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Wednesday, January 19, 2022
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Thursday, December 5, 2019 2:55 PM

How’s business? “Wonderful,” is the answer you’ll probably get from those who only know the stock market continues to rise. 

How is business in Indiana or in your sector of the economy? That answer is often hard to find. 

  • MUNCIE - This week we set aside time to remember Dr. Martin Luther King, Jr. and reflect upon his influence. Classrooms around the country will replay some of his speeches, and students together will read his Letter from a Birmingham Jail. It is necessary that they do so, and no Americans can count themselves as truly educated who have not read much of his most popular arguments. King’s words are part of the canon of American political writing, and belong to a long tradition of Enlightenment thought. His best belongs in the same intellectual anthology as that of Jefferson, Lincoln and Thomas Paine. The essence of the American aspirations towards freedom can be understood by cobbling together just a few paragraphs from Paine’s Rights of Man, Jefferson’s second paragraph of the Declaration of Independence, Lincoln’s Gettysburg Address and Second Inaugural Address, along with King’s Letter from a Birmingham Jail and "I Have a Dream" speech. Few readers likely experience the same misty-eyed affection for these words as do I. But, they cannot help but move even the most cynical observer of the American experience. Even an hour spent reading these words might allow us to better appreciate one another as we go about building a more perfect union.

  • ANDERSON – The subject line of the email telegraphed what was coming. “It’s a hoax!!!” it said. The writer didn’t hide his lack of credentials. “Listen, I’m no doctor or expert or the like,” he wrote, “but, BUT, I’ve read five books on this medical corruption in western civilization and two on masks. Masks are not at all safe. Period!” My reader was doing his own research. He was in the process of reading a sixth book, this one by vaccine skeptic Robert F. Kennedy Jr. “The title sez it all: ‘The Real Anthony Fauci, Bill Gates and the Global War on Democracy and Public Health,’” he wrote. “WOW!!! Read it!!!” I was tempted to ask how many books this fellow thought Fauci had read during his long career in public health, but I decided it would be a wasted effort. I’m sure we could have gone back and forth discussing the man’s so-called experts. He mentioned Dr. Robert Malone, who claims to be the inventor of the mRNA vaccine, and Kary Mullis, a Nobel Prize winner and developer of the test used to determine whether a patient has contracted COVID-19.
  • BLOOMINGTON – With a $1 trillion infrastructure package on the books and the Biden administration’s $1.8 trillion “Build Back Better” measure preoccupying the Senate after passing the House, government spending is very much on Americans’ minds. In public meetings, I frequently hear people say that government’s share of the economy is too big, and it’s likely that voters’ feelings about federal spending in particular will figure prominently in next year’s elections. If you look ahead, even beyond the current debate on Capitol Hill, there’s no question that there will be intense pressure to expand even further. To deal effectively with climate change, reckon with the impact of an aging population, handle the health care needs of Americans post-pandemic – these are problems that will demand a role for government. Which, in turn, will mean more spending, more bureaucracy, more opportunity for corruption, and less space for the individual enterprise that fuels economic prosperity. The U.S. is not alone in this. “On current forecasts,” The Economist wrote recently, “government spending will be greater as a share of GDP in 2026 than it was in 2006 in every major advanced economy.” 
  • MUNCIE – Last month the state’s largest healthcare firm, IU Health, announced it would freeze prices through 2025. That end date is tentative, and the plan is short on public details. However, there has been enough reporting about the issue that we can begin to understand how financially important this is for businesses and consumers. It is also useful to interpret this decision in light of the overall hospital monopoly problem in Indiana. IU Health has claimed that this price freeze will save Hoosiers about $1 billion over the five-year freeze from 2021 through 2025. This may be correct, but this not-for-profit hospital system earned $1.2 billion in profits in 2020. Numbers of this size seem almost abstract and difficult to assess without more context. By comparison, IU Health’s profit rate is four times higher than what Walmart has posted in any of the 52 years it has been a corporation. Last year, IU Health reported profits of more than $33,000 per employee. IU Health has been able to sustain what economists term supra-normal profits for many years because it has become a strong regional monopoly in many parts of the state. This allows the firm to price its medical services at more than three times the federal reimbursement level. This is high by national standards, but to be fair to IU Health, it isn’t even the worst in Indiana on some measures.
  • INDIANAPOLIS – Last week in this space, data showed Indiana performed well compared to most other states in the COVID-induced economic decline and rebound of 2020-21. Today, consider a longer period of time, 2007 through 2019. Why this 12-year span? The year 2007 was the last before the financial debacle required massive and novel recovery measures. The year 2019 was the last before the worldwide COVID pandemic from which we are still recovering. While the shorter-run is important, the longer period tests our state’s economic development policies. Jobs are the favorite economic talking point for many politicians. How did Indiana do adding jobs from 2007 to 2019? Nationally, the number of jobs grew by 9.3% and by 6.0% in Indiana. But that national figure gives more weight to the bigger states than the smaller ones.
  • INDIANAPOLIS – Last year was one of the bloodiest years in Indiana history as Indianapolis set yet another homicide record with 271 murders, while Evansville, Fort Wayne and South Bend all had deadly years. Perhaps, just perhaps ... it’s because Indiana is awash in guns. On Tuesday, the Indiana House voted 63-29 on HB1077 the “constitutional carry” bill that would abolish permits to carry handguns. According to National Instant Criminal Background Check System that was created by the 1998 Brady Act, these checks have increased steadily over the past three years after spiking during the 2016 election cycle. Indiana NICS firearms checks totaled 1,815,531 in 2021, down slightly from 1,935,587 in 2020. In 2019, there were 1,450,565 checks. These checks spiked to 1,436,725 in 2016 and 1,076,917 in 2015 when there was speculation that Democratic presidential nominee Hillary Clinton was heavily favored over Donald Trump. Rumors were rampant that a third Clinton administration would herald new gun restrictions. While Indiana has a population of 6.8 million people, the NICS checks during these five years totaled 7.7 million.

  • INDIANAPOLIS - Back in 1976 I read a short newspaper story citing French demographer and scholar Emmanuel Todd who forecast the collapse of the Soviet Union. In his essay titled "The Final Fall," Todd deduced that the USSR suffered from stagnation, low birth rate and high infant mortality, rising suicides, alcoholism and worker discontent. At the time, I thought Todd's notion was crazy. The collapse of a nuclear super power? As a graduate of Indiana University's Russian and East European Institute, and working in Elkhart where a large Soviet dissident community had gathered in the 1980s, I attended seminars at IU and Notre Dame in which a number of scholars such as Prof. Robert F. Byrnes, Prof. Darrell Hammer, Prof. Robert Campbell of IU and Notre Dame Prof. George A. Brinkley Jr. believed that communism as we knew it was dying. "You cannot even find a glass of beer in Moscow," Prof. Byrnes said. Prof. Campbell added, "This society has to be rebuilt from the ground up. There's no way of getting out of this mess without any trouble. The question is: Can Gorbachev manage the trouble?" But in 1986, few scholars were predicting the Soviet collapse. That began to change two years later, when Prof. Brinkley described 1988 and 1989 as Soviet leader "Gorbachev's hump" following the fall of the Berlin Wall and poor harvests. Prof. Hammer observed in September of that year that "The Soviet Union ought to solve its economic problems before trying to reform politically.” In my Elkhart Truth article dated Nov. 5, 1989, I wrote, "In the light of astounding events that have taken place in 1988 and 1989, anything can happen. And it did. I watched CNN on Dec. 25, 1991, as the old Soviet hammer and sickle flag was lowered from the Kremlin after Gorbachev resigned. The USSR was kaput. Why tell this chapter today? Because there are now predictions that the same fate is in store for the United States of America.

  • MUNCIE – The end of 2021 must be met with relief by most Americans. It was a grim and dangerous year that needed not have been so awful. As 2020 passed into memory, there were signs of hope everywhere. The miracle of vaccination offered to end the COVID-19 pandemic that gave our economy its worst year on record and killed 375,000 of our neighbors. The bitter election of 2020 was over, and we could look forward to the 46th consecutive peaceful transition of a presidential power. The tranquility that follows from elections offered a quieter, more prosperous 2021. This hope was shattered, repeatedly and with grim and dangerous outcomes. The very heart of our democracy was attacked on Jan. 6, 2021, as a group of rioters, sprinkled with hundreds of active insurrectionists, attempted to overthrow our government. For the first time in two centuries, our Capitol was ransacked. Our elected leaders, including the vice president and all the members of the House and Senate, were evacuated from their places of duty in the chambers of Congress. We have had many enemies in the 245 years of this Republic, but none has successfully interfered with Congress in this solemn duty. Not in the Civil War, not at the heights of two world wars, a Cold War or terror attacks has this happened.
  • WEST LAFAYETTE – The property tax is the biggest source of tax revenue for most Indiana local governments, and they were worried about the effect of the COVID recession on property tax revenues. But rising home values in 2020 will increase assessed values for tax bills in 2022. The federal COVID relief bills increased Indiana income in 2020, so the state’s limit on property tax revenue will keep increasing in 2022. Tax rates are likely to fall in many jurisdictions next year, so fewer taxpayers will be eligible for tax cap credits. Local governments will collect a bigger share of their tax levies. Looks like the recession will not be a problem in 2022. So, what should we worry about now? How about inflation? We have no experience with high inflation. The Indiana property tax is much different today than it was during the high inflation of the 1970s. So let’s try to think it through. Suppose there is a “pure inflation,” which adds the same increase to prices, incomes and property values. It couldn’t happen, but it’s a useful experiment to look at inflation’s effect.
  • SOUTH BEND – Two big political mistakes by Democrats in Congress, compounded now by seeking to blame it all on Sen. Joe Manchin, leave the shaky Democratic chances of retaining control of the House near zilch. And they depend on Donald Trump successfully backing really strange GOP Senate nominees to keep the 50-50 balance in that chamber. Big mistake No.1 for Democrats was thinking they were operating from a position of strength after Trump was defeated. With Joe Biden in the White House, Kamala Harris able to break ties in the 50-50 Senate and a Democratic House majority, exuberant party leaders began talking up, actually promising, a transformative progressive change to rival Franklin Roosevelt’s New Deal and Lyndon Johnson’s Great Society. That was totally unrealistic. Roosevelt and Johnson had large Democratic majorities in Congress, essential for sweeping changes. 
  • ANDERSON — A lot of Democrats are mad at Joe Manchin these days. Less than a week before Christmas, Manchin appeared on Fox News to reveal his opposition to President Joe Biden’s Build Back Better initiative. “If I can’t go home and explain it to the people in West Virginia, I cannot vote for it,” he said, “and I cannot vote to continue with this piece of legislation, I just can’t. I’ve tried everything humanly possible. I can’t get there.” The news drew angry reactions from the progressive wing of the Democratic Party. U.S. Rep. Ayanna Pressley of Minnesota accused Manchin of moving the goal post. “He has never negotiated in good faith,” she said, “and he is obstructing the president’s agenda.” The reality, though, is that the president’s agenda isn’t all that popular in West Virginia. Donald Trump trounced Joe Biden there with almost 70% of the vote. That leaves progressives with little leverage in this fight. In fact, making folks like Pressley mad might make Manchin more popular in his home state, not less.
  • INDIANAPOLIS – Cartoonists again have represented the new year of 2022 as a baby in diapers. More appropriately, 2022 peeks in cautiously, wearing a mask, standing in a circle with a 12-foot diameter, and a certificate of vaccination in hand. The old year, 2021, is seen wheezing, bedraggled and heading toward eternal rest in an overcrowded hospital emergency room. We know the tragedy and turmoil of the COVID pandemic. Unemployment and simultaneous staffing shortages, plus supply chain disruptions and selective inflation, get the headlines. What we may not appreciate is the actual performance of the economy during nearly two full years of COVID. Clearly, COVID hit the economy in both the U.S. and Indiana in the first half of 2020. However, Real Gross Domestic Product (GDP), the market value of goods and services, adjusted for inflation shows there was already economic weakness evident. In the last quarter of 2019, private sector growth rates for the nation and Indiana were moving toward zero. 
  • INDIANAPOLIS - Becoming Indiana's attorney general is not, historically, a path to the governorship, or any other higher office. Yes, Democrat Attorney General Alonzo Smith served as an interim lieutenant governor from 1886-89, and Samuel Jackson was briefly in the U.S. Senate in 1944. In 1992, Attorney General Linley Pearson won the Republican gubernatorial nomination, but nearly quit before the convention ended in a dispute over composition of the ticket. In 2016, Attorney General Greg Zoeller lost a 9th Congressional District primary to mostly-unknown Trey Hollingsworth, formerly of Tennessee, who used family wealth to win the nomination and the seat. In the television age of Hoosier politics, Attorney Generals Edwin Steers, John Dillon, Ted Sendak, Pamela Carter, Jeff Modisett, Karen Freeman-Wilson and Steve Carter saw the office as the capstone of their political and legal careers, though the appointed Freeman-Wilson later became the mayor of Gary. Our governors during this modern era have been lieutenant governors, House speakers, state senators, congressmen, or wealthy businessmen. The notion of the state's top lawyer becoming a governor or U.S. senator began after Republican Attorney General Curtis Hill took office in 2017.

  • NOTRE DAME – In late June 2018, Democrat U.S. Sen. Joe Donnelly was cruising toward reelection and was on a conference call with Hoosier agriculture reporters when he learned that U.S. Supreme Court Justice Anthony Kennedy was retiring. "It was like I got hit in the head with a baseball bat," Donnelly told me. "I had been watching that like a hawk, because the way the Supreme Court operates, there’s a time when you really can’t resign after that point in the year, there are things you have to do to get ready for the next cycle. He had already hired clerks. By that time, you’re really in so deep you can’t leave. So, this was the final week when he could possibly consider; this was the end of the final week. I know how emotional Supreme Court nominations are." Donnelly ended up losing to Republican Mike Braun five months later, 51-45%, with the Republican carrying 84 counties. The Kennedy retirement and the volatile confirmation hearing of Judge Brett Kavanaugh a month before the election that included sketchy allegations that as a teenager he had sexually assaulted a girl completely roiled the Indiana Senate race. The Kavanaugh confirmation sequence was a determinative one that may have decided this race. It gave President Trump more reasons to come to stump for Braun, showing up a half a dozen campaign rallies. It certainly ignited the Republican base. And it put Donnelly in a bind, eventually opposing the Kavanaugh confirmation. This coming June, the U.S. Supreme Court's decision's in the Mississippi case Dobbs v. Jackson Women’s Health Organization has the potential to alter the political environment once again. Republican U.S. Sen. Todd Young is seeking a second term and will likely face Democrat Hammond Mayor Thomas McDermott Jr.

  • INDIANAPOLIS – The Dec. 1 arguments before the U.S. Supreme Court in a Mississippi abortion case, coupled with a ruling in a different abortion case from Texas, have seasoned court observers predicting that major changes in abortion policy are coming. While the particulars of each case matter, two overarching observations suggest states will be able to substantially regulate – if not ban – abortions as early as next summer for the first time since 1973. The first observation is that a majority of the same court that decreed abortion is a constitutional right back in 1973 is comfortable with a Texas law that bans abortions after about six weeks of pregnancy. This new Sept. 1 law more than halved abortions in Texas, our nation’s second most populous state. A court committed to continuing its 1973 standard would not allow such a significant variance. The second observation is that the Dec. 1 arguments made clear that a majority of the court is uncomfortable with current vague standards (phrases like viability and undue burden are the core of current edicts), suggesting the whole issue may be upended and sent to the states for unique policy prescriptions reflecting the will of the people in those 50 separate jurisdictions. While we may not know the specifics of the decision until summer, it is not too early to begin to consider what might be different in Indiana and beyond when this potentially landmark ruling is handed down. First, if Roe v. Wade and its subsequent cases are struck down, abortion policy will drastically change.
  • INDIANAPOLIS – From my “lamestream media” perch things sure do look dicey and dangerous. There’s that 36-page coup d’etat Powerpoint titled “Election Fraud, Foreign Interference & Options for 6 Jan” that President Trump’s Chief of Staff Mark Meadows gave to the House Jan. 6 Committee. The Atlantic’s Barton Gellman writes that “Trump’s next coup has already begun.” According to Gellman, “If the plot succeeds, the ballots cast by American voters will not decide the presidency in 2024. Thousands of votes will be thrown away, or millions, to produce the required effect. The winner will be declared the loser. The loser will be certified president-elect.” Veteran GOP operative Steve Schmidt describes “the obvious edge of the abyss into which we are staring. A great crisis isn’t just at hand, it is underway. We are living through its early days.” NBC’s Meet The Press Daily observes: “Today prominent GOP candidates are running campaigns based on waving the bloody shirt of a stolen election. Sixty percent of the party’s voters believe the blood is real when it’s actually fake. Republicans in several states are trying their best to make sure those local officials who protected the election from false fraud claims won’t be there next time.”

  • FORT WAYNE – In the spring of 1968, the political leaders of the Allen County Republican Party gathered at the home of Chairman Orvas Beers to select the GOP convention nominee for secretary of state. Fort Wayne had been slotted for attorney general, but State Sen. Allan Bloom had turned them down. Instead, Lake County chose Ted Sendak. Fort Wayne now drew the slot to complete the current ticket with Secretary of State Edgar Whitcomb of Seymour, who was slotted to be governor. No immediate nominee jumped out to the local brain trust. One of the participants noticed local banker Bill Salin mowing his lawn. “How about Bill Salin?” one of them suggested. Salin was not a local party activist and basically unknown outside northeast Indiana.  Salin did head the trust department at Indiana National Bank in Fort Wayne. Banks, as we shall later note, then played an important part in the spoils system as well. And it should be noted that, while Salin disappeared from politics after being defeated by Larry Conrad in 1970, he went on to found the successful Salin Bank & Trust Company. So how did it come to be that a group of party officials could pick an Indiana secretary of state in such a haphazard reminder?
  • MUNCIE – It is economic forecasting season, so universities and consulting groups are offering their projections for 2022. I did so this week, continuing work from Ball State University that started a half century ago. Over the last 50 years, a dozen or so Ball State economists have authored economic forecasts for east central Indiana, the state and the nation. This has long been part of the university’s mission to state taxpayers, as well it should be. The process of an economic forecast involves a lot of mathematics and a lot of common sense. The economy next year always looks a lot like last year, and the year before, and the year before that. But, it also depends upon short-term changes, such as recovery from COVID, the cost of borrowing, the availability of workers and expectations about future spending by governments, businesses and households. Differences in forecasts almost always hinge on assumptions about upcoming changes to these. If you assume interest rates will remain low, COVID will be modest and consumers ready to spend, then the outlook will be optimistic. If you assume the Fed will raise rates, that the pandemic will continue to hurt spending and fewer workers will reenter the labor force, your projections will be far worse.
  • BLOOMINGTON – I still remember a question I got years ago. It was at a public meeting in southern Indiana, in one of those squat, featureless cinder-block buildings you find all across the country. This young woman stood up and commented that I’d traveled throughout the U.S.  and had met all kinds of people. So she wanted to know: What was my impression of Americans? I didn’t even hesitate: The American people are fundamentally decent, I told her. I still believe this. And when I say it, I’m not talking about a bare majority. Most Americans are good people. Why even mention this? Because at the moment, we live in a country where a lot of Americans don’t believe it. They think fellow citizens who belong to a different political party are at best misguided and at worst, evil. We have public officials who want nothing more than to do a good job and stick by the laws resigning because they’re tired of the threats to themselves and their families. 
  • SOUTH BEND – It’s not dirt cheap. It really is dirt. But it’s not cheap. The cost is $110 plus shipping for a baggie containing four and a half ounces of this dirt, hailed as miracle stuff in fighting the effects of COVID-19, promoting a healthy heart and improving brain function. Those who buy it really need improved brain function. The miracle dirt from a Canadian bog has been selling through online ads attracting attention of anti-vaccine and COVID-denier folks. Then U.S. and Canadian health authorities restricted our freedom and trampled on our rights, imposing recalls and holds at the border. So, the pioneering provider of real medicine rather than fake vaccines closed down under pressure of the health Gestapo. Is all of this as clear as mud? Actually, mud is important. In quest of cures, it’s useful to muddy the waters. This very special dirt, sold as Black Oxygen Organics, popularly known as BOO, is billed as effective when mixed with water for a muddy drink. A toast: “Here’s mud in your eye.” Some of the enlightened users found cures by bathing in the muddy water.
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  • South Bend Mayor Mueller hopes pandemic ending
    “And to get even bolder, I hope this is the last community event, big community event, hat is delayed or canceled because of COVID-19. We are weeks away from turning the corner and putting this behind us once and for all. I know we are excited to get there, and right now it is a little disappointing.” - South Bend Mayor James Mueller, speaking at a Martin Luther King Jr. event on Monday. St. Joseph County Health Officer Dr. Mark Fox: “I think we are certainly weeks away from being through the worst of the omicron phase. We may have crested now or sometime in the next week, probably, we will hit our peak at omicron. And the recovery from that should almost be as rapid as the rise was. While it’s caused a lot of infections, the duration is going to be relatively short-lived.”
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