INDIANAPOLIS - Indiana’s unemployment rate in July was 10.1 percent; this was the twelfth highest of the 50 states. Nevada was running at 14.3 percent to lead the nation while the lowest rate was 3.6 percent in North Dakota. We’re much closer to the worst than we are to the best.
Are these the best of times or the worst of times? In material terms, these might be the best of times. Many of the poorest walk around with cell phones to their ears; children go to air conditioned schools that are downhill (both ways) from home; machines for washing dishes and clothes stand ready for duty in many homes where baseball games are watched in HDTV on screens longer than the arm of any adult in the house.
Psychologically, these are bad times. Uncertainty is rampant in the economy. Fear and anxiety are responses to uncertainty that plague many households and businesses. Most, however, responded to the current economic uncertainty with caution. They cut back on spending, increased cash balances, reduced debt and assumed an adamant position sitting on their wallets.
Nonetheless, these are not the worst of times. As we scan the records of unemployment rates from January 1976 to the present, July 2010 was the worst month for only one state (Nevada, 14.3 percent). Indiana’s highest unemployment rate in those 34 years was 12.7 percent in January 1983. It was during that 1982-83 recession that 29 of our 50 states experienced their peak unemployment rates.
That long term view offers some comfort, but does not tell us if we are better off now than a year ago. Indiana’s unemployment rate in July was 10.1 percent compared to 10.3 percent a year earlier. But we have learned that an improvement in the unemployment rate is not necessarily the sign of a healthy economy.
Over the past year, the number of persons employed in Indiana has declined by nearly 52,000 persons (1.8 percent) which is the fifth worse case in the nation. Simultaneously, we saw the number unemployed fall by 11,000. Put those two numbers together and Indiana’s labor force dropped by 63,300, a two percent decline, the sixth worse case in the U.S.
Our state’s economy remains in bad shape. We are one of 17 states that had the numbers of employed and unemployed persons both drop in the past year. We’re in the same class as New York, Michigan, Wisconsin, Ohio, and Kentucky. Normally, when people lose jobs, the number unemployed rises. These times are so tough that people who already are unemployed leave the labor force along with those losing their jobs. The result is that the unemployment rate may improve although the underlying conditions are worsening.
Indiana had 39 counties in which the number of employed persons grew in the past year. As the number of employed persons grew in 26 of these counties, the number unemployed declined while the labor force grew. Kosciusko (Warsaw) is an example: employment grew by 2,100, unemployment fell by 900, and the labor force increased by 1,200.
The majority of Indiana counties (53) saw the number employed fall.
In 22 of these counties, the decline in employment was accompanied by a rise in unemployment. Vanderburgh (Evansville) exemplifies these counties with a 2,500 decline in employed persons and a rise of only 900 in those unemployed. The result was a labor force shrinkage of 1,600.
By contrast, there were 31 counties where the numbers employed and unemployed fell, depressing the labor force. Shelby County, for example, saw a 900 person decrease in its labor force, the combination of a loss of 700 persons with jobs and a decline of 200 in those unemployed.
As ever, the full story is always deeper than the headlines.
Mr. Marcus is an independent economist, speaker, and writer formerly with IU’s Kelley School of Business.
12/11/2009 2:16:00 PM The Dead Hand: Hot flashes from the Cold War
By BRIAN A. HOWEY
INDIANAPOLIS - Lt. Col. Stanislav Petrov worked at Serpukhov-15, a Soviet top-secret missile attack early-warning station. He was far below on the command chain from General Secretary Yuri Andropov, frail and at an enhanced level of paranoia after President Carter had issued Directive 59 that listed the decapitation of the Kremlin as a key U.S. nuclear war option. It was Petrov’s job to give Soviet leaders the five or six minutes needed to decide whether to participate in one of mankind’s most onerous paradoxes: Mutually Assured Destruction (MAD).
Shortly after midnight on Sept. 27, 1983, Petrov looked up at a monitor that was lit up with the red letters - “LAUNCH.” A light at one of the American missile bases had lit up. A siren wailed. Within minutes the creaky Soviet computers were signaling five U.S. missiles had launched.
In David E. Hoffman’s disturbing book “The Dead Hand: The Untold Story of the Cold War Arms race and its Dangerous Legacy” (Doubleday) this unknown Russian held the fate of the world in his hands. If the alarm was validated, the Soviet leadership and the General staff could launch a retaliation. There were only minutes to decide.
Hoffman writes: Petrov made a decision. He knew the system had glitches in the past; there was no visual sighting of a missile through the telescope; the satellites were in a correct position. There was nothing from the radar stations to verify an incoming missile, although it was probably too early for the radars to see anything. He told the duty officer again: this is a false alarm. The message went up the chain.
Hoffman’s triumph with “The Dead Hand” is that he tells the precarious nature of the final decade of the Cold War and its aftermath through the eyes of common men like Petrov, and through the diaries of famous men: President Ronald Reagan and General Secretary Mikhail Gorbachev. The achievement is how MAD - along with an engorged Soviet military complex that was prepared to release weaponized pathogens - became the greatest threat to the 10,000 year existence of the human race. Its very existence hung in the balance.
There is Igor Domaradsky, a scientist who dreamed for the rewards of scientific discovery like a cure for cancer, but ended up being “quietly dragged” into perfecting weaponized tularemia in what Hoffman describes as the “dark underside of the arms race.” And Margarita Ilyenko, a chief physician at hospital No. 24 in Sverdlovsk, who found herself dealing with an anthrax outbreak after spores were accidentally released from military Compound 19 in April 1979.
Four months later, candidate Ronald Reagan walked through the 25-ton blast doors of Cheyenne Mountain of the North American Air Defense Command, the nuclear war monitoring nerve center. The question - what would happen if a Soviet SS-18 hit nearby? - brought the answer: “It would blow us away.” Gen. James Hill would note that “a look of disbelief came over Reagan’s face.”
Reagan would lament on the flight back to Los Angeles four years before he and hydrogen bomb father Edward Teller would dream and announce the Strategic Defense Initiative. Hoffman quotes Reagan as saying, “The only options he would have would be to press the button or do nothing. They’re both bad. We should have some way of defending ourselves against nuclear missiles.” President Reagan would be one of 100 million Americans to watch ABC’s “The Day After” movie on nuclear war in 1983. It would play a role in what Hoffman describes as a president who became a “nuclear abolitionist.”
The book describes Gorbachev’s rise to power (Andropov’s last request was that Gorbachev be elevated, but it was hidden, allowing the infirm Konstantin Chernenko to assume power) and how he tried to get a grip on the endlessly sprawling Soviet military complex. In the end, when he was detained in a coup d’etat, he couldn’t tell Hoffman whether he had actually lost control of the Soviet nuclear football. Of Gorbachev, Hoffman writes, “A leader’s courage is often defined by building something, by positive action, but in this case, Gorbachev’s great contribution was in deciding what not to do.” And that was to try and match Reagan’s phantom Star Wars.
The book details two stunning developments. One was the Soviet’s response to Carter’s Directive 59. If leadership were to be decapitated, Hoffman reveals it would result in “one of the most creative, astonishing and frightening inventions of the Cold War. It was called Perimeter.”
Soviet leaders faced three choices in an imminent nuclear attack. One would be a preemptive strike. The second was a launch once U.S. missiles were confirmed to be on the way, even though a flock of geese could set off such a warning (Gorbachev kept a sculptured goose in his Kremlin office as a reminder), and third was retaliating after attack. Hoffman writes: What if the ailing Chernenko could not decide whether to shoot first or be shot? What if he was wiped out before he could decide? The Soviet designers responded with an ingenious and incredible answer. They build a Doomsday Machine that would guarantee retaliation - launch all the nuclear missiles - if Chernenko’s hand went limp.
The retaliatory system - The Dead Hand - would turn over the fate of mankind to computers. It is, quite simply, a vivid nightmare come true.
The second was Reagan’s decision to stay in the White House during a nuclear attack, insisting that the presidency - not the president - would be saved. He would quip that in the event of Soviet subs launching a warhead into the Beltway, it would be “George” who would get on the helicopter, he said of Vice President George H.W. Bush.
The Indiana angle in the “The Dead Hand” is U.S. Sen. Richard Lugar’s role with Sen. Sam Nunn in the Nunn-Lugar Act which established the Cooperative Threat Reduction Program. When Gorbachev and Reagan shook hands for the first time at Geneva on Nov. 19, 1985, the two superpowers had amassed about 60,000 nuclear warheads. When the Soviet hammer and sickle was lowered from the Kremlin in 1991, Nunn had been on the ground and was warned that the nuclear, chemical and biological weapons were largely unsecured and vulnerable to starving Soviet military figures.
The United States had spent $4 trillion during the Cold War, so spending $1 billion to destroy weapons “would not be too high a price to pay to help destroy thousands and thousands of Soviet nuclear weapons,” Nunn said.
There was a lingering Cold War mindset, especially at the Defense Department under Secretary Dick Cheney, Hoffman writes. Harvard physicist Ashton Carter recalled making a presentation of his concerns to Donald Atwood, deputy secretary of Defense. “His position was very clear, which was that we had spent 50 years trying to impoverish these people and we’d finally done it and at this moment you want to assist? He wanted them in free fall.”
Hoffman continued: In 1992, Senators Nunn and Lugar took a gamble with history. Back then, skeptics suggested it would be best to let the former Soviet Union drown in its own sorrows - to go into free fall. Nunn and Lugar did not agree. They helped Russia and the other former Soviet republics cope with an inheritance from hell. The investment paid huge dividends. In the years that followed, Kazakhstan, Belarus and Ukraine completely abandoned nuclear weapons. A total of 7,514 nuclear warheads, 752 intercontinental ballistic missiles and 31 submarines have been deactivated.
Hoffman concludes: It was never going to be easy for a country so turbulent as Russia to accept the hand of a rich and powerful rival, and it wasn’t. Given the immense size of the Soviet military-industrial complex and the sprawling nature of the dangerous weapons and materials, the Nunn-Lugar gamble paid off. The world is safer for their vision and determination. It was also a bargain. The yearly cost for all facets of Nunn-Lugar was about $1.4 billion, a tiny sliver of the annual Pentagon budget of more than $530 billion.
That, Hoffman notes, pales in comparison to the trillion dollar Iraq War, launched ostensibly to take away what turned out to be Saddam’s nuclear mirage.
Hoffman covered the 1980 Reagan presidential campaign for Knight Ridder newspapers and served as Moscow bureau chief, White House correspondent and assistant managing editor for foreign news for the Washington Post. He also authored the book “The Oligarchs: Wealth and Power in the New Russia.”
