Last week, the U.S. Bureau of Economic Analysis released its annual state-by-state breakdown of gross domestic product. For Georgians, the statistics make for extremely sobering reading.
Let's talk first about what the data mean in general. Gross domestic product per capita is probably the single most revealing data point about economic performance and economic trends. It tells you how much you are producing, per person, and how much you produce per person in turn drives everything else -- unemployment, poverty, business profits, personal income -- everything.
And as you can see in the accompanying chart, the data trend for Georgia is not encouraging. In dollar terms, adjusted for inflation, per capita GDP in Georgia has declined markedly since the turn of the century. If we compare ourselves to the rest of the country, the trend is even worse. When we began the century, GDP per Georgian was $903 above the national average. Last year, GDP per Georgian had fallen $6,621 below the national average.
That is a startling decline that is felt by every working person and business in the state.
Put another way, over the last 15 years -- 1998 to 2013 -- Georgia is one of only two states in which real per capita GDP has declined. The other is Nevada. For comparison's sake, national GDP per capita rose by 16.7 percent in that time frame.
The data are also helpful in dismantling dangerous if reassuring myths. We are told by our political leaders, for example, that our economic troubles are the consequence of the 2007-2008 meltdown of the housing industry. As you can see from the chart, there's no doubt the crisis had a major impact, and that impact continues today.
But that chart tells us something else as well: Our relative decline began long before the economic crisis hit. From 2000 to 2007 -- the supposed boom years -- Georgia's per capita GDP had already flatlined and had already fallen well below the national average. Our problems long predate the recession.
I'm sure it's great that Site Selection magazine, with a total paid circulation of 259*, ranks Georgia as the No. 1 state in the country to do business. However, people can't pay their mortgage or feed their children on the rankings of an obscure business magazine. Our economic strategy is not working, and the instinct of our current state leadership has been to avert their eyes from that reality and pursue its failed strategy with still more enthusiasm.
If nothing changes, nothing will change.
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*The magazine claims a total circulation of 43,606, most of which are given away for free.
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