This week, the conservative-leaning American Legislative Exchange Council (ALEC) released its 6th annual Rich States, Poor States: ALEC-Laffer State Economic Competitive Index. According to the report, Ohio’s “competitiveness” ranking went up last year from 37th to 26th. Don’t be surprised to see politicians point to this as evidence that their radical economic policies are working here in Ohio.
The ALEC report is just one of a host of “studies” released each year that attempt to measure which state economies are the most business-friendly. These reports are nothing more than a platform for these groups’ anti-tax/anti-government ideologies and use flimsy analysis that would fail any college 101 statistics class. For instance, the report evaluates Ohio against other states in terms of factors such as its minimum hourly wage, average tax rates and how union-unfriendly its laws are. In reality, these reports — and these factors — have proven to be very poor predictors of how states’ economies will perform in the future. [Read more...]