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Magazine features

It’s about [Ohio’s] economy, stupid.

Published in the Herald magazine on November 3, 2012.

Despite constant reminders from Barack Obama’s campaign, people sometimes forget that he inherited a country in freefall. In January 2009, the month he was sworn in as president, the USA’s economy lost 820,000 jobs. In February, another 681,000 people joined the unemployment queue, then another 652,000 in March. The rust belt states of Ohio, Michigan and Illinois, which had been bleeding manufacturing jobs long before the recession, were especially hard hit. The impending bankruptcy of General Motors and Chrysler threatened to serve as an exclamation point to three decades of industrial decline.

Since then, Ohio has stepped back from the brink of catastrophe. It is a halting, inconsistent recovery, but the unemployment rate has dropped to 7.1%, almost a point below the national average. The Republican Governor, John Kasich, observes that the state has added more than 100,000 jobs since he took office last year. On the campaign trail, Obama notes that by rescuing the car industry, his administration saved “a million jobs across the Midwest.” Where voters lay blame for the downturn and give credit for the comeback will determine who wins the presidential election. As goes Ohio, so goes the nation.

The Timken Company epitomises the state’s economic improvement. Around 2,200 men and women make steel bearings and pipes at its plant in Canton. Three years ago, when banks weren’t lending and orders were at a low, locals worried that the factory would shut down. Timken’s CEO James W. Griffiths spoke of “an unprecedented global recession… the largest drop of my lifetime.” Hundreds of people at the company’s non-union plants in South Carolina were let go. Employees in Canton worked one week on, one week off, to avoid compulsory redundancies. These days the furnaces remain lit around the clock, seven days a week, to meet demand.

The early shift ends at 3pm. At the back gate, on Harrison Avenue, workers wandered out to their cars, by no means all of which were American-made. “There are too many Hyundais and Toyotas,” grumbled Joe Hoagland, a shop-steward at the United Steelworkers local.

Bill Webler, at the Timken gate

“I’m ‘buy American,’ The signs are on my truck,” said his colleague, Bill Webler. “If we had to fight another world war today, how would we even produce the materials that we need?” The men of his family have served their country, from the fields of Flanders to Al Anbar province. Bill himself fought in Vietnam. He is aghast that so many of Ohio’s manufacturing jobs have been “folded up and sent to China,” but proud to be an exception.

“Republic, Diebold, Hercules Steel… it’s all gone. Timken has adapted to survive and so has the union,” he said. “I surprise the guys when I tell them my first concern’s the Timken company, because if it’s not here, ain’t none of us here. So we need to all row, and row well, because if this boat goes down, we all go down together.”

Timken’s owners donate generously to conservative candidates. “They are the Republican party in Canton,” the city council president, Allen Schulman, told me. When the boundaries of Ohio’s congressional districts were redrawn last year, a “small carve out” to include Timken HQ was requested by national leadership, to help the Republican nominee, Jim Renacci.

Schulman, a Democrat, gives credit where it’s due. “The Timken company was in serious trouble three years ago, because everyone was,” he said. “But they’ve had tremendous leadership and they’ve stuck with the community, which they didn’t have to do. They could go south, to Tennessee, where there are no unions, and they didn’t.”

The United Steelworkers are committed supporters of the Democratic ticket. “I can only hope that our members, whether they’re enthusiastic or not, will vote for their own best interests, which is to re-elect Obama,” Hoagland told me. “The way I look at it, you can’t afford to vote for the other guy.”

This is far from a consensus on the shop floor. “I’m more worried about my country as a whole than my job,” said steelworker Todd Kenney. “Family and the definition of marriage means a lot to me. We have to stand behind Israel.” He intends to vote for Mitt Romney in November and estimated that half his workmates will do the same. The USW crew put the split at closer to 70%-30% in Obama’s favour.

Webler felt the country’s politicians could learn from the last two contract negotiations at Timken, in which neither side got everything it wanted. “Republicans and Democrats need to figure this stuff out and quit acting like two-year-olds in the sandbox,” he said.

An outbreak of civility is unlikely in the state’s Senate election, which pits incumbent Sherrod Brown against Ohio State Treasurer Josh Mandel, a 34-year-old Marine Corps veteran backed by the Tea Party. Mandel paints Brown as “the most liberal Senator” in Washington and Obama’s “main lieutenant in the war on coal”. Brown accuses Mandel of missing meetings about important state business and installing unqualified campaign aides in managerial positions.

In the 2010 midterm elections, Ohio’s Republicans won the state legislature, took five of the Democratic party’s ten congressional districts and unseated the Governor, Ted Strickland. Kasich, the new chief executive, has an upbeat view of the state’s economic prospects. Jobs Ohio, a company he set up to attract industry, claims that in the second quarter of this year alone, it secured 77 new investments, created more than 4,666 jobs and saved 11,238 more.

This is a problem for Mitt Romney, because it undercuts his core message, which is that the American economy is stagnant, with no hope of improvement under Obama’s leadership. In several of the most important swing states, the green shoots of recovery are visible and the Republican Governors of Ohio, Virginia, Nevada and Michigan are not shy about saying so. When Florida’s Governor, Rick Scott, ran an advert boasting that “companies are hiring, expanding, putting more Floridians to work,” Romney’s campaign asked him to tone down the good news.

The day after Obama’s lacklustre performance in the first presidential debate, the national jobs report showed that unemployment had dropped to 7.8%, the lowest level since he took office. Romney insisted the glass is still half empty: “This is not what a real recovery looks like.” Former General Electric CEO Jack Welch, a generous donor to conservative causes, accused the administration of cooking the books. “These Chicago guys will do anything,” he tweeted. “Can’t debate so change numbers.”

In Ohio, dispute centres on the government bailout of General Motors and Chrysler, which enabled the two giant American car manufacturers to restructure, rather than cave in under their debts, at a time when neither could attract private funding and analysts viewed their product lines as overpriced.

In the second presidential debate, Obama wasted no time in referring to his rival’s infamous New York Times editorial suggesting that the companies should be left to go under: “When Governor Romney said we should let Detroit go bankrupt, I said, we’re going to bet on American workers and the American auto industry, and it’s come surging back.”

Romney has complained that he did not write the headline, but the first paragraph is unequivocal: “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.” All three of the great US car manufacturers are back in profit, albeit under the ownership of Fiat in Chrysler’s case. The editorial has been a millstone around Romney’s neck.

In Martins Ferry, just across the river from West Virginia, rows of Chevrolets glinted in the autumn sunshine. The Camaros and Corvettes are classic American muscle cars, the Suburban and Tahoe oversized people-carriers. The Cruze, made in Lordstown, Ohio, is a small car by US standards and an instant best-seller.

The franchise owner, Joe Staffilino, remembers watching congressional debates about the General Motors bailout four years ago and thinking “oh, man, I hope they sign this.” As customers worried that the company would go bust, he was forced to sell a second showroom in Steubenville, but sales have been strong ever since the government stepped in. Vice President Joe Biden recently held a campaign event at the dealership.

“It’s on an upswing around here. Better than it was, anyway,” Staffilino said. Polls show that this is a minority opinion in Ohio, where two-thirds of voters believe things are getting worse. “People are negative. They’re scared,” he suggested.

Joseph Martello in Mingo Junction

Down the road in Mingo Junction, the prevailing pessimism seemed well-founded. Many towns in eastern Ohio have been hollowed out by the demise of the local steel industry, but few so thoroughly as Mingo, where the main drag was almost entirely boarded-up, save for the American legion, an empty diner and a bar doing steady business at nine in the morning. “I don’t vote, I can’t complain about either one of them,” retired steelworker Joseph Matello told me. “It’s less hassle that way.”

The abandoned mills are eerily beautiful places. In Steubenville, a sign warned against trespassing, but the sentry post was deserted and I walked in unchallenged. The foundry was overgrown with grass and trees, their leaves turning red unseasonally early.

Many locals pin their hopes on a boom in natural gas, now that advances in hydraulic fracturing have made the Marcellus and Utica shale fields under Jefferson County a viable proposition. The well technicians come from established drilling states, leading to resentment that outsiders are taking what should be local jobs, but the unemployment rate has dropped from 13% to 10% and the hotels are full.

The implied message of the many yard signs decrying a supposed “war on coal” here is that Obama is a bureaucrat, beholden to environmentalist sissies. In the second debate, he spent more time confronting this perception than on any other subject: “We’ve got potentially 600,000 jobs and a hundred years worth of energy right beneath our feet with natural gas.” In adverts on heavy rotation in Ohio, one group of miners says Obama is killing the industry, a second says their Republican-supporting employer forced them to stand up for Romney, the first accuses the second of telling lies, and so on.

Pastor Sharon Van Dam, of St John’s Lutheran Church in Martins Ferry, told me the attacks have been effective: “The biggest Republican argument that would influence voters here is that Obama is anti-oil, anti-coal, anti-fracking. People say ‘gee, that’s bringing jobs here.’”

Pastor Sharon Van Dam

Before she became a vicar, Van Dam worked in the welfare office. One application came from a single mother whose teenage son’s pocket money for bagging shopping put her over the threshold for free health insurance. “Everywhere you go in the valley you see ‘help wanted’ signs, but people won’t take a job because they’ll lose their benefits,” she said.

In Wheeling, a few miles south, the casino was remarkably busy. It was Wednesday morning, the third of the month: Social Security cheque day. Retired bore-maker Bill Bunkley dragged his oxygen tank from one slot machine to the next, panting with emphysema. I asked him who was to blame for eastern Ohio’s industrial decline. “The mills had to go down for a reason,” he answered. “The people worked there, they chose the easy life, you know. Maybe if they’d worked a little harder it would have lasted some more.”

Bill Bunkley

James Sobczak, a former coal miner, complained that the government has done too little to help, for too long. “I don’t know that either president would turn it around. They’re both shooting a lot of bull,” he said. “We need change, that’s for sure, but it’s gonna take a lot more than the president.”

A recent study by the Public Religion Research Institute showed that neither Obama (44%) nor Romney (45%) is popular with white working-class voters, unlike former president Bill Clinton (61%). Both candidates have made strenuous efforts to connect, but neither the black Harvard-educated lawyer, nor the white Harvard-educated plutocrat have anything like Clinton’s natural empathetic gift. The incessant negative advertising, each portraying the other as out of touch with ordinary Americans, has surely had an impact too.

Clinton’s embrace of free trade was a source of disenchantment to the labour movement, which favours import tariffs to protect American jobs. In mid-September, Obama filed a complaint against China with the World Trade Organisation, accusing it of unfairly subsidising exports of car and truck parts. The timing of the announcement, at a rally in Cincinnati, Ohio, was too convenient to be a coincidence. “These are subsidies that directly harm working men and women on the assembly lines in Ohio and Michigan and across the Midwest,” he told the crowd. “It’s against the rules and we will not let it stand.”

At Stark Industrial in Canton, raw materials come from all over the world. “You have to buy steel where you can find steel,” CEO Sam Wilkof told me. “Are prices in the United States inflated? In some cases they may be. But if the playing field is not level and other countries are dumping it at an artificially-low price, that’s not fair.”

Wilkof is exactly the sort of small businessman lionised by the Republican party. His father, Raymond, founded the company, which specialises in drilling microscopic holes and making precision parts for the aerospace, medical technology and nuclear power industries. It has 35 employees, no union, very little staff turnover and generates consistent profits.

“We’ve had a Democratic president for four years. I don’t feel weighed down by bureaucracy,” Wilkof told me. “I don’t pay too much in taxes. Our Senator Sherrod Brown has done an excellent job of making sure that our economy continues to grow, but I don’t know that any one politician can lay claim to the recovery.”

A Stark Industrial worker

At a national level, the administration’s attempts to take the credit have been timid. The $800 billion stimulus package passed at the start of Obama’s presidency remains misunderstood by Democrats and reviled by Republicans. Ohio got tax breaks worth roughly $21.7 billion, plus an additional $8.8 billion in federal grants to spend on schools, roads and public safety. More than 860,000 people received extended unemployment benefits. But as Schulman, Canton’s council leader said: “If you asked the average person on the street, they would tell you ‘I don’t like the stimulus, terrible waste of money,’ because they don’t know what it did.”

In Martins Ferry, Bruce Wille, a parishioner at St John’s Lutheran Church, said just that: “I’m not so sure it worked. There was an opportunity there for some cutting, as heartless as that sounds.” Last time around, he voted for John McCain, but only out of admiration for Sarah Palin.

A month ago, Obama had a significant lead in Ohio opinion polls. All but 1% of it has evaporated since Romney’s dominant showing in the first debate. And because the recovery is uneven and uncertain, the Republican challenger’s attack lines remain devastatingly effective: “We don’t have to settle for 43 months with unemployment above 8%, 23 million Americans struggling to find a good job,” he said, toe to toe with the president. “There are three and a half million more women living in poverty today than when the president took office. We don’t have to live like this. We can get this economy going again.”

Obama fought back hard in the second debate, but his list of achievements, backed up with a barrage of helpful statistics, still boiled down to “it could have been a lot worse” and “things are finally starting to improve.” Will Ohio’s voters give him the benefit of the doubt?