, Corbin, KY


April 12, 2013

Kentucky politicians shooting air balls when it comes to economic competitiveness

CORBIN — No matter your personal affinity for redbirds or feral felines, after two straight years of national championship victories there’s no denying that the Bluegrass State is capable of producing one heckuva competitive force on the basketball court.

But regardless of the last two years’ inspiring efforts from Kentucky’s competitive young athletes and the ensuing celebrations in the streets of Louisville and Lexington, in the streets of Frankfort – the one city in the commonwealth where a competitive spirit ought to overflow for the sake of each and every one of Kentucky’s 4.4 million residents – there’s little cause for celebration.

That’s because yet another legislative session has come and gone with little to show for it. Whether we’re talking education, public pensions or standing up to federal czars gung-ho on taking over our energy and health care sectors, what meaningful steps were taken toward effective and lasting reform?

A new game plan is needed. More moxie, too – like the courage we saw displayed by the U of L Cardinals on the basketball court in their successful effort to capture this year’s NCAA championship.

Without it, University of Kentucky economics professor John Garen, Ph.D., says Kentucky’s competitive advantage relative to neighboring states will continue to diminish. Yes, Garen teaches at that other Kentucky university – the one that won the NCAA title last year, and is likely to come up big for a turnaround this upcoming season.

Whether you’re looking at wins and losses for a basketball team or statistics on a state’s financial well-being, the numbers don’t lie.

Garen’s breakdown of the commonwealth’s current economic performance secures for our neighboring states the right to shout the annoying – but never-failing – “air ball, air ball” at their Bluegrass counterparts:

—Kentucky’s labor-force participation is a full two points lower than that of either Indiana or Tennessee.

—Kentuckians’ average income is nearly $2,000 less than Indiana’s, and nearly $3,000 less than Tennessee’s.

—The commonwealth’s productivity is currently $4,000 less per citizen than either Indiana or Tennessee.

But just like points scored don’t tell the whole story of a basketball game, the commonwealth’s economic stat sheet has some other indicators that show a performance more abysmal than its Big Blue team’s performance in this year’s NIT, including this figure: Kentucky has amassed a state debt nearly 30 percent of its yearly productivity.

What’s worse, the architects of American federalism would cringe if they knew that Kentucky receives more than 100 percent of its General Fund spending in federal aid.

Our founders strongly believed that the states should hold the cards of power. It’s tough to do that when ours is one of the most federal government-dependent states in the nation.

Before we can witness a turnaround in Kentucky’s economy along the lines of the one I’m sure we’ll see on UK’s basketball court next year, we must plant some of that not-so-magical seed: capital.

We’re witnessing tremendous growth in other states like North Dakota and Texas, and even other countries like Hong Kong and Singapore because those places – unlike our beloved and beautiful but behind, state – have created a competitive environment which attracts capital and investors who can shoot and score from long range.

Our leaders continue to keep our entrepreneurs on the bench with policies that overregulate, overtax and overjoy the other team – the more-government-is-the-only-idea-we-have team.

Unfortunately, that team currently enjoys a sizeable lead in the contest for Kentucky’s future.

Jim Waters is vice president of policy and communications for the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

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