O'Malley and McDonnell: Battle of the Potomac

In his State of the State speech this week, Gov.Martin O'Malleymade a provocative boast: "Because of your wise and balanced decisions about where to cut, and your smart decisions about where to invest, Maryland's businesses are creating jobs again. Last year, Maryland businesses created more new jobs than we have in any year since this recession hit, and at twice the rate of our good neighbors in Virginia." In the ongoing rivalry between Mr. O'Malley and Virginia Gov. Robert McDonnell, them's fightin' words.

Though certainly a small sideshow to the debate playing out in the presidential race, the Maryland Democrat and Virginia Republican provide a ready contrast between the view that an activist government must play a role in the economic recovery and the view that jobs will only grow when government gets out of the way. They compete over new corporate headquarters and spar over tax rates. The fact that they lead their respective parties' national governors associations — and happen to be the two governors who live closest to the nation's capital (and the TV studios whence Sunday morning talking head shows emanate) — adds to the sense that they are among those who will carry the philosophical divide of their parties into the next generation. In fact, the two are scheduled to appear together tomorrow onCNN's"State of the Union." It's hard to imagine that Mr. O'Malley's dig won't come up.

Is it true? Yes. But it doesn't tell the whole story.

Here's where Governor O'Malley got his figures. According to the Bureau of Labor Statistics, Virginia had 3,641,100 jobs in January of 2011. Maryland had 2,508,300. By December, Virginia's seasonally adjusted, nonfarm payroll figures had risen to 3,663,100, a difference of 22,000. Maryland had 2,538,600, a gain of 30,300. That gave Maryland a jobs growth rate of 1.2 percent (good for 17th in the nation) and Virginia a growth rate of 0.6 percent (32nd in the nation). For what it's worth, the comparison of private-sector job growth (factoring out government employees) was even better for Maryland.

So, a validation of Mr. O'Malley's policies, right? Not exactly. It's more like a statistical quirk. As it happens, Virginia gained a lot of jobs in December of 2010, the month before Mr. O'Malley began his comparison. At the same time, payrolls in Maryland dropped. Thus, if you look at the change from December to December instead of January to December, the comparison tilts (if only slightly) in Virginia's favor.

Taking the broad view, the difference in how the two states have recovered from the recession is almost non-existent.

National employment rolls peaked in January 2008. At the lowest point, in February 2010, they dipped to 93.6 percent of their pre-recession level. Since then, they have been on a slow but mostly steady rise and, thanks to the strong employment growth for January that was reported yesterday, they stand at 95.9 percent of the January 2008 figure.

Virginia's employment statistics have been consistently better than the nationwide figures — at their lowest point, also February 2010, the commonwealth had 95.3 percent of its pre-recession jobs — but its trajectory has more or less mirrored the U.S. average. Maryland's path through the recession has been different. For a time, it held on to far more jobs than its neighbor to the south, but it experienced a sharp drop in early 2010. Since then, it has, with some variation, mirrored the situation in Virginia. As of December (the latest month for which state-level statistics are available) both states have returned to about 97 percent of their pre-recession employment levels, with Virginia in the lead by a whopping two one-hundredths of 1 percent.

All that suggests that Governors O'Malley and McDonnell should spend less time arguing with each other — and more time falling on their knees to thank the Founding Fathers for carving out some land on the border of their states for the nation's capital. That fact, more than any particular policy either of them has pursued, is likely what made the recession shallower, and the recovery sharper, than it has been in the rest of the nation.

—Andrew A. Green

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