unpopular as taxes. It is politically popular to talk about cutting them, and even more popular to actually do the deed. Governor Kasich bet his political future on cutting taxes.

I think he honestly believed that he would get elected to another job, and his successor would have to figure out a way to pay for the services taxpayers expect. Perhaps the acorn that dropped on his head is the realization that he himself will have that responsibility. He is, after all, in office through 2018.

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By Mike Barhorst

Contributing Columnist

The writer is the mayor of Sidney.

The writer is the mayor of Sidney.