Booming Columbus
I can’t speak for the entire Nation, but I can speak for Central Ohio. And here, the economy is good. Let’s look at the numbers first: the Dow Jones Industrial Average, the “temperature” of the American stock exchanges, is setting record highs. For the millions of Americans invested in 401-K retirements plans, that is a great thing. Your money is making money. The Central Ohio unemployment rate is 3.3%, a number that was considered beyond “full employment” for decades. Want a job? You don’t need to “do” fast food, there are thousands of jobs available in “distribution centers”, and even better jobs coming in this “Silicon Valley of the Midwest” boom.
In spite of the current home mortgage rates, they can’t build enough houses here. Columbus estimated 5000 new home builds in the past year, the “need” is closer to 15,000. The mortgage rate still is high at 7.3% (down from 8.1%), especially when compared to the rate available two years ago of only 2.8% (when I luckily refinanced). But it all beats my original rate in the late 1980’s of 8.5%.
The market pressure is also pushing existing housing prices up. In the past four years, my own home value has increased 64%. Unfortunately, the County Auditor figured that out too, so my property taxes will go up, but not anywhere near that much.
Market Forces
My natural gas bill doubled from $0.35 for a cubic foot in 2021 to $0.69.9 in 2022, but dropped back to $.53.5 in 2023. It still “feels” high, but better than it was. On the other hand, the electric bill hasn’t changed much in that time.
The daily “standard measurement” of inflation is the price of three items: gas for the car, loaves of bread, and gallons of milk (though to be fair, I don’t drink milk, so I definitely had to look that one up). A gallon of 2% milk today is $3.29, below the 2023 average of $3.42. A loaf of white bread is $2.00, up $0.20 from this time last year. And a gallon of gas is under $2.70, down more than a $1.00 from earlier in the year. Most items are trending down, or at least even.
Managing Tides
It’s easy to blame economic forces on politicians. But all they can really do is react to the current problems and do their best to influence the outcomes. Donald Trump didn’t “cause” the Covid shutdown. He did his best to avoid a Covid economic depression, a difficult thing to do when unemployment went from less than 5% to greater than 15% in just a couple of months. It could have been the Great Depression of the twenty-first century, like the one my parents experienced in the 1930’s. But it wasn’t, for most of us.
And Joe Biden did his best to re-open and moderate the swings of the economy as we all went back to work. Sure there was inflation: exactly what pumping all that money into the economy to avoid depression would do. But there also was a return to more than full employment, and increases in wages. And the Biden policies “fixed” the worst of what could have been a “wildfire” economy followed by a crushing recession. The “soft landing” of the economy, pandemic and post-pandemic, has arrived.
Mismanaged Retirement
And from a more personal standpoint, Ohio’s retired teachers are “riding” the economy as well. Ohio’s teacher retirement system was mismanaged. With an investment portfolio of $90 billion, in the past fifteen years their “private” (and hidden) investment strategy fell $70 billion short of just following the stock market, according to the State Auditor. And the System paid “investment specialists” millions of dollars to do it.
The result is that in a decade of retirement, I have received only a 4% Cost of Living increase, instead of the promised 18% or even more. I’m living on 2014 money, with a purchasing power of almost 30% less today.
And, to get partisan; the Teacher Retirement debacle is a product of Ohio’s Republican government. Led by then Governor John Kasich (who made his millions working for the failed Lehman Brothers investment firm), Ohio’s leaders were convinced that private investment strategies could beat market strategies every time. They gave the System full authority to invest behind closed doors, and to cut benefits. And that’s exactly what happened. They cut benefits and cost-of-living increases, raised the retirement age and the amount every teacher paid into the program (second highest in the Nation); lost billions of dollars in potential profits and paid themselves millions in bonuses to do it. So here we are.
That needs fixing too.
