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Thursday, June 27, 2019
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  • INDIANAPOLIS — Last week, the governor of Missouri was interviewed on NPR and stated that farming was the number one industry in his state. I’ve heard the same claim from Indiana politicians. In fact, one Hoosier solon claimed farming was “the backbone of Indiana’s economy.” I responded, “Every corpse has a backbone.”  Why do people in Missouri and Indiana believe such exaggeration? Perhaps, at one time (in the 19th century) it was true. Farming does take up a lot of the land we see when traveling from one place to another. Plus, the farm lobby is still disproportionately strong. How important is farming? Folks from Purdue love to say, “If you eat, you’re are part of farming.” Oh, so true! Plus, if you eat, you’re part of trucking, dentistry, and waste disposal. Let’s look at three different measures not provided by the biggest farm lobby of all, the U.S. Department of Agriculture:
     First, value added, the part of Gross Domestic Product (GDP), our basic measure of economic activity, attributed to Agriculture nationally (including farming, forestry, fisheries and hunting) is 0.8%, or 19th of 19 private sector industries. Number one is (drum roll… ) real estate, rental and leasing at 13.3%, followed by manufacturing at 11.4% of GDP. To be blunt, total value added from farming is less than 0.8% of the U.S. economy.
  • INDIANAPOLIS – You don’t want to hear it, but fractions are important. They guide our lives. The unemployment rate. The pollen count. The interest rate. The speed of a car. All are fractions with numerators (the numbers on top) and denominators (the numbers on the bottom). Per capita personal income (PCPI) is a fraction that became the holy economic grail for Hoosier politicians. What do they know of that annual numeric stew cooked by the U.S. Bureau of Economic Analysis? PCPI is personal income divided by population? Yeah, but personal income is not the amount you report to the IRS. The top of the fraction (personal income) includes money paid by employers for Social Security, unemployment insurance and other sums you don’t see. Plus there’s dividend, interest and rental income “imputed” to you. Also included is the value of government payments you get (Social Security) or made on your behalf by government (Medicare and Medicaid).
  • INDIANAPOLIS - Once upon a time, in the Hoosier Holyland, our focus was on companies. How can we convince them to move to or expand in Indiana? What do they want? What can we give them to induce their capital expenditures within our borders? We could hear that wonderful Fats Waller song: “Find out what they like, and how they like it, and let them have it just that way.”  Proximity to a golf course, an interstate highway, an open sewer? We have it. Tax breaks? We’ll break every tax in the book. Compliant workers? You’ll never hear a mumblin’ word. Every county has a building just waiting for your company. Regulation is not the Hoosier way. Safety is a personal matter. Our motto is “No frills, no bills.” We’re comfortable being close to the bottom in most state rankings for education, environment, and economic progress.
  • INDIANAPOLIS - The new green is on the trees and the forest floor in front of me. Vibrant blues and startling yellows burst from hidden recesses in the leaves of last year. And Faye of the Forest is perched on the deck railing beyond my window. It’s raining, but she sits there, adjusting her hair, inspecting her nails, and smiling. I step to the open door and ask, “What are you smiling about?” “Why not?” she asks in return. “It’s a lovely day leading to an energizing season.” “Energizing? Agonizing,” I counter. “Don’t you realize millions of young Americans in high schools and colleges are talking to counselors or searching the web to find out what different jobs in different places pay?”
  • INDIANAPOLIS – Helping our communities grow is one objective of governors, mayors and their economic co-conspirators. We might thrive better if they focused on helping our communities develop. Development, as one of my co-conspirators reminds me, is a precursor, a foundation for growth. If diversity of ownership is considered development, then foreign direct investment (FDI) has many virtues. When a foreign-owned company invests in a local city or town, it does more than build or repurpose an existing structure. It hires local labor to do that work and may exhibit different expectations about construction methods and timing. This can be an improvement or a degrading, but it is a difference.
  • INDIANAPOLIS – Indiana Landmarks does a commendable job of historic preservation. They recognize the structures worth restoring because of certain events or persons of the past or for their architectural significance. Saving neighborhoods, however, by zoning them with strict standards designed to keep them looking as they did in some bygone day is contrary to good sense. Yes, others have different values and I’m supposed to respect them. It doesn’t make it easier for me or them when we insist the government be used to enforce our values. Not every Indiana courthouse is a gem worthy of eternal existence. Just because we grew up with it doesn’t mean succeeding generations should be burdened with our nostalgia. Public buildings constructed before 1920 were, in most cases, more charming than those erected in the past 100 years. But charm alone cannot accommodate the present or the future.
  • INDIANAPOLIS – You probably are familiar with Metropolitan Statistical Areas (MSAs), groups of counties around cities of 50,000 or more persons. Sometimes an MSA is only one county, but often an MSA includes nearby counties because there is considerable commuting between the core county and the outlying counties. Bartholomew is the only county in the Columbus MSA. However, the Evansville MSA includes four counties, one of which is in Kentucky. In all, 43 of Indiana’s 92 counties are part of 14 metro areas, some extending into each of our four neighboring states. But do you know Indiana also has 26 Micropolitan Statistical Areas involving 27 counties? The federal Office of Management and Budget (OMB) says “Micropolitan Statistical Areas have at least one urban cluster of at least 10,000, but less than 50,000 population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.”
  • INDIANAPOLIS - Americans seem indifferent to the level of personal debt and obsessed with public debt. My mother had an aphorism: “You had your fun, now you have to pay for it.” Debt, according to this view, is incurred for a lack of patience, a preference for current gratification over future comfort and security (health and other emergencies aside). As consumers, we put those concert tickets and those clothes on the credit card, which we do not pay off promptly. But in the public sector, we don’t want to build our streets and roads or operate our schools to a higher standard because we don’t want to pay higher taxes or user fees over time. In our homes we say, “It’s our money to do with as we please.” About government we say, “It’s the politicians and bureaucrats fault; they waste so much of our money on needless projects.” Neither statement holds up under examination.
  • MERIDIAN HILLS  –  Last week I spoke to their Honors at a meeting of the Northern Indiana Mayors in Logansport. The session began at the Dentzel Carousel alongside the Eel River. It was a comfortable site for officials who are forced by an anti-urban legislature to spend so much time going around in circles. If Mayor Kitchell wants to increase tourism, he should have the name of the river changed. Who wants to canoe the Eel when it could be the Elk?  The state has two Eel rivers, but no Elk (there is an Elkhart River in Elkhart Co.). This is a chance to end confusion about the Eel and improve economic opportunity for Cass and five other counties. Beforehand, I examined what’s happened to the population of Indiana’s 547 incorporated cities and towns between 1970 and 2017. Of those 547 places, 454 (83%) were home to less than 5,000 each. How big does a town have to be or what economic activity must it have to constitute a community? Does a population of 22 (River Forest, outside of Anderson in Madison County) qualify?
  • INDIANAPOLIS – Here’s another bundle of happy news about Indiana’s workers. This time it covers a 10-year span, including both the recession and the recovery. We’ll compare Indiana’s labor force in 2007 with 2017. Yes, it would be more interesting to use 2018 data, but they are being checked and prepared for distribution. Happy item #1: Of Indiana’s 92 counties, 88 have seen their number of unemployed persons decrease by a combined total of 30,700. Happy item #2: Only four counties (Hamilton, Porter, Hendricks, and Boone) saw the number unemployed increase. So small were these few increases that they totaled only 1,100 persons. It was also these four counties that led the state in increased employment and increased labor force. Were these small increases in the number unemployed just a timing factor as many people flocked to these counties where job growth was so plentiful?
  • INDIANAPOLIS – I spend too much time with old folks like me, folks who interpret the world through fantasies born of their experiences. They and I have hardening of the intellect as a result of inadequate interactions with the diverse people of our communities. Take the self-righteous conservatives and liberals with whom I associate and identify. They (we) think they (we) understand today’s world because they (we) lived in yesterday’s world. Conservatives view the world through cataracts that cloud the subtleties of life. Liberals wear lenses that put halos around strangers. But both “know” the truth and have inflexible remedies to cure all ailments.  
  • INDIANAPOLIS - Nelson Pneumatic, local chair of Nerds for Numbers, called me late last week. “I’ve got great news,” he said. “Indiana’s Gross Domestic Product (GDP) grew faster in the second quarter of 2018 than GDP did nationwide.” “Wow,” I replied. “Did you tell the Governor’s office? They’ll want to issue a proclamation.” “I’ll do that later,” he said. “I wanted you to know first so you can start baking some humble pie. It shows the General Assembly is the ever-wise entity that, by lowering business taxes, is working for working Hoosiers.” “By how much did we beat out the other 49 states?” I asked. “Oh,” Nelson sighed. “You won’t see the glory of Indiana as reflected in the data.”
  • INDIANAPOLIS  – Let’s take a short stroll through the orchards of data prepared by the U.S. Bureau of Economic Analysis. While we are there, please consider how your county can increase the earnings (wages and salaries) of your residents. No, I’m not going to preach for higher minimum wages, more skillful workers, or generous employers. Leave all of that outside the orchard gate. Let’s just think about the income generated in our counties, but paid to workers who live elsewhere. That’s right. The person working next to you in a factory, warehouse, office or store may be an “alien” from Henry County (New Castle). He takes his earnings back home to Hancock County (Greenfield) where he buys groceries and pays property taxes, to say nothing of other spending. Do you have any sense of the magnitude of those funds flowing out as each commuter leaves for his or her home in another Indiana county? Or maybe even in an Ohio county?
  • INDIANAPOLIS  –  Some politicians use a magic mirror to ask: “Which is the fairest tax of all?” Likewise, some economists and other social agitators look into the same mirror to ask: “Which tax, currently in use, is the most regressive tax of all?” Both groups are answered: “The sales tax!” It’s wonderful to have such a mirror. Some fair tax people are devoted to the sales tax. After all, with exemptions for the barest necessities, like food and medicine, a sales tax discourages consumption, which is a sin. They contend responsible people, regardless of income level, save. You must put away money for that inevitable day when ill fortune brings unemployment, accident, illness, or college education. Those savings are to be invested in corporate America via mutual funds or other stock market instruments.
  • INDIANAPOLIS – Like other Indiana cities, Columbus seeks to strengthen its downtown area. The plan was detailed by The Republic (Dec. 2, 2018). What appears to some as a progressive move forward is perceived by this aged observer as a reversion to previous concepts.  This is not a disparagement of the Envision Columbus plan. No. It’s a recognition of changing preferences and lifestyles, as well as the pendulum swings in urban land prices. Let’s look at some details. As the burdens of suburban living became manifest, downtown residences became popular again. The Columbus plan asserts: “young people and families expressed an interest and desire to live in the downtown area.” This might be a real trend or a transitory Millennials’ mirage.
  • INDIANAPOLIS – He was very pale and dressed in shades of gray. His business card read A.G. Bell. No address or contact information. Only the name. His Scottish accent was filtered through a generous white beard. “Youngster,” he said. “I be disturbed by excessive ringing in me ears.” “Tinnitus,” I was quick to diagnose. “I have it. It’s a continuous hissing sound that’s always in the background. Comes with age.” “I not be thinking that,” Mr. Bell said. “It’s truly ringing of me telephone. Not continuous, but frequent and excessive.” “Your popularity?” I offered. “So many folks wanting to talk with you. It’s a good thing you don’t put your phone number on your business card. Nonetheless our numbers do get out. And they do get used by all sorts of people.” “Six times in a single hour!” he roared. “Not one of them a call from someone I knew or even one who knew me. All of them trying to get into me purse for things or purposes.” “Ah, yes,” I said knowing the correct diagnosis now. “Unsolicited solicitations. Folks trying to sign you up for more comprehensive health insurance, advanced home safety systems, better credit cards, and exceptional good causes.”
  • INDIANAPOLIS – Drive along some of Indiana’s interstates and a single fact becomes evident: There are large numbers of persons on the road with you who are sexually deprived or unsatisfied. How else can you explain all those ads for “adult” literature and apparatus? Freudians would likewise see the many billboards for fireworks as appealing to suppressed libidos. Billboards are unlike other advertisements. You cannot avoid them. They enter your line of sight and are a distraction. But they also provide information, often desired and welcome information. That’s the tradeoff – information vs. intrusion. Some will escalate the discussion by arguing freedom of speech and property rights of land owners are at stake when regulation of billboards is under consideration. Newspapers, television, magazines, cellphones, your computer screen all are carriers of advertising. However, there is a difference: You and I invite those media into our lives. We can choose to ignore advertisements or to study them in detail. With billboards, we do not choose to be informed about Kitty’s Krunchy Karamels, Fred’s Fearsome Fireworks, or George’s Gents’ Grotto. Yet, it’s good to know a Bilge Burger is just ahead.
  • INDIANAPOLIS  – Last week we promised the data to back up the disquieting claim that “Indiana is not, and has not been, outperforming the nation in job or wage growth.” According to the Census of Employment and Wages, Indiana added 323,000 private sector jobs between 2010 and 2017, years of recovery from the Great Recession and a 14.0% increase compared to a 15.2% growth nationally. “That’s nothing,” you might say. “Only about 28,000 jobs spread over 92 counties and seven years.” True, but consider this: The seven states with 40% of the jobs in 2010 enjoyed 52% of the job growth. California alone increased its job count by 2.5 million, more than the entire number of Hoosier jobs in 2010 (2.3 million). Within Indiana, 78 counties gained employment, led by Marion County with an increase of 50,400, ranking first in numeric growth, but only 36th in percent increase. Vigo County had the distinction of losing the most jobs (829) while Martin County lost 15.1% of its jobs.
  • INDIANAPOLIS – Next week’s column will offer data demonstrating the failure of Indiana and a substantial portion of its counties to exhibit even average economic growth in jobs and wages. You, therefore, have seven days to sharpen your arguments supporting complacency, even satisfaction, with our economic progress. Flatly stated, Indiana is not, and has not been, outperforming the nation in job or wage growth. Yes, for short periods of time, largely in the early part of the recovery from the Great Recession (2010 to 2012), Indiana did better than the nation as a whole. But if we take the entire recovery period (2010 to 2017), the story is one of continued mediocrity at best. Why are we misinformed and self-satisfied? Is it the adverse economics of journalism combined with the self-interest of the booster community? The Times of Northwest Indiana did run a story on business closings in the past year, but how many other news outlets did so?
  • INDIANAPOLIS – Charlene Curio is a journalism student on her first off-campus interview. “Why do you write this weekly newspaper column?” she asks. “To introduce Hoosiers to their state,” I respond. “It was an idea of newspaper editors at a dinner in 1990 that became reality the next year. As I traveled the state I realized folks everywhere knew little about Indiana’s economy and population. Newspapers then, as today, focused on local sports, crime, and politics. They didn’t provide much information about the state and how what happens in one region compares to other areas.” “What should Hoosiers know about Indiana they don’t already know?” Charlene asks. “Where were you born?” I ask her. “In Indiana,” she replies with neither pride nor embarrassment. “And that’s the answer 68% of the people living in Indiana would give to that same question,” I tell her. “There are only 10 states with a higher percent of persons living in their state of birth. The top five are Louisiana (78%) followed by Michigan, Ohio, Pennsylvania and Mississippi. Altogether, 59% of Americans live in their state of birth.”
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  • Buttigieg email to campaign supporters: 'My heart is broken'
    "It’s been a week since a member of our South Bend family was shot and killed by a police officer. I’ve held meetings with community members, the police department, and faith leaders. And yesterday, I held a community-wide town hall to discuss race and policing in our city, to make sure all residents could be heard. It was a tough conversation. Hearts are broken. My heart is broken. It was a painful but needed conversation. And I feel overwhelmed and heartened by the number of people – supporters and critics – who have reached out and made it clear over the past week that they want to join hands and face these problems together. Safety and justice are inseparable. Making them a lived reality for all is one of the great challenges of our time. And the solutions will have to come from cities like South Bend, where people are ready to come together to struggle and repair. I’m running for president as a mayor of an American city because the toughest issues we face locally are also important national issues." - South Bend Mayor Pete Buttigieg, in a Monday morning email to supporters of his Democratic presidential campaign. Buttigieg is still planning to participate in the second Democratic presidential debate in Miami on Thursday night.
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  • Trump '100% for Pence on 2020 ticket

    President Trump made it clear that he will seek reelection in 2020 with Vice President Mike Pence on the ticket. NBC Meet The Press  host Chuck Todd asked Trump if he would run with Pence. "Well, look, look - 100 percent, yes. He's been, he’s been a terrific vice president. He's my friend." 

    Todd asked Trump why he didn't commit to supporting Pence for president in 2024. "Because it was a surprise question," the president said. "I mean, you know, I’m not even thinking of it. It's so far out. I mean, It's so far out. That would be the only reason. Now what happens in 2024? I don't know that Mike is going to run. I don't know who's running or anything else." - Brian A. Howey, in Indianapolis

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