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Sunday, June 25, 2017
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  • INDIANAPOLIS – No topic generates more email for me than the persistent belief of readers that wages in Indiana are low because the cost of living is low. I argue that income determines local housing prices and hence the costs of living, given that housing represents 15.6% of consumer spending, exceeded only by health care’s 16.8%. How low is the cost of living in Indiana? If the nation’s cost of living is considered as 100.0, Indiana comes in at 91.4, tied with Louisiana for 36th place among the states and the District of Columbia. That’s just 8.6% below the national average. (These are U.S. Bureau of Economic Analysis (BEA) data for 2014, the latest available.) The highest costs of living are found in the District of Columbia (118.1), followed by Hawaii, New York and New Jersey. The lowest costs are “enjoyed” by residents of Mississippi, Arkansas and Alabama. What is the biggest difference between D.C. and Mississippi? Why is there a spread between them of 31.4 points on this scale of prices? The answer is simple: It’s the price of housing. In D.C., housing services (rented and owner-occupied) come in at 162.5, followed by Hawaii and California. Indiana ranks 39th in housing costs at 75.4 and Mississippi is 50th at 63.2, with Arkansas lowest at 62.5.
  • INDIANAPOLIS – It’s easy to emphasize the pleasant present and forget a troublesome past. With a low unemployment rate and some good economic initiatives, parts of Indiana are doing well today. However, elsewhere in our state, a weak past led to neglect of essential work to maintain resources. It’s not different from an ordinary household. When you’ve had sustained unemployment or low wages, you don’t repair things around the house as needed or replace worn tires on the car; you just don’t have the money. You don’t save as much for retirement or other future needs. Catching up after down times is hard to do. Today we’ll look at just three aspects of metropolitan economic growth from 2005 to 2015: 1) the value of the output in the area as measured by Gross Domestic Value (GDP), 2) the number of wage and salary jobs, and 3) the average compensation of employees (wages, salaries, and employer paid benefits).
                
  • INDIANAPOLIS – It is a pity no town crier rings our news about the latest data for our nation and state. Last week the U.S. Bureau of Economic Analysis made public the 2016 GDP figures. Did members of the Indiana General Assembly or the state administration pause to study and reflect on these numbers? I doubt it. Possibly some isolated journalist picked up a news release on the Internet, but I doubt it. And what would that lone soul report? “Indiana ranked 42nd of the 50 states with a growth rate of just 0.8% in GDP during the closing three months of 2016, compared to the national advance of 1.9%.” No s/he didn’t, not if s/he wants to do any interviews with state officials in the rest of this calendar year. S/he would have to dig and find something cheerful to give every Hoosier a warm, fuzzy feeling: “Indiana doubled New York’s economic growth rate in the last quarter of 2016. Details at 11, 10 Central time.” This wouldn’t be exactly true, but close enough to be acceptable.
                
  • INDIANAPOLIS – “Is that all you got to say this week?” HomeFree asks as he bends over my laptop at the diner. He’s that kind of fellow. Named for his illiterate mother’s favorite movie star, he is inquisitive with a preference for the obscure. “Yes,” I reply. “I’m writing about the relationship between population in a metro area and its economy as measured by GDP.” “Bigger is better,” he says. “The more people, the more and better things an economy can produce.  That means the value of those things (their GDP) is also greater.”  “Not true,” is my rejoinder. “I took all 382 metro areas in the U.S. and found no meaningful statistical relationship between their population size and their Gross Domestic Product.”
  • INDIANAPOLIS – Last month we covered the basic population changes of Indiana and its 92 counties from 2010 through 2016. Now let’s go deeper to look at the components of population changes – natural increase, domestic and international migration. Populations grow because, usually, more babies are born than people die. We call that natural increase which accounted for 96% of Indiana’s population growth in the years of 2011 to 2016. That means migration (domestic and international) was responsible for just 4% of our growth. Economically, babies are important. They spur people to earn so they can spend on cribs, diapers, larger homes, and ultimately education and weddings.  Deaths, although important to selected sectors, do not have the wide economic impact of births. Marion led 70 counties in natural increase with 40,481 more births than deaths. In contrast, among the 22 counties experiencing natural decrease, Henry County (New Castle) led with 572 more deaths than births. The lowest ratios of deaths to births were in LaGrange (0.35) and Hamilton (0.38) counties, while the highest ratios were in Vermillion (1.32), Brown (1.30) and Fayette (1.27).
  • INDIANAPOLIS – Grabill is only 12 miles from New Haven. Both are within Allen County. You can drive from one to the other in less than 20 minutes. The Greater Fort Wayne Business Weekly (April 7) reports a furniture manufacturer is moving from Grabill to consolidated, larger quarters in New Haven. One reason for the short move is to keep 125 experienced workers together. They may even add 60 jobs in the future. That sounds good to me. A Hoosier company is doing well and sees a bright future. Workers are not losing jobs. No doubt their commuting patterns will change, but not drastically and most residents of Allen County will note no differences. It may not be good for Grabill, which will now have vacant buildings that could lead to lower property tax revenues. It will be good for New Haven because one of their vacant buildings will now be occupied, which should increase property values and hence tax revenues. Yet, the Indiana Economic Development Corporation (IEDC) has offered the company a total of $300,000 in tax credits and $60,000 for worker training, contingent on added workers being hired.
  • INDIANAPOLIS – I go to Econ Eddie, the go-to guy, when the inexplicable needs explication. “The Border Adjustment Tax (BAT) is really simple,” he says. “You’re a manufacturer and you ship something to some another country. You get paid for that shipment. But you don’t have to report that revenue on your tax return.” “Ye gads,” I shout. “The taxes I save are a direct subsidy from American taxpayers for me as an exporter. It also gives lower prices to companies and people in that other country, if I pass along my savings. It’s forced charity! Americans can hold their heads high for their generosity to other, poorer nations.”  “Oh, it’s more than that,” Eddie says. “Because you can sell for less, more buyers in other countries will want your product. This means you could invest more in America, hire more American workers, perhaps raise wages or increase your dividends, your executive pay, or up your stock price benefiting thousands of pensioners who hold your stock in their IRAs.”
  • INDIANAPOLIS – Through his budget proposals, President Trump is forcing all of us to be more explicit about our values. Take his desire to eliminate federal funding for the National Endowments for the Arts (NEA), the Humanities (NEH), plus programs for libraries, museums and the Corporation for Public Broadcasting (CPB). These federal organizations will lose $971 million in Trump’s budget. Indiana’s Arts Commission and its Humanities counterpart together get about $1.6 million. The CPB pumps $8.8 million into the state for public radio and TV. Museum and library support comes to $3.2 million. That totals to $13.6 million for Indiana from the feds. Weigh that against the Indianapolis subsidy for the Pacers (a presumably private, professional basketball team) to the tune of $16 million per year. What is the annual subsidy for the Colts? Is there a public subsidy for the baseball team in South Bend? For the hockey team in Fort Wayne? For the Evansville Otters? Let’s be clear, I’m a sports fan. This weekend I watched IU lose a (7-3) baseball game to Nebraska. Need I do more to prove my devotion (addiction) to sports?

  • INDIANAPOLIS – Last week the U.S. Bureau of the Census released its 2016 population estimates for Indiana counties. I sat down with Languid Longworth, a local legend in Logansport, to review the new numbers. “Fundamentally, I’m most pleased with the data,” Lang told me. “Cass County is like much of Indiana, avoiding the disruption of population growth.” “Right,” I said. “In all, Cass County lost over 1,000 residents since 2010. It was ninth among the 58 population-losing counties in the state.” “Now, now,” he said. “Let’s not talk about losing. I figure that means at least 500 cars not on our roads. Lines are shorter at the grocery stores and most places. Schools have fewer students which means each one can get more attention. You’ve got to think about the blessings that come with slow contraction.”
  • INDIANAPOLIS – This column is for Mr. W of Columbus, Mr. R in Terre Haute, and the many readers who see Indiana exclusively as a wonderful place. They believe, however, I tear Indiana down, not appreciating its glory. Indiana is a wonderful place because it has the opportunity to build a better future. We do not suffer from the overwhelming burdens of poverty, ignorance, and indolence that afflict many places in this world. Our problem is that we refuse to use our wealth, knowledge, and energy to make our state and communities better. Complacency is a public health hazard in Indiana. We suffer serious air and water pollution, decaying infrastructure, inadequate education, low quality public services, reactionary legislation based on superstition, all in fear that a step forward will upset the stagnation of our perceived equilibrium.
  • INDIANAPOLIS - Historic preservation never interested me. Public television’s Antique Roadshow is a farce about the monetization of memory. Junk shops, occupying valuable downtown space throughout Indiana, only trumpet our economic and social decay. Nostalgia, to me, is a disease of the mind. I delight in seeing the past transformed into a promising future. Reuse of a beautiful building, restoration of landmarks pointing to tomorrow is inspiring. Today, communities are falling all over themselves to attract imaginary young adults. It’s like seeking a new factory instead of working to retain and develop existing businesses. Indiana’s many small towns and older urban neighborhoods deteriorate when businesses and families leave. Disinvestment, the neglect of maintenance and rotting of physical assets, creates open wounds and ugly scabs. Instead of wondering how to attract unknown businesses or workers, we might try improving the assets we have.
  • INDIANAPOLIS  – When I first came to Indiana, nearly a half century ago, I found a study in the IU library declaring South Bend as the best place to live in the Midwest. It wasn’t surprising, since the author was a professor at a campus in South Bend. That’s what it is about rankings. Pick your criteria carefully and you can make Hell the most desirable location for permanent residency. Last week, several Hoosier newspapers carried a story from U.S. News & World Report ranking Indiana’s government first among the 50 states. Actually, it wasn’t government, it was state government finance, but that could not stop some headline writers. The governor was pleased by this national recognition and promised to keep up the good work. We could not expect him to say otherwise.
  • INDIANAPOLIS – How alike the nation is Indiana? One way to judge would be to visit representative Hoosier homes and compare what we find there with what we see in typical American homes. Without the resources to visit all those homes, let’s use some 2015 data from the U.S. Bureau of Economic Analysis. The first thing we see is the average Hoosier’s personal income is $6,172 (13 percent) lower than that of the average American. This means we have less to spend than those elsewhere in the nation. And so we do. The average Hoosier spent $4,098 less in 2015 on consumer goods and services than did the average American. Right there we see why a town of 50,000 persons somewhere else in the nation will attract more retailers with higher quality (priced) goods than a town of equal size in Indiana. There will be more diversity of services elsewhere than in Indiana for the same reason. For Indiana to be more attractive to retailers and to service providers we need more people with more income to spend.
  • INDIANAPOLIS – In the past week, the Committee on Elections and Apportionment failed to move HB1014 along to the full House. That anti-gerrymandering bill calls for establishing a commission to oversee redistricting. Unless bold action has been taken since this writing, the bill is dead for this session. There is no other bill of greater importance before the Indiana General Assembly. A redistricting commission would help correct the corrupt practice of providing safe seats for Indiana’s congressional representatives and those holding positions in the State Senate and House. However, our self-serving, one-party legislature has no interest in promoting democracy. Even those in the minority party have little concern for fair primaries and elections. Indiana will continue to have a legislature that is not representative of the people and not focused on the future of our economy. Instead, the General Assembly will persist as an instrument of the powerful and the privileged.
  • INDIANAPOLIS – In a world offering little comfort to small towns, joy came this past week to Crothersville, IN. Located just off I-65, south of Seymour, north of Austin, Crothersville now is the proud home of the Tigers, 2017 winners of a girls’ basketball Class A sectional championship. For 103 years, this Jackson County town of 1,600 waited for a sectional championship trophy. Now, only 41 years since the first girls’ team began playing Indiana’s game, that trophy is displayed at the high school on N. Preston Street. From that site of joy, it is only 176 miles north on I-65 to South College Avenue in Rensselaer, Jasper County, where a very different mood prevails. St. Joseph’s College will suspend operations after graduation ceremonies this semester. Continuing students are being offered opportunities at several other Indiana higher education venues. The college is closing. Its buildings will be on caretaker status pending resolution by the board of trustees of the future direction for the institution. Next fall Rensselaer will not welcome approximately 1,000 students and the 200 faculty and staff who serve them.
  • INDIANAPOLIS – I wasn’t there, but I hear, and that’s good enough to pass as truth these days, the Indiana Place Name Change Commission (IPNCC) met last week and submitted its recommendations to the General Assembly. The IPNCC wants the Sage Solons either to change the names or eliminate the places now called LaPorte, Pulaski, Versailles, Rome City, Mexico, Chili, Montezuma, Peru, Brazil, Lafayette and too many others to mention here. At the same time, a jolly group wants to bring the joys of gaming to High Ground (currently known as Terre Haute). The State Commission on Emotional Health (SCEH) reports gaming already has people grinning with limitless glee in Hammond, East Chicago, Gary, Michigan City, Evansville, Elizabeth and Lawrenceburg. Less ecstasy is to be found in Anderson and Shelbyville, where gaming at racinos is temporarily more restricted than in the aforementioned places. Not morose, but quaking with anticipation are folks where name changes will rid them of the stigma of alien association (French Lick and Florence).

       
  • INDIANAPOLIS – Indiana mayors have little power to go with their great responsibilities. They are largely invisible outside their own communities. They are not weak people, but collectively have little statewide clout. A year ago, I set out to interview former Indiana mayors about their experiences. Former mayors who held office in the past 30 years, with “no skin in the game,” I expected to be blunt and objective, knowing they were speaking off the record. Each interview with 18 former mayors was a learning experience for me. First, I learned I was a bad interviewer. I did not draw out my subjects, did not direct them to the issues I wanted to cover, but let them flow on issues they chose. Second, I discovered what conscientious, generous people we elect as mayors. These are our neighbors who want to accomplish good things for their constituents, for their communities. Third, mayors know the barriers they face. But those impediments, mainly creations of the General Assembly, are taken as given and worked with or worked around.

  • INDIANAPOLIS - The Indiana General Assembly has a wonderfully easy-to-use site for the citizen who wants to know about bills introduced by subject or author. I don’t know who is responsible for this site, but hats off to him, her, and them. Today I found 43 bills on the subject of drugs. There may be many others if I searched more diligently. Imagine that: Indiana, A State in Denial, is concerned about drugs, a well-known scourge, and the primary cause of many safety, economic, education, and health problems. State Sen. Jim Merritt has authored 14 of the 43 bills. Naturally, I find the most compelling to be SB 244 which mandates a fiscal impact study of drugs and drug addiction. Normally, a fiscal impact study concerns the revenues and expenditures of government. But SB 244 goes further. It calls for an economic impact study which includes work force concerns and private expenditures on prevention and remediation. 

  • INDIANAPOLIS – This is a note of hope to the General Assembly’s Funding Indiana’s Roads for a Stronger, Safer Tomorrow Task Force, known by its friends and family as the FIRSST task force. The hope is FIRSST will continue the work done on House Bill 1002 modernizing Indiana’s road financing policies. That bill has begun its travels and travails through the sausage machine of state government. The guiding factors in a road finance bill, where new construction is not the center piece, should be road use and safety, plus changes in the costs of maintenance and reconstruction. HB 1002 allows a 10-cent increase in the 18-cent tax per gallon of gasoline. This is double the increase in consumer prices since the last change in 2003. Was 10 cents an estimate of what a gullible public would accept? Or is it because the bill creates an index for future increases based on the changes (does that include decreases?) in consumer prices and personal income?
  • INDIANAPOLIS – One week ago, I promised recommendations for improving the state’s economy. In the past I’ve done that extensively, but somehow readers don’t remember. Here are some more thoughts to be forgotten. It’s time for business leaders to stop seeking subsidies from the same public sector they deny adequate funding to do its job.  Businesses complain of a shortage of qualified labor. Is it government’s responsibility to train the labor force? Are our elementary and secondary schools to be merely preliminary settings for vocational training? What does business do directly to improve the labor force? If they find too many workers disabled by illiteracy, drugs and alcohol, a common complaint in this state, do they sponsor work-prep programs, including alcohol and drug treatment efforts? Do they increase wages to attract more qualified workers? Do they separately or collectively offer intensive training programs for workers?
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  • Sen. Young 'officially undecided' on GOP Senate health bill
    “I am officially undecided. I’m still reviewing the package. I’ve been in contact with the governor. We’re having conversations with with him and his folks. I’ve been in contact with our insurance commissioners, state actuaries. We’re trying to get a sense now that text is available. We’re in touch with health care providers, patient groups. I’m just trying to make the most informed decision I can. I know this: Doing nothing is not an option. We’ve got 70 million Americans who live in geography where there is no choice.” - U.S. Sen. Todd Young after Howey Politics Indiana asked if he was a certain yes vote on the Senate Republican health care bill. HPI asked, is there any scenario where you would vote against it? Young responded, “Yes. Absolutely. After studying it if I don’t think it’s right for Hoosiers, then yes, certainly. I’m very open minded." Read the entire HPI Interview with Sen. Young in the next weekly edition on Tuesday.
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  • President Trump and bovine scatalogy
    Here in Indiana, when someone talks big, says unreliable things they can’t back up, Hoosiers call that person, pardon our language, a “bullshitter.” Or as Sheriff Joe Squadrito might put it, a purveyor of “bovine scatalogy.” Well, with President Trump’s claim that he has no audio files of his conversations with former FBI Director James Comey made via Twitter on Thursday, when last month he suggested he did, our assessment is that our president is a BSer. And because he has told hundreds of lies since taking the oath of office, do we believe him this time? This is a dangerous dynamic, because at some point in his presidency, Donald Trump is going to face a crisis where he is going to have to level with the American people and we are going to have to decide whether he is being truthful. What we have in President Trump is someone who is a serial liar and his chaotic administration runs on fantasy, half truths and alternative facts. We want to believe our presidents, but this one is in a realm all his own. - Brian A. Howey, publisher
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