Excerpt
WHEN VOTERS IN OHIO go to the polls today, they will have heard over and over again from Democratic presidential candidates Barack Obama and Hillary Clinton that their state's economic troubles are caused by the North American Free Trade Agreement (NAFTA) and other trade treaties.
But there was fresh evidence last week that NAFTA has had little to do with Ohio's doldrums, its job losses in particular. When the U.S. Air Force awarded a $40 billion contract for 179 new aerial refueling tankers, Ohio wasn't in the running as a site where the aircraft might be built. Instead, they'll be built in Alabama outside Mobile.
Why? The answer is simple: Alabama's business climate is good and Ohio's isn't. When major business projects are looking for the best site, job-hungry Ohio is rarely considered. And NAFTA has little or nothing to do with it.
Surely Obama and Clinton know this. If they don't, their understanding of the economy is lacking. If they do, their attacks on free trade were aimed to please NAFTA-hating union members. In truth, NAFTA is a boon to the Ohio economy. Roughly 55 percent of Ohio's exports go to Canada and Mexico, America's NAFTA partners. That exceeds the national share of exports--35 percent--to those countries.
For Alabama, the awarding of the tanker contract was only its latest economic coup. Earlier this year, Thiessen Krupp, the German steel company, decided to build a $3.7 billion plant near Mobile. And Alabama has attracted three foreign automakers to build plants in the state: Mercedes, Honda, and Hyundai.
Ohio was once an economic powerhouse, but now it lags behind Alabama in almost everything that might lure new business to the state. "Ohio has raced past 41 other states and now ranks 5th in state and local taxes measured as a percentage of income," David Hansen, president of the Buckeye Institute, wrote last year. Alabama, in contrast, ranks 46th in tax burden.
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